I understand it's not new to have the retail price be higher than the 'sale' price (for example, clothes and furniture), but even at clearance outlets, the price difference while large is rarely as dramatic nor as prolonged.
This also works for the craft store chain Michael's but to a lesser extent. They almost ALWAYS have a 40-50% off coupon in their weekly ad. So if you find something that you want but it's expensive, you can usually get it for half off. It's pretty awesome!
The frequency of running offers, and which offers to run, are just business details that can be tested and optimized. Some firms are a lot better at it than others. But at its core it's not fundamentally different than coupon mailers or rebate offers.
If you ever buy furniture for sticker price you're doing something wrong...
If something is constantly "70% off" (especially non digital goods and services), shouldn't consumers stop for a second and think how this makes sense?
- Selling to a different demographic (young adults - like 20-25 y/o) <-- This was probably a huge reason for the failure
- Making their stores "trendy" (for example, removing POS, instead employees walk around with iPads that have scanners attached)
- Removing constant "70% off" sales
Removing the sales probably was a part of the failure. But it was not as huge of a deal as people make it out to be.