The Low Prices vs. Bargains Dilemma

This feels like an over-simplification, and not translatable to other examples.

JC Penney had an established group of customers who liked what it offered - and for many, this presumably included liking (even enjoying?) the coupons and sales approach that was offered. In changing the model, JC Penney totally disenfranchised the whole group of customers who liked that approach. (It doesn't matter why they liked it, or whether other people also like it... it just mattered to JC Penney at the time that lots of customers did get some sort of gratification from it.)

Does this mean that no business can therefore ever succeed without a coupons and sales model? Of course not - and there's plenty of successful businesses with a different model. They're just started with a different model, and therefore appeal to a different customer base from the start.

The message of this example isn't that "people don't want low prices, they want bargains". It should be that "you change major aspects of your business model that your established customers like, at your peril".

The discounting model works well for Steam, Amazon etc. There's a variant used by less reputable retailers where you pretend the product was being sold for a big price then offer a "discount". People absolutely do love being told they're getting something cheap.

The "always low prices" model is a bit more complicated to make work than it sounds, but works for e.g. the "discount supermarkets" of Aldi and Lidl.

I think the repetitiveness of a purchase matters: if you're buying a one-off, you want the biggest discount and you don't care what the price is at all other times. If you buy the same thing every week, you may be more interested in reducing the decision workload by going somewhere consistently cheap.

Every time this CEO is brought out and beaten up I feel compelled to come to his defense. I used to visit JCPenney when I lived in a small city and I was frustrated by the products that felt overpriced for the coupons to later mark down. I had to wait to buy a shirt until the sale went on, and sometimes it meant I searched and bought elsewhere. When this new method arrived I was excited to know that I never had to worry if the price was going to get better or be horrible from week to week, so I could buy on my own terms and not feel cheated.

After the CEO was fired and the prices went back to the seesawing coupon schedule, I quit going and moved on to something else. He had a good idea. I will miss the no-nonsense pricing.

Short, unsubstantiated, unintelligent post lacking much detail, that is better suited as a comment reply to a more detailed post.

They don't offer examples where their claim holds true, nor go into the (potentially interesting) detail of why this might be true psychologically, or link to any studies like these sorts of posts usually do. Even if those studies make vague claims, at least offer further reading.

I hate discounts with special requirements (coupons, bonus cards, etc). Anyone can get the discount, but has to jump through pointless hoops to actually get it. Just give everybody the discount.

And I would love a shop that always gave low prices instead of temporary discounts. At least, that's what I keep telling myself; I don't actually mind paying more for quality products. There are a couple of very successful Dutch chains specialising in low prices (Action, Lidl), and I never actually go there. Instead, I go to more expensive shops that have exactly what I want but require a bonus card to claim the discount, which I do while hating it.

We're utterly irrational creatures, and I'm no different, apparently.

On the other hand, when I bought my first dishwasher, I found a model that was discounted from €300 to €200. I shopped around a bit more and found the exact same model at another shop for €200 and no discount. I bought it at the second shop. So there I clearly did prefer cheap over discounted.

I prefer low prices, every time I see an ad like "Save $x" or "From $x to $y" I feel someone was ripped off. But most people may really like the "bargains". Even my wife. I like to tease her "from 3000 to 300 for something that is worth 3".

That's depressing if true. I would much rather the price be the real thing all year round rather than waiting for a fake sale every second week.

I would love to online grocery shop with a core selection of items in my basket.

The UK service Ocado provides this functionality, but due to its constantly rotating offers shopping in this manner is inefficient.

I would much rather lower prices than offers.

Clothing is so overpriced. A name-brand button-up shirt or pair of jeans is not worth $55 to me. Buying the first shirt and getting the next for 50% off (so 25% off both shirts) is still insulting.

When I go to JCPenny, Macy's, or other stores at our dying mall (I think that might be all that's left), I head straight for the clearance rack. I'll buy those clothes for $10 or $15, or less.

It's a low price, and I feel like I'm getting a "$55 shirt" for $10.

I know that the evidence in this case is very clear, and that consistent, low prices didn't work. In fact I think there are a few instances of other people attempting similar strategies like Brandless. But Intuitively I feel like there must be a place for the consistent low prices model. Maybe intuition is just dead wrong in this case, or maybe we're just waiting for some visionary to turn up and everyone will be talking about how crazy it is no one managed to do that strategy before.

My liberal TL;DR: JCPenney failed in switching from coupons to fair and transparent pricing, not because "people love bargains", but because everyone else on the market is manipulating people with bargains.

Honesty loses to dishonesty on the market.

Again, as evidenced by this phenomenon, humans are not rational, they are emotional and rationalizing.

This is barely worth reading. I thought there would be more in it, but just read the TLDR in the comments.

TLDR:

> Low prices make us feel like we're tightwad bastards (Scrooge McDuck style). But bargains make us feel special and smart. And they allow our brains to change the narrative, "I didn't spend $60, I saved $45".

Wow. So much subjective.

They lost ~$1Billion in a year. The customer voted.

Why people never bargain for branded products and mall shops ?