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 to turn around the retailer, there was hope that simplifying the company's pricing strategy would woo back consumers. J.C. Penney eliminated sales and coupons, offering its customers cheaper everyday prices. 

The change led to "quarter after quarter of abysmal sales, repeated barrages of layoffs and a gross lack of customers," 

. Some took this to be a clear sign: Consumers crave big sales and coupons over day-to-day deals. 

, J.C. Penney spokeswoman Daphne Avila admitted in a statement that the company was returning to a mark-up-to-mark-down strategy:

We discuss the psychology of shopping deals and how retailers are using that data to reel in consumers.

LEARN MORE ABOUT THE PSYCHOLOGY BEHIND SHOPPING:

J.C. Penney to Revise Pricing Methods and Limit Promotions


From 2002 to 2011, the average cost that Penney paid for an item stayed about the same, from $9 to $10. During that period, though, Penney increased the average price tag to $36 from about $27. Yet even as the price tag rose, customers ended up paying less because of coupons or sales. "Now most things are on 60 percent markdown, and every time we do that, we're discounting Penney's brand," Johnson said. (The New York Times)


"A nationally advertised brand has power in the marketplace because it creates an emotional connection to the consumer. A brand is nothing more than a mental representation of a product in the consumer's mind. If the representation consists only of the product's attributes, features, and other information, there are no emotional links to influence consumer preference and action. The richer the emotional content of a brand's mental representation, the more likely the consumer will be a loyal user." (Psychology Today)

Decoding the Secret Language of Price Tags


Why do the prices at retailers like Costco and Target usually end in .99, but occasionally feature a quirky 7 or 4 for items in the clearance section? Obsessive shopping experts and store employees have been leaking the "secrets" behind these price-tag code numbers — which can help consumers tell the difference between a so-so sale price and an unheard-of bargain. (Time)

What Neuroscience Tells Us About Consumer Desire


It's easy for businesses to keep track of what we buy, but harder to figure out why. Enter a nascent field called neuromarketing, which uses the tools of neuroscience to determine why we prefer some products over others. (Harvard Business School)

Free Slurpees come with a twist: They may cost you


Those 7-Eleven folks sure must be dumb — as foxes. When they handed out 4.5 million Slurpees last July 11, a funny thing happened: Slurpee sales for the day rocketed 38%, says Nancy Smith, vice president of marketing. (USA Today)

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When J.C. Penney eliminated sales and coupons in favor of low every day prices, consumers went elsewhere. How do retailers price items to encourage consumers to spend?

How sales and coupons persuade consumers to spend more money

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