Pricing

When it comes to retail pricing strategies, customers are giving retailers the clear message that they get satisfaction out of tracking and finding the best prices. We may not understand why, but it's enough to know that it exists. Ask J.C. Penney. The retailer "lost" its customers by taking the thrill out of the chase. "Maybe Shoppers Don't Want ‘Fair and Square’ Prices After All," wrote Time's Brad Tuttle in an article about the hard lessons Penney's learned over the last two years. 

As retail brands evolve into omnichannel organizations, sharing and integrating data across channels has become critical to their success. In a session yesterday at the Internet Retailer Conference & Exhibition in Chicago, Stephanie Scheele, senior director of strategic intelligence for Vera Bradley, a retailer of fashionable handbags, accessories and luggage, discussed how the brand is using data collected online to dictate in-store pricing decisions. Scheele specifically focused on Vera Bradley's recently launched baby collection.

Amazon.com yesterday launched its virtual currency program, dubbed Amazon Coins. To kick things off, Amazon is providing all Kindle Fire owners with 500 free Amazon Coins, which are worth $5. "You can use the coins to buy apps and games, as well as items inside apps and games," Amazon said in a note on its homepage. Amazon also said Amazon Coins are available to purchase at a discount, for savings of up to 10 percent depending on how many coins you purchase.

Mickey Drexler, chairman and CEO of J.Crew, talks with Willow Bay from the Milken Institute Global Conference in Los Angeles about price pressure on brick-and-mortar retailers from e-commerce sites offering better value on merchandise.

In its simplest form, J.C. Penney's new sales plan is to raise prices on select items and mark them down periodically with sales and coupons. While there's nothing inherently wrong with this model, consumers should be aware that prices have spiked significantly on collaboration lines, and we've yet to see any sales to bring them back down to previous levels. 

Just about every day, a shipper asks me what FedEx or UPS incentive they should be achieving for their specific spend level. But it doesn't work that way. While overall volume and revenue certainly play a role in pricing, the discounts you get from UPS and FedEx are largely based on their understanding of your distribution footprint and package characteristics, which are directly tied to the carriers’ "cost to serve" pricing models. 

There's a wonderful Yiddish reflection that goes, "The difference between genius and stupidity is genius has its limits," which may explain the difference between Apple stores and J.C. Penney/jcp. What's interesting is the strategies for both retailers were set by the same person - Ron Johnson, formerly SVP of Retail Operations for Apple, currently CEO of jcp. It was J.C. Penney when he joined and announced his long and short-term strategies. Long term: re-do all of the stores in the 111-year old chain into mini-boutiques-under-one-roof, which

Wayfair.com, the largest online retailer of home products and furnishings, today announced the launch of Daily Fair, a new flash-sale feature to engage shoppers with significant savings on home furnishings and decor. Daily Fair will deliver limited-time sales with steep savings on up to 1,000 different products a day, bringing the thrill of the deal to all Wayfair.com shoppers. With a selection of more than 5 million products from 5,000 suppliers, Wayfair.com is uniquely positioned to source great deals and savings across a wide range of home product categories at an unprecedented pace.

Best Buy has announced that it will officially throw its hat into the permanent price-matching ring, Reuters reported. Beginning on March 3, the electronics retailer will match online prices of competitors, with plans to also shorten its return policy, a company spokesperson said on Friday. Best Buy has struggled in the midst of its discount and online rivals, with many claiming that it's become a showroom for Amazon.com.

The struggling department store chain this week will begin adding back some of the hundreds of sales it ditched last year in hopes of luring shoppers who were turned off when the discounts disappeared, CEO Ron Johnson told The Associated Press. Penney also plans to add price tags or signs for more than half of its merchandise to show consumers how much they're saving by shopping at the chain — a strategy used by a few other retailers. For store-branded items such as Arizona, Penney will show comparison prices from competitors.