Pricing

Gift card sales are expected to reach $100 billion in 2012, but after years of being a win-win for retailers, consumers are starting to take back the gift card power thanks to a highly profitable market: gift card resale.

Amid increased competition online to win shoppers’ discerning budgets, several midtier retailers have signed up with an online startup Netotiate (which it said means negotiate over the net) to allow shoppers to negotiate merchandise prices with them online.

Staples has awarded five small businesses $50,000 in free advertising and cash as part of its “Give Your Small Business the Push It Needs” contest. Selected from hundreds of video entries submitted on Staples’ Facebook page, each of the five small businesses will receive a total of $50,000 in local cable television advertising and cash in their home market.

Being fair and being loyal aren't the same thing. But can one engender the other? The question hit me when reviewing J.C. Penney's annual report, which reveals its new pricing strategy, Fair and Square, could produce a fair number of zeros in the coming months — i.e., declining sales. As coupons, price cuts and other discounts have essentially trained consumers not to pay full price (and to wonder what the full price on anything really is), the retailer walked away from the madness. Fair and Square, it said: everyday low pricing, with just two sales a month on out-of-season wares.

Structural nuances can mean the difference between a successful gift card program and a very successful program. Accordingly, I've identified six gift card management approaches that work well as long as they correspond to what retailers seek to achieve from their respective gift card programs:

According to research conducted for Coupons.com, a growing number of consumers are seeking out and using digital coupons. These same consumers, it turns out, are highly educated, affluent and big shoppers. According to the research conducted by GfK Knowledge Networks, digital coupon users make 69 shopping trips per year compared to 57 for the average shopper; spend $55.05 per trip vs. $44.87 for those not using digital coupons; and plan to go shopping within two days of either printing out a coupon from a site such as Coupons.com or downloading the offer to a loyalty card. 

Shoppers want to think they're getting a good deal. By taking advantage of sales and using coupons, they get that feeling. J.C. Penney claims it's offering "every day" low prices, which isn't true. It may fool the nonshopper, but not the shopper.

In their ongoing tug-of-war for consumers' grocery carts, Wal-Mart has again beaten Target on prices, according to the latest analysis from Kantar Retail. It won by the widest margin in seven iterations of the survey.

Target is reaching out to its vendors as part of a potential new pricing strategy to up its competitiveness with both online and brick-and-mortar rivals. The retailer has sent a letter to some of its vendors just as J.C. Penney is about unveil a sweeping overhaul of its pricing strategy. J.C. Penney plans to eliminate many of the promotions shoppers see in its stores.

J.C. Penney appears to be radically altering the way it operates by offering what it hopes will be a clearer way for consumers to determine exactly what they're paying for merchandise. The process will cut through the mind-boggling task of determining what something costs by doing away with cents on price tickets in certain cases. For instance, an item that cost $19.99 under the old system will now be $20.