JCP recently announced a change in its pricing strategy, which now includes a price-match guarantee.
I see two basic issues in taking this approach:
> I don't know how much the customers will trust Price match guarantees, especially when the items you are dealing with are NOT "signpost" items. Certainly such guarantees work very well with competition, as you want to signal to your competition that any price reduction war by the competition will be matched. It's a clever strategy when you yourself don't want to go low price / price war route. But hey, here JCP is the company that is going the low price route.
> With Price Match guarantee, JCP is making a conscious choice of attracting price sensitive customers -- who rank very low on loyalty. The stores will have to rely on volumes, and PMG will probably assist towards it. But now the stores will get crowded with not so profit generating customers, and due to factors like "butt-brush" effect, the experience conscious customers will seek other avenues.
Some of the pricing experts have expressed that JCP's strategies are turnaround, courageous, revolutionary, decisive, etc.; certainly JCP's strategy is very bold - as it challenges some of the traditional wisdom. I am now very curiously looking forward to Q2 and Q3 results.
I see two basic issues in taking this approach:
> I don't know how much the customers will trust Price match guarantees, especially when the items you are dealing with are NOT "signpost" items. Certainly such guarantees work very well with competition, as you want to signal to your competition that any price reduction war by the competition will be matched. It's a clever strategy when you yourself don't want to go low price / price war route. But hey, here JCP is the company that is going the low price route.
> With Price Match guarantee, JCP is making a conscious choice of attracting price sensitive customers -- who rank very low on loyalty. The stores will have to rely on volumes, and PMG will probably assist towards it. But now the stores will get crowded with not so profit generating customers, and due to factors like "butt-brush" effect, the experience conscious customers will seek other avenues.
Some of the pricing experts have expressed that JCP's strategies are turnaround, courageous, revolutionary, decisive, etc.; certainly JCP's strategy is very bold - as it challenges some of the traditional wisdom. I am now very curiously looking forward to Q2 and Q3 results.
