I’m going to tell you why I’m an idiot and why J.C. Penney CEO Ron Johnson needs to realize that he needs idiots like me to succeed.
Johnson, CEO for the past year, has had a rocky start, primarily because his idea of doing away with silly mark-up and discount games treated consumers like they were idiots. His “honest pricing” plans resulted in big declines in sales for the Dallas-based retail giant.
Why is that? Let me ’splain. No, there is no time. Let me sum up.
The fact is, we’d like to believe we make rational decisions when we buy things, but we don’t. People who understand this, who don’t try to outsmart the game, succeed.
I don’t shop at J.C. Penney, but I do shop at Banana Republic, which is like the JCP of my generation, only with the husky-men lines that men like me usually need. (I make it work.) Just about every day, I get an email from someone at Banana Republic, the subject line of which begins “40% off …”
Now, I don’t have to tell you what a math genius I am. Let me just say that I realize that if I get 300 e-mails a year telling me just about everything in the store is 40 percent off, then the original pricing is bulsh. The price for that sweater or pair of slacks is inflated, and they keep marking the price down to what I’ll actually pay for it, and we all pretend I’m getting a deal.
It’s a stupid dance, but I play along because, holy crap, did you see what I got today for 40 percent off! And it’s all so slimming!
The fact is, we’d like to believe we make rational decisions when we buy things, but we don’t. We buy Apple products that may not be as fast or as cheap as competitors, but they look kick ass and they’re simple to use, and those are pretty important qualities when it comes to electronics. We buy clothes that are too expensive but tell ourselves we got a great deal so long as it comes with a sales tag.
We are, quite simply, not as smart as we think we are. We are retail dullards.
People who understand this, who don’t try to outsmart the game, succeed. I heard a great story this week from a former insider at a huge national company that sells its wares on the Internet. He said the company hired a VP of marketing with a stellar reputation. My friend — super smart, creative, the whole magilla — was appalled at said marketing genius’ process.
“She has a team of kids out of trade school who can barely Photoshop. She has them crank out hundreds of ads per day,” he explained. “No rhyme or reason to them. Then they load everything up into the ad channels and see what performs. They take what is stat significant, then iterate on those hundreds of times (again, no thought process). They were crazy excited when the addition of a 1-by-1 pixel pink square resulted in massive gains.
“This process directly resulted in huge profits. I'm talking $50 million-plus in revenue. Because [people are] batshit.”
And this is the problem with Ron Johnson, who has tried to outsmart the market. I am dumb. I will continue to buy overpriced crap that is marked down 40 percent simply so I can say I got a deal. People will click on boxes with pink squares on them.
Another buddy, who has covered the company, says he needs to let JCP have its sales, and somehow brand the new stores as a totally different concept. Try your honesty crap there, because it won’t work on me, or others like me, because we like to be lied to when we’re browsing through your store. Because you may be smart, but people are batshit.
Elsewhere
Mark Davis is an idiot. No news there.
The City Council is full of idiots. No news there.
So, Dems are gonna turn Texas blue? I’ve heard this before. I’ll have much to say about this next week.
Retweets
No, YOU compare state/federal forms filed by Perry, Dewhurst. I’m going to lunch.
Compare state/federal forms filed by Perry, Dewhurst RT @texastribune: Weak disclosure laws keep public in dark trib.it/XylrmF
— Emily Ramshaw (@eramshaw) January 24, 2013The "honest pricing" strategy at JCP doesn't work.
