So, where did J.C. Penney go wrong? Well, while we admire their attempt to change, they attempted to destroy over a century’s worth of price conditioning consumers have been through with department stores and pricing in general. They weren’t completely off base, as consumers with more and more access to information (comparison shopping engines, consumer reports, etc.), are beginning to realize that the value of products is determined much differently than a sticker would suggest. Yet, assuming that most soccer moms (and dads) wouldn’t fall prey to the colorful print ads tucked within the comics section in the Sunday paper, overlooks how much the majority of consumers value “winning” the retail game. Simply, deflating the perceived value causes customers to value the actual product less.

Almost no one ever pays full price. In fact, studies show that people are much more inclined to pay $25 for an item valued at $50, than paying for the same item without a sale at $25. It’s all about the “price framing” of a product that creates a perceived value, which all leads to the excitement of getting a good deal