Description
He tried to respect his customers by giving them fair, honest prices without the manipulative fake discounts. In response, they abandoned his stores entirely and almost bankrupted the company. In 2011, J.C. Penney hired Ron Johnson, the visionary behind the Apple Store, to rescue the struggling retail chain. Johnson correctly diagnosed that the store's pricing model was a manipulative lie: prices were artificially inflated just so the store could constantly offer "70% off" sales. His radical solution was total honesty. He eliminated all sales, coupons, and fake markdowns, introducing "Fair and Square" everyday low pricing.The result was one of the most spectacular, immediate corporate suicides in modern business history. Sales plummeted by over $4 billion in a single year. This book dissects the catastrophic misunderstanding of consumer psychology.We explain the behavioral economics of "Price Anchoring." Johnson failed to realize that consumers do not want fair prices; they want the psychological dopamine rush of believing they won a negotiation and scored a massive deal, even if the "original" price was entirely fabricated.Learn the dangerous cost of absolute transparency. Discover why stripping away the manipulative illusions of retail pricing will instantly alienate your entire customer base.
