Indeed, Augustin wants to shift to a “Figure it out” pricing model that’s centered around educating consumers about Emilia’s competitive everyday prices. Augustin observed that the problems surrounding the way customers treat Emilia now are that customers are deal-obsessed, and they don’t understand that Emilia has “valuable” clothing even when not discounted. It seems like he wants to target that, by shifting their perspectives. He did not take the perspective of his customers to understand why they aren’t getting value out of his products. This is important because its easy to make generalizations and claims based on what you want the company to do and how you want the company to succeed, but at the end of the day that’s easier said than one. Why do customers care about the discounts so much? Why is the store keeping away other valuable customers?
If this is at all related to JCPenney, I completely understand. A store like that has, to my knowledge, become desolate of trends and anything attractive to young people, and may only attract frugal middle-aged women. What would make someone like me want to shop there? Better marketing, better branding and partnerships with things that are new and attention-grabbing. Probably completely changing their style, or having a good variety of good quality clothing. Aside from just my opinions, Augustin could take an opportunity to interview and ask his customers how they feel about Emilia, how they interact with it, and what they value the most from it. Why do they only purchase discounts? How do they respond to the same item at the same price, but labeled as sale vs not labeled as sale? I would encourage him to test using his existing pricing model before making drastic changes. From there, he can move away from the discounts-only model to doing discounts on certain days, or providing discounts in other ways like a membership or points system.
