JCPenney investing $1 billion on store, digital, tech upgrades to revive business
JCPenney unveiled an ambitious plan to revive its iconic but ailing 121-year-old department store business.
The company plans to spend more than $1 billion by the end of 2025 to remodel its stores, upgrade its online shopping experience, and improve its suppy chain capabilities to deliver online orders faster. The initiative is designed to fuel long-term growth and increase customer loyalty and frequency.
On a call with reporters, JCPenney CEO Marc Rosen, who took the helm in November 2021, emphasized that the investment is self-funded, with the chain not taking on any additional debt. (The company emerged from bankruptcy in late 2020 under new owners Brookfield Asset Management and Simon Property Group.)
“We have a strong cash flow,” Rosen said. “The billion dollars is coming from the cash flow the business is generating, not our owners or additional debt.”
Rosen added that the investments the chain is making builds on the progress it has already made this year, which includes more than a 5% increase in its customers’ shopping frequency, with the increase as high as 20% amid certain groups. It also builds on the launch of JCPenney Beauty, new product collaborations, completed store refreshes and improved digital shopping.
In determining the investment, Katie Mullen, chief customer officer, said the retailer talked to 15,000 customers to determine how to best meet their needs. She also spoke about Penney’s core customer group — which Rosen said includes teachers, medical workers and construction workers — and which the chain remains committed to.
“We are trying to attract more customers who look like our existing customers — America’s working families of all stripes — not moving away from our core customers,” Mullen said.
Along with the upgrades, the company plans to honor its legacy by bringing back the brand’s classic logo and go-to-market through digital, prime time, social, in-store and print marketing materials.
Here’s a rundown on the areas targeted by the new investment:
•In-store physical and tech upgrades. To make the in-store experience more inviting and productive, the company’s more than 650 stores are undergoing varying updates for an enhanced look and feel and improved technology tools for employees. The improvements include new and brighter lighting, an improved fitting room experience, centralized checkouts and a fresh coat of paint. The plan is to remodel anywhere from 50 to 100 per year, reported the Associated Press.
Additions such as a new point-of-sale system will better integrate with inventory. The chain is also upgrading its in-store Wi-Fi networks will provide faster connections for customers and employees.
“We have done remodels in over 100 stores so far and are really pleased with the results we are getting,” Rosen said. “I recently visited a remodeled store and it looked like a brand new store.”
•Enhanced digital capabilities. The company will continue to upgrade its website and mobile app with improved search functionality and product details, customer product reviews and more customized product and styling recommendations. These upgrades will enable customers to enjoy a more rewarding shopping experience across channels.
•Merchandising and supply chain optimization. Merchandising tools and supply chain operations are being upgraded so that customers can shop the right products at the right place and at the right price.
New inventory management systems, among other tools, will enable greater accuracy in decision-making and efficiency in execution, allowing JCPenney to cater to customers’ unique needs, fulfill orders faster and reduce purchase delivery times, the company said. Enhanced tools will also scale the retailer’s ability to provide customized and localized product assortments in tune with local community preferences and trends.
The company is also introducing a reinvigorated customer strategy, ‘Make It Count’, which is designed to remind customers that “JCPenney stands with them, matching their efforts to make every day, dollar and date night count,” the company said.
“JCPenney is on strong financial footing and is steadily increasing relevance and frequency with our core customers,” stated Rosen in a company release. “We are poised for continued growth and know that the surest path to success is by focusing on our customers. That’s why we are wholly committed to serving hardworking families across America with the attention, value, quality, choice and experience they deserve. Our customers are passionate, resilient and tireless in their efforts to make every moment count. We’re here to help them do that every day.”