Nationwide Closures
The current closures of JCPenney locations come as no surprise.
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Between 2020 and 2021, the retailer saw more than 100 locations close its doors for good. This string of closures happened after the store failed for bankruptcy.
Hitting Several States
JCPenney has announced several closures over the next few months.
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The retailer will close its doors at locations in Maine, Alabama, Texas, Maryland, Minnesota, California and Connecticut.
Decision Impact
Thousands of employees and devoted customers are impacted by this decision.
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The retailer, which has been around for 120 years, could be on the way out.
Combatting the Digital Age
In the digital age, traditional retailers face challenges like never before.
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Since 2000, department store sales have decreased by 40%.
Stores in Operation
JCPenney still has 660 stores in operation across the country.
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However, its competition with e-commerce has caused a loss in market share.
Amazon’s Market Share
In 2020 alone, e-commerce sales increased by 44%. Amazon corners half of all web-based retail spending in the U.S.
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Conventional retailers battle to contend with digital convenience.
Pandemic Increases
The pandemic sped up the shift to web-based shopping. During lockdowns, retail traffic in stores decreased by 60%.
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Numerous purchasers grew new, enduring digital shopping habits.
Personalization of Shopping
The personalization of shopping experiences has been revolutionized by artificial intelligence. Artificial intelligence-powered recommendations have been found to drive 35% of Amazon’s deals.
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Retailers put billions into artificial intelligence innovation yearly.
Immersive Experiences
Retailers have also focused on making immersive in-store experiences. Up to 40 percent more people visit experiential retail stores.
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Stores have events, workshops and interactive displays.
Seamless Integration
Retailers have the opportunity to integrate online and offline operations seamlessly.
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73% of customers are shown to use multiple channels while shopping, and buy-online-pick-up-in-store (BOPIS) sales increased by an impressive 208% in 2020.
Customer Service
Top customer service remains significant for physical retailers. For a better customer experience, 86% of customers are willing to pay more.
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A bespoke customer service can increase sales by up to 20%.
Shifting Focus
JCPenney is shifting its focus to beneficial locations and computerized development.
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The organization intends to decrease overhead costs by 25%. Online deals currently represent 30% of total revenue.
A Billion-Dollar Plan
JCPenney is taking action by spending more than $1 billion to improve customer experience across its stores.
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The task is being led by the company’s CIO, Sharmeelee Bala, who is responsible for the global technology systems behind JCPenney.
Supply Chain Upgrades
As part of the retail giant’s reinvestment strategy, JCPenney will invest $40 million to update the equipment and infrastructure of its distribution center in Reno, Nevada.
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The revamp will prioritize order efficiency and speed for online shoppers.
A Major Investment
JCPenney’s CEO, Marc Rosen, remains hopeful that upgrading supply chains will get the retailer back on its feet.
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“When we announced our $1 billion reinvestment strategy last year, this is exactly the type of upgrade we envisioned for our supply chain,” said Rosen.
Half a Billion Back to Customers
The retailer is set to give half a billion dollars back to customers as it revamps its loyalty program.
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JCPenney members can now earn double the rate of points compared to the old system.
More Rewards
With the new loyalty scheme, customers will earn one CashPass point for every dollar they spend.
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Patrons with a JCPenny card will earn 1.5 points for every dollar spent. They will also get a $10 CashPass reward when they hit 200 points or on their birthday.
Keeping Its Customers Happy
JCPenney has over 20 million members who shop at its stores about five times a year.
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The company expects to deliver over $500 million in rewards to customers. Katie Mullen, customer officer at the retailer said: “We want every trip to JCPenney to be worth it.”
Rewarding Patrons
JCPenney is joining several retailers that are improving their loyalty programs during the “retail apocalypse.”
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Mullen said: “Enhancing our rewards program is an important piece of how we bring value to our customers. We want to continue to earn the loyalty of America’s diverse working families.”
Embracing Technology
Retailers should embrace innovation and technology to remain relevant.
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60% of retail CEOs think that computer-based intelligence will significantly affect their industry. By 2025, it is anticipated that the global retail market will reach $31.7 trillion.
New Tech in Retail
A significant element of Bala’s strategy to turn JCPenney’s crisis around is to incorporate AI into the company’s everyday functions.
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Bala said: “We’re using AI to create more efficiencies in our ways of working, from implementing tech automation to help our team deliver more efficiently to using AI tools to help with reporting and analysis.”
Enhancing Customer Experience
JCPenney is not just using AI to streamline work behind the scenes. It is also using artificial intelligence to enhance customer experience.
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Bala said: “With customers, we’re using AI for skincare analysis as part of our partnership with Revieve.” JCPenney’s self-diagnostic tools can now help customers personalize their shopping experience and quickly find the best products for them.
High Hopes for the Retailer
Despite JCPenney’s dire situation, the owners remain optimistic amid the closures.
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They insist that they intend to open more locations rather than close them.
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