Home Critical To J.C. Penney Growth Strategy

At its 2016 analyst meeting, J.C. Penney Co. outlined a three-year plan to drive growth and financial performance, and the home department will play a key role.

In fact, home is one of three operations where the company said it would especially explore opportunities, along with beauty and special-size apparel.

J.C. Penney has initiated what it terms a “home refresh” to revitalize the operation and entice customers who want to update their homes. The refresh includes rolling out major appliance showrooms to about 500 locations and jcp.com, testing Empire Today flooring in three markets and adding Signature Design by Ashley to the furniture assortment in select stores and jcp.com. The company will also expand the number of Sephora shops inside store locations, accelerate The Salon by InStyle renovations, rejuvenate center core and emphasize fine jewelry.

J.C. Penney noted that it would also build value and differentiation through private labels and exclusive brands driving their penetration up to 70% of total merchandise sales by 2019. To do so, the company plans on eliminating labels that are no longer relevant to its customers and expanding popular existing brands to additional categories.

The company also said it intends to boost omnichannel execution particularly in mobile. A redesigned J.C. Penney app enables customers to locate items, apply coupons and access their rewards more easily. Shoppers now can complete their jcp.com purchases using a variety of shipping and pickup options, which has resulted in more than half of online orders stemming from or leading to an in-store experience, the company said. To enhance the existing pick up option, J.C. Penney has made 150,000 items on jcp.com eligible for same-day pickup at any store within four hours of an order placement. In addition, the company intends to provide a standard delivery turnaround of two business days or less to over 95% of the U.S. population, and has invested in state-of-the-art systems to support an enterprise-wide fulfillment strategy that minimizes markdowns and improves customer service.

“Since becoming CEO a year ago, the team and I have made considerable progress balancing the art and science of retail by improving our execution in omnichannel, marketing, store operations, supply chain and merchandising,” said Marvin Ellison, J.C. Penney chairman and CEO. “There is still much work to do, but I am confident that our focus on sales growth, new technology and expense management will continue to accelerate our turnaround and create shareholder value.”