What Will It Take for JCPenney to Succeed?

Joe Skorupa
Editor at Large
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By Joe Skorupa

As the reality of CEO Ron Johnson’s early failures sink in at JCPenney, I asked retailers to weigh in on the prospects for its long-term success. I did this at a live event and the response was surprising. I also asked about showrooming, mobile POS, and the rising influence of the marketing department in retail. It was a pop quiz about the hottest topics in retailing, and I captured the data electronically. Here’s what I found.

If retailers had celebrity status, then former Apple retail boss Ron Johnson would be one of the superstars. But since taking the helm at JCPenney bad news has spilled out of its Plano, Texas, headquarters like circulars falling out of fat Sunday newspapers. The stock is tanking, losses are piling up ($163 million last quarter) and the company has reversed course about foregoing promotional pricing, which had been touted as the cornerstone of its future success.

At the recent Retail Technology Conference (RTC), which is hosted by RIS, I asked the more than 120 retail attendees what they thought is the biggest hurdle facing JCP’s transformation.
I had assumed the top answer would be getting shoppers to respond to a bold new approach, but this answer came in a distant third. I also thought overcoming resistance from corporate culture would be highly ranked, but it wasn’t. This was a big surprise, because JCP has been furiously juggling senior level executives in recent weeks. And finally, I thought upgrading technology to support new initiatives would be a major factor, especially since Ron Johnson has actually cited it as a major inhibitor.
But retailers placed two different hurdles at the top in a tie. They are: effectively changing its brand image, and patience in the face of pressure to stick with the plan.
Is it possible for JCP to change its brand and become more like Apple? Retailers are skeptical at the moment. And if it doesn’t happen soon, will Johnson’s board be prepared to absorb short-term pain to achieve long-term success? This is clearly what everyone in retail is waiting to see.
Here are results from the JCPenney polling question:
What is the biggest issue facing JCP’s transformation?

Effectively changing its brand image                                 32%
Patience in the face of pressure to stick with the plan     32%
Getting shoppers to respond to a new approach                18%
Overcoming resistance from corporate culture                 9%
Upgrading IT to support new shifts                                      9%
Another big topic in retailing today is showrooming, the practice of shoppers using stores as product display rooms and then purchasing online. I thought for sure that shifting to unique products would rank highly, but it did not. Here is a ranking of the best responses retailers can take to combat showrooming:
What is the best response to showrooming?

Emphasize personal in-store services                              39%
Create a fun store experience                                           27%
Make online retailers pay state taxes                               14%
Support price matching in stores                                      13%
Shift to unique products                                                     6%
Not all questions on the pop quiz produced surprising results. When asked about the current status of mobile POS in stores the overwhelming majority said they were researching or testing now, which was to be expected considering all the buzz about mobile POS today. Here is the breakdown of the answers:
What is your organization’s approach to mobile POS in stores with full checkout capability?

Researching or testing now                                                  64%
Have a full or partial roll out today                                     11%
No plans for mobile POS with checkout                            10%
Planning mobile POS without checkout                                8%
No plans for mobile POS of any kind                                   7%
Drilling deeper into mobility I wanted to know which functions retailers are planning to deploy in stores. The ability to do inventory/product checking is a function that consistently tops mobility priority lists and it does so here, too, even edging out POS. Other choices seem like no-brainers, but since I wanted to know the top choice by retailers I limited the answers to one. Clearly, inventory and product checking is emerging as a best practice in mobile retailing.
What is the top function you are or you will use on mobile devices in stores?

Inventory/product check                                                     30%
POS (with or without checkout)                                        25%
Sales assist/clienteling                                                       20%
Accessing store website                                                     10%
Save the sale/endless aisle                                                    8%
Loyalty program                                                                     5%
Task management                                                                   3%
The final question I asked was to assess the impact of the growing influence of the marketing department in retail. The responses indicate the impact will make retailers stronger through a greater emphasis on analytics and BI, as well as a stronger focus on customer-centricity.
As influence of the marketing department rises in retail where will the biggest impact be felt?

Greater emphasis on analytics and BI                                 45%
More emphasis on customer-centric strategies                33%
More emphasis on innovation and experimentation          12%
Bigger budgets for marketing IT                                            6%
Increasing importance of digital channels                            3%
This is what a large group of retailers think about the hottest topics in retailing. What’s your opinion? I would like to know. Leave a comment here and let’s see where the conversation goes.

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