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JC Penney CEO - "no quick fixes" in omni-channel retail transformation. (She can say that again!)

Stuart Lauchlan Profile picture for user slauchlan March 2, 2020
Another disastrous set of quarterly numbers is a reminder of just how far behind the digital curve JC Penney is.

JC Penney bag

In my experience, there are no quick fixes when you are turning around a major retailer.

That’s certainly a maxim that JC Penney CEO Jill Soltau appears determined to prove. The one-time retail darling of Middle America turned in another set of shocking numbers last week, with even the all-important Holiday season unable to prevent a 64% year-on-year drop in net income.

To be fair to Soltau, the seemingly irreversible decline in JC Penney’s fortunes began long before she sat down in the hot seat in 2018, stretching back over a decade to a disastrous repositioning by then-CEO Ron Johnson. But there’s no sign of the digitally-enabled turnaround that’s been promised since Marvin Ellison took over as CEO, prior to his sudden departure to make the same promises at DIY giants Lowes. There is however rather a lot of buzzword-compliant ‘management speak’, such as:

To rebuild the fundamentals of our business, we are making improvements ranging from our core store processes to our integrated digital strategy. We are now consistently reducing inventory, improving shrink, re-envisioning our merchandise and rolling out innovations, including curbside pick-up.

When curbside pick-up is regarded as an innovation, that’s indicative of a rather narrower definition of innovation than is needed at the moment. But there’s more:

Our deep research and data informed us as we developed our plan for renewal. We acted on our insights and stood up experiential physical initiatives to test capital-light concepts that enhanced the shopping experience while gathering customer feedback to validate our hypothesis.

Once JC Penney’s absent customer base realises that it’s missing out on “experiential physical initiatives”, they’ll be flocking back. The new “engaging, inspiring customer experience” includes “occasion merchandising” to “better connect with how customers live every day, move, chill, all day, on point, and shine.”

What that word salad means in practice is anyone’s guess. Soltau tries a deeper dive for clarity:

Our customers want a great experience, both for themselves and to share with family and friends. To create that experience, we put our customer insights to work…we tested four distinct concepts, all bold, low capital and quickly implemented. Next, we took our learnings and implemented them in a single store, where we featured our new ‘occasion merchandising’, improved visual merchandising and a redesigned shopping experience. From there, we tested customer receptivity and gathered feedback, taking our scalable learnings and quickly rolling them out to more than 90 stores.

Then, in November, we opened our brand-defining store, it is the fourth articulation of our customer commitments and the manifestation of the research, planning and hard work that characterised 2019. We are measuring over 100 test points in this lab store to inform our future actions as we put the customer at the heart of everything we do.

As for who that customer is, step forward the “all-in shopping enthusiast”. Soltau explains:

I have believed all my career that fashion is an attitude, it’s not an age. And we are very focused on the all-in shopping enthusiasts, these are customers who love to shop. They live life to the fullest. They are the most interested in their personal style. We like to think that they have a growth mindset. They are very confident, yet they are interested in input and to be inspired. They are the most connected with their family and friends. They see part of their job as an all-in shopping enthusiast to bring life an excitement into the lives of their friends and family. So, all of our efforts are around the all-in shopping enthusiasts and getting it right for those customers will halo on to other psychographic segments.


Psychographic segmentation is a fascinating ‘black art’ in its own right and certainly has useful applicability in omni-channel retail thinking. But there are basic ‘nuts and bolts’ aspects of JC Penney’s strategy that need tackling, such as bolstering its digital platforms.

One interesting comment Soltau makes is that the company regards its e-commerce site as “our flagship store”:

We think about our physical stores and our flagship store,, holistically in terms of how customers shop us. Our goal is to connect with them emotionally at every touch point of the customer shopping experience, from exploration to discovery to purchase, whether it's in-store, online or through our app…More than 80% of our sales are generated in our physical stores, yet nearly 90% of our customers actually start their path to purchase online.

She adds:

In terms of digital priorities, we are focused on the three paths of personalization and our affinity programs, as well as e-commerce and they are all interrelated. We have foundation there, but our complete focus is to connect more emotionally with the customer. providing to them what they most want from us in the way in which they want it.

Tasked with delivering on that is newly-appointed Chief Digital Officer Karl Walsh, most recently responsible for building out a global e-commerce business at Pandora Jewellery. But as one experienced exec arrives, another departs, in the shape of Chief Customer Officer Shawn Gensch, who’d only been in the role for 9 months. When the CEO is talking up the vital nature of customer centricity, that’s an unfortunate vacancy to have to fill.

My take

The JC Penney story has been one that we’ve followed at diginomica with increasingly low expectations of signs of life, from the ‘jam tomorrow’ declarations of the Ellison era through to the management consultancy-speak from Soltau. What remains absent is any reason for Middle America to fall back in love with JC Penney. In an age of omni-channel retail, the firm is hopelessly behind the digital curve and running out of time fast. There are only so many more stores left to close…

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