Engaging shoppers for more than a century

JCPenneys evolution pays off in stores, online and in catalogs

By Lisa Casinger -- Kids Today, 6/1/2008 12:00:00 AM

This year JCPenney marks 106 years in business. James Cash Penney opened The Golden Rule, a dry goods and clothing store, in Kennerer, Wyo., in 1902 and today the Plano, Texas-based department store has more than 1,000 stores across the country. JCPenney is ranked No. 6 on Kids Today’s list of Top 20 kids home furnishings retailers with an estimated $420 million in kids home furnishings sales in 2006.

The company has quite the track record. By 1951 store sales had exceeded $1 billion. The company issued its first catalog in 1963 and those sales passed $1 billion 16 years later. JCPenney ads were first seen on TV in 1972 and it launched its Web site, jcp.com, in 1998. By 2005 the site surpassed $1 billion in sales. Last year the company achieved its second-highest sales and earnings in its history with $19.9 billion sales and $1.1 billion in earnings.

Analysts applaud the retailer for reinventing itself in the 1990s. Like many major department stores it tried to be all things to all people trying to sell a little of everything. It also dabbled in unrelated businesses like banking and drug stores. During the first several years of 2000 the company started moving toward smaller, single-story footprints and generally recreating its look to be more up-to-date, fresh and hip.

Though the company planned on opening 50 stores this year, it has cut that back to 36 because of the economic climate. So far this year’s numbers have fallen drastically, with net income in the quarter ending May 3 falling 49.6%. Sales are off 5.1%. However, online sales increased 9% and the Web site continues to be the retailer’s fastest-growing channel.

JCPenney launched “Every Day Matters,” its new brand positioning last year. The focus is to offer an easy, exciting and engaging shopping experience.

The retailer hopes to make shopping easier by offering integrated channels (stores, Web site and catalog), mall and off-mall locations and better store layouts with more manageable aisles, better lighting and effortless checkout.

To ramp up the excitement, it’s offering more brands (including private label) and more services, and it’s working to improve the merchandise flow so shoppers find what they want when they want it.

Engaging consumers is also important. JCPenney continues to build on its corporate social responsibility by investing in its local communities and becoming more eco-friendly. It has empowered its associates to exceed customer expectations and build relationships with them.

The J.C. Penney customer is typically 35 to 54 years old with annual incomes between $40,000 and $100,000. Through its own research, JCPenney says it is the No. 1 department store destination for teens; it’s the most popular apparel store for Hispanics; the No. 2 retailer of women’s apparel in the U.S. and the No. 1 children’s apparel retailer in major malls.

Aside from a selection of good/better/best products ranging from family apparel, home furnishings, jewelry, footwear, accessories and beauty, JCPenney also offers furniture, bedding and accessories for kids and babies’ rooms. Most of these items are found online and through its catalogs, though, as space is limited in the brick-and-mortar stores. The product assortment for infant/youth also includes activity/play yards, feeding, care/safety items, diaper bags, strollers, car seats and toys.

Though exclusive and private label products make up about half of the overall product mix, J.C. Penney does carry many well known brands in its infant/youth departments. There’s bedding from Kids Line, Bananafish, CoCaLo, Halo and Little Miss Matched, kid-sized furniture from Levels of Discovery and Kid Kraft, mattresses from Simmons, Serta and Sealy, glider rockers from Best Chairs and Dutailier and gear from Chicco, Graco, Summer Infant and Kolcraft.

One of the retailer’s corporate initiatives is going green. JCPenney was the EPA’s 2008 Retail Energy Star Partner of the Year (it’s the second year in a row the company’s earned the honor). The recognition came from the retailer’s use of in-store energy management and its retrofitted energy-saving lights.

In 2007, it also won a separate EPA award for four energy-efficient stores in Washington that used 35% less energy a year than other stores of the same size. The company said it is constructing and retrofitting more stores to meet the same standards this year.

JCPenney has collected and recycled cardboard boxes for more than 30 years and in 2006 alone it recycled more than 95,000 tons of cardboard and 12,000 tons of plastic hangers and other plastic.

Not only does the company strive to operate on a more eco-friendly level, it is bringing in more eco-friendly products such as organic cotton bedding, towels and rugs as well as green mattresses.

The Natural Care by Danny Seo line of latex mattresses from Simmons Bedding is offered online and at select stores. The green bedding bears the J.C. Penney “Simply Green,” mark, an exclusive store designation that helps customers make environmentally conscious choices.

Simply Green products range from private brands (including the children’s apparel brand Arizona) to national and exclusive brands. This spring the retailer began offering two cribs called Renew that tie in with the American Forests Global Releaf Project to help restore forest ecosystems in the United States affected by disasters such as hurricanes and wildfires. Ten trees have been planted for every crib purchased, and to date J.C. Penney has planted more than 38,000 trees. It also offers a 100% organic cotton sleepsack from Halo.

The company also is making efforts to appeal to younger shoppers. This summer, it plans to introduce private label lines of colorful dorm room furnishings called Dorm Life and back-to-school wear by designer Kimora Lee Simmons called Fabulosity.

JCP.com is one of the two main distribution channels for its infant and kids’ home furnishings and accessories. Catalogs are the other.

Sales on jcp.com have increased by 9% and it is the company’s fastest growing retail channel.