Where Should JCPenney Invest $1 Billion?

JCPenney announced plans to invest $1 billion through 2025 to further improve the customer experience and operating efficiencies after making “significant progress” in turnaround efforts in 2022.

“JCPenney is on strong financial footing and is steadily increasing relevance and frequency with our core customers,” said CEO Marc Rosen last week in a statement.

Rosen previously told the Wall Street Journal that the chain is renewing its focus on budget-conscious, middle-income shoppers with affordable fashion and housewares after previous management aimed wealthier and younger with trendy items and major appliances. He told the Associated Press last week that he believes JCPenney can fill a niche by offering lower prices than department store competitors while delivering a better service experience than off-pricers and online sellers.

JCPenney emerged from bankruptcy proceedings in December 2020 in a sale to Simon Property Group and Brookfield Property Partners. Shortly after that, Rosen was appointed as CEO to help in restructuring. Rather than trying to attract new customers, he aims to sell existing shoppers more.

As part of its self-funded $1 billion in investments, JCPenney’s more than 650 stores will receive brighter lighting and fresh paint. Checkout stations will be centralized, associates will receive mobile devices to gain better access to product information, and new POS sale systems will likewise enable better inventory reads.

Online, investments will be made to help JCPenney’s website and mobile app improve search functionality and product details, product reviews, and customized recommendations. Merchandising tools and supply chain operations upgrades are expected to help JCPenney fulfill orders faster, reduce delivery times, and better optimize local assortments.

On the product front, JCPenney’s beauty department has been revamped with an emphasis on inclusive brands following the defection of Sephora to Kohl’s. Also being emphasized are dress-up categories such as dresses and men’s suits as well as collaborations with designers and celebrities. National brands such as Forever 21 have been added, and private labels overall are being better defined.

Operationally, maintaining in-stock levels of basics like jeans, white T-shirts, and sheet sets and elevating messaging around the chain’s value proposition are priorities.

Beyond coupons and deals, JCPenney’s goal is to help customers better understand the value of the company’s products. Rosen plans to combine the deals with JCPenny’s loyalty program and mobile app to “help customers understand up front what they are paying.” Rosen told WWD, “It’s about making sure the customer understands the value we provide.”