JCPenney Takes AI Into the Store to Appeal to Cost-Conscious Shoppers

At they navigate a market heavily influenced by inflation, retailers must use a range of tools to respond to the needs of value-driven consumers.

In a conversation with PYMNTS, Katie Mullen, chief customer officer at JCPenney, discussed the preferences of value-driven consumers in 2024 and outlined the ongoing efforts of the retailer to align with these preferences and maintain relevance in the consumer market.

“This economy has been tough for our customers who are still feeling pressure on their discretionary spending. Now more than ever, families are looking for fashion and quality at a great value,” said Mullen.

Mullen noted that over the holiday season, customers shopped for a wide range of items, including fragrances, diamond jewelry, cozy blankets, and holiday decorations, along with perennial favorites like the retailer’s St. Johns Bay sweaters.

Mullen pointed out that when customers had tight budgets during the holidays, they put others first and were okay with delaying their own purchases if needed. Mullen credits JCPenney’s ability to adjust to changing customer habits to smart investments in technology and supply chain capabilities. This flexibility lets the company respond well to changes in how people shop.

How AI Is Impacting JCPenney

“We have used AI for many years to help us optimize our delivery to customers, make choices about when to replenish products to stores, which potential new customers to market to and what products to recommend to what customers,” said Mullen.

“At the same time, we know that AI can degrade the customer experience when it isn’t applied thoughtfully.”

Although AI technologies can bring positive changes, like personalized recommendations and improved efficiency, its careless deployment can have negative consequences. Mullen recognizes that thoughtless AI implementation can lead to issues such as inaccurate product information, algorithms struggling with individual preferences, and too much reliance on automation, which might alienate customers who prefer human interaction.

Furthermore, AI applications might unintentionally perpetuate biases, resulting in unfair outcomes. To address these risks, JCPenney highlights the importance of a careful approach to AI implementation, including ethical considerations, ongoing monitoring for bias, transparent communication with customers, and maintaining human oversight. Prioritizing a thoughtful use of AI allows businesses to enjoy its benefits while safeguarding and improving the overall customer experience.

AR’s Role in the Consumer Experience

“We’re stepping into the AR space where it makes sense,” said Mullen.

In 2022, JCPenney forged a partnership with Revieve to introduce AI- and AR-driven tools designed specifically for online shoppers. These tools enable users to virtually explore JCPenney Beauty products.

Beyond facilitating virtual product try-ons, the tool employs AI to assess skincare concerns based on a user’s selfie, ultimately providing personalized skincare routine recommendations, and allows JCPenney to connect with a broad audience, reaching individuals who may not have the opportunity to visit one of their physical stores.

What’s to Come in 2024

“The last few years have been hard on our customers, and they’re looking to make their dollars stretch further every chance they get,” said Mullen.

“Our customers are careful about where their dollars and cents are going and we’re going to continue showing them the incredible value we offer in our products and services, while also showing them that as a company, we celebrate who they are.”

That said, according to Mullen, JCPenney is gearing up to intensify its communication about inclusivity, placing a heightened emphasis on the importance of ensuring fashion accessibility for individuals of all body types and sizes.

Mullen also touches on the emphasis on in-store experiences.

“We see customers of all ages looking for compelling in-person shopping experiences,” said Mullen.

In the fall, Mullen shared that JCPenney announced a $1 billion plan to make the customer experience better. Looking ahead to 2024, Mullen says customers can expect more investments and a focus on making experiences enjoyable, whether in person or through online channels.