JCPenney Gets Extreme Makeover With Assist From Shoppers’ Smartphones

Hailing from the dawn of modern retailing, JCPenney (JCP) is reinventing itself as a slimmed-down digital-savvy merchant, connecting with customers by creating seamless journeys and 21st century experiences. That’s meant a makeover for how the storied brand defines engagement.

In a conversation for the series “Digital Payments Flip the Script: 10 Merchants and 10 Visions for Digital Transformation,” a PYMNTS and PayPal collaboration, JCPenney Chief Digital and Transformation Officer Katie Mullen told PYMNTS’ Karen Webster that as more physical retail resumes, digital now calls the tune.

“Some of the things that we are experiencing right now, I think, are the product of many years of transition,” she told Webster. “That’s the idea that customers walk around physical stores with their phone open, with an app open, and they’re looking at a listing on their app or on mobile website at the same time as they’re looking at physical product.”

That “smartphone as a shopping assistant” mentality is part of “the next normal” many pundits mused about for the first years of the pandemic. Now it’s just shopping. But the melding of physical and digital with payments choice is a new animal, and we’re getting more familiar with it.

Dividing consumer habits into the pandemic-inspired and those that were well underway before the health crisis, Mullen said smartphone-assisted shopping “was not COVID-driven, and it really shows us that consumers want an additional set of information than they can get from either channel alone.”

As pandemic-era accommodations like curbside pickup “stabilize back down to a normal go-forward level,” harmonizing expanded channels is a challenge of 2022.

She calls that “blur” — a smearing of traditional lines in both shopping and payments — and that’s where work is needed. Pre-pandemic, everything was its own channel, its own function.

Now, she said, “we’re in this world not only of selling channel blur, but we’re also in a world of blur between marketing and selling, and selling and loyalty, and loyalty and word of mouth. You start to have to manage all those pieces as distinct touch points with the customer, as opposed to separate end-to-end channels.”

See also: JCPenney Reportedly Could Buy Rival Kohl’s for $8.6B

Context Is (Almost) Everything

Even with post-pandemic normalization happening, there are unquestionably new expectations from shoppers on how to engage. Merchants must roll with these new dynamics.

“Where retail is going right now is that customers are engaging in real time in these micro bites that might be on a platform like TikTok, it might be on Instagram, it might be on Facebook, it might be on a retailer’s own platforms, but they’re bite size. What we need to think about is, ‘How do we make bite size interactions more cumulative and holistic?’”

That’s the contextual approach of engaging with customers wherever they happen to be and meeting them there, “especially where they are in the inspiration journey,” she said.

In other words, “if a customer starts a transaction online, should they be able to finish it in store seamlessly? Yes, that sounds logical,” she said. “If they’re starting something in store and they want to come home and think about it [and] check how it fits into their family finances and make the decision, well, great.”

“It’s the handoffs that we have to be much more deliberate in facilitating for customers,” she added. “That is how customers want to shop now.”

How human sales associates figure into this flexible flow is a work in progress, as commissioned salespeople don’t want to put in the work just for the app to get credit for their sale. JCP associates don’t work on commission, but it’s still part of Mullen’s calculus.

She said the company is “continuing to look at the promises that we’re making to customers and holding our teams accountable to what level of delivery we’ve made against those promises,” adding that “the reality today is the vast majority of our customers of all ages are engaging with us to some degree in multiple channels, both physical and digital. It’s a new way of thinking for our teams, but we’ve been lucky that everyone has embraced that.”

Read also: As Bidders Stalk Kohl’s, JCPenney’s 650 Locations and Customers Deserve 2nd Look

Venerable Brand, Meet Digital Shift

With this convergence of channels and experiences, payments become more complex, requiring the kind of transformational initiatives Mullen honed during her time as digital chief for Neiman Marcus Group.

Here again, there’s a certain amount of “blur” that merchants and their payment partners must bring into a unified flow that’s seamless for consumers regardless of channel or payment type.

“One of the things that I’m always looking to enhance as part of my digital remit is, ‘How do I get more people to create a profile, to save a credit card in that profile?’” she said. “Ideally for us that would be saving a PLCC card, or a co-branded card, as opposed to a multi-use credit card. But once I have them with an account with a profile, then it’s incumbent on me to make that easy for the customer to use that in any channel that they want to engage in.”

Noting that JCP is experimenting with buy now, pay later (BNPL) as part of its payments mix like so many retailers, Mullen said, “I think we’re all still in the process of figuring out what role each of those payment strategies have uniquely for different types of customers, or potentially for different occasions, when a customer might want to think about how do they get the best financing on a purchase given what their needs are at that time.”

Along with this contextuality, merchants need to strike the right balance because payments choice is increasing to the point where checkout options can paralyze the shopper.

“What I want for my customer is for them to be able to get from, ‘I know I want this item or this basket of items,’ to ‘The packet of items is on its way to my house’ as fast as I possibly can,” Mullen said. “Part of the challenge I think that we’re all wrestling with is the more [payment] options we put in the customer’s path, the more overwhelming that path can feel.”

Given the frugal profile of the JCP shopper — which has stayed consistent through the years — Mullen said this comes down to value that signals their importance.

“We’re staring that down and saying, ‘Are we giving enough value to our loyalty customer? How do we make that experience of being loyal to us more rewarding?’ because that’s really where we start to be in a two-way relationship with our customer, as opposed to being in a transactional engagement.”

That’s the danger now — favoring the relational over the transactional — and where JCP is focusing more efforts to dial down the purchase and pump up the experience.

“The key to loyalty is not only designing it to give the right value back to customers who have shown that loyalty to you, but it’s also about making sure that you can deliver that promise day in and day out,” Mullen saod. “It’s very hard to deliver experiential benefits at scale and consistency, especially when you’re talking about a fleet, like I have at JCPenney, of almost 670 stores. That’s a scale problem.”

It’s also where digital creates a new framework for retailers and their customers. Saying “the wonderful thing about digital channels is they grew up with this ethos of radical democratization of experiences,” Mullen explained it’s created more two-way communication between consumer and merchant, elevated by “a real deliberate convergence” of digital and physical retail’s “superpowers,” as she called them — trackability and human connection.