Wednesday, JCPenney CEO Ron Johnson unveiled details of a major overhaul that JCPenney stores are about to undergo. Based on WWD’s report this morning, nothing will go unchanged--save for the name of the store and its passable ecommerce component.
Johnson is focusing on the brick and mortar stores and his plans for those sound a little familiar. That’s because they’re similar to those of another mass retailer who recently announced a new retail strategy--Target. While JC Penney won’t necessarily have the same type of rotating limited edition collaboration component as The Shops at Target, their new selling floor format is the same idea. It’s all about “shops.”
Instead of the open selling floor you would find in a JCPenney today, with all of the racks together, there will eventually be 100 individual shops dedicated to each brand. This decision was made based on the success of JCPenney’s Sephora shop-in-shops, which generate more sales per square foot than the rest of the store.
MNG, JCPenney’s collaboration with mango, also has a shop-in-shop, so it will be interesteing to see the retailer’s other designer collaborations given the same treatment. Like Target, JCP’s roster of designer collabs is growing. Joining MNG, Nicole by Nicole Miller, I Heart Ronson and Olsenboye, will be “L’amour,” a Juniors line by Nanette Lepore.
Like Target there will also be a rotating component to keep things interesting. Each month, every JCPenney store will undergo a “radical transformation” with new visuals and products.
The other big news from the press conference was a new pricing structure, wherein all merchandise will be priced lower for everyday and clearance sales will be eliminated; and the announcement of Ellen Degeneres as the new face of the store’s ad campaigns.
While all of this will reportedly cost the company a whopping $800 million, much of which will be spent on rolling out the shops, executives are saying the changes will lead to $900 million in annual cost savings by 2013. If that's true, it's hard to see this overhaul as a bad idea.
A potential problem with the shop-in-shop format is shoppers who don't care about what brand they're buying and just want, say, a pair of pants. The format relies on individual brand identities being strong enough to attract customers. Of course, it worked for Sephora because it's such a well-known cosmetics brand; but does that mean it will work for, say, Arizona? At the same time, it seems cleaner and more structured than the way JCPenney and many department stores are now. For us, this sounds like it will make going to JCPenney less of a disorganized nightmare than department store shopping can often be.