Sephora in J.C. Penney

Sephora succeeds inside J.C. Penney

Time flies when business is good. One positive for J.C. Penney over a decade during which the chain has had its share of problems has been Sephora. The beauty retailer has given consumers a reason to enter Penney locations when they may not have done so otherwise.

Yesterday, the retail partners announced they would open 60 new Sephora shops inside Penney stores between April 29 and June 17. Today, the concept can be found in more than half of Penney’s 1,000 locations.

“J.C. Penney was one of the first department store retailers to forgo the traditional beauty counter and work with a global beauty brand to build a dynamic Sephora shop inside its stores,” said Angela Swanner, senior vice president for Sephora inside J.C. Penney, in a statement. “Ten years and nearly 600 locations later, Sephora inside J.C. Penney has become a leading beauty destination that will continue to be a growth driver in 2016 and beyond.”

Among the new shops schedule to open inside Penney stores this year will be a new Sephora flagship at the Northridge Mall in Salinas, CA. At 3,000-square-feet, the shop will be larger than the typical Sephora (2,000-square-feet) found inside of Penney’s stores. According to a press release put out by the companies, the flagship will offer a “larger assortment of emerging brands, innovative merchandise displays and expanded space for service offerings.” The companies have targeted November as the grand opening for the flagship.

In addition to its presence inside Penney stores, Sephora has also made a place for itself on jcp.com. Sephora is able to offer an expanded selection of products online and provide content on makeup trends, gift ideas and upcoming events in stores.

BrainTrust

"Sephora is not a store-within-a-store idea along the same lines as the branded shops rolled out during the Ron Johnson era."

Dick Seesel

Principal, Retailing In Focus LLC


"These two businesses are a great fit and Sephora definitely helps J.C. Penney seem a little hipper which can only help as they try to attract younger consumers."

Zel Bianco

President, founder and CEO Interactive Edge


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Adrian Weidmann

Managing Director, StoreStream Metrics, LLC


Discussion Questions

DISCUSSION QUESTIONS:
Why do you think Sephora inside J.C. Penney has worked when other store-within-a-store concepts have not for the department store chain? Are there other store-within-a-store concept partners that you think would be a good fit for Penney?

Poll

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Dick Seesel
Dick Seesel
7 years ago

Sephora is not a store-within-a-store idea along the same lines as the branded shops rolled out during the Ron Johnson era. Instead, it gives J.C. Penney a chance to be category-dominant in a business (cosmetics) that a traditional department store needs to succeed. And (in J.C. Penney’s case) the absence of key brands like Clinique and Lancome made it essential to build the business around a proven concept and name that customers had already embraced.

Macy’s has been quicker to embrace this idea in categories like sunglasses (Sunglass Hut) and athletic shoes (Finish Line). The idea might work in other businesses at J.C. Penney but it needs to go all-in with the idea, as it did with Sephora. For now, Penney’s bigger challenge is to convert Sephora shoppers in its stores to apparel and accessory shoppers, too.

Zel Bianco
Zel Bianco
7 years ago

Sephora is a good match for J.C. Penney because they carry a wide range of beauty products and the prices vary. Sephora also seems to have a consistent shopper experience and the appropriate amount of sales associates while the shopper experience at J.C. Penney seems to vary greatly. These two businesses are a great fit and Sephora definitely helps J.C. Penney seem a little hipper which can only help as they try to attract younger consumers.

Robert DiPietro
Robert DiPietro
7 years ago

This store-within-a-store model works for J.C. Penney and Sephora because it is 1.) relevant for the consumer 2.) the right brand to use in the “parent” store and 3.) a key category for the retailer.

For J.C. Penney another concept to work may be a key category — shoes. Maybe partner with a digital provider to expand in-store assortment like a Zappos.

Naomi K. Shapiro
Naomi K. Shapiro
7 years ago

The answer is often given in the story, showing that the retailer and partners have done their homework before launching. In this case: “the flagship will offer a ‘larger assortment of emerging brands, innovative merchandise displays and expanded space for service offerings.’”

Ken Morris
Ken Morris
7 years ago

Leased departments in the department store segment have always been standard operating procedure. The leased department partners are typically not the brand stature of a Sephora. It may be that department stores were more interested in building their own brand vs. someone else’s. Jewelry is almost always leased but not with someone like a Tiffany.

The Sephora brand appeals to the right demographic (18- to 45-year-olds) which J.C. Penney needs to tap attract new, younger shoppers that wouldn’t normally shop there. They are appealing to my children and not my mother. The segment has to wake up to the Millennial shopper and move the brands to appeal to this segment. Maybe adding the MAC brand, IKEA, H&M, Zara or Tiffany would shake up the segment. I believe J.C. Penney has hit upon a very successful approach.

Craig Sundstrom
Craig Sundstrom
7 years ago

Because it’s a strong brand OUTSIDE JCP, i.e. it works more despite Penney’s presence than because of it. Well, perhaps that’s not entirely true. JCP had the advantage of a large customer base which it could introduce to the name, and, in turn, Sephora brought sophistication to lesser malls at low cost and risk…so it was a true symbiotic relationship. Now that Sephora is a stronger brand, I’m not sure that mutual benefit still exists, though.

As for others, I think the Martha Stewart concept was the right idea — if only it hadn’t involved Grand Theft Accessories — so perhaps something in furniture or housewares.

Brian Kelly
Brian Kelly
7 years ago

Sephora works inside of JCP because Sephora works outside of JCP. Well that and somehow JCP has pulled it off, therefore positive comparisons with the non-JCP Sephora. 500 thus far with 60 more on the way. Well done, JCP you’ve found the win-win!

Beauty is a key category for JCP to have credibility in order to pull off its turnaround as a purveyor of Fashion. If it was “home grown” it would not work. (see Sears and COB) It is about as good as it gets for positive brand equity transfer.

JCP needs a boost in home. Partnering with Sur la Table could be a worthy addition.

JCP also needs a boost in center core. I think that play is much more tricky. Match-making is quixotic in Fashion and not for the feint of heart. Plenty of failed experiences litter the landscape. Portfolio or stand alone, what brand has the right elasticity and durability? Indeed….

Or as we like to say and never share, “retail ain’t for sissies!”

Kai Clarke
Kai Clarke
7 years ago

Sephora clearly offers a complimentary relationship for JCP. The real key is clear testing to discover other models which also work in the same manner. This will require a focus on just this, for a dedicated effort by the company.