Can J.C. Penney reinvent itself with its offbeat lab store?

Discussion
Photo: JCPenney
Nov 07, 2019
Matthew Stern

J.C. Penney has spent years trying to differentiate itself as middle-of-the-road mall department stores have declined in popularity while nimble, experiential, niche retailers have caught on. As the chain tries to figure out what works for its brand, it announced the launch of a new lab/store location, which is geared towards experimenting with trendier offerings that are a big departure from what customers traditionally associate with the J.C. Penney brand.

Can J.C. Penney reinvent itself with its offbeat lab store?
Photo: JCPenney

The lab store, called Penney’s, opened in the Dallas-Fort Worth area early this month, as per the Fort Worth Star-Telegram. The store features an in-store salon/spa, an area where visitors can take selfies using a range of backdrops, a barber shop and store-hosted classes on topics like makeup application, cooking, health and wellness. J.C. Penney CEO Jill Soltau described the store as, “the fullest articulation of our customer-centered strategy, an investment in our future and a lab to inform decisions to return J.C. Penney to sustainable, profitable growth.” Experiments that prove successful with store visitors could lead to chain-wide rollouts.

Other sources report that the store location also features an area for video gaming and a yoga/fitness studio. 

Penney has made numerous moves under multiple business leaders to reinvent itself since department stores began to experience a downturn.

At various points during the tenure of former CEO Marvin Ellison, Penney experimented with store greeters, expanded its selection of baby-oriented merchandise to capitalize on the closure of Babies “R” Us and reintroduced appliances (after pulling out of the white goods market 30 years earlier). Mr. Ellison left the chain in 2018 to join Lowe’s and Ms. Soltau discontinued appliance sales early this year.

Can J.C. Penney reinvent itself with its offbeat lab store?
Photo: JCPenney

Since Ms. Soltau arrived as CEO, the chain has experimented with initiatives like rolling out a new Instagram-inspired private label apparel brand and introducing branded outdoor shops into some locations in partnership with St. John’s Bay Outdoor.

One long standing partnership has stood out as a bright spot as J.C. Penney’s appeal has dwindled — its relationship with Sephora. A recent Motley Fool article, however, predicts that younger shoppers’ interest in competitor Ulta could snuff J.C. Penney’s saving grace.

DISCUSSION QUESTIONS: Will J.C. Penney succeed in discovering what its customers are looking for by experimenting far afield from its core offerings at its lab store concept? What features do you see being added to J.C. Penney that could possibly help turn the chain around?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"I think it’s very exciting and I am thrilled that they’re taking this action with a small test. The way forward is still rooted in brick and mortar."
"J.C. Penney needs to try something different to excite their customer base and I believe the “lab” concept is required to pull this reinvention off."
"I like this, a lot. Sure, they should’ve done it 10 years ago, but at least it’s happening."

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22 Comments on "Can J.C. Penney reinvent itself with its offbeat lab store?"


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Mark Ryski
BrainTrust

Experimentation and testing are critical to finding new ways forward, and so I applaud management for undertaking these initiatives. That said, this seems like changing light bulbs and the color of the life vests on the Titanic. J.C. Penney is facing huge challenges – existential challenges, I believe. They need to focus on fixing the basic/core operating model of the business. It’s hard to say what they might discover “works” in the lab store, but the initiatives described hardly sound like true innovations and more like a laundry list of buzzword concepts being thrown against the wall.

Georganne Bender
BrainTrust

Kudos to J.C. Penney for trying something that is completely unexpected. Doing the same things it has always done, just differently, isn’t enough. Regardless of your age, Penney’s image is that it’s where your mom shops.

But will this new concept work? It’s only in one location so it won’t make much of a splash – people in Chicago don’t care about retail in Dallas. What’s in it for me? Will this lab store turn the chain around? I’m an optimist but I wouldn’t take this bet.

Ben Ball
BrainTrust

Kudos for the aggressive approach to reinvention — but the biggest problem J.C. Penney faces is the base store. Offering a flock of attractive services in one location probably has some appeal, particularly in an upscale market like the one in Dallas. But throwing any one of these innovations into a traditional J.C. Penney store in Paducah will stick out like a sore thumb and fail.

RICHARD HERNANDEZ
Guest

I agree with you Ben– this format wouldn’t play in Paducah. J.C. Penney would have to tailor their stores to demographic they serve with bits and pieces of the new idea, but as others have stated, this is only window dressing. J.C. Penney needs to figure out what they want to be in regards to their core business.

Bob Phibbs
BrainTrust

I think it’s very exciting and I am thrilled that they’re taking this action with a small test. The way forward is still rooted in brick and mortar.

Art Suriano
BrainTrust
I do not see this concept in any way as a game-changer for J. C. Penney. The brand has a huge identity problem caused by years of poor leadership, not knowing who they were and doing a horrible job of communicating to customers why they should shop them. But let’s look at the pattern. Was Marv Ellison that strong as a CEO? He was right getting the company’s finances in order but not the man for creating a new “buzz” about the brand. And now he’s at Lowe’s. How are they doing? Marginal at best. Jill Soltau was not a great leader at Joann Fabrics and did very little to build their brand. At best, the chain survived and now she’s the CEO of J. C. Penney. I see a more significant problem today with CEOs who are borderline at best as leaders shifting around from one chain to another and accomplishing very little. J. C. Penney has a considerable presence because of the number of stores they still have. In many malls, they are… Read more »
Jeff Sward
BrainTrust

Several of these initiatives could very well work. And some may prove to be viable in “A” stores only. It gets very simple very quickly. What worked? What is now scalable? On what time/action calendar? With what budget? Now take a deep breath. None of this will work if they don’t change product, pricing, and presentation. J.C. Penney didn’t need a lab store to study, learn and implement what is working for Primark. Primark will be no less a threat tomorrow than they are today if J.C. Penney doesn’t deal with its merchandising mindset. Changing the thinking isn’t easy, but it also doesn’t have to cost a couple billion dollars.

Heidi Sax
BrainTrust

I’m all for Penney’s. Concept stores are a tried and true tested way of determining how to evolve in brick-and-mortar (just ask digital natives like Warby Parker and Allbirds). My guess is that, despite the optics, this experiment is focused less on barber shops and store-hosted classes and more about getting the merchandise mix right and overall branding right. As others have pointed out, it would be cost-intensive and time-consuming to replicate these features at scale.

Mohamed Amer
BrainTrust

The only way to discover is to leave the core comforts and venture into the unknown. It’s high risk, high reward effort that keeps the brand alive and in touch with changing consumer expectations.

Ms Soltau and team should be lauded for their gutsy decisions to reinvent the in-store experience. The energy to change can never be tapped in an environment shackled by the unstated legacies of long standing ways of doing things.

Rich Kizer
BrainTrust

I’ll take a shot at this. Perception is everything and I don’t believe the name Penney’s has much brand equity today, which I believe surfaces a challenge. Perhaps that perception could be changed by a new name with the Penney’s name below. At least it is new, and that could pay dividends over the old name and its perception. But I do think this concept thinking is brilliant and demonstrates the desire and enthusiasm of the leadership to make something great happen.

Lee Kent
BrainTrust

I’m with Rich on this one. If, and only if, the Sephora customer has exceeded the old Penney’s customer, will something trendy take effect immediately. Otherwise it will take great cultivation and marketing and with the old name with a tired following, not much of a chance. I wish them all the best, however, I’m not seeing it in the cards. For my 2 cents.

Ken Morris
BrainTrust

J.C. Penney needs to try something different to excite their customer base and I believe the “lab” concept is required to pull this reinvention off. Retail is theater and you can’t just guess at what the customer wants — you need to test the concept in a lab. Whenever you make technology changes you test them in a lab first. There is no difference here other than that the mistake you make by rolling out a poor store concept has lasting implications in the erosion of your customer base. You can’t just back off a store concept change the way you can a software change.

Maybe J.C. Penney should look to successful department store operators outside the U.S. like Harrods, KaDeWe, Selfridges, Galeries Lafayette or Le Bon Marché for marketing talent that understands theater.

Kai Clarke
BrainTrust

No, this move by J.C. Penney to reinvent itself with a lab store will fail. The reason is very straightforward; malls are failing and so are department stores. Like all department stores, J.C. Penney is trying to keep a dying dinosaur alive. It cannot. The retail shopper is going online, not to malls, and certainly not to department stores. J.C. Penney would have more success by converting all of its’ remaining stores to hardware stores, which are still in a fast growth stage, instead of continuing to redefine a dying department store model. Why not?

Brian Kelly
Guest
14 days 12 hours ago

I’m so happy J.C. Penney is testing. Cue the unicorns and rainbows!
What a load of rubbish. What else could they do and retain any shareholders?

How about a cold hard understanding that the middle class of the U.S. is fading. The archaic department store model (Field set his up in 1914) is the problem. American consumerism no longer bears any resemblance to the past. Whether it be 1914 or 1950 in a GI Bill-fueled post war suburban expansion.

Malls and mall anchors are going away for a reason, and the changed consumer situation is it. Stores will remain and thrive, just not those that are irrelevant.

Stores are too large. There are too many of them. The out of date regal merchant model remains and is compelled to fill them and that is the financial sea anchor that will take them to the briny red depths.

As we know, “retail ain’t for sissies!”

Lee Peterson
BrainTrust

I like this, a lot. Sure, they should’ve done it 10 years ago, but at least it’s happening. And as far as what’ll work, who knows? Could be anything. If DSW’s nail salon was successful, anything’s possible!

Cynthia Holcomb
BrainTrust

Reinvention rarely works. J.C. Penney might look to Nordstrom, a master of reinvention over a decades-long, continuous reinvention while still staying true to both product and customer. The lab seems like noise, a distraction of focus to avoid the real challenge — does J.C. Penney have a place in 21st century retail? Such thinking requires tremendous bravery on the part of leadership.

Outsiders are connecting the dots, as insiders avoid hunkering down to problem-solve for a real reinvention of JCP. Meanwhile, distractions like spa treatments, selfies, video gaming, and barbershops seek to engage a customer to buy services rather than products. Promoting services rather than product indicates internally JCP leadership does not have a relevancy plan in place.

Jeffrey McNulty
BrainTrust

I am optimistic about the future of J.C. Penney because of their concerted efforts to embrace change, innovation, and creativity. Jill Soltau is infusing the chain with enthusiasm and the ability to start creating new opportunities (like this offbeat lab store) that can and will create differentiation.

This turnaround effort will take time! However, there are signs of optimism that the organization is at least heading in the right direction. I applaud their efforts to reinvent themselves during this tumultuous retail environment. I am looking forward to hearing the feedback from their new corporate initiatives.

Craig Sundstrom
Guest

This sounds very much like one of the 17 (19? 26?) “reinventions” we’ve seen since the Johnsonaylpse (which I guess was the granddaddy of them all).

On one of the other threads today, a comment was made about “not thinking like a startup.” I’ll offer that JCP thinks TOO much like one: endless experimentation rather than just taking the basic model and working with it; it’s not some nimble startup with (just) a website and a few stores, it’s a mature retailer with hundreds of them. Dependable merchandise at reasonable prices should be the goal … “for people who like department stores but don’t like Macy’s” may be a hard tagline to build a business model around, but I think it’s their best shot.

Ricardo Belmar
BrainTrust
Penney’s is undoubtedly taking the right approach directionally by introducing a new concept that is nothing like the Penney’s store most shoppers have experienced. Gone are the overflowing racks of products, the dull gray color scheme, and lackluster styling in their apparel merchandising. The overall look and feel, more white space, brighter color scheme, and significantly improved merchandising is quite a departure — and a welcome one, I think. The new concept is a case of less is more — 13% less inventory, shows in the upscale look and feel. But is it enough? And is it too late? As others here have pointed out, the brand has an identity issue. Too many consumers think of JCP as where their parents shopped. They need to be bold and daring to create a sense of intrigue that will draw shoppers back in. Sephora wasn’t enough. Will services do it? It’s taking a page out of the Nordstrom playbook. If done right, and that means scaling it across their stores successfully, they could rise above the dull… Read more »
Casey Golden
BrainTrust
14 days 6 hours ago

It’s an interesting move for J.C. Penney and could build a relationship with new customers that are not discount-driven, but it’s going to take more than one location and a lot of work. Relaunching the brand Penney’s needs to be spot on, there is no room for failure. I like it and give kudos for a bold move.

William Passodelis
Guest
13 days 23 hours ago

Well, I am glad they are doing something and some of these things may prove to be helpful. As Mr. Clarke pointed out, there is a big problem because the department store — and the mall– are dying. I, however, like Penney and I shop there. I would like to see them survive. There is a second huge problem: a giant, burying debt load! I am most concerned about their debt.

I do wish them the best!

Karen McNeely
Guest

Clearly I’m in the minority, but I 100% think that Jill and her team have this on the right track. They’ve done their research, they are testing rather than rolling out knee jerk strategies that had no basis in what their customers or potential customers are looking for. I suspect this test will be successful The key will be in the execution of rolling it out to more stores in the chain.

wpDiscuz
Braintrust
"I think it’s very exciting and I am thrilled that they’re taking this action with a small test. The way forward is still rooted in brick and mortar."
"J.C. Penney needs to try something different to excite their customer base and I believe the “lab” concept is required to pull this reinvention off."
"I like this, a lot. Sure, they should’ve done it 10 years ago, but at least it’s happening."

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