Will being more like Home Depot work for J.C. Penney?
J.C. Penney is looking more like a home improvement store with every passing day. That’s not such as stretch given that Marvin Ellison, CEO of J.C. Penney, is drawing on his experience as an executive at Home Depot in his effort to turn around the department store chain.
Penney recently announced plans to expand the sale of major appliances to 100 more stores while adding home improvement categories, including ceiling fans, home safes, power tools and wallpaper, to its merchandising mix. Management also announced a pilot program to test a bathroom remodeling service in addition to an existing deal it has with Trane to install heating and air conditioning equipment.
“Roughly 70 percent of our customers are female and over 70 percent of those customers own homes. So, what they have said to us is we will buy appliances from you if you sell them. So we sold them,” Mr. Ellison recently told CNBC’s Courtney Reagan. “We set up 500 showrooms. It’s exceeded expectations so far, so we’re very pleased.”
Mr. Ellison said Penney’s push into new home product categories and services is made possible because the chain’s customers “trust the brand.” In many cases, Penney is returning to services it once offered years ago but later dropped to concentrate on soft goods.
As it has done with appliances, Penney plans to roll out home services using a “multimarket test-and-learn approach,” Mr. Ellison said in a press release issued yesterday. The department store chain plans to debut in-store displays promoting its home services this spring. It has also launched a digital storefront — jcpenneyhomeservices.com — where customers can shop for services and schedule in-home consultations.
While not naming Sears outright, Mr. Ellison clearly believes Penney can pick off sales from its rival. “We have one competitor with more than $13 billion a year in the appliance business that’s giving away market share,” he said.
Yesterday, Penney also announced plans to pilot smart home technology in an unspecified store this spring. The chain said it will partner with leading brands such as Samsung “to provide simple home automation.”
- JCPenney CEO: Here’s why we’re expanding into home services – CNBC
- JCPenney Accelerates Its Expansion In Home Services By Testing Replacement and Remodeling Programs – J.C. Penney
- J.C. Penney adding more services and hard goods, even bathtubs – The Dallas Morning News
DISCUSSION QUESTIONS: Do you see a significant upside for J.C. Penney as it adds home improvement product categories and services? Should stakeholders be concerned that Penney will neglect soft goods and other important categories as it homes in on new opportunities?