In its second-largest acquisition, Amazon buys the company for $970 million.
J.C. Penney Co. pioneered the American chain store in the Wild West, and it’s still a frontier player. The retailer, with Internet sales reaching $75 million this year, put up its first Web store five years ago.
JCPenney.com was first accompanied by a toll-free telephone number for customers who wanted to place orders. The company accepted its first online orders two years later. Today, the site is supported by an e-commerce business unit that represents the fastest-growing part of the $30.7 billion corporation.
Richard Last, executive vice president of JCP Internet Commerce Solutions, attributes the e-commerce unit’s success to its ability to leverage the assets of the department store’s traditional business.
“J.C. Penney is a well-respected name,” says Last, ticking off established house brands like Arizona Jeans, St. John’s Bay and Stafford. The company also boasts a database of more than 52 million shoppers, along with 1,100 stores and an infrastructure that supports a $4 billion annual catalog business.
Each part fits neatly into J.C. Penney’s e-commerce strategy. One of 14 call centers opened to handle telemarketing and catalog orders, for instance, now deals exclusively with inquiries from Internet shoppers. No matter where an order is placed, the retailer’s policy is delivery within 72 hours, a pledge backed up by six regional distribution centers.
Along with having orders shipped to their homes, Web shoppers can pick up their goods at any bricks-and-mortar store, catalog desk or Eckerd drug store, another division of the company. “Our target customer,” says Last, “is a working woman who may or may not want a Federal Express package left at her front door when she’s not home.”
The company’s catalogs further promote its Web store: The URL appears on every other page of its books, for example. Inserts in the Christmas, spring and fall catalogs also have raised awareness about the Web store. Whatever the advertising channel-direct mail promotions, in-store displays or offline ads-the company’s Web site gets a plug. Its most recent television ads, for instance, invite consumers to “come in, call up, or log on.”
Behind this invitation is the retailer’s powerhouse database and information technology infrastructure. Its complete catalog assortment, more than 200,000 stock-keeping units, is available online. These combined databases help market the Internet business and fulfill orders.
Last acknowledges that merging back-end systems with the Web site’s front end posed huge challenges. The biggest was displaying the entire contents of the catalog in a Web-friendly format. Site developers have added 3D modeling, “zoom rooms” and other features to improve the detail that shoppers see.
“The catalog doesn’t translate well to the Web,” says Last, “so we had to rework our content and processes.” That meant not only tossing out a business model based on a traditional catalog mailing cycle, but making sure that customers get the level of information and help they’re seeking online.
Penney’s transition from bricks-and-mortar to clicks-and-mortar never would have happened without support from top management, says Last “Change of this magnitude has to start with a commitment from senior management.”