December 26, 2000, 9:55 AM

Consumer trust and a three-channel approach drive J.C. Penney`s leap into virtual retailing

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“If a woman is in the home area, maybe she would want to buy other items to fill the home,” Pappajohn says. “It’s a way for customers to drive how they want to shop. Whether they want to shop or whether they want to shop and browse, we’re really looking at leveraging the power of customer relationship management.”

Further personalization will come through expansion of’s gift registries, another priority for Pappajohn. Although the site already provides wedding, graduation, home and baby registration, Pappajohn foresees registries for all types of occasions. “A 9-year-old could have his wish list on there. The parents could email the wish list to all his friends,” Pappajohn says. Ladd says she believes’s gift registries could provide another edge over its closest competitors. “None of the major online retailers have that. Target is the only other one, and you can’t yet sign up for it online,” she says.

Staying in the game

The site revamping is expected to benefit J.C. Penney corporate as well. “Part of the problem with J.C. Penney is they have not been able to pick the winners-the right products in the right area of the country-ahead of time,” says Evie Black Dykema, senior analyst, online retail, at Forrester Research in Cambridge, Mass. “Online data can help them achieve that.” also plans to continue to heavily market its popular name-brand lines, such as Arizona Jeans and Levis.

Pappajohn anticipates growth in’s auction site, part of the Fairmarket Network-in part because it lets the bricks-and-mortar operation test price acceptance.

“The auction is a great way to get rid of all the closeout merchandise from all of their stores, as well as from the online medium,” Ladd says.

Although is one of the bricks-and-mortar leaders in the online world, competition is nipping at its heels. Sears Robuck & Co.’s was ranked fifth for unique visitors to web sites in May, with a 12.4% buy rate, according to CyberAtlas. was ranked eighth. And the web sites of traditional apparel giants, such as Macy’s, The Gap and Old Navy, are not far behind, according to Media Metrix.

K mart Corp.’s, although it has a limited selection now, will offer more products than in a Kmart store by this fall, according to Ladd. K mart’s lead over others is Bluelight’s free Internet service; over 2 million people have signed up. “They have the names, phone numbers and addresses of the 2 million. Their challenge will be to convert them to Bluelight shoppers,” Ladd says.

In addition, Bluelight gives a run for its money in the home category, with its extensive promotion of Martha Stewart lines.

Still, Pappajohn considers the online leader, and, enjoys the challenge of competing in traditionally difficult categories on the web.’s categories, including apparel, home and general merchandise are going to be very big online, Pappajohn predicts, and he wants to be there when the customers arrive.


Christine Blank is an Orlando, Fla.-based freelance writer.

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