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Nearly 40% of JCP.com orders are picked up in stores

November 15, 2016 12:23 PM
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J.C. Penney Co. Inc. says consumers picked up nearly 40% of JCP.com orders at a local store in the fiscal third quarter ended Oct. 29.

That’s a huge number, especially considering the retail chain, No. 33 in the Internet Retailer 2016 Top 500 Guide, didn’t have buy online, pick up in store capabilities in place chainwide until earlier this year. Competitor Kohl’s Corp. (No. 19), by way of comparison, said earlier this week that 5% to 6% of Kohls.com orders were picked up in stores. Kohl’s rolled out in-store pickup capabilities chainwide in early 2015. Target Corp. (No. 22) has said consumers who order online and request in-store pickup account for 15% of Target.com’s volume.

57% of respondents to a survey Internet Retailer conducted in August said they had picked up an online order in a store. Of those, 73% said they did so to avoid shipping fees. The second most common reason was convenience, with 32% of respondents saying that the store was nearby and it just made sense to pick it up.

J.C. Penney offers free shipping on orders of $25 or more if a consumer will visit a store to pick it up, rather than have it delivered to their home. The free shipping threshold for home delivery is $99. If a product is eligible for same-day pickup—meaning the item is in stock at the consumer’s selected store—there is no purchase minimum.

Driving online shoppers into stores to pick up orders is important because J.C. Penney executives have said 40% of these shoppers buy more while in the store. It also gives the retailer the opportunity to fulfill that order from store inventory when available, which eliminates additional transportation costs for the retailer.

J.C. Penney is making improvements to its in-store pickup process. Previously, a consumer who visited a store to retrieve an online order had to visit a register or service desk. Now J.C. Penney is rolling out an Android-based app that will allow any clerk to assist a consumer in retrieving their web order.

“This is a classic example of what we call a second-mover advantage,” CEO Marvin Ellison said Friday on a call discussing Q3 results with analysts. “By utilizing updated technology to not only catch the competition but to leapfrog them, this new functionality along with our new mobile app, our improved store fulfillment and our enhanced delivery capabilities will increase revenue in the fourth quarter.”

J.C. Penney executives previewed what consumers can expect from it in the fourth quarter. Ellison said JCP.com will have 40% more SKUs available online than it had a year ago. The retailer also will compete on price. Starting Thursday, if a consumer finds a lower price advertised by a competitor within two weeks of purchasing the identical product at Penney’s, the retailer will refund the difference plus 5%.

For the fiscal third quarter ended Oct. 29, J.C. Penney reported:

  • $2.86 billion in sales, down 1.4% from $2.90 billion a year earlier.
  • A 0.8% decline in comparable store sales.
  • A $67 million net loss, compared with a $115 million loss.
  • The retailer did not report web sales.

For the first nine months of fiscal 2016, J.C. Penney reported:

  • $8.59 billion in sales, down 0.5% from $8.63 billion.
  • A 0.3% decline in comparable store sales.
  • A $191 million net loss, compared with a $382 million loss.

 

 

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