J.C. Penney rings up 25% of store sales via mobile devices

March 7, 2013 12:55 PM

One-quarter of all J.C. Penney Co. Inc. store sales are coming through mobile point-of-sale devices, and all store associates will have handheld iPod Touch devices by the end of this month, CEO Ron Johnson told Wall Street analysts last week on the chain retailer’s year-end earnings call.

J.C. Penney, No. 20 in the Internet Retailer Top 500, is in the process of overhauling its information technology platform with technology provider Oracle Inc. An early outcome of the I.T. upgrade is the mobile point-of-sale system that store associates can access with iPod Touches from Apple Inc., No. 3 in the Top 500 Guide.

“Within one month, every employee on the floor of a J.C. Penney store will carry an iPod and be able to check out customers anywhere in the store,” Johnson told analysts. As of two weeks ago, “25% of all transactions were conducted on a mobile device,” he said. “In this quarter we will start to see product information, training and all of our employee support systems go directly to employees through our in-store Wi-Fi networks on these iPods.”

The use of mobile devices in stores is catching on as chain retailers use them to assist shoppers with such services as checkout and inventory status, and the iPod Touch is gaining ground as the device of choice among several other chains including Recreational Equipment Inc., No. 64, Moosejaw Mountaineering, No. 276, and Alex and Ani, a jewelry and accessories chain retailer.

REI is currently rolling out iPod Touch devices to employees in its 120 U.S. stores, enabling them to help customers look up product information online, check inventory availability, place online orders and pay for items without waiting in line, says Mark McKelvey, REI’s divisional vice president, retail solutions.

For now each location is using just a handful of the devices while managers test how to use them most effectively, but REI plans to make mobile shopping more prominent in stores over time, he says. For example, in future stores, McKelvey says he foresees saving square footage devoted to fixed checkout counters by instead adding more mobile checkout devices to the floor.

The base price for an iPod Touch is $199.

While many customers are embracing the ability to check out in the aisle, McKelvey cautions that store employees will have to learn how to identify when shoppers are ready and not approach them too early. Otherwise, they might block impulsive or last-minute buys, he says.

Freeing store associates to assist shoppers in the aisle was the reason Moosejaw implemented iPod Touch devices in its nine stores, says Eoin Comerford, CEO. The mobile devices help keep store associates on the floor where they can interact with customers for the duration of their visits, including checkout. “That’s where we want our associates to be, on the floor engaging with customers, not behind a register,” Comerford says.

As of last summer, orders placed on from within the outdoor gear and apparel retailer’s stores accounted for 10% of total store sales, Comerford says. That was an increase of 25% from the prior year, he says. Moosejaw did not disclose store sales.

The retailer’s two newest stores, in Natick, MA, and Boulder, CO, have only two payment terminals, down from three to four available at Moosejaw’s older stores. 60% of all transactions at the new stores are completed on the mobile devices, Comerford says. Newly hired associates at all stores are now trained on how to check out customers on the mobile devices before they are trained on how to use the cash registers.

Reducing checkout lines in its stores before the 2012 holidays approached was a goal for Alex and Ani LLC, No. 909 in Internet Retailer’s Second 500 Guide. To accomplish that, the retailer co-developed with mobile technology provider Mobiquity Inc. a mobile checkout system that combines an app on an iPod Touch with a cradle that enables payment card swiping, bar code scanning and receipt printing. Alex and Ani outfitted each of its 24 stores with several of the mobile checkout systems. “Mobile checkouts have given the store environment a more intimate feel, and improved the flow of customer traffic while almost eliminating lines,” says Alex and Ani chief technology officer Joseph Lezon.

Alex and Ani says the mobile checkout system was in part responsible for a 318% increase in store sales year over year during the 2012 holiday season.




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