PLANO, Tex. — J.C. Penney Co. Inc. is aggressively pursuing a strategy aimed at doubling its annual Internet revenues to $2 billion.
The retailer’s agenda spotlights trendier lifestyle fashions with more compelling visuals, such as bigger thumbnail images and shorter, snappier and less obtrusive copy. Almost every Penney’s Web site fashion page has break-out “instant outfit” suggestion boxes that encourage multiple-item purchases. For example, shoppers who click on a ruffled white blouse will be shown a variety of other coordinating looks, from jeans and jackets to earrings and shoes.
Competing with rivals such as Macy’s and Wal-Mart, Penney’s is rolling out merchandising and technological innovations aimed at making Web site navigation fast, easy and focused.
Penney’s is shortening the Web address to jcp.com from jcpenney.com and linking the site to stores and catalogues with a branding campaign that guides shoppers to the Internet when they can’t find a product. The jcp.com logo will be stamped on Penney’s catalogues, direct mailers, and shopping bags and will be highlighted in broadcast and print advertising.
“The centerpiece of our new Internet merchandising strategy is the jcp.com brand and dramatically playing up the close and inherent synergies among our three-channel focus of stores, catalogue and Internet,” John W. Irvin, president of the catalogue and Internet division, said in an interview.
Chicago-based comScore Media Metrix said jcpenney.com had 11.24 million unique visitors in March, compared with 9.47 million in the same month last year, a 19 percent increase. As a comparison, macys.com had 5.02 million unique visitors in March and 4.35 million in the year-ago period, a 15 percent boost, and walmart.com had 21.72 million unique visitors in March versus 19.64 million last year, an 11 percent increase.
Cyberspace is becoming an ever more intense retail battleground. Federated, Macy’s parent, is earmarking $130 million for a two-year project to improve and enhance its direct-to-consumer business. Neiman Marcus, Nordstrom, Wal-Mart and Target have also upgraded their sites over the past year.
The Web is the 1,017-unit Penney’s chain’s fastest-growing division, Irvin said. Internet sales constituted about 37 percent of total direct sales (catalogue and Internet) in 2005, compared with 30 percent in the previous year and 23 percent in 2003.
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The $18.8 billion retailer hit the $1 billion mark in Web revenue in January.
“We have so much positive energy and momentum … We’re changing the site to be even more responsive and in sync with the needs and lifestyles of our target shoppers,” Irvin said in an interview. “We believe the next billion dollars of online sales is an achievable goal in the foreseeable future, but we’re not prepared yet to project a specific year.”
The company’s initiative includes installing more than 35,000 new point-of-sale systems in stores that are linked to jcp.com and in-store Internet kiosks to help shoppers find a broader and deeper range of merchandise. Penney’s is investing $250 million on the POS terminals, which began rolling out in 2005 and will continue through this year.
Penney’s Web site includes more than 300,000 items, many of which are aimed at younger mid-income consumers. There is an emphasis on women, who generate more than 80 percent of Penney’s total revenues, especially those 34 to 54 years old.
Penney’s average Web tickets are increasing, though Irvin declined to reveal average Web sale figures.
He said the Internet division was “profitable” and a place for new and established shoppers to experience changes also shaping up at Penney’s stores, such as off-mall or freestanding units, and catalogues that are more focused and specialized, including new “netalogues” that are distributed in stores as vehicles to guide shoppers to jcp.com.
March same-store sales at Penney’s stores decreased by 1 percent and were below initial guidance for a low-single-digit increase. Direct sales increased 5 percent, surpassing initial guidance for a low-single-digit gain. Sales through jcp.com continued to represent the company’s fastest-growing sales channel, rising 25 percent in March. Meanwhile, catalogue sales remained mostly flat for the month.
Last month, Penney’s launched the largest branding event in its history, with a pop-up or virtual store in New York’s Times Square. The opening of the pop-up store coincided with Penney’s fifth annual sponsorship of the Academy Awards.
Last week, Penney’s announced a joint deal with San Francisco-based Sephora that will place Sephora units in Penney’s stores starting this fall, as well as post a link on Penney’s Web site to Sephora’s Web site at sephora.com