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Making Up for the Delay: JCPenney Strengthens Online Business

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JCPenney’s online business

When it comes to online business, JCPenney (JCP) lags behind its peers like Nordstrom (JWN) and Macy’s (M), who have been investing heavily in the expansion of their e-commerce business. At the Oppenheimer Consumer Conference held in June 2015, JCPenney’s President and CEO designee, Marvin Ellison, discussed the company’s initiatives to strengthen its online business.

According to L2, a benchmarking and education firm, JCPenney ranks fifth in its digital IQ index for department stores. Nordstrom, Macy’s, and Sears (SHLD) are the top three department stores in the digital IQ index. Macy’s and Nordstrom together account for ~1.4% of the portfolio holdings of the Consumer Discretionary Select Sector SPDR Fund (XLY).

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Online initiatives

At the Oppenheimer Consumer Conference, Ellison stated that JCPenney will be launching a buy-online-pick-up-in-store-same-day facility this year in some of its stores with a complete rollout planned for 2016.

JCPenney has seen significant improvement in its online business, which has been helped by its expanded online merchandise assortment. Also, the company is reaping the benefits of its buy-online-ship-to-any-store facility. This facility has resulted in higher store traffic. According to JCPenney, there is a 20.0% chance that a buy-online-ship-to-store customer will purchase additional merchandise when they visit a store. In the first quarter of fiscal 2015, JCPenney expanded the number of stores from which it can fulfill online orders by over 160 stores.

The company has also been expanding its presence on  mobile platforms. The department store now has a JCPenney mobile app available on the iPhone, the Apple Watch, and the Android app.

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