Can J.C. Penney reinvent itself with its offbeat lab store?


J.C. Penney has spent years trying to differentiate itself as middle-of-the-road mall department stores have declined in popularity while nimble, experiential, niche retailers have caught on. As the chain tries to figure out what works for its brand, it announced the launch of a new lab/store location, which is geared towards experimenting with trendier offerings that are a big departure from what customers traditionally associate with the J.C. Penney brand.

The lab store, called Penney’s, opened in the Dallas-Fort Worth area early this month, as per the Fort Worth Star-Telegram. The store features an in-store salon/spa, an area where visitors can take selfies using a range of backdrops, a barber shop and store-hosted classes on topics like makeup application, cooking, health and wellness. J.C. Penney CEO Jill Soltau described the store as, “the fullest articulation of our customer-centered strategy, an investment in our future and a lab to inform decisions to return J.C. Penney to sustainable, profitable growth.” Experiments that prove successful with store visitors could lead to chain-wide rollouts.
Other sources report that the store location also features an area for video gaming and a yoga/fitness studio.
Penney has made numerous moves under multiple business leaders to reinvent itself since department stores began to experience a downturn.
At various points during the tenure of former CEO Marvin Ellison, Penney experimented with store greeters, expanded its selection of baby-oriented merchandise to capitalize on the closure of Babies “R” Us and reintroduced appliances (after pulling out of the white goods market 30 years earlier). Mr. Ellison left the chain in 2018 to join Lowe’s and Ms. Soltau discontinued appliance sales early this year.

Since Ms. Soltau arrived as CEO, the chain has experimented with initiatives like rolling out a new Instagram-inspired private label apparel brand and introducing branded outdoor shops into some locations in partnership with St. John’s Bay Outdoor.
One long standing partnership has stood out as a bright spot as J.C. Penney’s appeal has dwindled — its relationship with Sephora. A recent Motley Fool article, however, predicts that younger shoppers’ interest in competitor Ulta could snuff J.C. Penney’s saving grace.
- The JCPenney’s at North East Mall is about to get a coffee lounge, a spa and more – Fort Worth Star-Telegram
- Selfie studio, yoga, more: J.C. Penney launching flashy new store – Syracuse.com
- J.C. Penney dumps appliances – RetailWire
- Will bringing the outdoors inside stores work for J.C. Penney? – RetailWire
- Will greeters make Penney a more inviting place to shop? – RetailWire
- Will J.C. Penney’s new private brand connect with Instagram-savvy moms? – RetailWire
- Ulta Beauty Could Be Killing J.C. Penney’s Biggest Growth Engine – The Motley Fool
DISCUSSION QUESTIONS: Will J.C. Penney succeed in discovering what its customers are looking for by experimenting far afield from its core offerings at its lab store concept? What features do you see being added to J.C. Penney that could possibly help turn the chain around?
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22 Comments on "Can J.C. Penney reinvent itself with its offbeat lab store?"
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Founder, CEO & Author, HeadCount Corporation
Experimentation and testing are critical to finding new ways forward, and so I applaud management for undertaking these initiatives. That said, this seems like changing light bulbs and the color of the life vests on the Titanic. J.C. Penney is facing huge challenges – existential challenges, I believe. They need to focus on fixing the basic/core operating model of the business. It’s hard to say what they might discover “works” in the lab store, but the initiatives described hardly sound like true innovations and more like a laundry list of buzzword concepts being thrown against the wall.
Principal, KIZER & BENDER Speaking
Kudos to J.C. Penney for trying something that is completely unexpected. Doing the same things it has always done, just differently, isn’t enough. Regardless of your age, Penney’s image is that it’s where your mom shops.
But will this new concept work? It’s only in one location so it won’t make much of a splash – people in Chicago don’t care about retail in Dallas. What’s in it for me? Will this lab store turn the chain around? I’m an optimist but I wouldn’t take this bet.
Senior Vice President, Dechert-Hampe (retired)
Kudos for the aggressive approach to reinvention — but the biggest problem J.C. Penney faces is the base store. Offering a flock of attractive services in one location probably has some appeal, particularly in an upscale market like the one in Dallas. But throwing any one of these innovations into a traditional J.C. Penney store in Paducah will stick out like a sore thumb and fail.
Merchant Director
I agree with you Ben– this format wouldn’t play in Paducah. J.C. Penney would have to tailor their stores to demographic they serve with bits and pieces of the new idea, but as others have stated, this is only window dressing. J.C. Penney needs to figure out what they want to be in regards to their core business.
President/CEO, The Retail Doctor
I think it’s very exciting and I am thrilled that they’re taking this action with a small test. The way forward is still rooted in brick and mortar.
Chief Executive Officer, The TSi Company
Founding Partner, Merchandising Metrics
Several of these initiatives could very well work. And some may prove to be viable in “A” stores only. It gets very simple very quickly. What worked? What is now scalable? On what time/action calendar? With what budget? Now take a deep breath. None of this will work if they don’t change product, pricing, and presentation. J.C. Penney didn’t need a lab store to study, learn and implement what is working for Primark. Primark will be no less a threat tomorrow than they are today if J.C. Penney doesn’t deal with its merchandising mindset. Changing the thinking isn’t easy, but it also doesn’t have to cost a couple billion dollars.
Director, Growth Marketing for Wizard
I’m all for Penney’s. Concept stores are a tried and true tested way of determining how to evolve in brick-and-mortar (just ask digital natives like Warby Parker and Allbirds). My guess is that, despite the optics, this experiment is focused less on barber shops and store-hosted classes and more about getting the merchandise mix right and overall branding right. As others have pointed out, it would be cost-intensive and time-consuming to replicate these features at scale.
Independent Board Member, Investor and Startup Advisor
The only way to discover is to leave the core comforts and venture into the unknown. It’s high risk, high reward effort that keeps the brand alive and in touch with changing consumer expectations.
Ms Soltau and team should be lauded for their gutsy decisions to reinvent the in-store experience. The energy to change can never be tapped in an environment shackled by the unstated legacies of long standing ways of doing things.
Principal, KIZER & BENDER Speaking
I’ll take a shot at this. Perception is everything and I don’t believe the name Penney’s has much brand equity today, which I believe surfaces a challenge. Perhaps that perception could be changed by a new name with the Penney’s name below. At least it is new, and that could pay dividends over the old name and its perception. But I do think this concept thinking is brilliant and demonstrates the desire and enthusiasm of the leadership to make something great happen.
Principal, Your Retail Authority, LLC
I’m with Rich on this one. If, and only if, the Sephora customer has exceeded the old Penney’s customer, will something trendy take effect immediately. Otherwise it will take great cultivation and marketing and with the old name with a tired following, not much of a chance. I wish them all the best, however, I’m not seeing it in the cards. For my 2 cents.
Managing Partner Cambridge Retail Advisors
J.C. Penney needs to try something different to excite their customer base and I believe the “lab” concept is required to pull this reinvention off. Retail is theater and you can’t just guess at what the customer wants — you need to test the concept in a lab. Whenever you make technology changes you test them in a lab first. There is no difference here other than that the mistake you make by rolling out a poor store concept has lasting implications in the erosion of your customer base. You can’t just back off a store concept change the way you can a software change.
Maybe J.C. Penney should look to successful department store operators outside the U.S. like Harrods, KaDeWe, Selfridges, Galeries Lafayette or Le Bon Marché for marketing talent that understands theater.
CEO, President- American Retail Consultants
No, this move by J.C. Penney to reinvent itself with a lab store will fail. The reason is very straightforward; malls are failing and so are department stores. Like all department stores, J.C. Penney is trying to keep a dying dinosaur alive. It cannot. The retail shopper is going online, not to malls, and certainly not to department stores. J.C. Penney would have more success by converting all of its’ remaining stores to hardware stores, which are still in a fast growth stage, instead of continuing to redefine a dying department store model. Why not?
I’m so happy J.C. Penney is testing. Cue the unicorns and rainbows!
What a load of rubbish. What else could they do and retain any shareholders?
How about a cold hard understanding that the middle class of the U.S. is fading. The archaic department store model (Field set his up in 1914) is the problem. American consumerism no longer bears any resemblance to the past. Whether it be 1914 or 1950 in a GI Bill-fueled post war suburban expansion.
Malls and mall anchors are going away for a reason, and the changed consumer situation is it. Stores will remain and thrive, just not those that are irrelevant.
Stores are too large. There are too many of them. The out of date regal merchant model remains and is compelled to fill them and that is the financial sea anchor that will take them to the briny red depths.
As we know, “retail ain’t for sissies!”
EVP Thought Leadership, Marketing, WD Partners
I like this, a lot. Sure, they should’ve done it 10 years ago, but at least it’s happening. And as far as what’ll work, who knows? Could be anything. If DSW’s nail salon was successful, anything’s possible!
Founder | CEO, Female Brain Ai & Prefeye - Preference Science Technologies Inc.
Reinvention rarely works. J.C. Penney might look to Nordstrom, a master of reinvention over a decades-long, continuous reinvention while still staying true to both product and customer. The lab seems like noise, a distraction of focus to avoid the real challenge — does J.C. Penney have a place in 21st century retail? Such thinking requires tremendous bravery on the part of leadership.
Outsiders are connecting the dots, as insiders avoid hunkering down to problem-solve for a real reinvention of JCP. Meanwhile, distractions like spa treatments, selfies, video gaming, and barbershops seek to engage a customer to buy services rather than products. Promoting services rather than product indicates internally JCP leadership does not have a relevancy plan in place.
Founder & CEO, New Retail Ethos & New Retail Ethos Publications
I am optimistic about the future of J.C. Penney because of their concerted efforts to embrace change, innovation, and creativity. Jill Soltau is infusing the chain with enthusiasm and the ability to start creating new opportunities (like this offbeat lab store) that can and will create differentiation.
This turnaround effort will take time! However, there are signs of optimism that the organization is at least heading in the right direction. I applaud their efforts to reinvent themselves during this tumultuous retail environment. I am looking forward to hearing the feedback from their new corporate initiatives.
CFO, Weisner Steel
This sounds very much like one of the 17 (19? 26?) “reinventions” we’ve seen since the Johnsonaylpse (which I guess was the granddaddy of them all).
On one of the other threads today, a comment was made about “not thinking like a startup.” I’ll offer that JCP thinks TOO much like one: endless experimentation rather than just taking the basic model and working with it; it’s not some nimble startup with (just) a website and a few stores, it’s a mature retailer with hundreds of them. Dependable merchandise at reasonable prices should be the goal … “for people who like department stores but don’t like Macy’s” may be a hard tagline to build a business model around, but I think it’s their best shot.
Retail Transformation Thought Leader, Advisor, & Strategist
CEO, Luxlock
It’s an interesting move for J.C. Penney and could build a relationship with new customers that are not discount-driven, but it’s going to take more than one location and a lot of work. Relaunching the brand Penney’s needs to be spot on, there is no room for failure. I like it and give kudos for a bold move.
Consultant, AdoniisCollections.com
Well, I am glad they are doing something and some of these things may prove to be helpful. As Mr. Clarke pointed out, there is a big problem because the department store — and the mall– are dying. I, however, like Penney and I shop there. I would like to see them survive. There is a second huge problem: a giant, burying debt load! I am most concerned about their debt.
I do wish them the best!
Director of Retail, Milwaukee Art Museum
Clearly I’m in the minority, but I 100% think that Jill and her team have this on the right track. They’ve done their research, they are testing rather than rolling out knee jerk strategies that had no basis in what their customers or potential customers are looking for. I suspect this test will be successful The key will be in the execution of rolling it out to more stores in the chain.