The Sephora presence brings customers to J.C. Penney and improves the general perception of the company. Still, I wonder how housewares fit into their revamp. I’m not saying that people who buy luxury cosmetics don’t cook, but the mindset of shopping for cosmetics and housewares is quite different.

J.C. Penney is basing their jack-of-all-trades aspirations on dated department store models. Successful stores specialize. If they want to do housewares, I suggest they create a subsidiary that specializes in appliances alone.

I regularly shop a midsized J.C. Penney store in Menomonee Falls, Wisconsin. (The home of Kohl’s headquarters — not coincidentally.) Penney built this and other roughly 90,000 square foot locations before the Ron Johnson era, to see if it could operate Kohl’s-sized off-mall stores successfully. This location does contain a Sephora shop, although not as big as the one just installed at a local anchor store in a Simon mall.

I think it’s essential that J.C. Penney and Sephora develop a more “curated” version of their collaboration for the many even smaller J.C. Penney stores around the country. It’s arguably the most successful part of J.C. Penney’s business for the past several years — in many of the smaller communities where these stores are located, Sephora will be the only game in town for shoppers who want more than their local discounter can offer.

Expanding the relationship with Sephora makes sense for J.C. Penny provided certain caveats are in place. Clearly, when it comes to store-within-a-store concepts one size doesn’t fit all, especially in J.C. Penney’s case where store sizes can fluctuate significantly. There’s also the question of which emerges the dominant brand, i.e., do shoppers see Sephora as a department inside J.C. Penney or do they see J.C. Penney as a wraparound Sephora? Evolving the entire retail context is also critical if J.C. Penney is going to continue growing — with or without Sephora. The chain has to continue to find ways of expanding its shopping base and modernizing its customer offerings.

Clearly fine tuning assortments so that they are appealing to the local customer, and having a selection that makes it easy for that customer to say yes (to multiple purchases) is critical for every retailer. No one is going to beat Amazon’s breadth of assortment and “fair pricing.” Curation and locally tuned content is essential.

I may be alone in this point of view, but I find it hard to believe that Sephora/LVMH is selling out to one of the most tired brands in the U.S. That revenue vs. brand cachet decline has got to be off. It’s a win-lose IMO, with Sephora in the loss column, especially long-term. Short-term thinking and instant revenue sure looks good right now, I get that, but let’s check back in a few years after a few hundred store closings and see. Macy’s would’ve been a better partner, but perhaps a few years ago when Macy’s was a little healthier, they passed or were not interested. In any case, J.C. Penney will win every time they can bring a brand in-house that draws a younger customer on a mass scale. I’m sure it’s an injection of foot traffic they would not normally get, ever. In terms of other ideas, J.C. Penney missed on Apple (Apple gets it), but what about other CE brands? After all, a buck is a buck, right? Why not have… Read more »

The Sephora brand appeals to the demographic (18- to 45-year-olds) that J.C. Penney needs to attract — younger shoppers that wouldn’t normally shop there. With sales per square foot three-times higher than the average area in Penney’s, the Sephora shops in the 600 full-sized Penney’s stores are a huge success, which explains why Penney’s plans to incorporate Sephora in its smaller format stores. I think this is a brilliant strategy for Penney’s to extend its customer base by giving younger consumers a reason to visit their store. With a strategy to attract Millennial shoppers, this is a great opportunity to get this segment to change their perceptions of Penney’s and potentially become loyal customers. While this is a great strategy to attract young shoppers, Penney’s needs to continue to shift its merchandise assortment to younger styles and brands so they can more effectively compete with fast fashion specialty chains such as Forever 21 and H&M. Another focus area should be to accelerate its marketing and customer engagement on social media and mobile platforms where their… Read more »