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Editor\u2019s Note: As 2024 comes to an end, we\u2019re highlighting some of our most-read content of the year. We look forward to continuing to deliver original, thought-provoking stories like this one to our readers in 2025.<\/em><\/p>\n JCPenney<\/strong> has faced the same challenges that bedevil the entire department store vertical, ranging from lower foot traffic at malls to the high operating costs that come with significant brick-and-mortar investments. As a result, the category as a whole appears to be headed toward a period of consolidation: Saks<\/strong> parent company HBC<\/strong> recently paid $2.65 billion<\/strong> for Neiman Marcus Group<\/strong>, and activist investors recently raised their bid to buy out Macy\u2019s<\/strong>, according to the Wall Street Journal<\/em>.<\/p>\n Owned by Simon Property Group<\/strong> and Brookfield Asset Management<\/strong> since late 2020, JCPenney is actively working to retake its place as a leading department store retailer, most notably with a $1 billion<\/strong> turnaround plan unveiled in September 2023. Since unveiling this vision, the retailer simplified its loyalty program design in April 2024 to nearly double the rate of rewards for members, and in June 2024 it invested $40 million<\/strong> to upgrade its Reno, Nev. distribution center with a new induction, sorting and packing system. However, there\u2019s been even more going on behind the scenes and in a growing number of JCPenney stores.<\/p>\n The retailer is in the midst of rolling out new next-generation store technology, including new point-of-sale (POS) hardware and software, as well as upgrading its stores\u2019 WiFi and network bandwidth. A proof of concept in 30<\/strong> stores is being followed by enhancements to approximately 150 <\/strong>JCPenney stores this year, with upgrades across the retailer\u2019s 650+<\/strong>-store fleet scheduled to be completed within the next two<\/strong> years.<\/p>\n JCPenney CIO Sharmeelee Bala revealed the critical role that the retailer\u2019s valuable customer data will continue to play in its turnaround, which is only appropriate since \u201cthe lens we have maniacally focused on is the customer and the customer experience,\u201d she said in an interview with Retail TouchPoints<\/em>.<\/p>\n Retail TouchPoints (RTP): You began in your post at JCPenney in 2022. What were some of your main goals at that time, and how have they changed?<\/mark><\/em><\/strong><\/p>\n Sharmeelee Bala: <\/strong>When I started, the main conversation with the board and CEO was about the fact that JCPenney had not actually been investing in its technology for a long time, [even though] a couple of decades back its tech had been top of the line and cutting-edge. So my job was to \u201ckeep the lights on\u201d while also bringing in newer and better technology built for the future. The question was, how do we bring this together without touching every single system [in our tech stack], because nobody has those investment dollars. We determined that customer touch points were where we needed to invest.<\/strong> So we\u2019re focusing on our stores and digital systems, applications and ecosystems, because that\u2019s the way we meet our customers. Our goal is to be flexible and efficient in stores, and that the overall customer experience is something that [shoppers] can be happy with.<\/p>\n We\u2019ve invested \u201csurgically\u201d in some [aspects of the customer experience], such as when they\u2019re browsing or searching online. For example, we added a \u201cshop the look\u201d feature, which, if I as a customer don\u2019t know all the products JCPenney offers online, will make recommendations for things that go with each other. We\u2019re also putting into play some elements of personalized communications around sets of products, making it easier for [shoppers] to search and find.<\/p>\n In our stores, the new POS systems have more flexibility \u2014 for example, associates don\u2019t have to go to a different screen to place an online order for a customer. We\u2019re also going mobile-first; it will help during peak times to have cashiers walking around with mobile devices to check out customers. That could be a big winner for us, because no customer wants to wait in line. These are things that customers will immediately see.<\/p>\n RTP: How did that dual mandate \u2014 maintain the status quo while preparing for the future \u2014 affect your decisions around digital technology?<\/mark><\/em><\/strong><\/p>\n Bala: <\/strong>Digital was [an area] where we had to ensure the foundation we built would be scalable. It\u2019s a home-grown digital ecosystem, but we\u2019re building in microservices so that I\u2019ll be able to \u201cplug and play\u201d [when adding new systems and functionalities]. We won\u2019t build everything in-house, but I will build when I have the intellectual property, and I\u2019ll choose third-party solutions when they work for us.<\/p>\n RTP: What about the many areas supporting the customer experience?<\/mark><\/em><\/strong><\/p>\n Bala: <\/strong>It\u2019s all starting with data cleansing. We have a beautiful set of data that we can use for processing improvements and efficiencies, but we have to do data hygiene to ensure we\u2019re using the data to its fullest extent \u2014 and we\u2019re not there yet. However, we have brought in AI and machine learning-enabled systems in areas including merchandising, planning, assortment planning and supply chain<\/strong>, because we don\u2019t want to just focus on the systems that can maintain the status quo. Planners and operational associates on our digital teams already are using these tools to help with algorithm-based modeling, for example with shipping routes, nodes and choosing which store to ship from. This has helped us reach the customer faster; in fact, we improved delivery time by half a day<\/strong> in Q4 2023.<\/p>\n RTP: You mentioned investments in AI and machine learning. Have you encountered any resistance or fears that people\u2019s jobs would be eliminated?<\/mark><\/em><\/strong><\/p>\n Bala: <\/strong>With any new tech that comes into play, people will resist, but in this case it\u2019s less worry about losing their jobs and more about losing control, particularly if they have always managed things on Excel. We\u2019re taking the time for training, and stressing that we\u2019re augmenting, not replacing \u2014 and sometimes, the data can prove that these models are better than individuals calculating on worksheets. We want to give them the data about why<\/em> we\u2019re doing certain things, which will actually help their overall work and their efficiency.<\/p>\n In some areas people have been very receptive \u2014 they can immediately see more about what they want to do [with these tools] versus doing things manually. They say \u2018We\u2019ve been waiting for this, give it to us.\u2019<\/p>\n Additionally, as the CIO, I\u2019m focused on improving developer and engineering efficiency, [so I\u2019m looking at] places where we can bring in the generative AI models and automate things such as test case scenarios and code reviews.<\/p>\n But overall, the foundational thing is data, and we want to get to a point where we\u2019re data-driven <\/strong>in areas like supply chain and merchandising. I\u2019m also looking at where I can [continue to] utilize customer data in a meaningful way.<\/p>\n<\/p><\/div>\n![\"\"](\"https:\/\/www.retailtouchpoints.com\/wp-content\/uploads\/2024\/07\/Sharmeelee-Bala_JCPenney-1.jpeg\")