JC Penney's is still in the midst of an $800 million dollar revamp and they're changing everything, including the way they find new vendors. Starting with their vendor assortment for Spring 2013, JCP will begin accepting applications from prospective vendors containing information such as sales history, margin projections, visuals of what their space within the store could look like if given the opportunity to sell, fixturing plans and retail prices. JCP will shift it's focus from worrying about pricing strategies to figuring out how to curate the right mix of brands and vendors into their stores that will ultimately translate into sales.
JC Penney is also working to expand it's store-in-store concepts like the ones that currently exist for MNG by Mango, Martha Stewart and Sephora. In the future, all JC Penney stores will be reformatted into a carefully edited mix of store-in-store shops in varying sizes. The smallest size shop at around 300 square feet will be considered a "boutique" and feature multiple brands for categories like denim or swimwear. The medium sized spaces (around 500 feet) will be considered "shops" and feature single brands like MNG by Mango. Larger spaces (around 2000 square feet) will be considered "stores" that are enclosed spaces dedicated to one company or brand, like Sephora. Vendors will get to customize their own space in a way that is cohesive with their brand using a company-issued JCP fixture kit that includes wall systems and basic fixturing. For an additional fee vendors can "upgrade" their space with glass walls, ceiling treatments, lighting and premium flooring. Vendors will sign on for a 4-year term which JCP hopes will be enough time to build business and realize a solid return on investment. JCP is also taking a non-department store approach to negotiating product pricing. All merchandise will be purchased up front at a specified price with no expectation of receiving markdown money later. The vendors will also not receive requests from JCP for co-op advertising money. Two big issues that have "plagued the industry for far too long" says JCP's President Michael Francis. The entire shift will focus on creating solid and long lasting partnerships with vendors.
Noteworthy Changes at JCP
- Simplified Pricing. No more coupons or door busters. The pricing at JC Penney is now based on an "Everyday Low Prices" strategy which includes monthly values and clearances the first and third Friday of every month.
- A new "Fair and Square" store logo.
- New application process for prospective vendors.
- A plan to re-invent the JCP Home Store by Spring 2013.
- The discontinuation of the JCP 'American Living' brand after Spring 2012.
- The addition of new categories including greeting cards.
- The use of RDIF technology to help control shrink in stores.
- The reduction of private label brands carried in store.