This study analyses the JC Penney Company which was founded by James Cash Penny in 1902 with a mission to sell merchandise. Its growth has been explosive over the years to become the largest catalog merchant in the US.  However, like any other business, the company has been faced with some challenges including facing stiff competition in the industry. How a company adjusts in light of such challenges determines the extent of the success that is going to be actualized.

There are several critical services or operational capabilities that a company needs to excel in to succeed in its operations. Excelling in these aspects ensure that the business’ operations run smoothly at all times. It becomes easier to run the day to day activities and identify problems as and when they arise. In the case of JC Penney, there are various critical services operational capabilities that would help the business to excel at all times. These include being up to date with the current technologies and engaging customers at all levels.

Embracing technology in the relevant industry is important for the success of any business since it helps in improving productivity. To remain relevant, many companies have understood the need of going with the flow of the current trends. Technology helps create an open and communicative business environment making it possible to keep track of measurable goals (Pennington, 2016). Technology has also been regarded as one of the elements that help improve employee motivation due to the efficiency that is developed. The use of modern technology is critical and would be of great impact to JC Penney. The consistent use of catalogs, which has become outdated and replaced by online shopping, brings down the customer experience since customers are busy shopping online and lack time to go through the catalogs. The company has the relevant resources to execute E-commerce operations sufficiently. JC Penny is trying to keep itself in online business transactions to keep pace with the current trends in fashion and clothing industry. However, the company is not operating at a favorable level yet.

The company needs to improve on its E-commerce prospects. Online presence is important for a company such as JC Penney today given the strong competitive atmosphere that globalization has caused around the world. The growth of E-commerce needs to be kept at the heart of the business processes for the company to remain competitive. There is a need to make substantial investments to ensure that the company accords the relevant stakeholders a favorable experience that enhances convenience.  This helps in retaining the relevance of the company in light of the existing competition in the industry.

When it comes to customer engagement, it helps to identify what customers want, when and where they want it. This helps in instituting efficient operations by eliminating redundancy or unwanted activities. Gallup research indicates that fully-engaged customers present 23% more revenue than average (Pennington, 2016). Lack of a customer engagement strategy leads a business to miss out on opportunities.  For any business to succeed, it has to engage the customers and maintain a good rapport. The clients must be made to experience ratification and sensational shopping experience. JC Penney has made use of its website relatively well to interact with clients. Samples of their merchandise are placed on the website alongside their price, where most customers gather information and place their orders. Some of them make phone calls; others send emails to place orders.

However, JC Penney Company has not succeeded in winning the customer interests due to their poor communication with them.  The company’s customer care services are relatively poor. JC Penny staffs are associates who have several years of experience alongside less experienced employees who may have a different indulgence of client service and the subdivision store errands experience.  There is also a problem of not listening to the customers, which can prove costly for them in the long-run. Customers do not get feedback of their inquiries, which they make, through emails or calls. Most of the orders placed by customers go unattended and hence discouraging and chasing them away. A strong recommendation for an immediate problem would be suggested if the management developed systems of responding to customers directly. Finding other means of enticing customers like offering free Wi-Fi, would play a significant role in improving interactions with customers and enhancing a good relationship with them. The company’s management is also acclimating clients to shop for discounts, particularly those from low and middle-income families. Customers must be having a positive experience with the company for them to remain loyal.

The gaps in customer engagement in JC Penney are detrimental to the company operations. There are some activities that are likely to be affected negatively when customer engagement is poor. This would include activities such as stocking undesirable products or stocking desirable products but at the wrong time due to inadequate communication channels (Schmitt, 2013). In trying to establish effective customer engagement, JC Penney should understand that there is no single customer engagement method that works for all businesses in a given industry. However, the company should ensure that it focuses on clarity, simplicity, and empathy when dealing with customers. The aspects will help in understanding customer expectations and needs hence streamlining the company’s operations.

I have interacted with JC Penney on two occasions as a customer. The use of the company’s website led to the conclusion that it is user-friendly. To begin with, the website loads relatively fast. It is usually annoying to customers when they have to interact with a website that is slow on loading. The navigation of the website is also friendly. It provides clear labels to pages where the navigation tabs take the customer. The navigation also helps customers in knowing where they are currently and how to get back. The navigation system also provides customers with a ‘search’ function, which enables them to search their desired products directly without having to visit the categories provided. The website has mobile compatibility too. This is an important feature given that most customers make their orders through the phones as opposed to PCs. To be honest, customers are likely to have a positive experience on their interaction with the company’s website. This is because it has taken into account varied components that make a website user-friendly.

My first interaction with JC Penney was around November of 2016. The second interaction was in mid-March, and it was instigated by the assignment to ascertain if the customer experience I got at that time will be similar. With these interactions, I can briefly outline the order management cycle of the company. The cycle consists of steps like planning for the order, order generation, estimation of cost and pricing, order receipt and entry, prioritization of the order, scheduling of the people and equipments that will make the order available, fulfillment of the order, billing, claims and returns and post-sales services.

I realized that customer experience is dependent on how these steps are executed. JC Penney operates in multiple functional departments, and this seems to be bringing varied coordination problems. There is a need for the company to introduce internal performance benchmarks and inter-departmental dynamics to help govern how the order management cycle is carried out. The problems at JC Penney commence even before a customer makes an order. The marketing department has the responsibility of forecasting demand to help the production department arrange to capacity and inventories. This ensures that customers do not make orders for items that are not available as of that moment hence having to wait for long periods before receiving their orders (Hitt, et al., 2015). Integration of systems is also vital as it ensures that all the details of a customer are captured accurately to help provide them with a favorable experience.

Below is the value stream map for JC Penney.

This value stream map applies to customers making their orders online to later pick them at designated stores or have them delivered to their homes. It starts with the customer logging into their Jcpenney.com account. However, an individual can opt to proceed with the shopping endeavor as a guest.  Upon signing into the account, the customer is expected to browse various categories of products to choose whatever that suits them. When placing an order, there is need to fill in the relevant personal details and details related to the delivery. Upon approval of the details provided, the customer is at the liberty of paying either by cash or credit card and the products ordered are then shipped.

The value stream map seems quite straight forward. However, my shopping experiences in both occasions that I attempted were not quite positive. In November 2016, I placed an order to purchase a pair of apparels through the company’s website. There was a promo code that offered 30% discount on the products. I wanted the delivery to be made in my residence. After entering the promo code, I was directed to the completed purchase page. The 30% discount had not applied. I tried using the online chat to inquire why the 30% discount did not apply. The support that I encountered told me that maybe the code that I used might have expired. I could not understand that since the promo code was at the website as of that time, so I decided to call so that I can communicate with someone. The call support informed me that I should have received the discount and I should try again. I did not understand how I would try again since the purchase was already complete so I just ignored the whole thing. The order was later delivered though with some delay.

The second time I purchased from JC Penney was this year in March. This was more of an experimental purchase just to see if the customer experience would be different from what I had the last time I attempted to make a purchase. This time I purchased several products from different categories. After placing the order, I received an email the next day informing that my order had been shipped. Two days later, I received an email that stated JCP would not be able to completely fill my order since half of the products were not available. I called the customer support and informed them that most of the important products that I wanted more are the ones that are not available for delivery. As a result, I requested for the entire order to be canceled so that I would receive a full refund. I was put on hold upon making this request, and a supervisor came to the phone, but I had to explain the whole thing again. He was very rude based on the words that he was using and told me that I could not cancel the order since it was processing (remember I had been told through email that a complete order had been shipped two days ago). I tried bringing up this point regarding the email I had received regarding the complete order having been shipped. He did not listen, and he did not give me an opportunity to talk. He kept telling me of the company policies that did not make sense given the case at hand.

The above examples are good reasons as to why JC Penney should consider addressing the weaknesses in their order management cycle to help offer a favorable experience to customers. There seems to a lack an efficient integration among the departments. There should not be cases where customers order and make payment for a product but get the information later that the product is not available. The worst part is that the company is not willing to cancel the remaining products even when the order does not make sense to the customer now that some vital complimentary products are missing. These aspects should not be arising in the first place. For JC Penney to improve departmental integration and coordination, there must be a strong process in place that is combined with a proper business management software. The software should have the ability to streamline workflow processes. If the company does not work in this area, aspects of duplication, inflexibility, delay and data loss are likely to be prevalent on most occasions. Such aspects will always result to poor customer experience.

With regards to communication, my interactions with JC Penney were an indication that customers’ communications are flawed.  The customer support is not being of help. Being rude to a customer does not create a good image regarding the company. When customers make contact, they are in such of help. It is expected that the people that they come into contact with will help them with the prevalent needs. This is an area that JC Penney has to improve to make sure that customers get a favorable experience. There should be a system of monitoring how the customers’ support is communicating with customers. This will be meant to ensure that quality communication prospects are maintained at all times. When the support staff is aware that they are being monitored, they will work to their best knowledge in trying to resolve customers’ queries.  There should be a set standard of how to operate while encountered in a given situation.

The company should also interact with customers by responding to the reviews they leave on the forums and suggestion boards. Responding to reviews shows that it values its customers and the feedback that they leave behind. Negative reviews will give the company an idea of the operations to improve in order to boost customer experience. Positive reviews, on the other hand, give the company an idea of the things that are working well, and it will strive to maintain such operations in that state.

Every operation that an organization executes should take into consideration the customer experience that is likely to accrue. The operation should not necessarily have a direct contact with the customers. As the case for JC Penney has shown, lack of integration or coordination from varied departments makes the entire organizational operations fail to meet the needs of the customers. If JC Penney takes the initiative of mending some shortcomings that make it difficult for the customers to have a positive experience, the company will have a strategic advantage. This is because positive consumer experience works well in cultivating loyalty among consumers. This will go a long way in overcoming the prevalent stiff competition more so in this age of rapid technological advancement. There are customers that will stick to their preferred stores despite them being left being technologically just because of the satisfaction that they derive.

Exhibits

Exhibit 1: Progress of JC Penney through the years

The graph above shows that the progress of JC Penney has been decreasing over the years. This aspect is likely to have been attributed to the organization’s failure to excel in critical services and/or operational capabilities such as adapting to current technologies appropriately and engaging customers at all levels. Embracing current technology and engaging employees at all the times is likely to bring customers a positive experience. The lack positive consumer experience leaves them dissatisfied, and they are always out there looking for better companies to engage with. This is to say that JC Penney is losing part of its market share to competitors due to lack of enhancing a positive customer experience.

Exhibit 2: Number of stores JCP had planned to close

When a firm is planning to close 13.8% of its stores, it means that there is something wrong with its operations. The likely possibility is that these particular stores are not doing as well as they used to. Things that make consumers to rethink their interactions with a company are the quality of products and the quality of service that they receive. Neglecting critical services or conducting them in a shambolic manner will result to loss of customers hence reduced business that results in the closure of stores.

Exhibit 3: JC Sales Total Sales between 2005 to 2014

The figure above shows that JC Penney sales are in a decreasing state. There have been numerous customer complaints about this period regarding the quality of the products on offer, and this might be bringing some negative customer experience. Quality attracts and helps maintain customers due to the positive experience. Many times JCP customers have complained in the Consumer Affairs columns about the quality of the products offered in Penny stores. There is never going to be a shortcut to avoid this question. It is either a customer get value for their money, or they shift to another store. JCP needs to keenly reconsider their relationship with their suppliers. Low-quality products have a direct negative effect on the sales of the stores. When customers start complaining about the quality of products offered, especially when these complaints are launched online, it is obvious that this paints the store in a negative way which in turn makes customers think twice about purchasing there.

Exhibit 4: Comparing JC Penney’s Profit margins with those of Macy’s and Nordstrom

The graph above shows there is something good the competitors are doing, which JC Penney has failed in. One thing that I can imagine is their customer engagement and communication. From my experience, this is one area that the company is failing. I had a bad experience while trying to shop through the company’s website, and I also read through reviews of many unsatisfied customers due to their poor interaction with the company’s staff. JC Penney needs to start providing its customers a positive consumer experience, or they might end up winding their operations altogether.

References

Hitt, M. A., Hoskisson, R. E., & Ireland, R. D. (2017). Strategic management: Competitiveness

            &globalization. Press.

Hitt, M. A., Ireland, R. D., &Hoskisson, R. E. (2015). Strategic management:

            Competitiveness & globalization; concepts. Stamford, Conn: CengageLearning.Press.

Pennington, A. (2016). The customer experience book: How to design, measure and improve customer experience in your business (1st ed.). Pearson Education Limited.

Schmitt, B. (2013). Customer experience management: A Revolutionary Approach to Connecting with Your Customers (1st ed.). Hoboken, N.J.: Wiley.

Thompson, D. (2017, April 10). What in the World Is Causing the Retail Meltdown of 2017?          Retrieved from The Atlantic:   https://www.theatlantic.com/business/archive/2017/04/retail-meltdown-of-2017/522384/

Wagner, E. T. (2013, September 12). Five Reasons 8 Out Of 10 Businesses Fail. Retrieved from Forbes: https://www.forbes.com/sites/ericwagner/2013/09/12/five-reasons-8-out-of-10-businesses-fail/#14a7df416978

 
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