Best Buy’s (BBY) sales force wears blue shirts. Apple (AAPL) “specialists” are garbed in branded tees. J.C. Penney (JCP) associates can wear whatever they want. The un-dress code is a legacy of ousted Chief Executive Officer Ron Johnson, the former Apple retail chief who espoused a hipper, less formal vibe for J.C. Penney. The strategy has a flaw evident to many who have shopped at the department-store chain lately: You can’t tell the sales staff from everyone else. That made it hard to ask for assistance or pay for purchases because Johnson also removed many cash registers and put checkout devices in the hands of hard-to-find store workers.
As Johnson successor Mike Ullman tries to reverse a sales collapse at the century-old department-store chain, he’s restoring some retailing basics he learned during his previous stint at J.C. Penney’s helm. Before the back-to-school shopping season starts in July, store workers will be outfitted with red Penney lanyards. The company also is considering changing the relaxed dress code. “We want to make sure there is no doubt who works for us,” Ullman says.
While J.C. Penney made headlines with big strategic shifts such as its planned transformation into a mini-mall of brand-name departments and the elimination of coupons, which Ullman has already brought back, there are scores of smaller changes that have also stumped shoppers. The policy encouraging store employees to wear designer jeans, graphic T-shirts, and sneakers was part of an effort to make the retailer into a fashion destination. But to customers already alienated by the loss of coupons, the camouflaged sales staff became another reason to shop elsewhere, managers say. Sales last year plunged 25 percent, leading to a net loss of $985 million.
“It didn’t take long to figure out” why shoppers couldn’t find the sales help, says Ullman, who toured stores shortly after his return in April. When Johnson introduced mobile checkout devices much like the ones used at Apple stores, customers thought “we took registers off the floor and didn’t have a lot of places to check out,” the J.C. Penney CEO says. “We actually had a lot more places to check out than the customer gave us credit for because they didn’t know where they were.”
When shoppers did find a salesperson packing an iPod-based checkout device, they often didn’t trust the security of the wireless gear, which is still rare at U.S. retailers. They also balked at handing charge cards to a person who didn’t look like an employee. Customers must “feel comfortable giving their credit card to someone who is wearing the proper uniform,” Ullman explains.
The reduction in register stations created more challenges, such as where to fold and bag clothing, and where to actually store shopping bags. It sometimes was difficult for customers to get a printed receipt, rather than an e-mail. None of this created headaches at Apple, where tech-savvy customers typically buy one or two boxed items per visit and long ago embraced mobile checkout.
Ullman’s fix: putting 2,800 wheeled carts, which can be rolled to the busiest departments, in about 700 of J.C. Penney’s largest stores. Some will have a fully functioning cash register, and all will give store workers a place to fold clothes, store bags, and print receipts. The roughly 20 store workers toting mobile checkout devices in each store will wear a gray sash that serves as a holster. The chain is also adding signs explaining how to check out.
With children’s apparel accounting for 12 percent of J.C. Penney’s sales, the retailer is scurrying to get these tweaks ready for the back-to-school season. It’s also the first major shopping event since Ullman’s return and an important chance to show progress. “Back to school, that’s our Olympics” for the youth business, he says.