OPERATIONS

J.C. Penney checks into its newest business — hospitality

BY Deena M. Amato-McCoy

A department store chain is pursuing a new business opportunity in a $200 billion market.

J.C. Penney is now offering business-to-business solutions for the hotel and lodging industry, as well as the multi-unit residential industry. The retailer has launched a program to supply hotels, vacation rentals and properties managed by commercial property groups with blankets, pillows, towels, window treatments and even major appliances. Penney is putting together an outside sales force for the initiative.

“The U.S. hospitality industry represents approximately $200 billion annually — and a significant opportunity for J.C. Penney to gain market share and drive increased revenue per customer with major appliances and a renewed focus on soft home goods," said Marvin Ellison, the chain’s chairman and CEO. "Our entry into the B2B program reinforces our home refresh initiative, while providing new and innovative ways to achieve sustainable growth and profitability. Our broad assortment of private brands in soft home give us a unique cost and value advantage in this new and exciting space."

The new B2B program utilizes Penney’s nationwide fleet of brick-and-mortar stores and its vast supply chain. It also benefits from the retailer’s experienced sourcing organization. By hedging raw materials, working with a strong supplier base in over 30 countries and implementing a rapid production cycle time, Penney can gives business clients “the assurance that they are receiving the best quality products when they need them,” the company said.

“The move to B2B makes a lot of sense,” said Maureen Mullen, chief strategy officer at consumer brand consulting firm L2, told MarketWatch in a phone interview. “For one, [J.C. Penney] is entering an area that Amazon is not playing.”

The initiative comes at a critical time for Penney. The retailer got off to a slow start in its first quarter, reporting disappointing sales.

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OPERATIONS

Study: Automation puts millions of U.S. retail jobs at risk

BY Deena M. Amato-McCoy

Automation may be mission-critical to operational longevity in the retail industry, but it could be creating a significant pool of “stranded workers.”

Six million to 7.5 million retail jobs likely will be automated out of existence in the coming years, leaving a large portion of the retail workforce at risk of becoming “stranded workers.” Retail cashiers are at highest risk for automation technologies, and women hold 73% of these positions.

That’s according to a new report, “Retail Automation: Stranded Workers? Opportunities and Risks for Labor and Automation,” conducted by Cornerstone Capital Group and commissioned by the Investor Responsibility Research Center Institute. The report identifies the structural factors catalyzing change in the retail industry.

The report details the technologies retailers are deploying, looks at the drivers of automation, and provides a framework to analyze the automation strategies of 30 large retail companies. In some cases, technology is complementing labor by freeing workers from mundane tasks and facilitating a more personalized customer experience. In others, technology has the potential to automate a significant part of the sales process and render a range of jobs redundant. Taken together, store closures and technology have the potential to dramatically alter the employment landscape in America.

When it comes to adopting in-store technology, most of the surveyed companies are considering solutions such as mobile devices, self-checkout, digital kiosks and proximity beacons. In addition, sensor-based checkouts and smart shelves are a growing technology, as found in Amazon Go stores.

What many people don’t realize is that 36% of retail workers currently receive some form of public assistance, and the average retail worker is 38 years old. Contrary to perceptions, 71% of retail workers are full-time employees.

The study also indicates that Walmart and other large retailers have greater market share in communities with less than 500,000 people. If employment trends correlate to market share location, retail automation by retailers could disproportionately impact these smaller communities.

“The retail landscape is changing rapidly and investors need to understand the social and governance issues impacting valuations for public companies in this sector,” said Erica Karp, Cornerstone founder and CEO. “Retailers are facing a perfect storm: they need to balance demand for wage increases with the negative optics of future job losses. The winners in retail will be companies that provide recruitment, retention and training for workers and innovate with forward-thinking future store strategies.”

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Google ups the ante on mobile payments

BY Deena M. Amato-McCoy

Google is once again expanding its digital payment options.

The company knows it can be difficult for shoppers to make online payments within third-party apps and mobile websites, as well as in Google Assistant, when they are on the run. A new service is easing this pain and giving users more options.

Using the Google Payment application program interface (API), customers can now pay for purchases with credit and debit cards saved to their Google Account, which stores all personal information from email addresses and account activity to payment preferences. This means users no longer have to rely only on payment cards stored in their Android Pay app.

The Google Payment API is not a new tool. In fact, many merchants and developers already use the service to integrate payments in their own sites and applications, according to TechCrunch.

As long as shoppers see the option to pay with Google on supported apps or sites, they can pay with any account stored in their Google Account. The API supports faster checkout, drives more conversions, increases sales and reduces abandoned carts, according to Google.

By giving users access to more saved payment methods, it will be easier for shoppers to make purchases. It will also eliminate the need to fumble to find payment cards during checkout, pull out their cards in public, or re-enter data that Google already has on file, the company explained.

The service also gives Google a chance to gain momentum against rival Apple Pay. This comes at a crucial time since Apple Pay had 86 million users versus Android Pay’s 24 million users as of April, according to “Contactless Payments: NFC Handsets, Wearables & Payment Cards 2017-2021,” a report from Juniper Research.

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