All across the country, bigger retail chains are struggling. Despite the fact that brick and mortar stores still generate 94% of all retail sales, numerous Macy’s and Sears department stores are closing, and the futures of other specialty apparel companies are uncertain. And while JCPenney made the decision to close 130-140 of its locations within the next few months, the retailer isn’t giving up yet. In fact, they’re expanding into a whole new realm: home renovations.
Marvin Ellison spent six years at Home Depot before coming on as CEO for JCPenney, so he understands the importance of this expansion. Unlike many department stores, home improvement chains like Lowe’s and Home Depot are thriving. Ellison says 70% of JCPenney shoppers are also homeowners, and since consumers seem to be putting more money into their properties rather than into their wardrobes, he feels it’s time to make a change.
According to interior design experts, 47% of Americans haven’t updated their home’s interior in the last five years. But with consumer confidence at a 13-year high, home improvement projects are on the rise as well.
Specifically, JCPenney will be venturing into the sector of bathroom remodeling. Of all the types of home renovations, bathroom remodeling is one of the most popular. In fact, 60% of homeowners surveyed by Houzz said that they plan to remodel their master bathroom.
The chain will be testing six different programs in 100 of its stores starting in late March. JCPenney will be offering remodeling consultations along with other home solutions and appliances such as heating and cooling systems, water systems, awnings, smart home tech, and more.
While the expansion may raise some eyebrows, Ellison stresses that these new offerings aren’t really that different from what the company has offered to customers in the past.
“If you go back on the timeline,” says Ellison, “JCPenney actually served a lot of these products and services at one time in our history. A lot of people said the exact same thing about the appliance business, but we were able to roll out 500 showrooms and it was one of our strongest categories for 2016.”
The retailer actually used to be well-known for its appliance business, but the company eventually decided to do away with those offerings more than 30 years ago. But more recently, they’ve started offering LG, Samsung, and General Electric appliances with much success. The jump to remodeling, the company says, really isn’t such a stretch.
And given the fact that Sears has left a bit of an opening in the market, JCPenney feels the timing couldn’t be more perfect for this new undertaking.
Dana Telsey, CEO of Telsey Advisory Group, said in reaction to JCPenney’s announcement:
“If you think about the retail landscape overall, every single company has to try new things. If you’re just going to sit there and be an apparel company the entire time, you’re not going to capture the new demographic, the new customers.”
And while an increasing number of consumers are discovering the ease of shopping online, this move may end up getting customers through the door. After all, there aren’t too many places where you can buy new clothes, makeup, and kitchen appliances, all while scheduling a bathroom renovation at the same time.