How can CRM and a complete inventory management software solve problems for JC Penney

Inventory Management_JCPenney

Inventory Management is a huge problem that companies face these days, one of them being JCPenney. The well-known company, a company with nearly 117 year of experience and 872 stores across the world, have been facing a continuous downside with their pertaining inventory problems. It has become increasingly difficult for them to stay upright and have closed down nearly 138 stores in 2017, 8 stores in 2018, and almost 27 stores in 2019. 

As mentioned on

“JCPenney CEO Jill Soltau said during a call with investors on Thursday that resolving the retailer’s high inventory levels was one of her most immediate priorities.”


“Reducing and enhancing our inventory and clearing unproductive inventory is great for our cash flow and great for gross margin, but it’s also critically important to the customers’ experience,” she said.

What does this all lead us to?

JC Penney has to do something different than what they have been doing. Let’s say, get acquainted with technology and use the inventory management systems. This leads to us sum up the inventory problems with JC Penney, starting with:

  1. Over-stocking of Inventory
  2. Understanding the customers’ expectations
  3. Managing the retail space optimally
  4. Managing online and offline stores

What we can also identify, there is a way to sort their problems by merely addressing all the issues one by one. 

  1. Inventory Overstocking

“Chief Financial Officer Jeffrey Davis said in a statement that Penney was still working to “rightsize our inventory, better curate our assortment and, most importantly, provide a solid foundation that we can continue to build as we move forward.”

As rightly pointed out by CFO Jeffery Davis that managing the inventory is an important point, so let us assume:

JC Penney has 100 pieces of Women Summer Shrugs in its inventory, but their demand is merely 20 pieces. Similarly, they have stocked 150 sneakers, but again, they are not in demand because of the chilly weather. Thus, there are merely 40 pieces that are in demand. Also, men’s Denim Jackets are slowly losing their fashion, therefore out of 120 pieces of the same, approximately only 15 pieces sold out. 

This data shows that they overstocked the three products in comparison to sales. While the women’s winter jackets have adequate inventory levels. Thus, one thought runs across our mind, what happens with all the overstocked products? Well for starters:

  • They occupy immense space in the warehouse or storage units.
  • Chances of Theft or running out of fashion increase
  • They sell these products on lesser values in the Stock Clearance Sale

How to Avoid it?

Now after knowing the problem, let us discuss the solution. The overstocking can be reduced by merely recording the inventory level in the inventory management system. In better words, by predicting the right inventory using Inventory Planner. They help to understand the flow of inventory and cash flow. Before forecasting the stock requirements, Inventory Planner collects the previous data and analyzes them. This way, proper and accurate inventory information is determined. 

This way, JC Penney does not have to worry about overstocking. Also, they have all the information regarding the product on a simple platform.

2. Understanding Customers’ Expectations

Neil Saunders, managing director of GlobalData Retail, said 

“A lot of trust between customers and JCPenney was destroyed during the Johnson era,” 

Also, Saunders said,

“Indeed, the company has changed direction several times – first trying to attract younger shoppers, then younger moms, and now back to older shoppers. In our view, this flailing around is a symptom of a wider problem in that J.C. Penney no longer has a sense of what it wants to be and who it wants to serve. It is, therefore, in something of a no man’s land and fails to inspire anyone in particular.”

Customer information is a crucial part of an organization. It helps in understanding the customer’s satisfaction level, which, in turn, helps the company understand how they can meet with the customer’s demand. While talking about this, there is something that can help JC Penney to turn this around! The loyalty program – It is a way of telling the customers, “You are valuable.” 

What does the Loyalty Program do? 

They feed all the customer information in the system, help increase customer involvement, track repeat customers, identify their orders or interesting products, and retain customers for a long time! In short, your loyal customers will stay with you, and they can also bring in referrals. 

Credit: Jonathan Rolande (

Loyalty programs store all the customer data, analyze them, understand the customer’s expectations, and act accordingly. This way, chances of customer satisfaction increases, and simultaneously customer experience improves drastically. In other words, through loyalty programs, you are giving an added benefit to the customers, and in return, you are selling them precisely what they desire.

To name a few excellent Loyalty programs implemented over the years:

Sephora Beauty INSIDER: They work on a Point-based loyalty program where on every dollar spent in the store, the customer gets rewarded with a loyalty point. The best part is, the loyalty program integrates through all their channels – online web stores, Sephora retail outlet, or their physical store at JCPenney. The customers only require to maintain the same email address during their purchases.

Starbucks: Who doesn’t love a hot cup of coffee! To top it all, who doesn’t love being rewarded for having a good time! The loyalty program of Starbucks rewards their customers through personalized rewards along with exclusive offers and free refills!

Target: The famous shopping store of generations of people has a unique way to reward their customers. They have introduced REDcards. They come in as debit and credit cards and give an instant 5% discount on their daily shopping. Moreover, the cardholders can take advantage of free shipping and an extended 30-days return policy. Target has also integrated with a software that allows customers to reset their REDcard PIN number, manage the account, add more card users, and also, set alerts. If that’s not all! REDcard holders are also eligible to access Black Friday before other customers and get early access to promotional activities, events, and new products. 

Types of Loyalty Programs:

  • Rewards
  • Discounts
  • Free Merchandise
  • Prioritize and access to Pre-Sale or Unreleased products
  • Offers/Vouchers/Coupons

According to the statistics mentioned in, 

“81% of customers feel the loyalty programs help them continue business with those brands.”

“73% of customers would like to recommend brands that have good loyalty programs.”

3. Optimum utilization of the Retail Space 

JCPenney’s CEO, Jill Soltau, said, “I do see us as over assorted, and certainly we have had high inventory levels.”

Also, as mentioned in The Wallstreet Journal that,  

“The management of JC Penney prefers stores between 70,000 and 90,000 square feet, a sweet spot that enables it to display all its merchandise without having excess space.”

Chief Financial Officer Jeffrey Davis said in a statement, 

“This quarter we adjusted our approach to inventory management from ‘buying to store capacity’ to ‘buying and chasing’ into demonstrated sales trends,” 

With the recent developments, JC Penney has set out to reduce their brick and mortar area from roughly 1,10,000 sq.ft to 70,000 – 80,000 sq.ft. Stating, they prefer ‘smaller stores.’ Also, they implemented the ‘Inventory per Square-Foot’ technique. 

‘Inventory per Square Foot is directly related to Sales per Square Foot.’ 

This will help JC Penney understand the kind of sales happening across their brick and mortar stores. Also, by reducing the square foot, they can increase the customer experience with:

  • Improved and assorted store layout
  • More space to maneuver around the store
  • More selective and refined product range
  • Less Over-stocking
  • Increase Sales Staff to help the customers

How will Inventory per Square Foot help JC Penney? This strategy can give an accurate analysis of the best performing stores, least performing stores, and also, the stores that do not bring in any revenue. 

Let’s say, 

A store in Florida makes revenue of $14 Million annually,

While as a store in Indiana makes revenue of $8 Million annually, 

And a store in New York makes nearly $12 Million annually. 

It very clearly states that JC Penney needs to make changes in the strategy of the Indiana store as the revenue is least amongst the three stores. Or, it may even opt to close down the store, if there are no changes or improvements in the store.

Now image, JCPenney follows the same strategy with its 872 stores! Imagine the kind of data they will gather by the end of the financial year and clarity regarding each store’s performance. 

4. Online and Offline Stores

Let’s go beyond the regular brick and mortar store, and let’s step up our game! Why not? We go, Omnichannel!

In the digital era, customers prefer to shop through multiple channels. Thus, JC Penney needs to ensure its physical inventory is widespread through all the channels. But, more importantly, it also has to focus on customer satisfaction. So why not give their customers the liberty to buy from any platform (stores or eCommerce), and instead of returning to the same channel, they can return it anywhere! 

This, in other words, is called Omnichannel. And, it will definitely up the game!

All they have to do is integrate their stores to the eCommerce platform. And regularly conduct analytics to understand the revenue generated from those stores.

Final Thoughts

JC Penney is under a lot of pressure to maintain its 117-year-old name and fight the competitors as well. They have time and again said that their priority is to manage their inventory and re-establish customer experience. Coming to inventory management, Orderhive has helped many companies create a platform to connect smoothly with their customers. Also, at the same time, give detailed inventory information. A simple free demo can help assure you that Orderhive has dedicated itself to create a user-friendly application for the companies to succeed.

Ankita Bora

Ankita Bora

I write to express and believe that words are powerful. Long drives and traveling are my weekend goals. I write poems when I am happy and enjoy a solo outing. My mind works best when I am by myself at a cafe with a tall glass of cold coffee and sandwiches. I dance in the rain and heat never bothers me. For me, winters are the worst! I laugh when I cry and bring a smile to everyone close to me. Content Writer at Orderhive, I present knowledge on technical aspects on weekdays and on weekends I write for myself.

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