JC Penney boosts e-commerce sales with targeted promotions

The move away from general discounts has led to big improvements in key e-commerce metrics for JC Penney Co. Inc.

The retailer uses Metrical’s predictive artificial intelligence (AI) modeling-based solutions in its e-commerce promotions. Results included a 40% increase in new cart creation, an 18% reduction in cart abandonment, and a 10% improvement in revenue on targeted visits.

In 2018, Penney’s online conversion rate was below optimal levels and the department store chain frequently used discounts to boost sales. However, discounts come at a high cost, and the company realized that this sales model would not be sustainable. So she set herself the goal of converting customers online without sacrificing margin.

The retailer used Metrical’s predictive AI solutions to improve the targeting and performance of online promotional tools such as pop-ups and paid search. Penney’s also applied Metrical technology to its efforts to convert online sales of poorly performing product category items that had not been purchased in customers’ carts.

Performing a cost-benefit analysis, the retailer took conversion revenue and subtracted all associated costs, including cost of goods sold, marketing costs, shipping and more, to arrive at a bottom line that , according to the retailer, was triple what it had experienced before using Metric.

Other efforts Penney’s has launched over the past six months to rejuvenate its business include adding a new menswear brand to its own brand portfolio, introduction of same day delivery with Door Dash, adding merchandise of Forever 21 to its in-store and online assortment, and the opening of “JCPenney Beauty” boutiques in 10 of its stores from October 2021, with planned deployments in all Penney stores by 2023.

The department store retailer is also celebrating its 120and anniversary with a new integrated campaign featuring “Saturday Night Live” star Melissa Villaseñor, which includes a brand refresh in-store and online.

Marc Rosen, former Levi Strauss and Walmart executive, joined the company as CEO in October 2021, saying he was “looking forward to propelling the business into its next era and connecting with our customers in new ways.”

“Metrical’s insights have proven invaluable in both long-term and short-term planning and we continue to experiment with new ways to use it,” said Pratik Kodial, vice president of JCPenney business efficiency. “The fact that we have made progress indicates that we have achieved our internal sales and margin objectives. One of the other things we were looking at is the customer experience aspect. I don’t believe customers like pop-ups, but what we saw in the context of Metrical customers and their messaging was not a degradation in Net Promoter Score (NPS), which is what we use to measure customer experience. It was quite interesting, and we believe this program is a success.

“JC Penney is an ideal customer because they continually challenge us to try new things and expand our capabilities,” said Zabe Agha, Founder and CEO of Metrical.