JCPenney Bets Big On Beauty

Any homepage takeover is a gamble for retailers -- let alone one that lasts 48 hours. But JCPenney, in the midst of re-establishing itself as a beauty presence after a long break-up with Sephora, hopes that going all-in on beauty will let consumers know how seriously it's taking skincare and make-up. Katie Mullen, chief digital and transformation officer at JCPenney, talks to Retail Insider about the decision.

Retail Insider: JCPenney has been rolling out the new beauty business for several months now, and will be in 600 stores soon. How are you hoping the homepage takeover will help?

Katie Mullen: I came in about a year ago to help the company grow its ecommerce business and use that as a platform to revitalize the brand. Through COVID, we've not been able to get the word out about everything we were doing and bringing to customers. The new beauty business is part of how we engage customers. We launched JCPenney Beauty online in September, and we're just starting to learn how to sell beauty digitally. This is a new experience for us.

So we decided we wanted to push ourselves to create a moment, introducing ourselves to the world more fully -- the equivalent of a store opening in the digital space. And we wanted to celebrate the things different about our beauty business, specifically the hyperinclusivity. We've got a unique approach to founder-led brands. From a digital perspective, we wanted to sort of scream about that.

Retail Insider: What are the risks? What happens if I'm coming to the site for bath towels, not beauty?

Mullen: The risk is real for us. Every day, I have millions of visitors to the site, and most come for other categories: apparel, jewelry, and home.

But someone shopping for towels won't be disappointed. The search bar will be open, so that they can access other categories. We're just trying to get them to pay attention. We'd like to put our best foot forward by introducing our beauty offering.

So I think about it as a material opportunity cost, as opposed to a downside risk. The opportunity cost is the millions of dollars of sales I would do in other categories on those days. But it's worth it for us to tell the story of this new category.

Retail Insider: How will you know if this is a good idea? You'll learn how much you sell in 48 hours, but what might the brand payoffs be?

Mullen: I'm not focused on sales. If we get a ton, we'll feel very happy. This is all about awareness. We are expecting two to three times in traffic growth to beauty during the takeover. In this big, flashy way, you'll see educational content and founders. We want customers to engage with that content. The big win is someone reading an article about a founder, understanding what a K-beauty routine looks like, or thinking of finding out how to layer products.

This isn't purely commercial. We're a retailer and in business to sell things. But this is our first date with some customers, and we want a great initial conversation.

Retail Insider: Has JCPenney done this before?

Mullen: I've done homepage takeovers before, but it was not in the JCPenney playbook. But the team got excited because it allows for more storytelling and introduces us to customers who have never experienced JCPenney beauty. It also introduces us to brand partners and other founders.

Retail Insider:
Say more about inclusivity and founder stories. Why do they matter?

Mullen: Getting the word out about our commitment to diversity and founder-led brands matters to our customers. And I don't know that they know how much we have put our money where our mouth is there. This is an excellent opportunity for us to talk about how we're age-inclusive, size-inclusive, and ethnically and racially inclusive. We support all skin tones. We have halal beauty. No one else is doing that type of hyperinclusivity. We're doing it in other categories, too, but the beauty business allows us to tell that story and connect with customers.

Retail Insider: How about gender inclusion?

Mullen: A generation and segment of men are very comfortable with color cosmetics. They want the same treatment options for skin and hair. Sometimes, we call it grooming to make it a little more accessible.

Retail Insider: How do digital beauty sales compare to other categories?

Mullen: We've only been selling JCPenney beauty since September. Across the industry, beauty is heavily penetrated digitally because there's so much exploration and discovery in digital channels. So we know that customers are very comfortable buying beauty digitally, but we still have to introduce ourselves. Right now, it's a smaller business than jewelry, home and apparel for us. Beauty is the fastest growing, but off a smaller base.

Retail Insider: You were at Neiman Marcus before joining JCPenney. There's a big difference in price points. Are there similarities?

Mullen: Absolutely. Customers are curious about beauty, and the journey at the two retailers is very similar. The brand partners and price points are different, but everybody cares about inspiration, education, community engagement and relationships. Those aren't different at all.

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