JCPenney To Revamp Loyalty Program, Make It Easier To Earn Rewards

Image courtesy of Nicholas Eckhart

If you’re a frequent shopper at JCPenney, listen up: The retailer is poised to debut a new, revamped loyalty program making it easier for customers to earn free stuff more quickly and more often, as the retailer seeks to pad its bottomline amid store closures.

The Dallas Morning News reports that after a year of studying the loyalty programs for rival retailers, the hospitality and travel industries, as well as wading through customer feedback, JCPenney is expected to launch the new rewards program, along with an updated mobile app, sometime this month.

What’s Changing?

The program incorporates the department store’s other offering aside from closing, including its in-store Sephora locations and appliance departments, while providing customers with additional frequent-buyer benefits.

1. Under the new loyalty system, shoppers can now earn more than $10 in rewards each month, and those rewards will be valid for 60 days, the company says. Previously, shoppers were only able to earn $10 rewards once a month.

“Customers didn’t like having a limit on how many $10 rewards they can earn or that points expired,” Sherina Smith, vice president of loyalty and customer relationship management, tells the Dallas Morning News. “That’s not a way to drive loyalty.”

2. Loyalty members will also have the opportunity to receive member-only prices and invitations to exclusives events where they can earn rewards more quickly.

3. Those shopping at one of JCPenney’s 650 Sephora locations will be able to earn rewards for the department store, as well as Sephora’s own Beauty Insider rewards, essentially providing a double-dip reward opportunity.

Why Now?

Revamping the rewards program — a change that has been a year in the making — is JCPenney’s attempt to better appeal to loyal customers, who account for about 66% of the retailer’s sales, Smith said.

With the new system, the company aims to increase the number of JCPenney credit card holders, who will earn double points when using their store-branded credit cards for purchases.

Still, some analysts warn that a new loyalty program might not be a saving grace for JCPenny.

“If your product or experience is broken, changes in your loyalty program alone probably will not fix it,” Melissa Fruend, partner at LoyaltyOne Global Solutions, said, adding that programs are just one part of a turnaround strategy.

The retailer, which announced earlier this year that it would close 130 stores, has seen a decline in apparel business in recent years. Women’s apparel is JCPenney’s largest category, accounting for a full 24% of sales in 2016 by itself. That doesn’t even account for mens’ or kids’ clothes, which are also facing declining sales.

As a result, the company has increasingly turned its focus toward other endeavors. Appliances and home services — once more closely associated with flailing competitor Sears — are both performing well for JCP, and the company recently announced an expanded partnership with Sephora to bring more foot traffic into its stores.