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J.C. Penney Surprises as Genius in L2’s Digital IQ Index

J.C. Penney is slowly undoing the damage it blamed on ousted CEO Ron Johnson’s snafus that saw the chain experience a disastrous drop in sales: The Plano, Texas-based retailer narrowed its losses to $138 million in its most recent quarter and revenue was $2.88 billion, up from $2.86 billion in the previous year.

Hyper-aware of Penney’s laggard status in the online arena, current chief executive Marvin Ellison recently hired Michael Amend (formerly of Home Depot) to serve as executive vice president of omnichannel and Mike Robbins as senior vice president of supply chain (he previously held the same position at Target) to step up its multichannel efforts. But judging by a report released Monday by L2, the retailer is already doing a decent job of providing a seamless, cross-channel customer experience.

The research group ranked J.C. Penney as a “genius” on its 2015 Digital IQ Index, which weighed 58 department stores in 17 countries on their omnichannel efforts, guided selling strategies and social media initiatives. Penney’s placed second, just behind Macy’s, and topped Saks, Net-A-Porter and ASOS. Among the seven retailers classed as “feeble (that is, when investment doesn’t match opportunity) is Canada’s Holt Renfrew, owned by Selfridges Group Ltd.

“While macro data paints a picture of the [department store] category in decline, the format’s performance is considerably more nuanced,” the report said.

In fact, department stores significantly improved their omnichannel capabilities over the past year. L2 found that half now offer shoppers the option to buy online and pickup in-store (compared with 34 percent in 2013), while 61 percent display real-time inventory at the product-page level, up from only 16 percent two years ago. Additional features include allowing users to save their preferred store (18 percent) and see events (read: promotions and sales) specific to nearby locations (82 percent).

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But while 72 percent of retailers reported having seamless online to offline capabilities, just 30 percent of shoppers agreed, suggesting that most cross-channel handoffs leave a lot to be desired. For instance, in-store pickup is only offered by 43 percent of North American department stores, despite nearly all (95 percent) facilitating in-store returns for online purchases.

L2 also discovered that while retailers are posting an average 18 times a day on Twitter, they’re mostly shouting into the ether: The median tweet receives 9.3 interactions (meaning it was retweeted or favorited), down 63 percent year-over-year. Interestingly, 55 percent of retailers surveyed are using the network as a natural extension of their customer service.