How JC Penney is using iPod Touches to revamp customer service in 1,100 stores

A Penney's sales associate uses his company-issued iPod Touch device to scan a customer's purchases and accept her credit card payment under a new mobile check-out process that's being rolled out throughout the company. Credit:JC Penney

Before they begin their work shifts selling merchandise each day, sales associates in J.C. Penney's 1,100 stores across the United States now have to be sure that they head onto the sales floor with a work-issued Apple iPod Touch on their belt.

They're not carrying the devices for their music and entertainment value, of course. Instead, since November 2012, J.C. Penney has been giving salespeople the devices so they can help shoppers anywhere inside the stores.

"It's a customer service initiative," said Kate Coultas, a spokesperson for the 111-year-old retailer. "We want to make the process of shopping at J.C. Penney as easy and seamless as possible."

"Our associates want to be able to be out on the floor helping customers," said Coultas. "It doesn't help if they are stuck behind the registers. Now, if you are on the floor, you need to have an iPod Touch with you."

The iPods were first distributed back in November and are in about one-quarter of Penney stores. The full rollout to all of the stores is expected to be completed by the end of this month, said Coultas.

So far, the devices have been a big hit with the company's salespeople, she said.

"Some have nicknamed them 'Libby,' for 'Libby the Liberator' because they can be assisting customers without being chained down to a register," said Coultas.

They're also a great productivity tool because sales associates can use the iPods to access and view training videos, and store display layout illustrations and other company sales and policy materials that they must review as part of the jobs. Previously, those materials had to be viewed through the point-of-sale cash registers in fixed locations.

"Now they have access right in the palm of their hand," said Coultas.

Penney's salespeople can even scan purchases and check them out using their iPod Touch. The devices are equipped in a special plastic case that incorporates a UPC code scanner and a credit card swiping device, so customers never have to go to a cash register counter. Customers can "sign" their purchases using their fingertip on the screen.

"This is great because it's an easy way for them to check-out and because they don't have to wait in line," said Coultas. "It was definitely a great success for us on Black Friday last year. On Black Friday, associates would just walk up to people in line and say, 'hey, I can check you out right now.' Customers loved it."

The iPod Touch devices do have a few limitations, at least for now. They can't issue printed receipts for purchases and they can only be used to assist customers who are paying with credit cards. If a customer wants a printed receipt, the salesperson has to print one out at the old-fashioned cash register, and cash transactions have to be processed there as well. The devices can email a receipt to the customer for each transaction.

So while the cash registers will never disappear entirely, the iPod Touch devices are a wave of the future for Penney's as the company moves to introduce the new mobile check-out option to consumers, said Coultas.

In some of the specialty shops being built inside some Penney's stores, such as Levi's shops, the company is also experiminting with Apple iPad tablets for customer interactions, she said.

The eventual goal is to move to a majority of customer transactions to mobile devices and self- checkout inside the stores over time, but traditional service desks will always remain to help with returns, gift registries, online order pick-ups and other needs, said Coultas. "There's a cleaner, less cluttered look to our stores with the removal of register areas."

Coultas would not comment on the price tag for the iPod Touch initiative in the stores. But even though the company is spending money for the devices, she said, they are also saving money by having fewer cash registers, lower paper receipt printing costs and more efficient training opportunities for employees.

Overall, the program so far has been a smash-hit, said Coultas. "The issue was delivering better customer service and we were able to do that through this initiative."

Penney's has certainly been in the midst of plenty of other changes lately. CEO Ron Johnson arrived in November 2011 from Apple, where he was the senior vice president of retail since 2001. At Penney's, Johnson began an initiative to rid the chain of "sale" prices, which apparently confused customers and helped lead to a loss of more than $4 billion in fiscal 2012, according to reports. Now the company is returning to more traditional pricing amid other changes that include the construction of smaller specialty stores inside of traditional Penney's stores to extend their product offerings.

Johnson's mobile experience at Apple certainly shapes his views, said Coultas. "He's certainly bringing that kind of shopping experience here as well."

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