New technology could help cut costs and enhance customer experiences.
New CFO Jeffrey Davis told The Wall Street Journal that JCPenney could improve its ability to cut operational costs and enhance the customer experience by reallocating some of its $400 million in capital spending to be used on technology investments. He is committed to investing in technology to help improve decision-making for the retailer. Davis took over the position in July, succeeding interim chief financial officer Andrew Drexler.
In July, Davis stated, “"JCPenney is a mainstay in American retailing, and I'm proud to have the opportunity to sustain its rich legacy alongside a group of dedicated associates committed to differentiating the Company from its traditional competitors," said Davis. ”I look forward to working with our teams in Plano and Salt Lake to continue strengthening the financial position of JCPenney, further propelling the Company's momentum."
Now, Davis wants to use technology investment to help reduce general, administrative and sales expenses, but he also believes the retailer should invest in new technology to help it apply data collected from to enhance customer experiences and influence pricing decisions. The aim is “to allow our existing resources and processes to be more efficient and provide a higher level of service to customers,” Davis said.
“Our vision [is] to evolve this organization, either through human resources mining the data or other tools, to be much more nimble than in the past,” Davis explained. With his background at a company with more data-rich environments, Davis asserted, “Having seen what you can do if you have more timely information being provided,” he knows that new technology can help to improve overall decision-making throughout the company.
Senior equity analyst Oliver Chen told the WSJ that technology is a critical tool in helping retailers ensure that the right items are in the right place at the right time, helping to reduce markdowns. He explained, “It should be the top priority in retail at large because technology can manifest in better inventory management, and increased supply-chain speed. If you don’t invest in technology, you’re hurting your future chances of success.”