JCPenney's In-Aisle Checkout And Store Redesigns Are About To Collide

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JCPenney showed off its new "shops within the store" concept on Wednesday (Sept. 19). But there are still more than a few unanswered questions about exactly how the retailer's in-aisle checkout will work when it goes live in February 2013. The biggest issue: Will customers treat the clusters of mini-shops like a mall (pay when you leave each mini-shop) or like a department store (pay all at once at the end)?

The 1,100-store chain's CEO, Ron Johnson, admits that JCPenney is still figuring out the workflow for checkout. He'd better work fast—this is a lot more complicated than anyone assumed.

The idea is simple. As Johnson reminded investors and analysts at an event this week, JCPenney plans to use item-level RFID tagging for all merchandise, which will enable every associate to carry a specially equipped iPod Touch to do in-aisle checkout. (Johnson is calling that "checkout in pockets," because associates will be carrying the iPods in their pockets. Yeah, we thought so, too.)

Customers can also choose (for the foreseeable future) to check out at a conventional cash wrap, which will still take 75 percent less time because of the RFID tags. The chain will be phasing out those cash wraps very slowly, to avoid the "where do I check out?" reaction Johnson said was an early problem at Apple Stores.

All this will be going live next spring, just as JCPenney begins its three-year project to replace its 500-plus legacy systems with Oracle Retail. There's no indication whether the chain plans to use Oracle's new mobile POS offering, which the vendor announced on Tuesday (Sept. 18).

Whether it does or not, the problem JCPenney faces is the same: The new layout is terra incognita for checkout, and in-aisle checkout just makes things more complex. This isn't like a conventional department store (say, the current JCPenney), in which nobody will look twice at a customer who decides to avoid the lines in the Women's department and pay for her sweater in Housewares.

The chain's plan is for each of the mini-shops to have its own branding, the way the Sephora stores already do. That means a completely different look, in addition to special training for associates in the mini-shops pushing Levi's, Disney, Liz Claiborne, Joe Fresh and other brands.

It also means IT will be one of the few things that will be consistent from one mini-shop to the next. Or will it? Yes, every item will be RFID-tagged for the same inventory system. But that iPod Touch app used in the Liz Claiborne mini-shop? Will associates be able to use it to answer questions about other "departments" merchandise? If they can, that specialty branding is out the window. If they can't? Well, what type of customer service is that?

What about the look and feel of those mini-shop apps, including the checkout apps? Will the Levi's app look distinctively like it belongs to Levi's and the Disney app to Disney?

Will a customer be able to get a Disney receipt when he buys his Levi's, if the Levi's line is too long, or will he have to go to a generic cash wrap? Will associates encourage customers to pay for everything they've got in their shopping carts to discourage customers from mixing paid-for and not-yet-paid-for merchandise (the biggest Loss Prevention fear that comes with in-aisle checkout)?

JCPenney could opt to have customers pay as they leave each mini-shop, but that's a little crazy. It's like making them pull out a wallet 10 times, when it's clearly all the same store.

Or what if a customer hits the Levi's mini-store for jeans and Sephora for makeup, planning to pay at a conventional cash wrap, but then sees a line at the cash wrap and decides to duck into the Disney mini-store to pay—and maybe ask an associate there questions about the makeup if it turns out she has changed her mind?

Exactly how much technology should be available to help when the Mouse House gets Sephora questions is really not clear. And JCPenney has less than six months to figure that out.