JCPenney (NYSE:JCP) is busy undoing the work of former CEO and ex-Apple retail head Ron Johnson, and this week the company is axing the free Wi-Fi he once dubbed "fundamental architecture" for stores.
The retailer confirmed the removal of the service to BuzzFeed after shoppers voiced their displeasure on Twitter. A JCPenney spokesperson explained that the signal wasn't used very often by customers.
JCPenney has already invested $12 million installing the system last year, but shutting it off for customers will save the chain about $7 million a year, according to BuzzFeed. In the grand, $985-million-net-loss scheme of things that's not a huge cost-saving measure, but it's a start.
How worthwhile an investment free wireless internet really is is still up in the air. Johnson was a proponent, claiming that it would make for happier employees and would keep customers in the store longer. Competitors like Target (NYSE:TGT) and Macy's (NYSE:M) have also started offering free in-store Wi-Fi over the last year, while Nordstrom (NYSE:JWN) and McDonald's (NYSE:MCD) have been doing so since 2010.
But for current CEO Mike Ullman, the investment hasn't been worth it. In addition to slow usage, he said the mobile checkout technology that was based on the Wi-Fi was confusing for most customers. Shoppers also don't tend to realize free Wi-Fi in a store exists, or just choose to use their own data plan instead.
Mobile checkout will still be able to run on the private Wi-Fi network, but Ullman will put a new focus on making sure store associates are visible and able to assist customers.
- See this BuzzFeed Business story
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