J.C. Penney Plans to Eliminate Cash Registers by 2013

J.C. Penney CEO Ron Johnson has announced another chapter in his “transformation” of the venerable department store: no more cash registers by 2013. 

“My goal…by the end of 2013 is to eliminate the cash route,” the former Apple exec said July 18 at the Fortune Brainstorm Tech conference. “So you think of a physical store without a cash routing. Can you imagine a Target store without a place to checkout?”

Instead, Penney will rely on mobile checkout, which it will start rolling out this fall.

“You’ll be able to check out anywhere anytime, from anyone including yourself, because we’re going to roll out self-checkout to our stores next year,” he says. “It’s really cool and it’s really easy because it’s RFID-based. You don’t have to scan an item. You just throw it down and there’s the price.” 

He added that self-checkout couldn’t have happened if the company continued to use coupons. (The company eliminated coupons earlier this year as part of its “Fair and Square” pricing strategy.) “You couldn’t do that in a promotional business strategy, because the customer has to figure out that every item had this unique price and was it right for this hour,” he said. “So all of the strategy we’re doing are linked together by a high integrity pricing strategy.”

However, that pricing strategy will also receive a major tweak, Johnson announced. Previously, the store offered three tiers of prices: everyday prices, month-long sales, and clearance. Now the two pricing levels have been pared to clearance and everyday. 

“People found [the old structure] very confusing,” he said. “So we’re going to eliminate the month-long value and just reinforce that every item is lower and priced every day.”

He also said that outsiders were too quick to pronounce his new strategies a failure.

“Transformation takes time,” he said. ‘We’re in a marathon here. It’s going to be four years, and we’ve got a very precise vision of how we’re going to get there, and we’re going to stick to our plan.” 

And he said that he retains confidence in the future of brick-and-mortar stores.

“[Online sales] are going to level out,” he said. “If I had to pick today, would I rather be an online-only retailer and try to compete 10 years from now, or a physical retailer trying to complete 10 years from now? Knowing that the digital and physical worlds [are coming] together, I’d take a physical retailer in a heartbeat.”

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JCK News Director