J.C. Penney wants a piece of the $6B dorm furnishings market

Dive Brief:

J.C. Penney is launching new “dorm shops” inside of 500 stores this week, featuring a curated selection of bedding, bath and décor products designed to entice many of the recent high school graduates and their parents who begin their shopping early, according to a company press release.
The 400-square-foot stores-within-a-store offer mini refrigerators, microwaves, portable air conditioning units, storage solutions and later this month will also include Packard Bell laptops. To make the college moving day easier, customers can ship their online orders to a J.C. Penney store located close to campus, the company said.
Total back-to-school spending for K-12 and college was estimated at some $75.8 billion last year, up from $68 billion the previous year, according to the National Retail Federation. Families with college-bound children tend to spend more on bigger ticket items and are expected to spend more than $6 billion on dorm furnishings this summer, according to J. C. Penney chief merchant John Tighe.

Dive Insight:

The spending period may be longer and more diffuse than at the holidays, but back-to-school shopping is the second most important retail season, after the holidays, according to the NRF.

Back-to-school shopping increasingly begins in the summer. Consumers prepping for school make almost half of the purchases in July and August, giving August an average back-to-school purchase volume three times higher than average, according to research from Yahoo emailed to Retail Dive. Over the last five years, like so much other commerce, online shopping for school supplies (a category that now encompasses electronics and furniture, along with the traditional pencils and apparel) has grown more than 75%.

That makes Penney’s buy online, pick up near campus approach particularly savvy. "JCPenney has a sophisticated omnichannel network with a variety of convenient shipping options, which can be especially important as students head off to college,” Tighe said in a statement. “We have the benefit of leveraging our store fleet to deliver JCPenney.com orders quickly, efficiently and at a low cost to the customer, representing an opportunity to drive additional sales.” The retailer is promoting its shipping approach in part by publishing a list of its stores located within just a few miles of major college campuses.

The push on dorm furnishings is also an effort to boost sales of J.C. Penney's private brands, including JCPenney Home, Home Expressions and Cooks, which in turn could help the company buoy its margins. To help sell products to students and their parents, the retailer is providing a checklist for dorm necessities like twin sheets, dorm-appropriate cookware, mattress toppers, bath towels, clothes hangers, desk lamps and alarm clocks. The 500 J.C. Penney stores with dorm shops also feature localized team apparel and room décor, and include new categories like microwaves and compact refrigerators.