For JC Penney, Customer Data Matters

This week, JC Penney turned off Apple Pay.

Initially, they didn’t make any formal announcements about the drop. Instead, rather innocuously, a customer inquired via Twitter about why his wife was unable to use Apple Pay at the cash register, and JC Penney let the world know that they were no longer offering the payment option.

JC Penney later gave a more detailed explanation. Their official reason was that since they were unable to comprehensively comply with an April deadline for supporting EMV contactless chip functionality, and so they decided to switch off all contactless payment options online and in their 800+ brick and mortar stores. They also indicated that customers could still use the more traditional insert or swipe options and that the ‘vast majority’ of their customers used this more traditional payment method.

The inference in their statement is that they know their customers and that their customers will be fine without Apple Pay. It’s a bold move, especially for a company that has been struggling, to limit choice on behalf of their customers. It’s also startling because the technology they’re cutting is inarguably more secure than a traditional credit/debit card.

So why would an enterprise like JC Penney make a deliberate move away from technology?

One hypothesis – a good one – is that JC Penney is trying to turn around their slump by getting better control of their data. This move will give them complete and comprehensive access to customer and purchase data, and that’s a powerful tool in business, especially for a company that is not doing well. If this is true, it could be considered a smart decision to take a pause, not upset the majority of their customers and get a grip on what’s selling and who’s buying it. It’s a way to stick their hand in a running engine and not get too badly burned.

In a world where their competitors are using big data, AI, and even behavior science to stay relevant in the marketplace, stepping back from technology has caused an interesting stir. If it is truly a calculated move on JC Penney’s part, some kudos should be given for the attempt to disrupt their business – albeit temporarily – while they regroup.

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