The article emphasizes on continues degrading sales of the retail sector for past few years. The introduction of online sales or e-commerce sector hits the conventional purchasing decision concept of the customers in a significant manner. The availability of online sales has enhanced the convenience level of the customers at the time of purchasing any particular product or service. It has also allowed customers to minimize the required time for purchasing specific products or services. For that reason, it has provided a better alternative option for the customers for fulfilling their needs and requirements on regular basis. The article has highlighted that the online sales volume has increased by up to 22% that reflects around $3.34 billion (businessinsider.in 2017). It has induced prime retail stores like JCPenney and Macy to shut down their branches or run on decreasing sales volume in future. The study will look to focus on identifying potential clients for developing effective communication system. It will also look to demonstrate the understanding of present problem in an effective manner.
From the assessment of the article, it is clear JCPenney is the prime client that has contributed to the loans estimated around $48 billion. Now, JCPenney is regarded as one of the largest American departmental stores. It is present in around 1014 locations across Puerto Rico and USA (jcpenney.com 2017). Therefore, it holds significant percentage of the total sales volume within the retail sector. JCPenney has established its presence almost in all the popular shopping malls for getting close to the desired level of customers. Majority of the stores of JCPenney holds considerable amount of space of the malls that require huge investments from the investors. Therefore, JCPenney’s decision of closing stores is likely to create massive impact on the overall sales of the retail sector. Moreover, it has put the massive investment by the investors of developing shopping malls at extreme risk. For that reason, it is essential to develop effective strategic communication consulting plan for JCPenney for inducing them to keep running the all the stores in future as well.
As illustrated by Downs and Adrian (2012) strategic communication allows clients to understand all the positive and adverse affect of current situation. Now, the increasing popularity of online sales or e-commerce network is likely to grow in future as well. Therefore, it will be very difficult for the traditional departmental stores to keep their revenue at the desired level. However, closing of the stores is not the only option left for JCPenney from avoiding of occurring loss. In fact, closing on stores is related with huge investment made by the several parties that can affect the overall business even further. The investors need to share the impact of closing one prime store from shopping mall on the business level of the other stores as well. For that reason, the strategic communication will have to be focused towards identifying the best possible way to counter the popularity of online sales. For that reason, CMBS will have to focus on developing long-term business collaboration with the entire business opening at a particular shopping mall. As per the article by Linke and Zerfass (2012), strategic communication reflects a communication of a process, concept or data for fulfilling long-term strategic goals of an organization. Now, in the present complex business situation, CMBS will have to focus on developing long-term contract with all the stores opening at the malls in order to enhance the security level of the investment considerably.
Commercial investments focused towards ensuring profitable returns. However, continues degrading situation of the retail sector has putted entire lending procedure of CMBS at risk. Without guarantee of profitable return, it is unlikely for CMBS or any other lending organizations to invest big amount of any particular project. Therefore, it might enhance the risk level associated with the other investment as well. Thus, it is necessary for both the authority to make proper business collaboration for ensuring each other success in the competitive market. The Morningstar has highlighted that around 48 billion in loans backed by the shopping mall property at serious risk. For that reason, the strategic communication will have to focus on highlighting the closing decision of other retail organizations like Macy's and Sears as well. Therefore, it is likely to reduce the competition associated with the retail procedure as well. As a result, it would likely to provide more opportunity to JCPenney to keep the revenue level at the desired order (Macnamara and Zerfass 2012). The strategic communication have to focus on developing long-term planning of countering present adverse situation associated with the business procedure. Thus, the strategic communication would also focus on identifying the best possible way to regain customers from the increasing popularity of the online sales.
Many retail stores have focused on enhancing the convenience level of the shops for attracting the attention of the customers in an effective manner. Therefore, JCPenney will have to focus on developing cafeteria and also providing free Wi-Fi to the customers in order to ensure they spend quality time with their friends and family. The strategic communication would also focus on highlighting continues increase in the regulatory burden. As a result, sudden decision of closing stores is likely to create legislative challenges for the business procedure, which is also likely to create adverse impact on the overall sales volume (Thomas and Stephens 2015). Hence, strategic communication needs to develop strong long-term relationship with all the businesses capturing the space of a specific mall in order to back massive investment of developing malls.
On the other hand, increasing popularity of online sales has created challenges for JCPenney to keep the revenue level at the desired order. The overall sales volume of the retail sector has dropped by 5%, which has also reflected the decreasing profit level of JCPenney. For that reason, the management of JCPenney feels that it would be very difficult to keep the present number of stores open in future as well. It is actually increasing the operating cost associated with the business procedure in a significant manner. For that reason, it would be critical to close all the worst performing retail outlets for keeping the profit at the desired level. Several studies have identified that popularity of online sales will keep on increasing in future as well (Falkheimer and Heide 2014). Increasing popularity of internet has allowed people to buy any product as per their linking from anywhere. Moreover, online sales technique provides more alternative option for the customers at the time of selecting a particular product. Therefore, it would provide very little opportunity for the traditional retail organizations like JCPenney to enhance the sales volume. For that reason, management of JCPenney perceives that it will be unwise to invest bigger amount on those stores that are not performing at the expected level. Hence, closing down all these stores will allow the organization to minimize the cost associated with the operational procedure in a major way.
However, opening of any retail outlets within the popular shopping malls requires massive investment. As a result, organizations have to depend on long-term business in order to cover up all the investment comprehensively. Closing of different outlets will not provide the opportunity to the organization to recover entire amount of investment. As a result, it is likely to create impact on the long-term investment procedure. Still, the management of JCPenney has expressed their concern of acquiring relatively lesser loss by closing down different shops. In fact, the management of JCPenney has expressed the fact that they are not the only one who has taken decision of closing down different shops present in different geographical locations. Rather organizations like Macy and Sears have also taken similar decision in order to keep its existence in the market. Still, closing down of different outlets will also minimize the targeted customers of the organizations (Fredriksson and Pallas 2015). Therefore, those customers will also look for different alternative options like online sales in order to fulfill their daily needs and wants. Hence, closing of retail outlets is eventually likely to boost the popularity level of online sales platform, which will decrease the business level of the organization even further.
From the analysis, it can be illustrated that retail stores are likely to face massive challenges in order to keep the sales volume at the desired level. For that reason, security backed commercial lending organizations will have to be extremely careful at the time of making decision on investing massive amount on shopping malls and other commercial sectors. Moreover, the article has also highlighted the significance of maintaining appropriate legislative collaboration with all the retail entities that are purchasing space of the shopping mall. The legislative regulation should focus on developing log-term relation where no businesses can take sudden decision of breaching the investment procedure. Otherwise, it can put the entire investment made on developing a shopping mall in severe risk.
businessinsider.in, 2017. The shopping mall apocalypse is creating a $48 billion disaster in American finance. [online] Business Insider. Available at: <https://www.businessinsider.in/the-shopping-mall-apocalypse-is-creating-a-48-billion-disaster-in-american-finance/articleshow/57546096.cms> [Accessed 30 Apr. 2017].
Downs, C.W. and Adrian, A.D., 2012. Assessing organizational communication: Strategic communication audits. Guilford Press.
Falkheimer, J. and Heide, M., 2014. From Public Relations to Strategic Communication in Sweden. Nordicom Review, 35(2), pp.123-138.
Fredriksson, M. and Pallas, J., 2015. Strategic communication as institutional work. The Routledge handbook of strategic communication, pp.143-156.
jcpenney.com, 2017. JCPenney: Window & Home Decor, Bedding, Appliances & Clothing - JCPenney. [online] JCPenney. Available at: <https://www.jcpenney.com> [Accessed 30 Apr. 2017].
Linke, A. and Zerfass, A., 2012. Future trends in social media use for strategic organisation communication: Results of a Delphi study. Public Communication Review, 2(2).
Macnamara, J. and Zerfass, A., 2012. Social media communication in organizations: The challenges of balancing openness, strategy, and management. International Journal of Strategic Communication, 6(4), pp.287-308.
Thomas, G.F. and Stephens, K.J., 2015. An introduction to strategic communication.
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