Home Refractory This Department Store Partners with DoorDash for Same-Day Delivery: Will There Be More?

This Department Store Partners with DoorDash for Same-Day Delivery: Will There Be More?

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Like all retailers, department stores have not been immune to the blow of the COVID-19 pandemic. In fact, many have closed their doors since the crisis began, leaving malls in a difficult position.

Shopping centers routinely rely on department stores to act as anchor tenants, attracting customers and driving rental activity for nearby businesses. So losing department stores is a hit mall REITs or real estate investment trusts can’t afford in 2022.

Now the good news is that some department stores are taking steps to expand their customer base in the new year. And one such brand is JC Penney (OTC:JCPN.Q). The struggling retailer recently announced that it was going into a partnership DoorDash (NYSE:DASH) To offer same-day delivery for home products in more than 600 of its stores. And that might be exactly what saves it.

Image source: Getty Images.

A tough ride

Like many retailers, JC Penney filed for bankruptcy in spring 2020 when a lack of walk-in customers hit the already struggling retailer hard. A few months later, the department store giant got a bailout of sorts Simon real estate group and Brookfield Wealth Managementtwo large mall operators bought it out of bankruptcy.

But JC Penney still faces some hurdles. Despite its generally affordable price point, it doesn’t exactly have a great reputation when it comes to appealing inventory. And at a time when customers are increasingly shopping online, the chain’s e-commerce experience leaves a lot to be desired.

However, partnering with DoorDash could give JC Penney a solid edge over its competition. Nowadays, more and more retailers are making it easier for customers to get the goods they need. Not only have many increased their delivery speeds, but they are also offering BOPIS – buy online, collect in store – as well as curbside pickup.

Offering same-day delivery could help JC Penney grow, or at least keep its customer base on the convenience factor alone. This is especially true at a time when supply chain delays are forcing consumers to wait longer for the goods they order online.

Good news for real estate investors

The loss of a foothold like JC Penney could spell serious trouble for mall operators across the country. In fact, a major reason Simon and Brookfield decided to acquire JC Penney was to spare their own properties from the loss.

By offering same-day delivery, JC Penney is doing its part to become a competitor in the department store space again. And while it may need to take other steps, such as B. revamping his inventory to really grow his fan base, his DoorDash partnership is undoubtedly a strategic one at the moment.

In fact, there’s a good chance other retailers are exploring similar partnerships as consumers increasingly do their shopping online. Granted, they won’t necessarily use DoorDash’s services, but same-day department store delivery could soon become a common offering. And it might give real estate investors a sigh of relief when it comes to their mall REIT holdings.

In the meantime, investors looking at retail stocks (as opposed to mall REITs) should focus on companies that are taking specific steps to improve their shipping and delivery businesses. With the general shift towards e-commerce, fast turnover could be the ticket to customer loyalty in the years to come. And same-day delivery is really just one of many offerings that retailers can leverage to improve the customer experience.

This article represents the opinion of the author, who may disagree with the “official” endorsement position of a Motley Fool premium advisory service. We are colourful! Challenging an investing thesis — including one of our own — helps us all think critically about investing and make decisions that help us be smarter, happier, and wealthier.