JCPenney Takes Satellite Network Into Third Decade

By | July 15, 2007 | Satellite News Feed, Telecom

Department store chain JCPenney is a satellite-network veteran, having used the medium to deliver various content among widespread operating locations for more than two decades. Recently, JCPenney was looking to expand its satellite capabilities, as the retail giant wanted to find a more cost-effective and time-efficient model for distributing training to its employees.

While JCPenney has operated a satellite network for nearly 22 years, acceptance of the system — and the embracing of all that a satellite network can offer, has been a slow process, says Alan Langford, JCPenney’s creative production and network manager. “For years, we were strictly a DVB network providing just video [to stores],” he says. “We would go to our [information technology] group and tell them we could help them with some of their bandwidth issues, but at that time, we couldn’t get anybody to listen to us. Our [information technology] group said, ‘We do landline. We don’t do satellite.’ The excuses we always heard were ‘rain fade and weather problems made satellite unreliable.’”

Langford has been with JCPenney’s communications group since 1988 and started on the creative side as a producer. He assumed his current position, where he is responsible for the satellite network, videoconferencing network and television facilities, about seven years ago. “We’ve always known that wasn’t the case. It’s not any less reliable than when a backhoe cuts your landline in the middle of a broadcast. We lost a main circuit a couple of months ago, and it was a guy in a manhole with a chainsaw cutting copper out of the street to sell it.”

Today, the attitude toward satellite within JCPenney has changed, Langford says. “Our [information technology] group is all over satellite. We are full proponents of satellite and working with our [information technology] group to do more. They are buying some additional bandwidth to do some of the things they want to do like content delivery, testing digital signage in the stores and some other applications.”

JCPenney also considering using very small aperture terminals (VSAT) as a backup source for stores in case terrestrial lines are lost, and the company also is investigating the feasibility of using satellite to provide a communications network for new stores that need network connectivity, but do not yet have access to the terrestrial infrastructure that can meet their needs, says Langford. “We are looking at using portable dishes to use the satellite to provide that,” he says. “Times have changed for us, and we are getting a lot more support than we used to.”

The acceptance is going so well that JCPenney has begun construction of its own satellite uplink. For the past 10 years, JCPenney has relied on a company located 60 miles south of the retailer’s Plano, Texas headquarters to provide uplink services. JCPenney has spent a total of about $1 million on uplink services, and while prices have come down, the company decided to end the contract in favor of operating its own uplink facility, Langford says. “For what the facility will cost to build and operate, the payback will come in a short period of time,” he says. “We have had to send content along two 60-mile terrestrial lines to the uplink facility. Having our own facility takes away a potential point of failure.

“If you don’t have any type of production facility or knowledge, you may not benefit from this,” Langford says. “But we’ve learned a lot, and there is not a lot of technical upkeep required for the facility. Things have gotten to a point where building and having people maintain the facility twice a year will be very cost effective,” he says.

Helius Powers New Capabilities

While JCPenney is taking new steps on the operations side of its satellite network, advancements also are being made on the content side, as the retailer continues to expand the capabilities of the network and the type of content that is being delivered.

“The original reason the network was installed in 1985 was because it was a buying tool,” Langford says. “We would do eight-hour broadcasts where corporate buyers would show a line of merchandise, and our stores would buy the merchandise over the TV. They may show 1,000 dresses in a day, and the stores would sit there and look at them and pick which ones they wanted. At that time, we were one of the only retailers that localized buying — where the stores actually bought their own merchandise. It served us well for many years because the stores could tailor their selections to their clientele.”

But the changing nature of the retail business forced JCPenney to adjust its operations, Langford says. “As time to market for merchandise really became an issue, the company was forced to go to centralized buying,” he says. “By the time the stores would make those commitments to the corporate buyers and they would go back to the vendors we were kind of behind. So now we are like everyone else with centralized buying.

“When that happened, the network changed into a communications and training center,” he says. “The training aspect was where we really leveraged the cost. We used to have regional training centers around the country and we would fly associates into the training centers.”

JCPenney continues to expand its satellite-based training efforts and Helius Inc. installed a satellite- and terrestrial-based network solution designed to deliver corporate training. Helius, based in Lindon, Utah, provided JCPenney with a customizable MediaGate Router 4550 and the Helius MediaClassroom solution package, enabling JCPenney to deliver training to more than 150,000 employees at more than 1,000 locations throughout the United States and Puerto Rico simultaneously via satellite. “We could have very easily purchased the same type of satellite equipment again and continue doing the same things, or we could take things to the next level with our corporate training and communication, and get a lot more for our investment,” says Langford.

The MediaClassroom OneTouch Live and OnDemand software provides an interactive live and on-demand training system, replacing the DVDs and CDs JCPenney relied on previously to deliver training services. “We use this in combination OneTouch, which is basically a keypad with a built-in microphone,” says Langford. “It gives us one-way video and two-way audio. The instructors can talk to the students and the students can respond. It was early interactivity, and we were able to cut down travel costs and shut those training centers down.”

Helius’ system also allows JCPenney to track associate training progress through an embedded learning information system that automatically captures trainee progress, test scores and program completion. “Helius’ MediaGate Router acts as a TiVo-type device for our stores and offices. We can provide training to our associates when it’s needed — not just when it can be scheduled. Training is available when our associates need it most. It’s that simple.”

The installation of the Helius system also has brought other benefits for JCPenney, Langford says, including speed of delivery, cost effectiveness and additional bandwidth to support message traffic. The Helius system is allowing JCPenney to explore installing a digital signage network in its retail stores, says Langford. Among the features that may be included are attaching radio frequency ID chips to merchandise, so when shoppers holding the products approach the digital signage screens, a targeted ad spot would appear on the screen. “True digital signage is not about commercials,” he says. “We have 7 to 10 seconds to grab people. They are not going to stop and watch a 30-second ad. We have the facilities to produce our own content, and I think the first big box retailer that commits to digital signage will have a lot of competitors follow suit.”

“The Helius system opens up new opportunities today,” Langford says. “Helius looks at this like a software system. They sell hardware because they have to, but I like the software. You can work with them, and there are all kinds of uses that we stumble on to everyday.”

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