JC Penney is an iconic retailer dating back 111 years, yet lately it has fallen under hard times. For years it had an unique spot in retailing between stores like Macys and Sears. Lately though it has lost that middle ground and has been unable to compete against Belks, Macy’s and Kohl’s. In a sign that the company was seeking to change its image and appeal to a more upscale customer, it brought on Ron Johnson of Apple and Target fame as its CEO. Johnson introduced the concept of ‘no sales’ which quickly flopped with customers and other ideas such “mini-shops” in Penney stores featuring hot brands that seemed to be taking off. Yet after 17 months, the board of directors seemed to have lost confidence in Johnson and replaced him with his predecessor, Mike Ullman. Many have been left wondering, can JC Penney turn it around and also what went wrong with the highly touted, Johnson?
Ron Johnson came on as CEO of JC Penney with high expectations and a stellar resume. At Target, he had been Vice President of Merchandising, where he was responsible for launching the Michael Graves line of consumer products that raised Target’s image beyond that of just an upscale K-Mart or Walmart. At Apple, he was Senior Vice President of Retail Operation where he was credited with creating the Apple retail experience for customers. Yet at Penney he was a flop and consumers were leaving in droves. The answer of why he failed is actually quite simple. He failed at the basics of branding for retail. Today’s retail shoppers want an experience and emotional attachment to their retailer. Johnson never tested to see what shoppers wanted and expected from their JC Penney shopping experience. His team never did basic market research and testing to see if the ideas he was bringing to the retailer would be accepted by the current customers and retain their continued loyalty. Secondly, he failed to define JC Penney with consumers, who were left wondering was JC Penney trying to compete with Macy’s or Kohl’s.
Now the question is, can this retailer be saved? Yes it can with proper branding. JC Penney and any retailer need to realize what smart companies have realized, that their brand DNA and their brand values – the emotional experience they want their target audience to have whenever they interact with them – is the only real way to differentiate themselves from their competitors. If their brand is created correctly, it allows them to stand out from the pack and give their potential customers a reason to choose them over the competition. JC Penney needs to define that brand identity and create that emotional experience. They need to tell their story of who they are and have two audiences with that – shoppers and investors. That means surveying their shoppers to see what they are doing right, what they are doing wrong, and what they want from JC Penney and what JC Penney means to them. Once all of this is done and JC Penney knows the story, brand identity, and what they want to convey, all marketing must be built around that story. Consistent online marketing with the what is being done in the brick-n-mortar stores is vital to their business model.
Next JC Penney has to realize, today’s consumers are savvy and expect an experience and attachment to their retailer. JC Penney has to create that experience that will make consumers want to return again and again. Shoppers need to know what to expect when they go to a JC Penney store. For example shoppers know what to expect and what type of experience they will have at a Walmart and how a visit to a Nordstrom will be. Consumers are buying the experience the retailer creates for them, as well as the relationship that is provided to them. JC Penney needs to create that experience from the moment a shopper enters the store to the point of sale.
In telling their story and creating the experience, they need to work on their communication strategy. They need to convey a sense that they are not under siege and also that they are not going anywhere. This will help calm investors and also assure customers that the changes they are seeing with JC Penney are fundamental and here to stay, so come and see the JC Penney experience.
Finally, the advertising needs to be consistent and tell a story throughout the branding. Ellen DeGeneres was used in advertising with the no sale strategy and then disappeared largely with the attempted branding at JC Penney. That is a major branding mistake. JC Penney needs to use the same people in all of their advertising and help tell the story. Today’s consumer expects a story to be told in their advertising be it Old Navy with stars of yesteryear or Macys with their star designers. That is all part of selling the experience.
JC Penney is a retail icon and will survive. Yet its current troubles are a warning for any retailer on the importance of branding in today’s world where there is a wide array of competitors and shows how critical both a story and creating a retail experience is to its success.
David E. Johnson is the CEO of Strategic Vision, LLC, an Atlanta-based public relations agency that specializes in branding and crisis communications. Additional information on him and his agency may be obtained at www.strategicvision.biz
