In the world of marketing, branding and advertising, JCPenney’s major re-branding efforts have dominated the conversation over the past few months as we watched their sales plummet. JCPenney’s marketing team has been a punching bag in the media, teaching all of us what not to do. It seems now that the “experts” knew what was to come in advance of the changes, in spite of the excitement witnessed by the announcement that Ron Johnson was taking over the retailer. There is not much left to be said about the mistakes that were made. The real challenge for the community that has a passion for brands and branding is to begin to suggest ways in which JCPenney can turn this rebranding disaster around and thrive into the future. A lot (but not all) of what they did made good business and marketing sense.
To begin with, the re-branding was definitely in order. Sales were OK but stagnant before the changes. JCPenney was an iconic brand reflecting the values of America’s middle class. That audience, however, was rapidly shrinking. Additionally, more than half of JCPenney shoppers were over 55 years of age and 87 percent were Caucasian. Two of the chain’s main competitors, Target and Kohl’s, appealed to younger shoppers who represent the long-term future for most brands. Going after a younger, upwardly mobile, more diverse segment made complete sense.
Whether through research and/or experience and intuition, JCPenney sharply defined their new audience during their re-branding as the tech-savvy Millennials who are diverse ethnically and in their sexual orientation. The re-branding against this audience was “textbook perfect” by the merely establishing a sharp audience focus and then shaping each and every touch point, from merchandising through all communications, to resonate with this segment. They have been successful in attracting this new customer who previously never gave JCP much thought. Along with a temporary absence of sales and discounts, however, sales plummeted through a loss of their traditional core customer who not only could not relate to this new brand, but didn’t necessarily like the audience JCP was embracing.
Lost in the conversation about discounts and a new audience was the strategy to create a mall within the store through fashionably-designed and brand-named mini shops. The department store itself is a very old and somewhat dated concept, so such a strategy could re-vitalize this very large, often multi-level retail space.
It’s time to put hindsight behind and take on the challenge of moving JCPenney forward after this re-branding. Here are some of my thoughts.
1. Continue with the mall-within-a mall-concept. There are millions of square feet of dated retail space under the JCPenney name and this update makes the store more appealing to any target audience.
2. JCPenney has very quickly apologized to their core customer, saying they are now listening. They obviously haven’t been listening very long and they should formally get to know this shopper like they did with the Millennials. The “Frumpies” (I didn’t coin the term) should be better understood as an important target.
3. Find out what the brand stands for with the core audience. The brand is what they think it is, not what JC Penney wants it to be. Let research reveal the brand and then be the best at.
4. Along the way, find out what is important to the core audience, what are their aspirations, fears and values? What shopping experience do they want? Where does e-commerce fit in? For shoppers who left JCPenney, where did they go and why?
5. Keep the lines of communication open through social media. Don’t ever stop listening.
6. Let the core customer lead the way to future change. Evolve to a younger audience one step at a time.
7. Don’t let the new JCP brand targeted to Millennials die. It’s perfect for a smaller specialty store inside a mall or strip center.
One asset JCPenney has by default after their re-branding is that it has become an underdog brand and that carries a lot of positive weight in this country. What other assets do they have that can be leveraged? What else can they do to get back on track?