Tuesday, April 9, 2013

Branding Takes Time: J.C. Penney Edition

Yesterday J.C. Penney fired its CEO and announced they're bringing the old CEO back.

According to experts interviewed for a report tonight (April 9, 2013) on National Public Radio the CEO made five critical mistakes:

  • Overlaid a past turnaround formula onto an incompatible present situation
  • Confused very different brands
  • Moved too quickly
  • Took away the coupons
  • Didn't use a data-based process (e.g. piloting changes, mining customer data).

Partially I agree:

  • It is true every situation is different and Apple is indeed not J.C. Penney.
  • Piloting is a good idea.
However there are other points that I take issue with:

  • There are times when radical change is needed - and J.C. Penney had become a crap store - physically even, it looked dingy.
  • Consumers move extremely fast.
  • The coupons were absolutely worthless because everybody knew you paid the same price no matter what. 
But those are just marketing points. The bigger picture has to do with the brand. And this is where the Board should have given the CEO more time:
  • The basis of the brand is its customer. J.C. Penney's customer was unknown - vague - mixed up with Sears.
  • Ellen DeGeneres was an important brand symbol but the Board did not allow enough time for the store to explore what she meant.
  • Brand value lags -- so what happens today is a reflection of the actions taken yesterday. It takes time for the brand to turn around.
Now they are bringing the old CEO back, so there will clearly be even more brand confusion and the gains achieved thus far will be wasted. 

A good takeaway from this debacle is that branding takes time. You can't rush it - it's not an ad campaign. While a retail turnaround can be done quickly in physical terms, mentally you have to support and reinforce what the transformation means.

This was a very big screwup, and it's a shame because I liked the way J.C. Penney was going.