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JCPenney Re-Refreshes Brand - Third Time's the Charm?

Posted by Mark J. Miller on January 26, 2012 03:35 PM

Trying to figure out what’s on sale when and then waiting for the next sale to buy particular items can be frustrating to consumers so J.C. Penney Co. — in its first major overhaul of its retail arm since former Apple exec Ron Johnson took over as CEO in November — is attempting to make things much easier.

The company this week announced that its stores are doing away with having seven kazillion different items on different sales simultaneously and just “marking down all of its merchandise by at least 40% so shoppers will no longer have to wait for a sale to get the lowest prices in its stores.”

The move, including the repositioning commercial above, comes as jcpenney, as the chain rebranded itself at the 2011 Oscars, is re-rebranding with a new logo — following the previous year's rebrand at the 2010 Oscars (check out the logo progression below). What was that about trying to avoid consumer confusion?

So why is it rebranding for the third time in as many years? During the 2011 Oscars broadcast on ABC, it kicked off a campaign promoting "jcp" in a red square logo. At the Oscars a year earlier, the brand refresh was all about "JCPenney" offering more exclusive lines to not only expand its customer base but boost loyalty and get its current ones to visit more often.

So here we are with 2012's repositioning. The retailer, which just announced that it will cut thousands of jobs across its 1,200 American locations in a cost-cutting measure, is introducing three tiers of pricing in a permanent markdowns, anti-sales mentality move that kicks off February 1st.

The new pricing philosophy: general everyday low pricing will be otherwise known as “Fair and Square Pricing.” Additionally, there will be “Monthly Value” discounts on some items (sounds like a sale to us) and “Best Price,” indicating items marked for clearance on the first and third Fridays of the month (otherwise known to many in the American workforce as "payday").

"The big question on investors' minds will be how customers react to a single price point versus a perceived discount under the old strategy," says Citi Investment Research analyst Deborah L. Weinswig, the AP notes.

"The department store is the number one opportunity in retail today,” Johnson said in a company release. “We are going to rethink every aspect of our business, boldly pursue change, and create long-term shareholder value, as we become America's favorite store. Every initiative we pursue will be guided by our core value to treat customers as we would like to be treated — fair and square.”

Penney’s has also gotten some press in the past month for creating a dustup with rival Macy’s after it put a bunch of cash into Martha Stewart Living Omnimedia and announced that it would sell some of MSLO’s branded products, which has been solely Macy’s department for a few years now. The announcement led to Macy’s telling Martha it would see her in court. (Stewart isn't just seeing her new partnership with jcpenney challenged, but recently saw Hallmark Channel cancel her daytime TV show to replace her with Marie Osmond).

Other partnerships that J.C. Penney has announced with its new look and positioning include tapping Ellen DeGeneres as a brand ambassador. As a press release notes, "Ellen began her career in her teens as a jcpenney associate and now, as one of the country's most beloved television personalities, she will help bring the new jcpenney experience to life in her own fun-loving, sneaker-wearing, laugh-making way."

Additionally, fashion designer Nanette Lepore has created an exclusive line with the retailer.

As for JCP's patriotic new logo, which bears a vague resemblance to Gap's 2010 scrapped logo with its corner-hugging blue square, it's explained as follows:

• The new jcpenney logo, which combines the elements that have made jcpenney an enduring American brand, by evoking the nation's flag and jcpenney's commitment to treating customers Fair and Square. The square frame imagery will be evident throughout all of jcpenney's marketing, to remind customers to frame the things they love.

• New brand marketing to showcase great product in an exciting new way, to solidify jcpenney's relationship with its loyal customers and entice new ones. This includes the new monthly book, beginning next month, that millions of Americans will receive, which includes 96 pages of highlights for that month, as well as an entirely new look for jcpenney stores in terms of signage and presentation.

Company president Michael Francis explains the 2012 brand relaunch:

"We are redefining the jcpenney brand so we become a store for all Americans, by offering an experience they cannot get anywhere else. This will start by freeing consumers from the barrage of promotions and undifferentiated shopping experiences they have become used to and replacing it with something entirely fresh and new that is evident in every aspect of our store – new brands, new marketing, unique attractions, and much more. Beginning on February 1, our customers will see immediate changes that give a sense of how we will transform jcpenney over the next four years. It will be a breath of much-needed fresh air and give them reasons to visit jcpenney more often than ever before. Our objective is to make our customers love to shop again and across jcpenney, we're very excited about the changes to come."

The company will begin the transformation of the jcpenney shopping experience on February 1, with the implementation of its new logo, pricing strategy and "monthly cadence," including new in-store signage reflecting true price clarity as well as edited merchandise assortments for the monthly store set.

Beginning in August, jcpenney will begin a month-by-month, shop-by-shop strategy to update all stores with new and exciting merchandise and presentation. Two to three shops will be installed monthly, each and every month, over a four-year transformation period, including the debut of Town Square during 2013. These initiatives will culminate in the complete transformation of jcpenney by the end of 2015.

The company also outlined $900 million of cuts at day two of its presentation to analysts in New York, on Thursday, the financial objectives and funding for the new strategy, including in-store boutiques: "As we transform the business model, our teams are committed to improving sales productivity in our stores, generating 40 percent or better gross margins, while lowering expenses to industry-leading levels. Taken together, this creates a formula for long term, sustainable profit growth."

Its press release on the financial component of its transformation also noted:

Beginning in August 2012, jcpenney will begin a month-by-month, shop-by-shop strategy to update its stores with new and exciting merchandise and in-store presentations. Two to three shops will be installed each and every month, over the four-year transformational period. Kramer reiterated the expectation that jcpenney's transformation would be complete by the end of 2015. Commenting on the Company's plans to self-fund its transformation, Mr. Johnson noted, "We are fundamentally re-imagining every aspect of our business and we fully expect the bold and strategic changes we are making to our operations will result in improved profitability. This should enable us to fund the transformation of jcpenney's store experience, while at the same time returning value to shareholders with steady earnings growth."

Long story short: It's a new year, and a new JCPenney. What do you think of it all? Post a comment below!

Comments

Leban Hyde United States says:

Well, at this point they need to stick with it. This many rebrands (redesigns, refreshes, whatever) in such a short period is a red flag that the business is failing. I understand why the execs want to toss their identity for a new one (red to blue is pretty extreme), but it frightens me that it will have adverse affects. The follow through will be key to winning customer loyalty.

Personally, I think the logo is horrid. The square within a square is dizzying and counters the simplicity they were trying to achieve. The company name, now three initials, is dwarfed by the white space inside the red outline square, robbing the company name of it's importance. It is an identity, afterall. And I didn't get the reference to Old Glory until it was explained in the article. I see what they were going for, but I don't think it necessarily works.

And, yes, it reminds me of the Gap re-brand SNAFU. But, like I said, they need to commit to the look. Time to stop dating, JCP Wink

January 27, 2012 09:51 AM #

Ann United States says:

Im not interested in the changes. Its like they are flailling their arms for attention and with Ellen Degeneres as a spokesperson? The majority of women are not androgynous.

Im not shopping at JC Penneys anymore.

January 27, 2012 09:03 PM #

Brenda Eff United States says:

Nobody calls it JCP or jcp -- it's J.C. Penney or Penney's, no matter what they call themselves. And at least last year's version works as a favicon or avatar on social media; shrinking the letters within a frame isn't going to do them any favors in an iPad mobile social world! I get that it's an American flag, but I don't think they gave their last logo (the red square one) a chance to stick.

January 27, 2012 09:13 PM #

Jeffrey United States says:

No company can brand or rebrand them selves. It's always the public that determines what the brand was, is, could and will become. It was the public that determined Federal Express should be FedEx. JCPenney's has always be verbalized as "Penny's". My question is why they didn't implement what the public has always dictated?

January 28, 2012 08:38 AM #

JoAnna K. Wilson United States says:

Great. Regardless of whether or not one likes the new logo, what about the positioning of the stores in today's market? With the cut backs everyone says they are doing and probably half are adhering to, it makes sense to have a department store with good products offer these at fair and reasonable prices to the consumer. I wish Ron Johnson the best of luck, and I hope the new team he has built is able to see and reason beyond the smoke and mirrors of big retail advertising and actually merchandise the stores to hold on to this American staple, the department store. I believe we have all sunk our identities into what we have had sold to us as superfluous necessities by not just advertising/branding, but the media at large (tv, movies, rag mags, etc.) that it is time to get back to basics with an aspiration level, both fashionable and affordable, that is achievable for the truly average wage earner in this country.

January 28, 2012 02:13 PM #

Gerard Thailand says:

Seems to me that a new logo is not the issue. Removing all store promotions might not improve  customers' experience in JC Penney...they are part of the customer experience.
Now we need to wait until they execute in the store their new customer experience strategy...and will see how smart they are...

January 28, 2012 08:46 PM #

Leanne United States says:

How is everyone SO MISSING this AMAZING new transformation? It's not about the actual logo or what people will call the store- it's about what all of this means to the actual shopping experience. The branding is just supposed to reflect the actual changes that are taking place! All of the previous comment-makers just don't get it!  

I am 32 years old, married, a mother of one and plan to grow my family. My family has a household income that probably puts us right in the bullseye for JCPenny executives-- let's just say I can't buy Prada, but we make enough that Penny's wants me as a customer. I own a home, I have a college degree, and I'm a savvy shopper. I'm in a book club, I get my hair hight-lighted, and most of all, I want STYLE-- style that I can afford.

Target has given me a shopper's equivalent of a "style hit" every now and then, but it's just not enough. Xhilaration, really!?, that's all there is to choose from after all those cool commercials?

Kohl's has made me dis-believe in "sale prices." I knowing that those shirts never cost that much in the first place. I'm not that stupid.

And Toys R Us- You infuriate me! Don't make me wait and wait on these stupid coupons that I can't use until tomorrow!

Bravo JCPenny-- you are brining style, affordability, and straight-forward pricing that I really appreciate.

Thank you for the new imaging that makes me believe that you can bring me style again. Before I thought you were just Worthington, but after this awesome direct mail piece that almost made me cry in excitement, I have a renewed hope! Thank you for cutting out the stupid "sale" prices that are intended to trick me into believing I'm getting a deal. I'm not that stupid and I appreciate you recognizing that. Thank you for another place to shop.

I have just one request- PLEASE HURRY. Bring this in-store remodel to my store before I lose all this excitement.

Oh, and I'd work for your marketing team any day. They have done a great job.

January 28, 2012 10:05 PM #

fran luckin United States says:

A piece of direct mail that almost made you cry? Wow. What was it?

January 31, 2012 02:47 PM #

MEB United States says:

Best marketing I've seen. The new magazine ROCKS!  Outstanding Creativity! Can't wait to see the March issue. Thanks-I get it.

January 31, 2012 08:38 PM #

shankar Saudi Arabia says:

if only changing logos could make businesses successful ?!!
i guess next year we should see the blue box removed and the change can then be termed simply fair a shorter version of fair and square.

January 29, 2012 04:53 AM #

shankar Saudi Arabia says:

why not have a new slogan "save your pennies with us"

January 29, 2012 04:57 AM #

Darlene United States says:

I'm very excited about the transformation. I believe it will work very well. I LOVE the logo. It is very cool. Two things: 1). Please do not close the JC Penney store in Orangeburg, SC or replace it with a JC Penney outlet. That is not good. We need the actual store!! Also, please train us through your marketing/advertising to say, "JCP." This part will need some work, as many people refer to the stores as JC Penney or Penney's. Again, I'm super excited and I know the brand/stores can do very well!!!

January 30, 2012 09:49 AM #

Dan T. United States says:

JCP doesn't just roll off the tongue and as others have said, they have a lot to overcome due to the popularity of their other monikers.  I like parts of their new direction but it does have a "too little, too late" sense of urgency to me.

January 30, 2012 02:45 PM #

Deborah Budd United States says:

I have to say the "JCP" rebranding seems forced to me (never mind the ugly and unimaginative logo design -- lazy design thinking).  We've always called the store "Penney's," so is "JCP" an attempt to make customers abandon old associations and think of the chain in a new light? And will the "everyday low prices" strategy (can you say Wal-Mart?) also mean a downgrade in merchandise quality? Penney's was once all about affordable style + above average quality for every dollar spent. Over the past 20 years, I've watched the local stores degrade to be like every other low-level retail outfit--more and more junky import clothing, less style and value for my dollar; let's not even talk about how run-down the properties have become and how unappealing as a place to even window shop, let alone go into a dirty dressing room to try on clothing (yuck!).  
So call me a skeptic.  I'd like to think former Apple Store guru Ron Johnson can save the JCPenney's brand, but middle-class-aimed department stores are a tough environment today, given that, economically speaking, the middle class' ability to consume is shrinking. But if Martha Stewart (arguably another brand that may be reaching the end of its run) is the best JCP can do as a design partner, I suspect my hopes for Penney's future recovery are slim.

January 31, 2012 11:41 AM #

Comments are closed

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