Thursday, September 20, 2012
If It's A Penny For Your Thoughts & You Put In Your Two Cents Worth, Then Someone, Somewhere Is Making A Penny. But Not J.C. Penney.
We wrote a column a short while ago about how J.C. Penney, wasn’t really a brand. Not in the classic sense of the term anymore, if you meant that it was a name imbued with some resonating meaning that differentiated it from its competitors – oh, and not just on price, which, strictly speaking, would make it a commodity. And how it had become a “placeholder,” just kind of occupying a space in the category. Oh, and that the advertising was, well, not really advertising in the classic sense that it was actually supposed to motivate people to act positively, but ended up being Ellen-DeGeneres-based-semi-comedic petit amuses – something TV viewers consumed while they waited to engage with real advertising and real brands.
Well, you might have thought we suggested something akin to the end of the world. Readers wrote back and forth about how, since everyone actually “knew” the J.C. Penney name, there was all the proof anyone needed that it was an actual brand. It didn’t seem to matter that they weren’t actually selling stuff, or, to be fair, enough “stuff” to actually make a profit. Marketers and brand folks nattered back and forth about the commercials and the humor and the entertainment value and how very “engaged” viewers were (although in this case “engaged” didn’t have any relationship to viewing followed by an increased sense by the consumer that the brand better met the expectations they held for such retailers), a little confused by the “no-deals” strategy while they laughed all the way to Penney’s competitors, their pockets and smartphones full of traditional and electronic coupons. So there it was – we said, they said.
But the marketplace is always the acid test. Or, in the case of J.C. Penney, it might better be said the jack-acid test. The lack of positive consumer behavior or “engagement” led to a $310 million dollar loss on a 21% sales drop. So we were not surprised to see that Penney’s CEO, Ron Johnson, had to report that the rest of 2012 would be as bad as the first half. Mr. Johnson indicated that he thought they were still going to face some problems weaning consumers off coupons, promotions, and low-lower-lowest price strategies. You think?
Shoppers – that wily band of wired-directly-into-the-Internet consumers – have been taught well by retailers to expect that there’s always someplace to get stuff on sale, and often those things on sale are real brands. So moving away from discounting without being able to offer any other value (we mean “value” not “price) is hard. Really, really hard. Mr. Johnson emphasized the turnaround would take time. So far Mr. Johnson hasn’t been right about a lot but he’s probably right about that. Hard stuff takes time.
But you know what they say about that. “Time and tide wait for no man.” And in the brand world, the very same thing is true about placeholders.