Brand Strategy Proposal
Client: JCPenney
Submitted: Joshua Morales
Date: March 7, 2013
1
Overview
JCPenney, along with other department stores, has lost
relevance in the minds of today’s consumers. To remedy
this problem CEO Ron Johnson launched a rebrand
strategy that did not resonate well with the intended
audience. Research was conducted to give context and
definition to a new brand strategy that is recognizable,
differentiated, and relevant.
Challenge
There were several challenges faced in the process of
developing a new brand strategy. In order for JCPenney
to succeed and thrive in the current environment the
company would have to appeal to a larger target audience
without disregarding the consumer base that made the
company successful in the past.
Approach
In an effort to find areas of opportunity, research was
conducted on the department store environment in order
to gain an understanding of the larger picture and how
JCPenney and their competitors fit into the larger problem.
Next, information was gathered about JCPenney and
their three competitors this analysis included but was
not limited to: mission, vision, values, attributes, PEST
analysis, SWOT analysis and current target audience. Last,
ethnographic data was collected about customer habits,
and attitudes towards JCPenney and their competition.
After the research was completed a new brand strategy
was crafted supplemented with suggestions of executions.
Table of Contents
Phase 1: Research
Catagory Overview
JCPenney
Kohl’s
Macy’s
Sears
Conclusions
Phase 2: Brand Strategy
New Target Audience
Brand Strategy | Rationale
Brand Signal Recommendations
References
Catagory Overview
Category Review
The department store traditionally was the go to place to
shop for clothing in the past. They were comprehensive
destinations as opposed to just another store to be
found at the mall. In the past few years there has been
a major shift in the department store landscape. Due to
technology, demographics, and economic recession these
stores have been forced to reinvent themselves in order to
stay alive. Fast fashion stores such as Zara and H&M has
diverted customers away from the traditional department
store. Another factor that has contributed to the downfall
of department stores are major online shopping hubs
examples being Amazon and Ebay. JCPenney’s, Macy’s,
Kohl’s, and Sears have all made attempts to develop new
strategies for survival.
JCPenney | Overview
JCPenney | Current Situation
JCPenney’s took 2012 headlines by storm with the launch
of their new brand strategy. At first expectations were high,
but as the year passed many started to call the strategy a
failure citing quarterly reports and a sharp decline in sales.
Historically, confidence in the department store has never
been lower. At the moment analysts are predicting the
death of this historic brand.
JCPenney | Current Brand Strategy
The company’s brand as reported from their rebranding
event in late January 2012 and in conjunction with
research is centered on the original founder’s use of the
Golden Rule: Treat others as you wish to be treated. Ron
Johnson wanted to “…update and modernize the brand…”
The former president of JCPenney Michael Francis said
that the brand would now focus on being “American”
and will be perceived by people as such; so efforts to
implement perception into the minds of the public have set
forth. The brand promise appears to be ‘Fair & Square’.
JCPenney | Target Audience
JCPenney | Target Audience
Prior to the most recent changes JCPenney had targeted
their brand towards shoppers in the middle class with
families and middle aged people. The customers were
either bargain hunters or time-savers. There was heavy
use of coupons to show consumers value and give bargain
hunters something to hunt.
Recently the new strategy has lead JCPenney to align its
focus on a much younger and trendier audience that does
not seem to recognize the brand as the go to place for
their clothes. The new audience holds the perception that
JCPenney’s is the store a “shop for old ladies” as stated in
one of the interviews.
4|5
JCPenney | PEST Analysis
P
Some states have enforced legislation against unions (Right to Work)
E
Income inequality and debt has left consumers with little discretionary income
S
Younger people are moving away from older suburbs
T
Environmental issues are present in mainstream
Political
WTO favors globalization
Fast fashion industry has changed retail due to their process infrastructure
Economic
National economy has become more integrated with global economy
Older generations still believe in U.S. exceptionalism
Societal
Conflicting generational values
Access to information is portable and with consumers at all times
Online shopping more available and convenient (Amazon)
Mobile devices allow for shopping on the go
Technological
6|7
JCPenney | SWOT Analysis
High technological integration within department store
Strength
Diversity with in-store products and presentations
Loyal internal stakeholders
Weakness
Not relevant to new target audience
Abrupt shift of target audience
Lack of strong differentiation
Endorsements from large name celebrities
Opportunities
Consumers looking for more convenience
Competition is perceived as very expensive
Audience only remembers the JCPenney from 5-10 years ago
Threats
Competition’s prices are justified in the eyes of consumers
Perceived differentiation of JCPenney is poor quality
S
W
O
T
JCPenney | External Interviews
Interviews | Tim, Age 22
Interviews | Alicia, Age 21
Interviews | Margret, Age 47
When is the last time you shopped at JCPenney’s?
I’m 22, the last time I went to JCPenney’s was 4 years ago.
When is the last time you shopped at JCPenney’s?
The last time was in New York about 2 years ago.
When is the last time you shopped at JCPenney’s?
I went to JCPenney’s about 1 year ago.
Would you shop at JCPenney’s now?
No! It’s a shop for old ladies. There is nothing there, it
feels institutionalized. The stores smell, they are cluttered
and there are racks everywhere. I cannot say one good
thing about it. JCPenny is a thrift store, there isn’t any
quality there. They are just in the business for the money
and don’t care about quality since all they sell is cheap
old women wear; they are not at all updated with today’s
fashion. When I go shopping at JCPenny I feel like I’m at a
doctor’s office.
Where do you normally shop? Why?
Macy’s, definitely Macy’s over JCPenney. They (Macy’s)
feel more up to date and they seem to have more sales.
I’m a fanatic for sales and coupons. Plus I always see their
ads on tv saying they have sales going on. They also have
excellent customer service; I have always been treated
well when I go there.
Would you shop at JCPenney’s now?
No, not anymore! Penney’s was always a middle-of-theroad family-oriented store. This is what made them one
of America’s mainstays. When the new CEO opted to make
Penney’s into a trendy, teenage-fad outlet he sealed its
fate, the end. Penney’s was our favorite clothing store
for years. The new CEO has “shut the doors” on my family.
I was a dedicated JCPenney shopper, even on the bronze
rewards program. Now I’m lucky I go there once a month.
They should bring back with the rewards and coupons that
gave me the incentive to even go to the store. I talked to
an employee about how some of their brands have been
discontinued and the way the pricing was, and she said
they all love it. It is not about the employee it is about the
customer, that’s what’s got to be heard!
Where do you normally shop and why?
American Eagle, Hollister, Bloomingdales, Kohl’s. I shop
there because they are modern, lively, they are like 2013
and JCPenney is still stuck in 1997.
What makes those stores feel “2013”?
The lighting and, just the atmosphere of the place,
you know? It doesn’t feel cheap.
Who are JCPenney’s ideal shoppers?
I see JCPenny’s as humble I guess. The typical person I
see going there is someone who does manual labor and
hardworking, blue-collar types. They don’t really care how
they look.
What is comes to mind when you think JCPenney?
When I think JCPenny I see bland clothes, not colorful,
mute colors. I think of a place where old people would go.
When I think about Macy’s I think simplistic, clean, open;
I mean you can feel that even in the logo Macy’s has it’s
more clean and up to date.
The only thing that could possible save Penney’s at this
point would be to fire the new CEO and return to the
traditional model that Penney’s was. Barring that, and
soon, it ceases to exist!
8|9
JCPenney | Internal Interviews, Ethnographic Research
Internal Interviews
Interviews with several store front employees reveal a
genuine and unflinching support of the new rebrand
initiative. The actions brought on by Ron Johnson to JCP
have been welcomed by employees who see the store as
modern and soon to be the standard of the department
store experience. The employees say that the change
in focus may have been too abrupt for JCP’s last target
audience, which was a much older demographic. The
employees seem to have lived and acted on the values
established by the brand. Many also have said they
now shop at JCP more often due to the inflow of newer
and up-to-date trends of clothing. The employees were
very diverse in ethnic background, income levels, and
geographical locations; yet all shared the same level of
enthusiasm for the brand
Ethnographic Observations
parks
car
Mall
Entrance
observes
signage
enters
mall
walks
around
mall
stops at
appealing
stores
Exploration
seeks
preffered
store
enters
JCP
JCPenney
Entrance
approach
by CSR
guided
to brand
name
explores
in-store
shops
walks to
checkout
CSR
checks out
on spot
customer
leaves
JCPenney
Exit
Customers were quite relaxed and spent more time in
JCP than they did other department stores. External
subjects were speaking with CSRs as if they were friends,
there seemed to be more of a human connection at JCP
than there was at Dillard’s or Macy’s. At the competition
customers and employees acted very superficial towards
each other. This was hinted in the distance, stance, and
lack of enthusiasm in the eyes of both people in the
engagement. Also in addition to that speech patterns were
much more lively and happier in tone at JCP than they
were at competition where the tone and speech was fast
abrupt and distant.
Kohl’s | Overview
Kohl’s | Current Situation
Kohl’s is the 4th largest retailer in the nation with 1,146
stores in 49 states. The store locations are conveniently
located in several off-mall locations, which makes Kohl’s
the primary destination as opposed to the mall. Looking
at the competition Kohl’s is doing better financially than
JC Penney’s or Sear’s. Kohl’s is also one of the lowest
cost operators in the retail industry. Investors do have
confidence in Kohl’s to make a comeback.
Kohl’s | Current Brand Strategy
The Kohl’s brand is centered on the family and offers a
convenient choice and location for budget conscious
consumers. Kohl’s has many private label and exclusive
brands that appeal to a wide variety of consumers. Their
brand promise is one that challenges consumers to
‘expect great things’. This has built the perception that
any future move the company makes will be great. The
company is known for how they present great deals to
customers, which involve setting artificially high prices
and requiring customers to hunt for the discounts.
10 | 11
Kohl’s | External Interviews
Interviews | Greg, Age 34
Interviews | Adam, Age 56
Interviews | Tracy, Age 19
When is the last time you shopped at Kohl’s?
I went to Kohl’s a few weeks ago actually.
What brings you to Kohl’s today?
Just wanted to pick up some clothes for my grandkids.
When is the last time you shopped at Kohl’s?
The last time I went to Kohl’s was a few months ago.
Why shop at Kohl’s?
It’s just so convenient you know? I don’t have to deal with
walking into a crowded mall and it’s also on my way home
from work. I’m able to pick something up from there if my
wife or kids need something.
Why shop at Kohl’s?
It was on the way home. I really did not want to go to a
mall to pick something up really fast. I just wish that Kohl’s
had a better online service. I find myself using Amazon to
but thing faster now without having to wait with people.
Do you shop at Kohl’s normally?
Not really, they have a few nice brands and all but I go
to Zara most of the time. Zara just always seems to be in
style. Kohl’s feels like a place for older people with a family.
That just doesn’t seem like my type of place.
Anything you would like to see change at Kohl’s?
Yeah there is. Most of the time I’m stuck between having
to buy some random celebrity brand or some really cheap
quality brand. I wish there was something for the middle
guy, you know?
Anything you would like to see change at Kohl’s?
Their online service this place would be perfect if the store
distributed like Amazon.
Do you normally shop online or in-store?
I like to shop online. I pick out what I want before I get
there, but at Zara there is so much more to look at once
you really get there. With Kohl’s there isn’t that much to
see once you get what you want.
Macy’s | Overview
Macy’s | Current Situation
Macy’s has managed to gather a surge of confidence and
a positive outlook for their future. The company has been
making many positive moves that resonate well with their
audience. Recently Macy’s beat Wall Street expectations
in their quarterly earnings. The company is also locked in a
legal battle at the moment over the Martha Stewart line of
products that JC Penny has been seeking to acquire.
Macy’s | Current Brand Strategy
The Macy’s brand has been reinvented recently and has
been labeled the MOM initiative. MOM is an acronym
that stands for My Macy’s localization, Omnichannel, and
MAGIC selling. This three tiered approach focuses on
research for local tastes and styles, enhanced product
delivery, and relationship driven customer service. This
approach helped to fill a void in fashion retail that
consumers have been seeking for a while.
12 | 13
Macy’s | External Interviews
Interviews | Tina, Age 29
Interviews | Ava, Age 21
Interviews | Lisa, Age 44
When is the last time you shopped at Macy’s?
I shopped at Macy’s just a few days ago.
What brings you to Macy’s today?
I got an email with some coupons, so why not stop by?
When is the last time you shopped at Macy’s?
I come to Macy’s every few weeks to see what they have.
Why do you shop at Macy’s?
They have great customer service and the quality of the
clothes is just excellent for the price they offer it at. They
also seem to have a selection that works with my tastes.
Don’t you receive coupons from other stores?
I do, but to be honest I just don’t think they have the
quality selection that Macy’s has at such a great price.
So it is rare that I would shop with them.
Why do you shop at Macy’s?
They have everything I need here. Good quality and great
people. I can’t really think of another department store I
would be shopping at.
Anything you would like to see change at Macy’s?
Not really. Nothing comes to mind at the moment.
Why dont you think the other stores carry quality?
I’m not sure, I guess it’s just the way they present
themselves. JCPenny for example, they have this weird
lighting in the store. It makes the clothes feel old.
Do you normally shop online or in-store?
I always shop in-store. I don’t mind coming to the mall and
the coupons always bring me in. It’s just been a habit. I
wouldn’t want to stop it now because of the internet.
Sears | Overview
Sears | Current Situation
Sears is a subsidiary of Sears Holding Corp. and has been
struggling to regain their footing for the last few years. Like
JCPenney, the company is predicted to fall if something
is not done soon. Sears has acquired some exclusive
celebrity clothing lines but this has not done much to help
their situation.
Sears | Current Brand Strategy
One of the primary reasons that many analysts are
attributing to the downfall of sears is the lack of a clear
brand promise. Sears has developed an online social
shopping experience referred to as ShopYourWay, which
seems to be the closest resemblance of a promise to
the customer.
14 | 15
Sears | External Interviews
Interviews | Tommy, Age 36
Interviews | Erma, Age 50
Interviews | Jacky, Age 24
What brings you into Sears today?
I came to pick up a pairs of jeans and some tools.
What brings you to Sears’s today?
Just picking up some clothes for my grandkids.
When is the last time you shopped at Sears?
Last time I was at Sears… wow, it has been around 8
years. I think my mom took me there.
Do you normally shop at Sears?
Yeah if I need any jeans or something I go to Wal-Mart
sometimes. I come here for tools and anything I need
around the home.
Why shop at Sears?
I’ve known the name for a while. I have been coming to
Sears for a while now, plus I see they carry some of the
celebrity clothes that the kids like.
Anything you would like to see change at Sears?
It works for me. I don’t shop that much to be honest, I have
just known the name for most of my life so its where I go if
I need to pick up something.
Anything you would like to change about Sears?
Yeah, i’m not too fond of their customer service. I guess
people are just not as nice as they used to be.
Would you shop at Sears now?
I can’t think of why I would. The store just seems so bland.
I could always go to Macy’s, H&M, or Zara for something
nice with a good price. Nothing is attractive about Sears.
Is there something Sears can do to be appealing?
Nothing I could think of. I mean they have never really
been on top when it comes to being trendy. I know they
have a lot of tools and grills, but when it comes to clothes I
think they should just give up.
Observations
Observations
To recap, the traditional department store has taken a
major hit from factors outside of their control such as
the global economy, fast fashion chains, major online
shopping hubs. Currently JCPenney’s, Macy’s, Kohl’s, and
Sears have all made attempts to develop new strategies
for survival; some have been more successful than others.
Different approaches have been taken and much has been
revealed about today’s consumer. To combine what was
learned from the trial and error of the strategies with what
is known about fast fashion and online shopping; some
well clarity of opportunity arose.
In order for the department store to survive in the future
global economy companies are going to have to align
their strategies with the subversive demands of today’s
consumer. The most prominent of these demands are
localization, customization, convenience, and quality.
New Target Audience
New Target Audience
There is a very diverse audience who will be engaging
with the brand. In order to bring focus on who the brand
will be delivering to consumers were analyzed based on
psychographic segmentation. The model used was the
VALS segmentation System.
Achiever
The Achiever’s primary motivation is achievement. They
live goal-oriented lifestyles and have a deep commitment
to their career and family. Their social lives reflect this
focus. Many Achievers have a large amount of respect
for authority and the status quo. They value consensus,
stability, and approval from their peers.
Striver
The Striver primary motivation is achievement as well.
They are very concerned about what their peers think
about them. Money is an indicator of success for these
people as they seek to emulate the looks of those who
are well off. The Striver is an active consumer, since in
their mind the ability to buy is a reflection of success to
their peers.
Demographic Data
21 to 40 years old
All Ethnicities
Male and Female
Bachelors Degree
HHI: 17K to 60K
Urban and Suburban Homes
0 to 3 Kids
16 | 17
New Brand Strategy
Strategy Rationale
The purpose of this strategy is not necessarily to give
a superficial brand promise to the public; rather the
purpose is to provide a meaningful experience for today’s
consumer. This is achieved by aligned the business
strategy, brand idea, and brand driver around two core
elements personalization and convenience. Unlike the
past today’s consumers control what is delivered to
them. They demand products that are just for them or the
perfect fit. It is not enough to operate with localization
in mind; customization for the consumer must play the
most prominent role. The consumer must feel every
engagement with the brand is uniquely theirs and not
mass produced like the past. This strategy does not cause
conflict with the founding principle of JCPenney’s, the
golden rule, “treat others as you wish to be treated.” The
strategy actually enhances it by engaging on a much more
personal level.
Operational Definitions
Closed-loop
Streamlined consumer-centric operations that provide
a consistent brand experience.
Integrated
Cross-channel efficiency for convenience across all
customer engagements with the brand.
Adaptive
Consumer-centric operations that provide a consistent
brand experience while evolving with consumer demands.
18 | 19
Signal Execution Recommendation
Attributes
Employee Brand Engagement
When planning and execution any brand signals it is
important that the following key attributes are the lasting
impression in the mind of the consumer.
A new program must be developed to rally employees
behind the new strategy and bring them to understand
what “Just for You” means. This applies to the entire
workforce not just store level staff. The goal of this is to
have everyone in the organization understand their larger
objective and live the principles of the new strategy.
Dependable
Customers can always rely on JCPenney to deliver a
quality product and unique experience that was made
just for them.
Sincerity
JCPenney always acts with honesty in mind, providing
customers with an open and genuine environment.
Diversity
JCPenny works to ensure there is diverse selection of
styles and brands for our customers to choose from.
Brand Identity
The current brand identity does not effectively capture
the essence of the new strategy so it is recommended
that a comprehensive new brand identity be crafted to
better align the brand signals of JCPenney with the brand
strategy. Without this crucial element taken care of the
strategy will ultimately fail.
Advertisement Campaign
To further express the new strategy to the public an
advertisement campaign that reflects the core principles
of the new brand strategy is advised. This campaign
should at minimum run on the following mediums: print,
television, and social media.
Online Experience | Main Website
If the strategy is to be a success convenience for the
consumer must be addressed. The JCPenney website
needs to be redesigned with the new strategy in mind.
This does not mean a superficial makeover of the site;
rather a new experience for the consumer. It is suggested
that the site include user engagement tools, social
connection tools, and outfit customization tools. The
overall goal is to empower and give a personalized
experience through this critical brand signal.
App Development
The app is another critical brand signal as the consumer
will carry the app everywhere they go. It is imperative that
the app revolve around the “Just for You” brand driver. It is
advised that the empowerment tools stay consistent with
the tools utilized in the full website.
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