For decades JCPenney was able to appeal to customers who were conditioned to buy with coupons and discounts. That was its market position and its essential brand message. That changed dramatically in 2011, when the 111-year-old retailer recruited Ron Johnson—senior VP of retail operations at Apple Inc.—as its new CEO. Johnson, who was previously VP of merchandising for Target, proceeded to try and recast JCPenney with a younger, hipper image.
He got rid of the coupons, eliminated discounts and introduced his “store-within-a-store” plan. Less than two years later, Johnson is gone and JCPenney is now in disarray, with its stock down more than 50% (to roughly $14) and the company looking to raise $1 billion to stay afloat, according to reports. The company is also embroiled in a lawsuit with Macy’s stemming from a $200 million contract with Martha Stewart. It all adds up to a PR nightmare, with a steady flow of negative stories by the major media outlets about what went wrong and whether JCPenney can save itself.
JCPenney might not wake up from the nightmare until the company is able to reassure both investors and consumers about why they should come back into the fold and start shopping again at the chain’s 1,100 stores.
The communications strategy will play a critical role in whether the retailer associated with “everyday low prices” can move forward and regain its financial footing.
Myron Ullman—who preceded Johnson as CEO—has been brought back to take on the helm. He needs to work quickly with the company’s communications team to change the corporate narrative, say PR and branding experts.
“You’re dealing with a rudderless ship,” says Hayes Roth, CMO of branding agency Landor Associates. “For PR to try and put an artificially positive spin on a terrible situation just won’t work. [PR] has to be straightforward, telling the company’s story in very clear terms that are relevant and credible to JCPenney’s consumers today.”
Roth recommended three tips for communicators when tasked with redefining a brand that has veered well off course and put its business on the line.
1. Get back to basics. Craft a story that reminds consumers and prospects about what separated the store from its competitors in the first place (read: sales, discounts and low prices).
2. Communicate the brand’s historic value, but, at the same time, tell consumers about how the company isMike going to enhance the brand experience and what tools the company is be using to create that experience. “What’s going to be the smell, taste and feel you get when you walk into a JCPenney store,” Roth says.
3. Leverage all of the social channels and harvest the information intelligently. Listen to what people are saying online, and sift for the “uniquely ownable, compelling” stories. Build on them to help drive the communications plan, Roth says.
JCPenney has started to take some pains to get back to its roots. William Ackman, the activist investor who recruited Johnson, told Thomson Reuters that the retailer will return to offering newspaper circulars while The Wall Street Journal reported that the chain is expected to deemphasize the “JCP” brand favored by Johnson and return to “JCPenney.”
A NEW ‘GAME PLAN’
JCPenney is now trying to cauterize its wounds. “My plan is to immediately engage with the company’s customers, team members, vendors and shareholders, to understand their needs, views and insights,” Ullman said in a statement.
He added: “With that knowledge, I will work with the leadership team and the board to develop and clearly articulate a game plan to establish a foundation for future success.”
David Johnson, CEO of PR agency Strategic Vision, stresses that when trying to recover from such a huge blow it’s important that communicators help to set expectations.
“You have to realistically give [consumers] a good timetable for turning things around and explain that this is not something that can happen overnight,” he says. “They need to calm down investors and consumers, and converge on a consistent message.”
Johnson says that as JCPenney seeks to rebuild its image it’s important that the new regime doesn’t take a dim view of public relations. ”PR has to be involved,” he says. “And there has to be clearcut lines of communication between management and the PR team so there’s a coherent message.”
Giving PR a seat at the table is all well and good, of course, but a lot more depends on whether PR can marshall all of the available marketing channels to convince consumers to come back, says Mike Paul, president and senior counselor of MGP & Associates, a reputation-management firm.
“All the tools that make up communications—marketing, advertising, corporate communications, customer service, social media—must be on a united front,” he says.
Paul says that in order for the communications strategy to be successful, JCPenney has to re-evaluate the mindset of its customer.
“For the JCPenney customer, it’s all about the sales and that’s not necessarily a communications message, that’s a behavioral message,” he says. “If you’re telling me as a consumer, who’s been going to your store for years, that there are no more sales, you’re telling me not to come to the store anymore.” PRN
David Johnson, firstname.lastname@example.org; Mike Paul, @reputationdr; Hayes Roth, email@example.com.
We recently saw one of the nation’s most iconic retail brands, JCPenney, dismiss its CEO, citing a failed strategy that left the company unprofitable and customers fleeing to competing brands.
Yet beyond a failed strategy, Ron Johnson failed as “Chief Storytelling Officer.” His brand story did not resonate with what the JCPenney customer wanted from the brand and the shopping experience.
This situation is not uncommon. Many CEOs fail to tell a good story about their vision, brand and products. Another example that recently made headlines is Hewlett-Packard. CEO Meg Whitman’s story has gotten lost in turnaround tactics. Her inability to communicate a vision for HP has created a lack of confidence with shareholders, industry analysts and customers.
For CEOs to deliver on their most important management objectives, they must craft a clear and compelling narrative that activates key stakeholders.
As a PR professional, your role is work with your CEO to deliver a story that sells. Here are some tips:
Understand your target audiences and the core emotional drivers that cause them to engage with your brand.
Help your CEO align their narrative to those needs, values and desires.
Ensure all communications deliver on the brand narrative to create consistency and clarity.
CEOs must use story to communicate their strategy, so key stakeholders buy-in and stay engaged in the CEO’s vision as the strategy gets executed. It’s your job to facilitate that process and ensure your CEO is an effective Chief Storytelling Officer.
Danielle Berg is a principal of Telling Media, a business consultancy, and co-author of the forthcoming, “Use the ‘S’ word in business.”