Article

Experts discuss dos and don'ts of rebranding

Defining the target audience is one of the most important steps when developing a rebranding strategy.

June 14, 2012

Rebranding can be a daunting task; just ask GAP or J.C. Penney. But when done well, renewing a brand's image can lead to better customer loyalty and sales increases. Retail Customer Experience asked a few retail experts about the dos and don'ts of rebranding. Our experts were Bob Phibbs AKA the Retail Doctor, Sheridan Orr, managing partner of the Interrobang Agency, a customer experience consulting firm, and Doug Stephens, the Retail Prophet.

What are the most important aspects to keep in mind when launching a rebranding campaign?

Phibbs:

• Your customer.
• Your heritage.
• Your value proposition.
• How big a leap your new brand will be from the old. It's not a matter of "use a new PMS color."
• The potential upside measured against the downside. Can you exist in transition long enough for changes to take hold?

Orr: When you think about what a brand is, it is an emotional connection to your customers. It is a piece of their minds that you want to own. Successful brands are very specific about the space they want to own. Nike is performance athletic wear. Disney is fun family entertainment. Ikea is affordable design. If you don't know exactly which space you want to occupy then it is hard to craft a brand that creates an emotional response.

When is it in the best interest of a retailer to "rebrand?"

Phibbs: When a customer no longer sees the brand as relevant it is the LAST stage in my opinion to address. JCP and GAP have strategically missed with redesigned logos as a way to point towards a new direction they hadn't firmly established —  just a promise — which fell flatter than a duck's footprint.

You only get one shot, I'm sure Talbot's is looking at rebranding but what would it be? They already tried to go after a younger crowd and, like JCP lost their regulars, becoming reliant on sales and discounts to get the merch out the door — never a good way to manage.

Orr: People change over time; if the brand has not evolved with them, then it is time to re-evaluate. Belk is an excellent example of a retailer that needs to and is rebranding. If you were raised in the South, Belk was where you went to buy everything from baby shower gifts and prom dresses to wedding presents and everything in between. However, over the past decade the South saw a massive influx of people from not just all over the country, but all over the world. Belk failed to keep pace with the New South and lost relevance. It was no longer the shopping destination of choice and therefore is trying to figure out how to broaden its appeal to a more urban, affluent shopper. If a retailer fails to connect on an emotional, visceral level with their customer or the customer has changed, then it is time to rebrand.

What are the dangers of rebranding?

Phibbs: Again, creating hope that things have changed versus reality. It is just lipstick on a pig of a customer's experience.

Orr: Rebranding is full of pitfalls because it is quintessentially changing your identity. The greatest fear is that you will alienate the current customers or goodwill that you've built over time. To rebrand well is a monumental effort. Every tag, sign, advertisement, screen, Web location has to be changed. It always takes more money than you budget, and it requires organizational stamina because it takes years to see the true effects of a rebrand strategy. That is unless it is an immediate disaster like Gap's attempt at crowdsourcing their logo or new Coke.

How can a retailer best ensure that consumers will embrace the new look/design?

Phibbs: Testing. Testing. Testing. When many units are in play, you need to be absolutely sure, like a franchise concept that the system can be duplicated with results. A department store in particular is not a speed boat. Where I was able to rebrand many businesses, they were one-offs. You can fire the whole crew, redo the brand, product, the works easily because there is a shared vision, feet on the ground and clear direction. Without that, it is "a shoot then aim backassards," as my dad used to say, approach.

Orr: A brand is so much more than a logo or design. It really is about the feeling you want to evoke in a certain target customer. Again, you have to start with what real estate you want to occupy in which consumer's mind. If you want to appeal to the hipster, then your design and logo have to be done in a retro, funky style. If it is the timeless classic customer, then it has to be sophisticated and elegant. Jeffery Zeldman once said that "Design in the absence of content is not design, it's decoration." The same can be said about design that is not purposefully trying to build a connection.

Why did JC Penney's recent rebrand fail?

Phibbs: Where do I begin...

• Let's be clear, it wasn't about Ellen. If it had been me, the consequences of a BIG miss should have been fully understood.
• The big gamble was treating their loyal customers as disposable. Cutting off coupons they used often to come into the store had no replacement.
• Botched implementation of strategy. What the heck was "everyday values for a month" versus EDLP versus Friday special limited time sales. No customer wants to have to look at the calendar to shop.
• New logo, new marketing, same old store. You don't invite people to a party that's no good.
• Pinning all their hopes on one guy. Ron Johnson is smart, but the implementation he directed was done primarily by existing staff. The road show he touted as taking a couple years to implement ramped up expectations. Better to have quietly tested the strategies in Plano before whole-scale changes.
• Cutting staffing and commissioned sales people meant bitterness ensued across the Web at time they needed every bit of compassion.
• Throwing out the baby with the bathwater. JCP sales were only down 2 percent last year; much of what they were doing wasn't spectacular, but customers were regularly shopping.

Will customers morph into high profit, margin rich brand buyers like Johnson hopes? If this had happened prior to the crash of 2008, I'd be more hopeful. As of now, I think the tides have turned against JCP and doubt they will be able to make headway as the customers stay away.

Orr: A brand should be something solid that customers can rely upon. J.C. Penney's has rebranded three times in as many years. This constantly shifting positioning leaves customers unsure about what the company stands for. Moreover, Penney's tried to solve a problem that the customer didn't have. Who was begging them for "every day low pricing"? I'd venture to say no one. Their devoted shoppers liked the idea of going in and finding a deal. Moreover, it was uninspired. I still don't know who their target customers are or what differentiates them. I'm guessing they don't know either, and that is the quickest path to failure.

Stephens: I don't see the Penney reposition as a failure of strategy, because the rebranding wasn't given nearly enough time to take root. How could anyone expect JCP to change decades of behavior in just a few months? And it should be expected that in the process of reinventing themselves, they will indeed disenfranchise some of their consumer base. But over the longer term, they would have likely drawn a new and presumably higher value consumer to the brand. Unfortunately they blinked. In my opinion this was more a lapse in courage than a failure of strategy.

Can you point to an example of a successful rebranding campaign?

Phibbs: I think Starbucks moved from a focus — "We have the best beans in the world" to "What's your choice," moving from "me, me, me" to "what we can do for you?"

Orr: I really like what Tourneau did to expand the appeal of luxury watches. It's an interesting case study, too, because who really needs a watch anymore? You can find out the time, weather and global position from your phone. They had to fight to remain relevant by changing the entire reason you buy a watch — let alone a really expensive one. Tourneau embraced technology, created an urban feel and targeted those wishing to show their success in an understated way. They also used a lot of analytics to find out everything they could about their customers and why they buy. In the process, they eliminated some fallacies that were holding them back. Then they created an iconography that evoked what they stood for and created a connection with their targeted customer.

While rebranding is hard, what is even more difficult is to evolve an iconic brand. Macy's and Tiffany both did that well. They kept the elements of the brand that their devoted customers held dear while broadening their appeal to new customers.

Stephens: Successful rebranding/positioning: Apple 2000-2001 and Target repositioning to affordable chic relative to Walmart's low-cost model.