The Whiteboard: Tick, tock: Brands on the clock for 2013 face uncertain futures
Every new year is a time of opportunity or challenge for most brands. New plans, new objectives, new programs are inevitably put in place.
But two brands in particular face considerable obstacles this year that will test their brand strategies.
JCPenney: Please pardon the mess while we reconstruct our brand. 2012 was nothing short of brutal for JCPenney. Their new CEO, Ron Johnson, the man with Apple retail on his resume, introduced a new brand concept based on everyday low prices and gradually instituting boutique departments within their stores.
Sales went on an immediate nosedive and haven't leveled out yet. Two years ago, JCP lost about $175 million. In 2012, it expects to have lost about twice that much. Yikes.
The brand transition is, indeed, a mess, but there appear to be some signs of hope on the horizon. The boutiques-within-the-store concept is gradually beginning to take hold. Sales per square foot are substantially higher in the boutique areas of stores that have already been converted. Name brands such as Liz Claiborne, Levi's and Izod are providing products available only through JCP.
The brand is still battling lower sales and store traffic, but considering how drastically different its new vision of the brand is, it could be doing worse. Even its stock price improved slightly in the last quarter of 2012.
The boutique refit is scheduled to continue through 2015, at which time every store should have about 100 pockets of unique products priced at everyday values. You have to give the old retail giant credit. It seems to understand that a brand isn't rebuilt overnight. Its bold "Fair and Square" brand vision is a huge gamble that could pay off with a fresh new retail force in the market.
But the patience to make it work is coming at a high price. Stockholders will demand to see more progress as the year unfolds.
BlackBerry's in a jam. BlackBerry phones were once the smartest phones on the market. They were early leaders in text messaging and email but seem to have been treading water for several years as other phone manufacturers have caught, and passed, them. The innovations in the industry — led by Apple's iPhone and Android-based phones — have turned BlackBerry into an also-ran brand, with a market share in the U.S. of less than 2 percent, according to some estimates.
And it hasn't helped that BlackBerry's proprietary Internet service has faltered or crashed several times in the last few years, leaving its users disconnected and frustrated.
The mother company for the BlackBerry brand is RIM (Research in Motion). It is promising that its newest line of phones, the BlackBerry 10, which is due in early 2013, will deliver new levels of capabilities on par with the leaders.
But in a technology-driven segment like smartphones, parity is hardly a rebuilding strategy. The brand needs to stake out some kind of territory it can own, perhaps building on its higher level of security (which is known to attract government users) or finding a technology edge it can hold on to for more than six months.
If it is unable to achieve either of those, the brand will likely find itself about as relevant to smartphone users as Franken Berry.
By comparison, JCPenney and BlackBerry are both clearly struggling to return their brands to levels of bygone days. But only JCP appears to have a clear strategy for how to reinvent itself within its marketplace. Its new concept is differentiating and is following a prescribed path.
BlackBerry, on the other hand, has lost its technical edge and much of its total market share across the globe. It seems to lack a strategic anchor that will help it compete against the likes of Apple and Android.
While both JCP and BlackBerry are in a downward spiral, don't be surprised if only one can pull out of it. While JCP has a concept with some promise, BlackBerry appears headed for the auction block.
Time will tell.
David Taylor is president of Lancaster-based Taylor Brand Group, which specializes in brand development and marketing technology. Contact him via www.taylorbrandgroup.com.