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For brand owners who care about building an enduring and valuable brand, the recent JC Penney drama offers an excellent learning opportunity. Venerable retailer JC Penney opened its doors more than a century ago and generates annual revenues of nearly $13 billion from its 1,100 stores. JC Penney was a force to be reckoned with in mid-market department store retail for most of the 20th Century. And that’s exactly why the brand is stuck in its self-inflicted drama today. Like its competitor Sears, the department store format is becoming a relic–an idea that no longer serves shopper’s changing behaviors and preferences in our digital age.

Now JC Penney is a broken company and a broken brand.

And no matter how much the brand needs fixing, it won’t happen until the internal culture is fixed. JC Penney is a brand without a soul, with no higher purpose than profit taking. Customers no longer care about JC Penney– not the once loyal shoppers who valued their discount coupons, nor the potential up-market name brand shopper the “new JCP” tried to attract. Over the past two years, JC Penney same store sales have dramatically declined nearly 30%. The company’s stock is trading at roughly half of what the current hedge-fund owners paid for their original investment. Heads will roll and they did!

Let’s look at the lessons for marketers based on JC Penney’s recent attempts to transform its iconic brand:

What got you there, won’t keep you there.

Brands begin to decline long before the cash they generate does. JC Penney’s owners and executive management were heavily invested in keeping up the status quo–doing the urgent work of meeting the numbers and maximizing shareholder value, while the more important work of innovating new value for a new generation of shoppers seemed less of a priority. Sadly, once the decision was made to transform the JC Penney brand, the CEO in charge of creating the transformation of a 100 year-old brand was fired in less than 18 months. Seemingly too little, too late.

Lock onto true north before changing anything.

Penney’s ousted CEO Ron Johnson is a brilliant retail executive. He came to JC Penney from a culture that valued innovation and creativity, unfortunately once there, he and his Apple team attempted to cram it down the throat of a culture that was locked into “discount coupons” and low margins. The culture clash was a recipe for disaster.

As a result, the brand continues to drift with no higher purpose or true north that people care about. JC Penney is a lost brand – no longer knowing who it is or why it matters. Consequently, in the minds of shoppers, the brand offers no compelling idea of value whatsoever regardless of the merchandising mix or the price point.

True north is the sacred reason the brand exists in the first place. True north is not subject to the whims of the marketplace. To transform an iconic brand, the transformation begins from the inside out, not the other way around.

Iconic brands are typecast.

Just like an aging child actor, brands will always be who and what customers remember them to be. Iconic brands are typecast. By its current generation of shoppers, JC Penney is and always will be a discount department store brand. A Chevy, no matter how elegantly designed and engineered, will never be perceived at parity with a BMW. You can only stretch brand relevance so far. This is especially true for iconic brands. For JC Penney, moving up market in an Apple-esque manner has proved to be a steep ascent indeed.

Once JC Penney abruptly dropped its beloved coupons, legacy customers abandoned the brand in droves, while the up market customers didn’t easily buy into the idea of an up market JC Penney store – with devastating effects on the business. Perhaps a sub brand strategy would have been more effective means to leverage the larger up market transformation of the parent brand.

Be committed no matter what.

Revolutions are bloody and expensive. Change is painful and takes a long time. As previously mentioned, the ousted CEO was on the job for less than 18 months. That’s hardly any time at all considering the physical scale of the business. Big old boats take longer to turn around. The new store design and merchandising was only recently beginning to see the light of day in a few JC Penney stores. Whatever merchandising and product mix specifics were underway, the brand owners were not fully committed to the transformation of this iconic brand into something greater and more relevant to 21st century shoppers.

When the process of transformation eventually became too painful, brand owners became frightened – so much so, they brought back the former CEO who represented a safer option of the old JC Penney.

To have a chance at success (not a guarantee), brand owners must be all in over the long and uncertain road of transformation. This idea doesn’t sit well with owners whose primary concern is the preservation and rapid growth of their investment capital rather than the creation of highly valued brand.

Publisher’s Note: We sincerely invite the senior marketer of JC Penney to join us, Free of Charge at The Un-Conference: 360° of Brand Strategy for a Changing World. Value creation will be an underpinning theme and one that all brands must master to thrive. Contact Derrick Daye.

Sponsored by: The Brand Storytelling Workshop

Join us at The Un-Conference: 360° of Brand Strategy for a Changing World
Featuring John Sculley May 16-17, 2013 in San Diego, California
A unique, competitive-learning workshop limited to 100 participants
As in the marketplace — some will win, some will lose, All will learn

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AT&T CEO Randall Stephenson took the stage this afternoon at the Fortune Brainstorm Tech conference in Aspen, where he was asked about a recent report in 9toMac that AT&T might charge customers extra if they want to use FaceTime over 3G cellular networks (a feature that was announced for iOS 6).

The company previously offered a generic “we’ll share more information with our customers as it becomes available” statement with 9to5Mac. Stephenson didn’t go too much further, but he certainly didn’t rule the charge out.

“I’ve heard the same rumor,” he said, insisting that for now, AT&T is focused on working with Apple to get the technology stabilized, so “it’s too early to talk about pricing.”

Speaking of controversial pricing news from AT&T, Stephenson was also asked about the “toll free” data idea that been the company has been discussing, where app developers pay for their users’ data usage, either with a direct payment or by giving AT&T a cut of ad revenues.

Stephenson acknowledged that this is something people get “emotional” about (when the idea was first reported, our own Jordan Crook called it a “boondoggle”), but he compared it to toll-free, 1-800 phone numbers. Just as it helps Sears to pay the bill for calls from its customers, there are mobile companies that have “business models premised on traffic,” so why not pay to remove any barriers to that traffic? In fact, Stephenson claimed this is something that some of the content providers are asking AT&T for.

Amazon has quietly made its “Universal Wish List” feature even more powerful and aggressive, VentureBeat has learned from developers. But some people are saying it’s too aggressive.

Now, if you say, find a toy that you like on Walmart’s website, Amazon’s feature allows you to see the same product in an overlay window — including a price discount — that lets you buy the product on Amazon.com, sometimes for the same price or cheaper.

(Click on image at left to expand, to see how it works).

Amazon is using the feature to target an increasing number of products on the websites of giants such as Walmart, Sears, BestBuy, and others. It’s just the latest sign that Amazon is ratcheting up pressure on competitors that have had higher costs because they run relatively expensive “brick and mortar” stores. Amazon has already pissed off big retailers with its mobile “Price Check” app.

Amazon introduced the Universal Wish List feature about four years ago, but the feature started out relatively benign — without the price discount information. But a few months ago, Amazon quietly started adding the price and discount information, essentially making the feature more predatory because it seeks to lure the user into buying the item at Amazon.com. See the “Before” image at right (click to expand), which depicts how the feature worked until relatively recently, i.e, with a relatively light touch.

The Wish List feature, at its base, is a browser add-on that you download from the Amazon site. Once it is added, you just click on the Wish List button on the top of your browser whenever you come across an item you like. It then transfers to your Wish list the pricing and other spec information of the product you were looking at.

To be sure Amazon, isn’t matching all products with discounts. Many times, its own products are more expensive.

However, one lawyer, Parker Bagley, an attorney at Goodwin Proctor who specializes in copyright law, says that if code on the existing site is being impacted, and Amazon is lifting images and showing discounts, this could develop into an “unfair competition” type claim. Bagley, who helped defend the New York Times from a site that sued the Times for linking to its pages (in a famous case three years ago that showed how little legal precedent there is in this area), says regarding Amazon’s action: “It’s arguably an unfair taking of something from your web site by a competitor.”

One company Digital Folio, which offers a competing product to Amazon’s feature, says its lawyers warned the feature could be copyright infringement. Patrick Carter, chief executive of the company, says Amazon may have overstepped its bounds by more directly tinkering with the code of the sites it is targeting. His site was toying with doing the same thing, but his lawyers recommended against it, saying it was in dangerous legal territory on copyright. Instead, his company decided to not overlay retail sites, but created a sidebar that sits to the left of the sites.

Rony Sagy, another San Francisco-based lawyer specialized in intellectual property, is more careful. She says Amazon is playing hardball, but is not doing anything illegal. After all, users are choosing to download the Wish List feature to their browser, and she says copyright claims in this case are somewhat farfetched. Use of the images could be considered “fair use,” she says.

More disturbing, however, is that Amazon is quietly grabbing lots of data about a user’s surfing and buying habits, she says, as well as covertly tracking pricing strategies of its competitors, all the while not clearly disclosing exactly what it is doing with that data.

The Amazon feature may infringe on Walmart’s Terms of Use. Walmart’s terms state that third parties are not allowed to “modify” its site or any of its content. They continue: “The Contents and software on this Site may be used only as a shopping resource. Any other use, including the reproduction, modification, distribution, transmission, republication, display, or performance, of the Contents on this Site is strictly prohibited.”

When I asked Walmart for comment, spokeswoman Amy Lester said the company is fine with the Amazon Universal Wish List because it does “not impact our code or a customer’s privacy on our site in any way.” She did not address the apparent violation of Walmart’s terms of use. Sears and Best Buy declined comment.

HTML before

HTML after

Digital Folio’s Carter says Walmart  takes a strict interpretation when it says there’s no code impact, because there really is a form of intrusion happening (see screenshots of the code, and note the difference between the “HTML after” code and the “HTML before”.)

Carter continues: “It seems that Walmart may be saying it’s fine for Amazon to deliver any content they want now and in the future at Walmart.com, which seems to be a very risky position….What if later the Amazon’s pop-up grows in size to cover up nearly all of Walmart.com, delivers a discount to undercut the Walmart price, or delivers text, ads, or other content the site owner does not agree with — yet it is all conduct on top of and within the browsing window for Walmart.com?

Carter suggests that targeted retailers such as Walmart may not have expressed outrage because they may be developing or planning script-injection features themselves.

Carter’s Amazon-like product, Digital Folio, does not interfere with the site that you’re on. Moreover, it is independent from Amazon or other sites, and so aims to be an honest broker in pulling the best price and product specs for you (see a video of how the Digital Folio product works below). Digital Folio also shows pricing history, something that Amazon doesn’t do. Digital Folio does this by showing the prices that all of its users are seeing on specific items around the Web. This crowd-sourcing model also helps avoid the criticism that Amazon gets for keeping its own price gathering activities private.

Finally, note the video at bottom which shows how Amazon appears to even interfere with the site of a company called Tesco, causing the product in question to even disappear momentarily at times from Tesco’s site.

My own bet is that Amazon won’t get called out on this in the courts just yet, unless it goes a lot further.  In the meantime, look for other sites to get more aggressive.

Filed under: VentureBeat

Completing our Ikea trifecta (following the store inside a banner ad and the new Uppleva line of multimedia furniture), the Swedish chain just won a Yellow Pencil at the 2012 D&AD awards for a campaign designed to keep its annual catalog in Australian homes for longer stretches of time. Since the chain's furniture helps people save space, ad agency 303Lowe decided to offer monthly in-store redeemable "rent checks" to cover the 22-by-20 centimeters the catalog occupies in people's homes. It'd sure be great if all my freeloading, space-hogging catalogs had to pay up or get tossed out on their spines. Sayonara, Sears! See you in hell, L.L. Bean! My wife's Victoria's Secret volumes, however, would stay where they are—in the bottom drawer, beneath my sweatshirts. Via The Inspiration Room.

As competition intensifies, it becomes increasingly more difficult for retailers to thrive, with big retailers like Sears, JC Penney and Macy’s resorting to Every Day Value Pricing. To succeed, retailers must avoid missed opportunities. This article identifies three opportunities retailers can take…



Please visit Search Engine Land for the full article.

When it comes to the politics of provocative T-shirts, there are degrees of complexity and impropriety. JCPenney last year caused much anxiety and heated intellectual debate over gender roles with a T-shirt that read: "I'm too pretty to do homework so my brother has to do it for me." Sears has gone the simpler route to infamy with a shirt that is not prompting as much intellectual debate—one with the straightforward slogan "I ♥ butt plugs." It's has since been removed from Sears' online store. So, rogue employee or completely useless T-shirt vetting process?

I run this little experiment for Executives from time to time.  It’s time to run it for you as well, given that Sears is about to close 100 – 200 stores, given that Best Buy ramped-up sales by about 20% and was killed, from a profitability standpoint, after discounting to compete with online brands.

Why is ranking data not available in Analytics?

Cutts: Over 96% of sites get all of their searches within the 1,000 limitation. The last 4% of sites would require 2-3 times more data storage.

Due to the Panda update, lower quality sites are outranking an authority site. Why?

Singhal: Google’s preference is always algorithmic – it is scalable across all sites, countries, and languages. Overall, the Panda update has been a very positive change – the scientific measurements say the Google user experience is better than it used to be. However, they understand that no algorithm is perfect and want people to submit reports of instances like this so they can improve the algorithm.

Cutts: Google is listening. Unfortunately, the changes take time to implement. They use the aggregated reports to try to improve the algorithm. The algorithm is under active development and they want to get it right.

When we search for appliances, why do we only get Sears and other major stores?

Cutts: The web is one of the only places where the small business can move faster than the big guys. The big companies are often big for reason and as a result they can outrank other pages. However, the search engine does give the small business a chance Google Webmaster Tools is somewhat of an equalizer though and small businesses should use this – i.e. big businesses are more likely to use text in images/flash and small businesses will know better. Also, small businesses should concentrate on the small niche.

 Are they trying to make the algorithm so perfect  that they are missing the user experience?

Singhal: All scientific measures and manual reviews indicate that the algorithm is getting better and that search quality is improving (improving search quality = more relevant, higher quality results).

Google Places Page that got shut down by competitor – is there a better process to stop this type of behavior?

Cutts: The web used to be the “wild west” and there is still a small element of this especially in local. The local area is changing fast and a combination of manual spam fighters and algorithmic changes will get this under control. They are open to ideas on how to prevent malicious deletions of other businesses. They are working on this.

Where is the balance between privacy and data with SSL encryption?

Cutts: The trend is search is becoming more personal and this should continue, which means this is important to Google. People are unhappy that they have lost some of their keyword data. However, if you download your data from Google Webmaster Tools, 96% of people can still see all of their keyword data. They will not back down on the SSL – if anything they may move forward and advertisers may not get the data in the future. People want to know that they are not being snooped on.

Are PRWeb and press releases considered black hat due to duplicate content?

Cutts: Press releases are going to other people and asking them to write about you. Instead, work hard to produce high quality content on your site and people will want to write about you. It is harder to fake natural than be natural.
Singhal: The content must be high-quality and useful from a reader’s perspective. If the content is high quality and you work hard for the users, it is OK.

If I do doorway pages will the whole site get penalized or just the doorway pages?

Cutts: Are you asking how to do doorway pages (incredulously)?!? There is an answer though – it depends on the amount of spam. If there is a huge amount of great content, they will probably only penalize the portion of the site that is using doorway pages. However, if

Singhal: Don’t do it man.

Everyone says I need more links. How do links improve the quality of the site? I don’t want to play this game and I don’t want to do this.

Cutts: What matters is bottom line. Links are a part of search – they represent online reputation. Although there are many tools that report links, none of the tools can tell you which links are trusted by Google (not even Google’s tools). While the link structure looks bad from the outside, the actual linkgraph that Google uses/trusts looks much better. When the New York Times complained about a site with 10,000 spammy links, Google investigated the site and not a single link had slipped through Google’s filter. Only the links Google trusts count.

Is Google going to give more data to webmasters?

Google can either give more data (i.e. 2000 queries instead of 1,000) or give a longer timeframe (i.e. 60 days). They are leaning toward more data – they figure people can just download data periodically and still have access to past data. In an informal survey of the audience they disagree – 60% want longer timeframe and 40% want more queries.

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Ok, yes, it’s another ad/marketing campaign from a brand trying to be cool by association with zombies. But unlike the Sears spot we recently covered, this one’s actually pretty clever.

Visit the Westlake Hardware website, rollover the specialties dropdown and you’ll see Zombies at the bottom of a list of the things you’d expect to see on a hardware store website. You can select whether you are a zombie or a human to find all the tools and information you’ll need to survive the Zombiepocolypse.

Not sure what to do with all these tools, then simply check out their help center for questions and answers to aid in your survival.

And of course stay up to date on the latest Zombiepocolypse news in their breaking news section filled with Zombierific videos including their violent protest against the store.

Try and find that at your local big box store, psh!

Let’s face it, we all love zombies. But it seems lately they’ve become pretty played out on TV, the internet, commercials… pretty much everywhere. But it’s not until they appear in a Sears commercial that one might be able to officially conclude that they have, in fact, jumped the shark. This spot by EuroRSCG offers to give zombies a beauty makeover, likely to promote their whole “more than just appliances and tools” message. So the question is: does this make Sears now cooler by association or zombies now uncool by association? Discuss.