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Rebranding: Fair and Square


One of the biggest challenges in branding –more challenging than branding itself—is rebranding, taking a product or brand that is understood by the public and sending it in a whole new direction.

Earlier this year, JCPenney, a popular midrange department store in the United States, began a rebranding effort that has turned more than a few heads. Its new logo and the new brand promise it symbolizes –to be fair and square—may not seem like much until you consider what JCPenney has, for years, represented. Traditionally, JCPenney has embraced heavy couponing, endlessly cyclical sales, and crack-of-dawn doorbusters to move their merchandise. In the US, few other retailers epitomize these practices the way JCPenney has.

That is why JCPenney’s new “Fair and Square” rebranding is such a 180° departure: they are killing off coupons and sales completely, rounding their prices to whole dollars (goodbye $9.99, hello $10), and allowing easy returns without a receipt. To make up for the lack of coupons and sale discounts, JCPenney will lower prices storewide by an average of 40%. In other words, you will save just as much under the new pricing as you used to under the coupon system.

The former JCPenney might have priced a jacket at $100 with the expectation of selling it for around $60 after discounts. The new JCPenney will price it at $60 outright. Fair and square, right? But there is a reason most retailers price, coupon, and discount merchandise the way they do. Without comparison shopping across stores, for example, it is not obvious whether $60 is a good deal. Applying a 40% off coupon to the jacket priced at $100, however, feels like steal.

The model is fresh, bold, and pro-consumer, but JCPenney needs to do two things for it to succeed. First, it needs to convince customers that eliminating coupons, sales, doorbusters, and psychological pricing are major benefits, worth shopping at JCPenney to enjoy. Second, after spending years conditioning customers to look for discounts, it needs to convince customers to keep returning to the store after coupons stop appearing in their mailbox every week.

JCPenney’s recent campaign featuring popular American talk show host Ellen DeGeneres does the first very effectively but hardly touches on the second. In several spots, Ellen whimsically demonstrates the absurdity of .99 pricing schemes, coupons, and doorbuster sales. But they do nothing to assure consumers that their next JCPenney purchase won’t be more expensive than the last.

Consumers won’t notice the lower prices on their own but will notice the absence of coupons right away. JCPenney must expand on its message accordingly, illustrating why the new model won’t cost shoppers more than before. These customers need to know that ‘no coupons’ does not equal ‘higher prices’ and that they are still getting a great deal in the store

JCPenney is in a precarious situation.  If the retailer is forced back into its old practices after publically criticizing them, it could become a public laughing stock and alienate consumers further. If they adjust their message appropriately, however, they could become the ultimate counterexample against the manipulative pricing games played by most other retailers.

Written By: Stephen McVerry

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