New York Times’ Stephanie Clifford asked me for reactions to J. C. Penney’s recent presentation about the vision and path forward for the venerable chain.  My comments were featured in her piece as follows:

Denise Lee Yohn, a branding consultant, said that she was impressed with some of his ideas, but that Penney’s physical presence was a limiting factor. “I don’t think the opportunity to do something dramatically different is possible, given their real estate and the realities of retail.”

I thought I’d flesh out my thoughts a little further:

CEO Ron Johnson seems to have accurately diagnosed the chain’s problems with comments like “We have to radically rethink presentation,” and “We haven’t given the customer enough reasons to love us.”  And, among the smart plans he and President Michael Francis outlined were focusing on new/hot brands and launching a new monthly magazine-like book.

But they also announced they wouldn’t be launching a new prototype store until 2014 and projected it would take until 2015 for the total transformation to be complete.   While I don’t question the magnitude of the change needed, three years is a lifetime in retail.

Tectonic shifts in technology will continue to change the retail landscape and consumer buying behavior.  And emerging brands like Uniqlo and H&M seem to be well on their way to making mid-tier department stores obsolete.

Meanwhile I’m dubious that today’s fair weather  investors will be patient enough to wait three years — especially when they’ve got other retail options like Apple whose share price recently soared to record levels after the high-tech giant doubled its profits in one year.   Moreover although J. C. Penney’s shares gained 15% after the company issued a 2012 profit outlook well above analysts’ projections, I question whether it will indeed be able to fund the transformation with cash flow from operations, as it’s promised.

But I suppose the company is stuck with large, expensive, and in many cases less than desirably-located real estate assets.  And as such, it only has so many options to explore and levers to maneuver.

I was bullish on J.C. Penney when I wrote my Brands to Watch in 2012 post earlier this year — and I remain cautiously optimistic.  But I would have like to have seen a more aggressive turnaround timeframe and more ideas about transforming the shopping experience.

What do you think?  Comments open!

related posts:

• 12 Truths to Guide Retailing in 2012
• Build Your Brand with a Cohesive Customer Experience
• Brand Experience Briefs

(Here’s the latest “brand experience brief” — insights from my audits of new and interesting retail and restaurant concepts.)

Check out this video featuring photos and my notes on Tin Shed, Patagonia‘s new retail concept — and then check out my interview with head of retail marketing at Patagonia, Vickie Achee, which I posted a couple of days ago.  She calls Tin Shed “a grand experiment” for the company and explains the thinking behind the concept.

recent brand experience briefs:

• ihop express – a fast casual concept from the venerable pancake chain
• Walmart.com – a shopping mall retail storefront for Walmart’s online business
• 77kids – a style lab in New York City’s Times Square for American Eagle Outfitters’ kids brand

(If you’re Interested in learning how to improve your in-store experience, sign up for a Brand Experience Day. We’ll head out into the field to experience retail concepts — good and bad — and then regroup to identify and apply the insights to your business. Learn more.)

Today’s interview takes a peek behind the curtain at an extraordinary company, Patagonia. 

Patagonia is known worldwide as an outdoor clothing and gear brand, but I wanted to better understand the company’s retail strategy.  Who better to ask than the head of marketing for the North America Retail Division at Patagonia, Vickie Achee. A twenty-plus veteran of the company, Vickie has held many marketing and branding positions throughout her tenure and has the inside scoop on the company’s current push to grow retail (opening 15 stores this past year), including its new concept, Tin Shed.

Take a listen to learn how Patagonia is taking on a grand experiment in retail, opening its mindset to different types of markets and retailing models.

Later this week I’ll be posting photos and notes from when I visited the Tin Shed location in the Upper West Side of Manhattan, so check back soon to get even more inside scoop.

related content:

• What Your Underwear Says About You
• Brand Value Creation — Learning & Growth
• Tiffany Vandemark on Chobani Fit

brand as business bit:  Phil Rosenthal‘s analysis of Eastman Kodak’s failure in yesterday’s Chicago Tribune is quite insightful — particularly in its juxtaposition of Kodak and R. R. Donnelley & Sons Co., the commercial printing company that’s been shedding its legacy and reinventing itself.  Most telling is the quote from Donnelley’s CEO and President Thomas J. Quinlan:

“The real trick is to not get wrapped up in evaluating individual technologies…For us, it’s: Where are the emerging trends, and how is that going to affect communications?”

This points to the importance of having a customer/market orientation vs. a technology one.  A successful path forward comes from focusing on what people are going to want to do, instead of which technology is best.

brand as business bit:  I just taught “Why Small Businesses Need Brands and How to Build Them,” a session in Marketing Profs University course on Marketing Your Small Business.

I talked about how brands don’t only create value for large companies — they’re also important to small businesses.  A couple of reasons:

Small businesses need to build relationships with suppliers and distributors, the media , investors, local government, banks, etc.  You need to stand out among the sea of proposals or plans they are inundated with and you need to be crystal clear about what your value is so they will want to business with you.  A brand can help you do just that — a thoughtfully-designed brand identity and substantive brand story communicate what the company stands for and express it in a memorable, compelling way.  If your company doesn’t have the salience and clarity that a strong brand provides, your business is likely to be passed over by these people without a second thought.

Also small businesspeople have so many decisions to make and a brand serves as a compass for making them.  For example, the pressure to grow and produce immediate results can lure entrepreneurs into pursuing areas outside the company’s initial charter.  While branching out into a new technology or adding to your service offering may make sense when viewed through the lens of short-term growth, these distractions divert precious dollars and manpower away from your top priority – that is, developing a strong and sustainable core offering.  Because a brand embodies the values of the company, it can serve as a decision-making filter when you and others are evaluating growth opportunities.

Heather Rast, the course curator, tweeted some of the other points I made — here’s a screen grab of her Twitter feed during the session:

P.S. If you’re interested in the course, it’s recorded for use on demand.  Use my code “BRANDASBIZ” when you register to save $200!

brand as business bit:  Next week I’m teaching a webinar, Why Small Business Needs Brands and How to Build Them, as part of a Marketing Profs University course on Marketing Your Small Business.  Here’s a sneak preview:

One of the topics I will cover is how to differentiate — and among the approaches I will discuss is specialization.  By designing your business to appeal specifically to a certain type of customer, you become known as an expert for that market and stand out from the crowd.

An example:  When I did a Google search for website agencies in my city, I got over 8000 results.  Now that’s probably not an accurate number of actual agencies in town — but I can imagine there are at least 100 and they all seem exactly the same. They all seem to be saying and offering the same things – effective, innovative, well-designed websites.

But then there’s City Gates, an agency that specializes in making websites for churches.  They’ve developed a real expertise in knowing the kinds of features, content, and designs that churches want and need – and this expertise separates them from the crowd.

If you were a church, which agency would you pick – one who specializes in serving organizations like yours or a generic one?  That’s the power of differentiation through specialization.

(P.S. If you’re interested in learning more about Marketing Your Small Business, register for the course and use my code BRANDASBIZ to get $200 off!)

(The following is the first in a two-part blog-exchange I’m doing with Stephen Denny, author of Killing Giants: 10 Strategies to Topple the Goliath in Your Industry.  Because Steve and I are among those teaching the upcoming Marketing Profs University course, Marketing Your Small Business, we decided to address retailers’ issues and opportunities in these posts and focus specifically on small businesses.  

The following are questions I posed to Steve, his answers, and my follow-up.  My post will appear on Steve’s blog next week.  Steve kicks off the MPU course next week – so register now and use my coupon code BRANDASBIZ to receive $200 off!)

Denise:  How are small businesses uniquely suited to win “in the last three feet” of retail?

Steve:  Small businesses win in the last three feet by understanding that there’s always time left on the clock. By not going away, in other words.

Giants, by their very nature – from their rewards systems to their staffing plans – are built for the “start” and rarely for the “finish.” They’re great at throwing agencies and dollars and fluff into the air, but they’re also on the hook for the rest of their quarterly objectives. Executives in giant companies don’t stay to the end. Executives – and founders – of Giant Killers do, because it’s their life’s work.

How do small businesses win in the last three feet? They spend other people’s money. They take the foot traffic or the eyeballs that were purchased at great cost and recognize them for what they are: qualified prospects, courtesy of someone else’s marketing budget. They don’t make the false assumption that they’re brand converts unwilling to hear about another solution.

Does it always work? Who knows. But if you can turn what was once a slam dunk and turn it into a jump ball, the possibilities for growth are endless.

Denise:  How are mobile and other retail trends making winning in the last three feet more challenging?

Steve:  Augmented reality, the quick merging of online and offline and the built-in disadvantage of having to pay for a brick and mortar presence all loom pretty large over this conversation, don’t they? And Amazon’s price checker app certainly hits this nail on the head pretty hard.

If I had to pick the one most significant structural shift I’ve seen in the “Winning in the Last Three Feet” world, I’d pick the technological one – specifically, the smartphone in your pocket. The rise of the ubiquity of the mobile internet and location based services have created a self-service culture very comfortable with on-the-fly purchase decisions, often – as in the case of the Amazon app – while the customer is face to face with the physical product in someone else’s storefront.

Is this “against the rules”? Yes! Dirty as hell. And Amazon can do it, so it will. Last I heard, Amazon wasn’t in the business of installing that 72” flatscreen – but I do hear rumblings that they might be looking at opening retail stores of their own.

Denise:  QR Codes — Is there something here? What are we to do with this opportunity disguised as utter confusion?

Steve:  QR codes are the modern day El Dorado, unfortunately, as most marketers don’t know quite what to do with them and virtually all consumers ignore them, so the evidence today suggests. Many marketers much more knowledgeable that I am on this subject declare the jury to be out, which really is too bad – I want this to work because it seems to be such a wonderful opportunity for people to stop what they’re doing and watch the video I want them to watch. With regret, “compliance” isn’t always a first reward of marketing anymore, is it? This may be the reason QR codes are still in the dark, frankly.

But I’m not giving up hope. The one project I’m working on today puts QR codes and mobile-friendly videos they point to in the hands of in-store retail evangelists so that the newest of new schools is supported by the oldest of old school techniques: the original “social” media, meaning real live people. Using QR codes as the in-person double-click – aided, in this case – is a step that makes sense in this particular case. More on this as it develops! It’s still in its early phases.

Denise:  I really like your answers, Steve, and see a common theme running through them – that is, the need to think different – to zig while others zag. Whether it’s focusing on the “finish,” breaking the rules, or using technology to provide more personal service, there’s always value in doing what others don’t!

related posts:

• how to succeed in small business
• six best practices in retail

brand as business bit:  Sam Palmisano, CEO of IBM from 2002-2012, stepped down from his post on Sunday.  I’ve been an admirer for years.

The New York Times ran a great piece about Palmisano’s impact on the venerable company, including increasing its stock market value to $217BB, making it more nimble and innovative, and focusing its thinking with a four question framework:

• “Why would someone spend their money with you — so what is unique about you?”
• “Why would somebody work for you?”
• “Why would society allow you to operate in their defined geography — their country?”
• “And why would somebody invest their money with you?”

In the spirit of New York Times Magazine’s annual Year in Ideas, I’ve compiled an alphabetical digest of ideas, from A to Z, that I wrote, spoke, and passed along over the past 12 months.  The following are excerpts — the original pieces linked. 

By assembling this collection of preoccupations, provocations, and predilections, I realize how random my ramblings may seem at times – but I hope they’ve been helpful to you in some way.  So here we go:

All You Need Is Love – Love is a driver of business — when businesses are grounded in love and when leaders love the people around them, the result is growth and goodness and success and strength. (my op-ed published by the Greenville News)

Belief Repositories – “Belief repositories are fueled by hard evidence but can lead marketing teams to make investments where no experiment or marketing mix model has yet been run.” (Joel Rubinson in a guest post on my blog)

Culture Isn’t Enough — A vital, vibrant culture unifies, aligns, focuses, motivates, and propels.  But it is not enough to produce a profitable business.  Culture must be linked to, and pursued with the same rigor and vigor as, the customer experience. (blogpost)

Decrease Your Deal-Dependence with Differentiation — Differentiation is really the best way for all businesses to address consumers’ new value mindset. (my bylined article published by Franchise Update Media)

Embrace (and Enforce) an Inspiration Policy –  Clarify why inspiration is important to the company, and how people will be supported and encouraged to develop it.  (one of the top10 things i’m going to use from Andy Stefanovich’s book, “Look at More Stuff”)

Failure Is a Gift – “I think of my failures as a gift. Unless you view them that way, you won’t learn from failure, you won’t get better.” (from my three-part recap of Harvard Business Review’s Failure Issue which quoted former P&G CEO A.G. Lafley)

Grow As Slowly As You Can — Growing slowly allows you to make sure you have the right people and allows you to personally foster your culture. (learned from talk by Jason Fried, CEO of 37signals)

Health Is In the Eye of the Beholder –  Health means different things to different people — and that variation is actually good news for restaurateurs. (my bylined article published by SmartBrief for Restaurants)

Innovate Around the Person, Not the Technology — The temptation with any development in technology is to use the new capability as the starting point for innovation.  But this often leads to developments which fall short of or are off base from what end users want and need. (my guest post on CEA’s Digital Dialogue)

Just Because… “Food is served fast, doesn’t mean it has to be the typical fast food experience” – (from my recap of the reality TV show, America’s Next Great Restaurant, quoting Steve Ells, founder of Chipotle)

Kodak Tries to Bring Its Digital Revival into Focus — Kodak is not giving the consumer a reason to purchase. I don’t know that a good brand halo helps if you don’t have the ability to convert it into sales. (my POV quoted in Bloomberg Business Week)

Less Is More — “Trader Joe’s may offer customers less choice. However, in terms of ease of choosing and relevance of choice, it is definitely where less choice is more.” (C.B. Whittemore in guest post on my blog)

Modern Brand Names — Brand names reflect the business climates they’re developed in — modern brand names need to tap into the differentiating power of values and personality. (blogpost)

Not 360 Degree Marketing – “The goal shouldn’t be 360 degree marketing.  Find 10-20 degrees that give the most leverage.” (advice from Tim Maleeny, Ogilvy’s Director of Planning)

On-Stage Leadership – “Leaders are always on stage… it’s a metaphor [to explain] role modeling is the key element. They’re always in the spotlight.” (the philosophy behind Sharp Healthcare’s leadership training, as explained by Director Mark Tomaszewicz)

Progressive Brands Should Turn Their Backs on Sustainability – “Brands have a far more important – a far more exciting – role to play in helping us all move towards becoming more sustainable in our lifestyles.” (POV of Guy Champniss, Managing Director of Meltwater Consulting, as relayed in my blogpost)

Quality… of engagement is a better measure of brand strength than quantity of followers (from my piece “Leveraging ‘Like” Into Loyalty” published by Franchise Media Update)

Remarkable Retail — What makes a retail store an experience so compelling that customers will tell others about it?  Interactivity, a personal and local feel, and an editorial voice. (my e-newsletter recapping a series of Brand Experience Briefs)

Storytelling – “If you’re curating really excellent thought-provoking content, and then sparking conversations around that content, you can build that kind of equity…so that people naturally develop a relationship with you.”(recommendation from Sam Rosen, Creative Director and Co-founder of ThoughtLead)

Take a Crap – I told a CEO to “take a crap” – that is, go sit on the toilet in her restaurants — so she could see how much the details of the customer experience get overlooked.  (blogpost)

Use Your Fear – Survivors aren’t fearless.  They use fear:  they turn it into anger and focus. (one of many business leadership lessons from the book, “Deep Survival” as relayed in my presentation)

Visibility – A logo must achieve impact and contact. The former is about visibility, stating what the brand is and stands for; the latter connects the brand to the customer, making a personal, emotional connection. (my Brand New Perspectives column in QSR Magazine.)

Wallets…are becoming as unnecessary as watches.  Smart phones are easier to use, provide more functionality, and offer greater security.  (blogpost)

X…as in TEDx San Diego – spoken word artist Sekou Andrews opened this year’s event with an inspiring declaration:  ”When our ‘ready’ is ‘able,’ our will be done.” (from my slideshow recap)

You Need More Competition — More competition is a good thing because it generates increased demand, gives customers confidence, builds up infrastructure, and helps you get better. (my bylined article published by SmartBrief on Leadership)

Zappos — CEO Tony Hsieh says, “Every employee can affect your company’s brand.  Not just the front-line employees that are paid to talk to your customers.” (quoted in my speaker video)

Thank you for following, reading, re-tweeting, liking, commenting, and sharing me and my work this year!  See you in 2012 for another year of ideas!