Is Penney Wise? The Retailer Is the Latest to Risk Rebranding

The Nike Swoosh. McDonald's Golden Arches. Apple's -- well, apple. Corporate logos are the proverbial picture worth a thousand words. Or millions of dollars in sales.

As the recession recedes and companies return to business as usual, they're back to tinkering with their looks. J.C. Penney (JCP) announced this week it will introduce a new logo and brand identity as part of its effort to regain stature in the department-store sector.

The new look will appear first on ads during Sunday's Academy Awards broadcast, but Penney's is already getting flak over the design change. "JCPenney's Logo Is Changing, Bet You Won't Notice," was the Advertising Age headline. "Like a U.S. Senator that sends out tweets using 'omg' texting lingo, it's just kind of lame," blogged the marketing site

"Our new logo honors our legacy while reflecting the modern retailer we've become," said CEO MIke Ullman, in a conference call with analysts. "We think it's an evolution, not a revolution."

A Hard Sell

Like Penney's, companies often change logos to communicate excitement and a shift in strategy, said Rob Scalea, CEO-North America of The Brand Union, a branding and design agency. But he acknowledged shoppers can be a hard sell.

"The logo is a way to identify quickly what the consumer is looking for, " said Scalea. "The logo represents the brand. That carries a lot of connection."

Penney's is only the latest of several retailers to tinker with their looks recently, with varying degrees of success:

Starbucks (SBKS): To mark its 40th anniversary this year, the coffee chain removed both its name and the word "coffee" from its logo. The new symbol kept only the mermaid icon and gave her a facelift. The reaction has been mixed. But since not everybody goes to Starbucks for the coffee anymore, why advertise it in the logo?

Target (TGT): Like Starbucks, Target has been quietly dropping the type from its logos and letting the red bull's eye logo do all the talking in most of its ads and displays. But the red-and-white design was already so ubiquitous in stores, hardly anyone has noticed the missing verbiage.

Seattle's Best: If Starbucks' new logo was streamlined, its down-market Seattle's Best brand went downright minimalist with its new identity. Several respondents to a Seattle Times poll noted the logo looked like it belonged on a blood bank, but Seattle's Best is sticking with it.

Gap (GPS): Gap made a big splash in October with its new logo, but not the kind of splash it wanted. Critics said the design was bland and unimaginative. Comments online were merciless, saying the logo looked like it was generated by a computer program, among other insults. Gap tried to smooth things over by going on social media to ask for better ideas -- and what it got was more backlash. It surrendered after a week and went back to its old logo.

Tough Customers

Consumers can be tougher critics than designers when companies switch logos: Witness Tropicana (PEP), which until the recent Gap follies probably held the record for the fastest makeover about-face. Critics said the 2009 repackaging of this orange juice brand made it look like a generic. The design replaced the orange-with-a-straw logo on the carton with a close-up of a juice glass that was so close-up shoppers couldn't tell what it was. Sales dropped 20%, and Tropicana went back to the old packaging after two months.

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People can become very attached to logos as a stand-in for the company they represent, says Richard Bates, chief creative officer of The Brand Union in North America. "That's partially why they get so upset when it changes," he says. "You're signaling that what they perceived that brand to be has shifted."

Gap's problem was partly that shoppers didn't see a shift in the store to go with the new logo. "You don't want to use a logo change as a Band-aid," says Bates.

If a logo change is part of a true overhaul, it will survive, even if the initial reaction is negative, he says: "If you've done that properly, then sticking to your guns is fine. People always have a reaction to change. It dies down pretty quickly."

Instant Reactions

But expect plenty of comments after the Penney ads appear in the Oscar telecast. The Internet has given these brand identity crises a life of their own, warn the admen.

"The same reactions happened in the past, but it wasn't so effective when it took two weeks to write a letter to the home office," says Bates. "Now everybody can flame online."

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