As frequent readers of this blog know, it’s not often that I praise a re-branding effort because so much of it is utter nonsense. But Petco’s recent rebranding, while not perfect, demonstrated a step in the right direction.

The pet supply retailer refreshed its logo and added a brand themeline that says, “where the healthy pets go.” The reasons I like it are because it’s a reflection of the consumer (not the company) and it puts a stake in the ground.

Here’s what I mean about the latter: By saying “healthy,” Petco has said who it is for and who it is not for with a value we’d all like to think our pets have. It has represented a true and emotional choice. Who wouldn’t want to think their pets are healthy?

Many brands are afraid to do either. They often believe that they have to sell some tangible benefit that they believe is important (Quiznos’ “M’m, m’m, m’m, m’m, m’mtoasty!”) or try to be overly clever (such as Citibank’s “Citi Never Sleeps”), neither of which is believable.

We often advise clients to say who they are for because, if the value is emotionally intense for the target audience, the entire target audience believes they are a part of it. (If we’re talking Apple, for example, we all like to believe we “think different.”)

Of course, maybe not everyone at Petco gets it. Its VP of brand creative said the themeline “reflected our healthy values and where we are taking the company.”

Nah, it represents who prospective customers aspire their pets to be. If you think it’s a reflection of the company, then there is more work to do.

We all could see this coming. Best Buy has become the latest retailer to change its business model after technology has changed the we we live our lives. Blockbuster went bankrupt (only to be recently purchased by Dish Network). Circuit City went belly up. And retailers like FYE have reduced the size of its stores to that of a walk-in closet.

Best Buy, coming off a nearly 5% drop in sales, announced it is reducing the size of its stores by 10% – read: reducing staff – and expand its Best Buy Mobile stores that focus on service, as well as renew focus on online sales.

This is a fine first step and all to adapt to today’s ability of the consumer to buy hardware, software and even content through the Internet. Today’s retail world is about the consumer not being tied down to a brick and mortar building more now than ever.

The question, of course, is whether it’s too late. It has always shocked me by how slow Blockbuster moved to adapt, thus failing. The demise of Circuit City was remarkably swift. Even Walmart is reporting a drop in in-store electronic sales.

My belief is that Best Buy will never be what it was once, because nobody can. The control of choice and time has shifted to the consumer and retailers like Best Buy look outdated if they don’t radically change. More than that, consumers are embarrassed to enter one of the outdated brands. For the last few years, going into a Blockbuster was akin to being in the witness protection program. You didn’t want to be seen because it meant you were behind the times.

At least Best Buy has something of a brand, something few in the retail sector do. It has permission to change because its brand is based on purchasing and value. But it is in serious danger of feeling outdated because the brand is still about the retailer, not the consumer.

To make this venture – and, no doubt, other ones to come – Best Buy must modernize its brand. Shifting the business model is nice and all, but it’s not enough and time is running out. Without a change in meaning, this shift just means the drop in sales will continue – just more slowly.

Sears announced what has become an epitaph to the once great department store – another quarterly loss. For the third quarter, Sears lost $218 million which is more than $91 million than it lost in 3Q last year. Clearly, Sears is hemorrhaging and it needs to do something or it too will go the way of Circuit City – and it must do something quickly.

Sears blames poor appliance and home improvement sales for the loss. It is even making the unprecedented move of remaining open on Thanksgiving in a frantic effort to bolster 4Q revenue. It seems to me that, if it is having problems getting people in the store on a regular day, I doubt many consumers will rush out of their Thanksgiving holiday meals and celebrations to go to Sears. (It actually might work if Sears had a brand whose meaning had permission to be a destination on a holiday.)

Sears executives can blame a poor economy all they want for their increasing losses.  They can blame the economy until investors run out of of patience (or cash) and the once-great icon of retail falls, leaving carcasses of retail space and an unemployed workforce in its wake.

It would be naive of me to suggest that the faltering economy is not a contributing factor to the problems at Sears. In fact, the faltering economy is the very thing that magnifies the problems at Sears (and many other companies for that matter), which is its lack of ability to create and sustain preference.

In a good economy, this inability to create and sustain preference is not as acute of an issue as revenues from sales and promotions can often mask the bigger problem.  But when the economy is off and people are being more particular about where and how they spend their money, preference is often the difference between survival and failure.

This lack of preference has a snowball effect. I drove by our local Sears on Tuesday and counted five cars in the parking lot. Ever pulled up to a restaurant with no cars in the parking lot? Did you go in and have dinner?

Throughout the last few years, we at Stealing Share have talked to great length about Sears and the problems it faces. We believe we have a strategy that can give it exactly what it is missing – preference and a reason to go to the store. This does not involve changing Sears’ advertising agency or hiring a social media expert to create a silly viral video or Facebook page.  It involves two things:  1. A willingness to change. 2.  A real desire to win.

By continuing to do what Sears has always done will only bring it to the same place – a continuation of hemorrhaging cash. Open yourself up to change, and embrace the opportunity the market is giving you and, not only will you survive the down economy, you will flourish.

“We believe our first responsibility is to the doctors, nurses, and patients, to mothers and fathers and all others who use our products and services.  In meeting their needs everything we do must be high quality….”

The above quotation is taken directly from Johnson and Johnson’s corporate credo.  As you have seen Tylenol, McNeil, and J&J have been in the news quite a bit with the “voluntary” recall of Children’s Tylenol, Zyrtec, Motrin, and Benadryl.    These products were recalled after issues with their quality were raised.  Now the FDA is investigating nearly 800 “adverse events” that may have been caused because of a recalled product.

It is not uncommon event to have product recalls.  Usually strong companies can rebound from them.  But this one is a bit different.  These quality problems did not just happen this year or at a single point in time.  There have been quality concerns since 2008 when J&J/McNeil started getting complaints about odors in its products.  Now, there are new allegations that McNeil did not adequately and thoroughly cooperate with the FDA and that failures in quality since 2008 were not resolved or taken seriously.

Regardless of what happens in subsequent senate hearings and court room dramas one thing is sure:  Johnson and Johnson failed in executing its brand.  Its failure was not a single event, but a series of events in which it seemed to do the exact opposite of what its credo says.  This is more than a tarnished image this is failure of a brand.

This failure  shows yet again how deeply brand must be infused in an organization for it to work.  Not so different than BP who talked a good game, so too now has Johnson and Johnson found itself in the same position.  If J&J really lived their credo and brand of responsibility to those who use their products, these quality issues would have been investigated and resolved before two years and  775 “adverse events” had occurred.

McNeil announced today that they are taking steps to bring quality “back to a level … that Johnson & Johnson demands of its companies” no doubt under pressure from J&J which raises the question, if quality is your brand, how did it decrease so that it needed to be brought “back to a level?”  Moreover, this is Johnson and Johnson’s problem, not McNeil’s.  J&J bore the responsibility of quality oversight (especially since it is their brand) and failed.  The FDA letters were coming to J&J after all.

J&J must begin to repair its brand now.  This goes way beyond it repairing its image or even ensuring quality process measures are in place so this does not happen again.  This is not about an expensive advertising campaign or PR push. J&J’s brand repairs must start at the C-suite and go all the way down to the manufacturing floor with retraining on the importance of the brand at all levels of the company.  Each employee must know and understand their role in the over all J&J brand, they must be empowered to act to protect it regardless of how small the issue may seem at the time.  If quality is the cornerstone of  your brand of being responsible to your customers, product quality failure is unacceptable and must be addressed at the moment it occurs, not two years later.   Bill Weldon, J&J CEO has gone on record and apologized for failing in their credo.  This is a good first start, but unless it is followed up with company-wide action, it is slicked up PR.

Update From Fox News:

If service really is missing from the service industry, then the laws of supply and demand should take over – and maybe this rotten economy might just produce a silver lining.

Yesterday, I had the distinct displeasure of interacting with a snot-nosed store clerk at a local Bed, Bath & Beyond. I was returning a gift I had bought and needed help. Turned out, the clerk exemplified what is wrong with our service industry. There is no service. She obviously hated her job, thought customers were the enemy and believed she was doing the store a favor by showing up at her scheduled start time.

I propose that there are many motivated unemployed workers around now, and the retail and service industries would do well to fire their put-upon workers and replace them with folks who want to work and think the job they perform actually matters.

While I am at it, I would ask United Airlines to fire gate attendants at the commuter terminal in Dulles and see if any qualified applicants are available. Like, for example, someone that can speak an understandable form of English, an important skill when making boarding calls over a screechy loudspeaker.