When RadioShack introduced “The Shack” as a nickname last week and part of a new marketing and rebranding campaign, the response from the industry and the public was mixed. Some in the blogosphere went so far as to say a name change will never work, while others suggest there are clear steps that must be taken to succeed at a rebrand.
"I applaud the aggressiveness of it," says Tony Telloni, MD and New York market leader for Burson-Marsteller, of RadioShack's decision. "All of a sudden they are a part of the dialogue and conversation, and they weren't a month ago."
Jason Schlossberg, president and partner at Kwittken & Co., was more critical though, noting that changes at the brand should precede a new moniker.
"It seems to be more of an example of marketing trying to change the business, rather than the business itself or operations changing [first]," he says. On the other hand, Schlossberg was in favor of Pizza Hut's introduction of “The Hut,” which followed the brand's addition of non-pizza menu items.
RadioShack had its reasons for the introduction of The Shack, including "contemporizing the way we want people to think about our brand," CMO Lee Applbaum said in a statement. The company is also incorporating more wireless products, and recently added T-Mobile as one of its carriers.
While renaming or nicknaming can be an appropriate or successful part of a marketing campaign, Al Krueger, founder, partner, and the right brain of Comet Branding in Milwaukee, notes that the actual name change should be a small part of the overall evolution.
"The idea of a brand and branding is really front-to-back, side-to-side, top-to-bottom, and it has to be some sort of an evolution within every single touch point of that," he says.
But it is also important to note the differences between a full rename and a nickname, explains Eric Blinderman, MD at CJP Communications. While introducing a new nickname might appear to be less of an undertaking than a complete brand or corporate identity overhaul, it still requires research and testing, transparency, and market permission, in order to make sure the message is received – and received well.
"When a corporation is using a nickname or using that as a name, like Volkswagen using VW or something like that, I think you need market permission," he says. That can include customers already using the name in daily interactions, or even an implied permission, like Gatorade using G because it finds that fits with its young, hip demographic.
"When a brand becomes a friend, it often gets a nickname – take FedEx or Coke, for example," Applbaum said in a statement. "Our customers, associates and even the investor community have long referred to RadioShack as 'The Shack,' so we decided to embrace that fact and share it with the world."
But even then, the "contrived familiarity" can be problematic, says Martin Bishop, brand strategist at Landor Associates, which helped Federal Express become FedEx in the late 1990s. "It's one thing for people to have a nickname for a store or brand, but it's another thing for the brand to use it," he said. "It's like trying to force people to be more friendly with them."
The added familiarity of a new nickname leads into another point from Blinderman, talking about the importance of transparency and honesty when a company is thinking about a rename.
He notes that all companies should realize they shouldn't try to rename a company “just for the sake of trying to cover up negative perceptions or operational deficiencies."
"If a company is not transparent, if they try to slap a new name on as a band-aid, they are going to get called out very quickly," Blinderman says.