Best Retail Brands 2009

Best Retail Brands 2009 Global perspectives on a changing marketplace Regional challenges, trends, and insights The remaking of retail CPG: stand out or get out Creating and managing Getting more for less www.interbrand.com brand value TM

Contents Weathering p01 Introduction: weathering the storm A letter from Jez Frampton. p03 Overview p30 The remaking of retail by Lee Carpenter and Greg Silverman Resources are limited and tension is high. The time is ripe for retail innovation. the storm Creating and managing brand value. Jez Frampton p32 How we value retail brands p04 Building retail brands by Criteria for consideration and methodology. Lee Carpenter, Jean-Baptiste Danet and Stuart Green p34 The Best Retail Brands 2009 A look at retail challenges and the future of Profiles of the most valuable retail brands in retail brands in three regions. the U.S., Canada, Mexico, and Europe. Making sense of the economic turmoil of and the all important human interaction. Their habits and behaviors will continue to recent months will take time and a degree I would say, a recipe for great innovation adapt to the technologies available to them p08 Creating value in-store by Kelly Crouch of hindsight that most business leaders and opportunity! and to the truths about our lifestyles and and Emily Grant Appendix just don’t possess at the moment. Our habits exposed by the recent economic, Why brands should focus on shoppers’ needs attention must focus on the immediate As the rankings in this magazine show, social, and environment events. Getting a in downturns. Commonly asked questions needs of businesses and brands in real retailers are now actively managing their grip on this fast changing world and feeling time. History alone will deal with the rest. brands and creating valuable business assets. confident that your brand can sail through p10 Getting more for more by About Interbrand and our Best Retail And the world of branding has changed too. these stormy seas requires a strategy that Bruce Dybvad and Rune Gustafson Brands study We’ve focused on retail in this edition Data is used to build the business case for is based on today’s truths rather than Cutting price in downturns isn’t an answer— of the Interbrand magazine because it brands, to highlight the initiatives within a yesterday’s assumptions. It requires a focus on the shopper experience instead. Contact us is a powerful barometer of economic strategy, and to build ROI models into brand strategy that is delivered in stores and lives sentiment. The dramatic differences in programs, not to mention the monitoring in customers’ heads, not well intentioned p14 Best practices by Lynn Gonsior and the fortunes of the various High Street or and active management of brand value documents and plans. Françoise Novel Main Street players highlight the mood of creation. This means that brand management Top retailers are growing more sophisticated the day: Are you in a position to weather, can live happily within the highly accountable I hope you find the thinking in this magazine in their approach to finding growth. Their or wither in, the storm? world of retail using data and value as the useful to you, your business, and your brands insights can help your brand. bridge between the financial and commercial as we all continue to tackle the challenges A retailer once told me that he didn’t have streams of activity. before us. p16 The crisis paradox by Josh Feldmeth time to build his brand; he was too busy Markets are contracting and results are meeting the needs of his customers and his Retail has certainly been deeply impacted by Regards, under pressure. Intelligent branding is business. At Interbrand we would view this the economic realities of our times. But what required to extract more value from invested as the very essence of building a brand, but better market is there to pick itself up and brand assets. it’s easy to see why the marriage between fight back? retailers and brand management hasn’t p20 Break away from the pack always been easy. Branding was historically While cost-cutting has formulated the bulk by Fred Richards and Bertrand Chovet viewed as the “lipstick on the pig,” a graphical of businesses’ reactions to the downturn, Differentiation at shelf level is key to veneer which added questionable value in the we are now recognizing that demand creation standing out in saturated categories. face of global logistics and sourcing. But as is the required antidote. Demand can be markets have changed, so have attitudes. created without relying on discounting which p24 Fast moving consumer goods in hinders a business, erodes margins, and regional markets by Richard Veit Differentiation is the essence of good places a business under increasing pressure. Regional brands in growth markets have business in any crowded market; the ability Demand creation requires us to step away the upper hand—but only if they work on to influence demand beyond the tangible, to from the crowd, to do things differently in our building innovative brand propositions. go beyond the table-stakes of convenience, quest to stand out, and own a clear position Jez Frampton quality, service, and the like, into the realms in a market. Global Chief Executive p28 Shifting winds by Burton Blume of the unique. Brands are the way we do Interbrand and Jonathan Chajet business; the factor that makes our service Perhaps retailers need to better understand Trends and insights for the future of Asia’s offer, our product line-up, our culture, and of how their brands drive value and what retail markets. course, our language and appearance more actions should be taken to ensure that desirable over the competition. their brands are readied for the market of tomorrow, as well as the market of today. Retailers are perfectly placed to build truly great brands. They have many rich data All around us the world is changing. points: physical experiences involving To only view these changes through the numerous opportunities to create eyes of the economy is dangerously one- uniqueness, including service, process, dimensional. Consumers’ attitudes have product mix, layout, ambience, culture, changed and will continue to change. Best Retail Brands 2009 01

Overview The Best Retail Brands has taught us that a brand is not just a logo, a name, or a snappy slogan—it’s the tangible and intangible assets that customers attribute to a retailer. Interbrand is delighted to unveil the Best Interbrand pioneered the technique of Retail Brands 2009. measuring brand as a business asset twenty years ago. In this time we have conducted For almost 10 years we have published our over 5,000 brand valuations across all Best Global Brands report in cooperation industry sectors around the world. We now with BusinessWeek. It ranks the top 100 focus all of this experience and expertise to global brands by their brand value and bring you the Best Retail Brands. has become the barometer for successful brand management. Indeed, it has actually The retail sector offers some unique been ranked as the third most sought-after challenges. First, we understand that the benchmark report by CEOs. culture of retail is immediate and extremely operationally focused. This creates a We are proud of the success that we’ve had in tough environment for brand thinking and provoking the debate among business people management to thrive, but our study shows about the value of brands to business. We the impressive performance of the leaders, look forward to this study becoming equally and we wanted to share the lessons of success. influential among retail leaders. Second, compared to other sectors, When a business gets it right, the brand retail brands tend to operate over the becomes a value creation engine. Brand most expansive brand experience for their valuation is a great tool for showing a customers. Retail branding extends from business how to optimize its brand. We the robust insights that formulate brand use it as a proactive tool. By showing an strategy into product assortment, sourcing organization the earnings attributable to and selection, format strategy, store design, intangibles, assessing the role that the brand engagement of people, and in many cases plays in purchase decisions, and revealing the the creation and supply of private label relative competitive strength of the brand products. Strong retail brands orchestrate within its markets, the organization can focus a complete shopper journey with the its attention on building the brand’s value. objective of achieving the long-term loyalty Indeed, our experience shows that simply by of their customers. recognizing the brand as an economic asset, like other business assets, it starts to be managed for growth. 02 Best Retail Brands 2009 Best Retail Brands 2009 03

Building 01 The relationship between brand Rising disposable incomes, growth in purchasing power, continued expansion of urban areas, increased mobility, and a retail brands and retail wider choice of products and services have all been key factors in changing consumers attitudes towards shopping and how they spend their money. by Lee Carpenter, Lee Carpenter, CEO North America: The store is a physical expression of the brand and provides a powerful opportunity to make 03 Key trends and Jean-Baptiste Danet, emotional connections and influence choice. In creating an experience, the brand guides every decision, from the orchestration of the challenges in regions and Stuart Green customer journey, to the messaging at each touchpoint, to the assortment of the store. Brand is the way you do business. It is what LC: There is one key challenge in North makes you different: You can’t just say it—you America right now: value. And this is true of have to do it. It takes place in the store, every segment. Most consumers are giving online, on the pages of a catalog, and over the careful consideration to their purchases telephone. Brand isn’t just the logo, it’s the and retailers need to offer a compelling physical real-time delivery of the promise your proposition to earn the dollars that are being brand makes—an experience the consumer spent. We’re seeing less frivolous buying and will undergo—shopping. When you walk into more investment purchases, such as buying a store, you are entering a brand. So, you consumables in bulk and purchasing high- can see why the store is a primary means of quality, classic clothing that will last. brand engagement. It provides a powerful opportunity to make emotional connections Shoppers will be feeling unsettled for a while. and influence choice. The connection lives They’re busy reassessing what’s important beyond the transaction to create feelings and to them, just as retailers are reassessing memories that last. the relative importance of reducing costs versus increasing investments, going on Jean-Baptiste Danet, CEO Europe: In the defense or offense, in order to optimize 1960’s, consumers discovered supermarkets store performance. and hypermarkets and huge offers that fostered the discount concept. In the 1990’s, JBD: In Europe, the general trend is that we saw a new generation of specialized department stores are suffering and retailers reinvent the retail business. hypermarkets are stagnating. Mega-stores Biography: Lee Carpenter, Biography: As CEO of Interbrand Biography: Stuart Green takes an Brands like Sephora, Zara, H&M, and Grand are visited but the act of purchasing has CEO of Interbrand Design Forum Europe, Jean-Baptiste Danet leads intentionally pragmatic view to Optical focused on the concept and used become more difficult; stores located in city and Interbrand North America, the European practice with strong creating and managing brands, every touchpoint (from space to service) to centers suffer from the consumption crisis. is recognized as one of the most conviction to deliver a holistic believing that the ultimate yardstick reinforce this concept. In other words, they At the same time, the well-positioned brands influential retail experts in the U.S. approach to brands. His leadership has for brand effectiveness lies in the acted like a brand. Since then, brand and retail like H&M and Zara gain share. He and his team pioneered, and successfully built many of the world’s end-user experience. As President have become inseparable. continue to refine, an integrated most valuable brands. Understanding for the Asia-Pacific region, Stuart SG: Asia-Pacific continues to develop at business model that blends creative, the equal importance of all brand ensures that Interbrand’s diverse a rapid pace. Across the region mixed use analytic, and strategic retail touchpoints, Jean-Baptiste has grown and collective thinking leads to a disciplines to build brand experiences his team’s practice and brought to life distinct customer experience for 02 The development of developments (e.g. residential, commercial, leisure, and retail spaces) are increasing; that go beyond selling to develop new disciplines and processes that every client. Stuart has 24 years retail branding in Asia an example being Singapore’s Marina Bay In Japan’s main urban relationships with shoppers. He is a deliver the greatest quality work for in brand management and design development, set to launch in 2010. The champion of bringing the brand to Interbrand’s valued clients. working in Europe, the US, the retail component is a critical factor, and is life by understanding where and how Middle East, and the Asia-Pacific. largely driven through the integration of centers, retailing is now brand can be leveraged in the store for Stuart Green, President Asia-Pacific: commerce, office space, as well as leisure greater value. 20 to 30 years ago, retailing across Asia and residential, and the best price. a sophisticated business consisted for the most part, of small family run shops and market traders (the exception In the same vein, themed malls, consisting being Japan’s very successful department of shops, restaurants, local and international with many homegrown stores). In the main urban centers, retailing fast food outlets, cinemas, nightclubs, is now a sophisticated business with and art galleries are now being developed many homegrown brands as well as the in the Philippines, China, and Malaysia. international players looking to tap into the fastest growing region in the world. While many parts of the world experience a decline in the popularity of malls, many Asian markets go from strength to strength. brands as well as international players. 04 Best Retail Brands 2009 Best Retail Brands 2009 05

In 2007, Internet retailing universities, and other experts, develops and patents new ingredients to bring the most Best Buy strives to differentiate its brand experience through distinctive touchpoints, In order to be globally relevant, a retail brand needs to have a clear proposition that was worth nearly US $49 billion innovative products to market. This, coupled tailoring store environments and selling styles is nearly universally compelling, with the with its affordable prices, has been a recipe to customer insights, with current emphasis ability to be flexible enough to operate within for success. on the employee expertise and commitment. the varied constraints found in markets across the 14 Asia-Pacific UNIQLO’s simple ideology of providing high The company constantly tests new concepts, such as robotic vending machines in airports around the world. countries, and is forecasted quality yet affordable basics is striking a chord carrying cell phones, computer accessories, JBD: Cultural differences and geographic with consumers ranging from the fashion- and cameras. Consumers give it top marks for boundaries are often insurmountable forward to those just looking for something shopping experience and meeting expectations. challenges for retail. Truly global retailers to double by 2010. comfortable to wear. JBD: H&M and Zara, have reinvented the have invented something new, and kept their advantage over time. In retail, as the goal is Charles & Keith, a Singapore based retail retail/apparel industry, understanding the to capture as many consumers as possible, brands focusing on shoes and accessories perfect mix between finance, space, and the brand idea needs to be accepted and saw that shoes from foreign wholesalers were brand. Carrefour and Tesco have, in their understood everywhere. consumer report, South Koreans are the sensory environment with service that is expensive and unsuitable for smaller Asian own way, invented the European way of most avid online shoppers in the world with relevant to consumer needs, will attract and feet. It quickly capitalized on this opportunity selling goods to the biggest number of Finding the best locations and being able some 99 percent of Internet users having maintain loyalty. Although value for money with its own line of shoes. It now has an R&D consumers. Aldi and Asda have created to invest in new offers, while maintaining shopped online. is a common denominator across markets, team of 70 people, which has churned out the low-cost supermarkets. Sephora is the quality of the concept requires strong discerning consumers are increasingly willing over 750 women’s footwear designs. still the only worldwide chain structured management and visionary skills. This is a Luxury brands are also increasingly driving to pay a significant premium for quality like a supermarket to seduce women key challenge. The consumer will buy less, so consumer behavior in both developed and stature. Ultimately, brands that sell LC: Wal-Mart, Tiffany & Co., and Best Buy are with perfumes and cosmetics. FNAC has the goal is to capture the bigger part of the (Singapore, Japan, South Korea, Hong Kong), quality products and demonstrate a good brands that know who they are, understand succeeded in fulfilling its brand promise purchase power. That’s where a strong brand as well as emerging markets such as India, understanding of local consumer attitudes their customers, deliver consistently on their as a place where you feel more clever and can create difference. China, and Indonesia. and preferences stand out. These are the respective brand promises, and continue intelligent when you buy a book or a PC. And great retail brands. to innovate and explore new directions. yet, others that had done well are beginning Wal-Mart is determined to change and to show signs of losing. M&S and C&A create 07 Key factors that will 04 Characteristics of a adapt to meet emerging customer needs. less difference than before. The role they used determine the success great retail brand 05 The retail brands The company is working to make brand to play on the retail market is not as powerful. that are getting it right touchpoints clear and relevant, especially those that have the most impact on The consumer can substitute them and is even actively looking to do so. of retail brands in moms. These touchpoints include store the future environment, website, in-store messaging, LC: A great retail brand that has a ringing clarity about its reason for being and that SG: Retailers that address the local needs and product mix, and sustainability. 06 Going global truly understands and delights its target motivations of their customers will continue Tiffany & Co. stands for quality and longevity LC: Retail brands need to understand their The Iconic Prada store in Ginza, Tokyo. segment will have great appeal. It’s easier to build a loyal base. Homegrown Asian and claims a large share of mind. The cachet customers, use that information to deliver for specialty brands serving a narrow niche brands continue to emerge. Some of the ones of the Tiffany blue box adds a high-value value, and provide a compelling and relevant LC: Retail involves complex logistics, and Some mall owners are also promoting with very distinctive needs, like “pet parents” getting it right include the Hong Kong brand intangible to any purchase. The company has experience that connects with the shopper. these inherent challenges are further environmental sustainability through their or “gamers.” You can appeal to emotions Shanghai Tang, which offers a full range of fully recovered from a “brand-slip” a couple complicated when responding to varied developments. SM Group, the biggest and passions, or help people manage their clothing for men, women and children, plus of years ago when the wrong merchandise JBD: We can assume that all the major customs and regulations. In some instances mall developer from the Philippines, put problems. It’s tougher for mass brands home furnishings, accessories and gifts. Now caused it to fall to novelty level. Today, Tiffany retailers have made plans for the crisis we meeting the needs of varied locations would in place an energy management system since they were created to appeal to very part of Swiss luxury goods giant Compagnie continues to reaffirm its unique appeal with a are facing today; for example Carrefour require an entirely different proposition. as early as eight years ago. There are also broad segments, but even they are finding Financière Richemont, Shanghai Tang small number of stores to keep from diluting had decided to move all its formats to the For example, many popular U.S. stores sewage treatment plants in the malls. These success, being perceived as having genuine operates stores in China, Japan, Malaysia, the brand and it’s expanding into eyewear and Carrefour brand prior to the recession. are founded on the notion of having huge environmentally conscious practices reduce character, definitive core values, and concern Singapore, Taiwan, and Thailand, as well as watches to drive revenue and relevance. assortments and long hours, sometimes operating costs as well as earn significant for community. All that, of course, has to be Dubai, UAE, London, and Paris. The brand Planning a clear way out will determine open around the clock. In Europe and Asia goodwill from shoppers. delivered consistently across all channels— continues to learn and evolve, with new long-term success. Retailers will benefit people shop much more frequently in much not an easy task. stores staying true to its 1930’s Shanghai Art from the purchase recovery before the smaller stores, often with reduced hours and Destination shopping is also a theme. Asian Deco accents and bold colors and tongue- rest of the economy, and they will give the there might be little to no parking—a very consumers love to travel and shopping SG: Over the years, many international in-cheek-humor, but expressed as a modern signal. The ones that invest in their network, different experience from stocking up on excursions across the region are growing in retailers in Asia have failed, simply because international lifestyle brand—with a maintain their concept, and understand popularity. This has increased in recent years they didn’t adapt to a different environment broader appeal. The great retail brands two-months worth of paper towels and their customers in difficult times will recover frozen pizzas. with the growth of low-cost carriers, as well and different consumer needs (the exception know who they are, before the others. But, many of them will not as the expansion of flight routes. Locations being the luxury sector in more recent years). THE FACESHOP is one of Korea’s largest make it to that day. And the strongest are such as Singapore, Bangkok, Hong Kong, So first, it’s important to understand that Asia retailers of body, bath, skin care, and make- understand their already looking for ways to accelerate and Ho Chi Mihn City are becoming regular weekend travel destinations for shopping. is complex with a large variety of cultures, races, languages, and religions, all at different up products aimed at both women and men. The company has quickly expanded customers, deliver the death of the weakest. stages of economic and social development. to over 740 retail stores in 19 countries. consistently on their Online shopping is another area of interest. Internet retailing was worth nearly US$ 49 Second, brands that sell quality products and demonstrate a good understanding of THE FACESHOP’s philosophy lies in understanding the importance of health respective brand billion across the 14 Asia-Pacific countries in local consumer attitudes and preferences and beauty. Continuous development is promises, and continue 2007, and is forecasted to double by 2012 to approximately US$ 71 billion (Euromonitor have a better chance of success. Third, location continues to be a critical driver an integral part of THE FACESHOP way of life. The company’s research institute, a to innovate and explore International). According to a global Nielsen of success, but brands that can develop a center of collaboration with dermatologists, new directions. 06 Best Retail Brands 2009 Best Retail Brands 2009 07

Creating value in-store: Shoppers are what consumers become when they enter the store environment. Shoppers even Product Q, which is a little bit different but appears to do almost the same thing. or workplace, and cannot be gathered by looking at market research studies that • Promoting trial • Facilitating greater purchase frequency understanding and profiting segment differently–chiefly by their shopping outline what people buy. Those insights behavior, habits, and practices. They are also What do they do? Remember the statistic are meaningful, but leave out specific • Encouraging trade up more dynamic; willing to change in-store about 70 percent of purchase decisions being environmental dynamics and are often from the differences between • Adding or increasing margin variants behavior based on local events (e.g. a great made in the store? If the brand does not cut backward looking. Understanding and seasonal display could turn a programmatic through the clutter, communicate why it is observing how people behave and what • Motivating multi-product routines shoppers and consumers shopper into an impulse shopper), caprice different, or otherwise make this situation influences them in the store provides an (e.g. “I’ve had a rough day—I’m going treat simpler for the shopper, the shopper may well opportunity to effect change, plan for the Putting it all together myself to something from the skin care go with another option or even abandon the future, and deliver meaningful innovation The marriage of shopper insights with in- by Kelly Crouch and aisle”) or macro trends (e.g. penny pinching). Outside the store, when the same segments are consumers, nothing may have changed purchase entirely. How can a brand effectively address the for the shopper. To understand what motivates and influences store strategy can lead to the construction of in-store solutions that increase shopper satisfaction while orchestrating profitable Emily Grant in how they see brands. However, inside the store, as shoppers, their behavior is anything needs of the shopper? There are a number of ways to better meet the shopper, brands must understand the basics of the shopper: purchase behaviors. In our experience at Interbrand, brands that have done this in but static. The goal, then, for brands is shopper needs—key operational factors, like retail have seen significant gains. • What drives the shopper to go to a store, shopper connection. And to achieve this, in-stock position, must be solved, but on top Biography: As Brand Analytics Director, Kelly guides the integration and on what kinds of trips to the store is they need to leverage shopper insights and of the basics, other levers can be activated to One of our clients, Procter and Gamble, of analytics programs and ensures insights are represented within the brand likely to be purchased? use creativity to orchestrate in-store behavior better meet shopper needs. These tools are consistently utilizes shopper insights to strategic and creative outputs. Kelly’s analytics expertise includes the and drive choice toward the brand. things like: • Is the category usually a destination, create store solutions that successfully grow design and interpretation of research for branding purposes, delivery planned, unplanned, or impulse the objectives of their brands. Its efforts have of retail insights, creation of business cases and decision frameworks, • Merchandising logic in the form of Shopper insights, or an understanding of purchase and what drives that role? paid off in a number of categories, in terms and ensuring clear links between brand and business strategy. The category principles (e.g. vertical versus how shoppers behave in-store, is a key first of increased share and volume, and have also American-born Kelly now lives and works in Amsterdam. horizontal shelf arrangements by brand, • What are the current purchase drivers step to optimizing the value of brands in the helped to establish P&G as thought leader and scent, size, etc) and barriers in-store? retail environment. But in order to leverage a key partner to retailers. Biography: As Senior Consultant in the Analytics group at Interbrand, shopper insights, one must first understand • Planned adjacencies and store layout • What are the underlying associations Emily Grant conducts research and provides strategic guidance on the differences between consumers both within and across the categories with the category? In another example, a big-box, North projects across a variety of sectors. She has worked on engagements and shoppers. American retailer instantly saw category for a number of high profile clients. • Category and brand sign-posting • What information do shoppers seek in increases in the range of five percent in and wayfinding the store, specifically? Why should we make understanding the revenue, as well as units within a common shopper a priority? • Total store planning and flow • How do shoppers select and de-select household product category in test markets, In-store, shoppers have unique options and what are the decision after a relatively simple shelf and category • Packaging communication and information needs. hierarchies? reorganization built on shopper insights. The retail shelf: the forward position in Yet, the store plays a major role in the They have unique habits and practices that • Multi-level communication • How do shoppers want to interact with the battle for consumer spending success or failure of brands. In many occur when they are shopping. Cues that In fact, because the in-store environment is • Emotive and interactive communication, products? What interaction do they need? The battle is on. The current environment categories, 70 percent or more of purchase attract a consumer to a brand may not be so frequently overlooked or under-examined, such as imagery, technology, or out-of- has not only changed the economic realities decisions are made in-store. Recessionary the same cues that cause a shopper to • How do shoppers orient themselves in the opportunity for gains, even based on box displays for consumers around the world, it has belt tightening only increases the number of choose a brand in the moment of purchase. the category? In the store? relatively simple solutions, can be significant. radically shifted the mind-set of shoppers decisions that are made in-store as shoppers Extracting more value with little to no But first, to make the right decisions with in-store. In normal times, companies spend scrutinize every line on their list, double- With this in mind, brands must help to Note that these things should be considered incremental investment is always a good idea. tools like these, marketers must also a tremendous amount of time and resources checking that they’re spending wisely. With deliver a seamless shopping experience at both a category and brand level. Brands And considering the current environment, understand shoppers. Good branding in the development and management of this in mind, it is crucial that the in-store that meets shopper needs while delivering must carefully balance their own interests for some FMCG players and retailers, it might professionals know how to get people into their brands by developing identities, experience, and how brands are presented in benefits to the brand and retailer. To do this, with those of the retailers that sell their mean survival. stores. However, in order to get a consumer measurement tools, and communication, the environment, should be managed with at brand manufacturers must understand the products. Understanding the total category, to make a purchase, marketers must also including significant media spending budgets. least as much rigor as the other components dynamics of the shopping environment—how and how the brand can best perform within So, brands must get to know shoppers, understand what happens in-store, and Yet, these are anything but normal times. of a branding program. options are considered and choices are it, will ensure that brand marketers can not just consumers. In-store should be structure the brand offering in a way that made. Even if a brand has successfully caught forward their own objectives while retaining treated as an input to brand strategy. The connects to shoppers in the environment. When consumers feel pain in the pocket Shoppers versus consumers the interest of a consumer, the shopper’s perspective on the needs of the retailers. If store environment is a brand opportunity, book, they react differently inside the store. What is the difference between consumers needs must still be met in order to convert brands can deliver performance in-store for not just a point of tactical operations. How can brands understand what Unfortunately, it is this in-store decision and shoppers? Essentially, they are the attachment into purchase. Imagine a both their brand and the retailer’s category, As the competition for share and loyalty shoppers really need? moment that is chronically misunderstood same people, but they operate in two consumer who has decided they want to partnerships with retailers and the ability for continues to get more intense, brands that To understand the best use of the tools and under-resourced. Many brand owners different environments, subject to different purchase a product, Brand X. They have seen brands to influence the store environment manage the shopper aspect of their brand mentioned above, the first objective must have mistakenly treated the in-store environmental influences, and possessing an ad and decided this is something they will become stronger. put themselves in a position to differentiate be to understand the shopper. We must experience as yet another operational different needs. want to buy. This consumer travels to their and create meaningful value as a brand and investigate consumers in the role as shoppers function. Major decisions are made with favorite store, goes inside, and becomes Incorporating strategic objectives of retailer partner. in order for brands to unlock the mystery little connection to brand and marketing Consumers are the overall targets for a shopper. the brand of the store and orchestrate valuable management, with conversations rarely brands. Aspects like location, demographics, In addition to understanding shoppers, shopping behavior. moving beyond the fundamentals of in-stock and the habits and practices of their life This consumer/shopper wants Brand X, but brands must also be clear about what they position and promotions. Even if they wanted often segment them. The goal of brands is not sure where to find it in the store. This want to achieve with shoppers. Knowing the Shoppers and shopper behavior must to extract more value from the shelf, many is to form bonds with target segments of alone may turn them away. If they do locate priority strategy for the brand and category is be studied. Marketers must follow them, brand owners lack the insights and tools to consumers—to touch them where they the section, they are presented with more the second leg to unlocking value in the store observe them, and ask questions. This do anything about it. live, work, and play. options than they’d imagined. They can environment. Strategies for the brand might investigation can’t just happen in the home choose Brand X, or Brand Y, or Brand Z, or be things like: 08 Best Retail Brands 2009 Best Retail Brands 2009 09

Getting more for more: The experience is the brand In retail, the experience is the act of shopping, However, for most brands, the experiential influence (the in-store/online experience) has The value of experience in downturns While the shopper experience is always whether it’s online, in catalog, or in the store. been allowed to happen in an informal way. essential, it can be the difference between how price promotions The retail brand comes to life through the touchpoints of its physical delivery—the This is in stark contrast to the foundational aspects—those things that trigger brand death and survival in a recession. When making purchase decisions in downturns, can be offset by an selective mix, color, and packaging of in the consumer’s mind like the product customers become increasingly more merchandise, the tone and manner of and its packaging, a logo, a jingle, or an demanding about their shopper experiences. the employees, and the space that’s been architectural icon. Retailers do a great job They want to know more information about improved shopping enriched with lighting, images, music, and fragrance, that ultimately influences a shopper’s purchase decisions. The experience managing these things. Likewise, the transmission of the brand each product—its provenance, its standards of manufacture, and its performance criteria. experience is everything that matters. In other words, the experience is the creation of that which is idea is usually handed off to a capable marketing and public relations team. The difference between a good experience and a great one often comes down to one single by Bruce Dybvad and symbolized by the brand’s mark, its visual and A promise is made—faster action, tastier experiential touchpoint. Did the salesperson verbal assets, and creates a lasting emotional food, sexier looks—and conveyed to the make the extra effort to accommodate the bond for shoppers. public to convince target consumers to put shopper; did the package convey value or a Rune Gustafson the brand into their consideration set at the sense of high quality; was the product located Stop and think about it: Why do we have point they determine need. at eye level on the shelf? A great experience the interpreted feelings we have about the consistently delivers the brand promise on organizations we do business with and the What businesses fail to realize is that every point, while also innovating within this Cutting price isn’t a long-term solution restaurants we frequent, the products we the experience is where the foundational promise. Ultimately, this is what will make A bargain mentality can put a strain on the choose at the shelf, the banks we trust, (product/service) and transmissive any brand in a consumer-facing category relationship with customers. When the or the manufacturers we hold in high (promises) elements come together. After stand out, especially when the competition is emphasis of the dialogue is on price, the door esteem? It’s something beyond the simple all, if the experience does not deliver on the focused on offering less for less. is open to fierce competition. At the same transaction. What are the influences that expectations of the received brand message, time, the brand attributes that originally affect the way we choose brands? There are the brand will be relegated in the consumer’s engaged the customer—the tangible and three: foundational, the product and its brand mind to the scrap heap of unfulfilled hype intangible things that attract and satisfy, signature; transmissive or the promises made; and posturing. In the majority of businesses, like store ambience, innovative products, and the experiential influence, the most critical experience is so disregarded that more or impeccable service—lose momentum. of the three. In fact it’s easy to argue that often than not, the winner is the brand that The shopper has fewer reasons to connect there is no brand without the experience. disappoints the least—not the one that does Biography: Bruce Dybvad is the Biography: Rune Gustafson with the brand. the most to define the experience. President of Interbrand Design Forum leverages his extensive experience and Interbrand Cincinnati. Bruce in brand management and retail But if cost-cutting isn’t the answer, how orchestrates all research, design, marketing as Chief Executive do retailers survive? One way out of this strategy, architectural, and of Interbrand London. He leads downward spiral is to recognize that in implementation efforts. His global a multifaceted team to create uncertain times shoppers increasingly vision, experience, and industry and manage brand value across return to the retail brands to which they knowledge have resulted in an all brand touchpoints. Rune is a feel emotionally connected. Shoppers want exceptional creative process that regular contributor to publications stability, and strong brands provide the ensures the fulfillment of client and conferences throughout warmth and reassurance that they need. In design and strategy. Europe, Asia, and the United States. effect, this is only achieved when promises are met on a regular basis. Promises are delivered by the brand’s people, its product, In uncertain economic times, and its place—the essentials that make up the shopping experience. the temptation for panicked It is important to remember too that in tough retailers is to rely on lowering times, customers will continue to welcome new product ideas that are relevant to their prices to drive store traffic. everyday needs. The paradox that good ALE retail brands face is that although shoppers But relying on continued S are looking for support from their favorite, trusted retailers, they still want new ideas, price promotions isn’t new products, and new ways of surviving the downturn. The strongest retailers are the sustainable or differentiating ones that combine brand promise with brand innovation, offering shoppers the most for in the long-term unless their money. you’re a true discount brand. 10 Best Retail Brands 2009 Best Retail Brands 2009 11

Shoppers look to brands they can trust. M&S In order to instill this trust, it is important for The new M&S store at White City, Westfield, London. The first of a employees to live the brand’s values everyday. new generation of M&S stores Here are some ways for brands to 02 A great experience helps build 03 Store design plays a serious role in the enhance the shopper experience brand equity. When mistakes are made, shopping experience, supporting both the without increasing costs. accumulated goodwill encourages sales staff and the customer. 01 A great brand understands the customers to forgive. It goes without saying that the restaurant needs of its core shoppers so that it Shoppers look to brands they can trust. and hospitality businesses have the means can keep the experience relevant. In order to instill this trust, it is important to heighten their brand value through the Before the economic bubble burst in Japan for employees to live the brand’s values experience. Last year, Holiday Inn studied in the 1990’s, the retail focus was on luxury everyday—even when times are tough. the needs of its guests around the world and brands. Companies that were resilient found six crucial experiential touchpoints enough to survive the recession and even Banks are suffering from one thing right to improve. It is beginning to make those thrive in the years following have been those now: a lack of consumer trust. Financial improvements throughout its global fleet, that shifted the focus to quality. Brands institutions desperately need to build trust and it is already seeing the efforts pay off. that rose in value during the period include into their brand, whether it is through UNIQLO, Japan’s leading clothing chain that a sincere and positive message that A well-conceived environment is another added private label cashmere at moderate emphasizes service, or a product that helps example to demonstrate how you understand prices, and household and consumer goods consumers in a new and innovative way. consumer’s needs. A simple way to improve giant MUJI that succeeded in offering its Financial institutions would be wise to this experience is flattering lighting, or beautiful aesthetic at a price acceptable consider brands like JetBlue or Perrier, which fragrance in stores so shoppers feel pampered to budget strained consumers. successfully restored trust in their brands by the surroundings. Kiddie spots, Internet after comparable disasters. When JetBlue access, or relaxed no-sales zones can also Currently, in the restaurant category, we see passengers were left stranded at various provide a friendlier atmosphere. Convenience how less agile Starbucks, despite the many airports, the honest, sincere, and quick public can be stressed, as well as flexibility of use. devotees to its fragrant US$ 4 coffee drinks, apology of its CEO stemmed the damage and Creativity through window displays, like that is losing relevance and customers to booming started repair before its consumers could found in Urban Outfitters and Anthropologie McDonald’s, which is flexible enough to begin to doubt the airline’s performance. stores is a major source of value since add premium coffee to its low-priced menu. Likewise, when benzene was found in Perrier inspiring ideas will be seen as part of a store’s McDonald’s has succeeded in stealing market water in the 1990’s, its people immediately customer service. A community of employees share in a tough economy by adapting to notified the public and took every bottle off who share an understanding of brand-based consumers’ needs and innovating within the market to ensure confidence that they values and behaviors are invaluable to a great its promise. had the customer in mind. For both, quick brand experience as well. When they work in action maintained value in the long-term. conjunction with the rest of the brand, they While it is too soon to tell how the public give the retail experience the kind of vibrancy apology from banking giant Barclay’s CEO that leads to loyal shoppers. John Varley regarding the credit crunch has fared, the move was an honest attempt to Improve and innovate emphasize and restore trust. If Barclay’s Success relies on seeing the full potential of also manages to deliver on the high brand influence. In the past, retailers focused expectations of its apology and bid to help on merchandise and presentation, but today with reconstruction to ensure the crisis they are looking at the entire experience and doesn’t happen again, it is likely to be in how all the parts and pieces come together better shape than most banks. to create a brand. In tough times, when the shopper is more discriminating than ever, the brands that offer more for more rather than less for less are the ones that will come out of the downturn with substantial brand value. A well-conceived environment is another example to demonstrate how you understand a consumer’s needs. 12 Best Retail Brands 2009 Best Retail Brands 2009 13

Best practices: In-store, it provides managers with handheld computers that show how garments rank To merchandise its latest designer line, Target used high-end store Barney’s to showcase the Sephora has also updated its website, to include a “Ratings & Reviews” function Target is offering whimsical bags comprised of the recycled product packaging, and GE how to compete in by sales. Its meticulous data monitoring of shoppers’ thoughts, process, and actions has allowed Zara to carefully select its product. These efforts generated headlines and excitement, while introducing new shoppers to the brand. designed to help shoppers make more informed beauty purchases. The revamp was based on consumers’ desire for as much has leveraged its already-green practices by pushing windmills, water filters, nuclear power, and cleaner turbines and jet engines. a new world order merchandise and better deliver on its brand promise to offer the latest designer looks Best Buy is building traffic with “Best Buy information as possible about its products, and a more interactive way to share it. These brands did not just co-opt this trend— by Lynn Gonsior and for less. Insights like this are invaluable— particularly when times are tough and shoppers’ decisions are more complicated Mobile,” a small specialty corner store focused on selling mobile devices and service plans. Best Buy has opened 41 Best Buy Mobile The website will eventually offer extensive information about products and brands, with reviews from experts and shoppers and they were innovative and adapted it to their specific brand promises. As a result, their bids to go green feel authentic and trustworthy. FranÇoise Novel than ever before. stores in North America so far. It’s a powerful leverage it can use against the competition. a Q&A forum. The function will also include a Sephora star rating system for the product 05 Developing the brand talent pool Improvements to the in-store experience The stores sell 90 different phones and pages, allowing the brand to demonstrate could be as simple as adjusting the lighting services from nine carriers. Employees value to its shoppers. Brands that are truly customer-centric are If there is one secret of success for brands, or optimizing the floor plan. Retailers are demonstrate their expertise and know-how still in the minority. And the few that are it would be a speedy ability to adapt not only being innovative about how they by helping shoppers set up email and other These brands have taken measures to create customer-centric are unique in considering to rapidly changing markets and social stay in tune with shopper’s demands and functions on new phones. trust and access using the web—in some employees. They realize the importance of conditions. Even in tough times, brands desires, but are also improving the floor plans cases taking cues from the shopper directly. brand culture and how employees play a daily must respond to emerging trends with based on the customer journey to boost the All of these brands have endeared themselves There’s much to learn from their innovations. role in bringing the brand to life for shoppers. inspired products to fill stores quickly impact of their brand, and improve point- to customers. They have showed that Classic examples are The Container Store that and attract customers. They must also of-sale profitability. Beyond the scope of the they care about the relationship and that 04 Becoming part of a larger trend invests in many hours of training in every continue to grow by stealing market share sale, the brand is brought to life through a they can keep up with consumers’ needs store associate, and Starbucks, which has from competitors. well-tailored store experience. In the last few on their terms. Top brands regularly look at larger social been known to shut down its coffee shops years, Carrefour has updated its hypermarket trends, profiling shoppers’ needs and taking to retrain and reinspire its passionate baristas In a time of reduced budgets and staff, Biography : With a background in layout to improve the customer journey. It 03 Becoming the shopper’s the time to revitalize store models. They in order to improve the delivery of the this may seem impossible. And yet, brands retail design development for Kroger reduced the complexity and confusion that trusted resource experiment with trends so customers will brand experience. continue to find ways to compete in a and the Limited, Lynn Gonsior shoppers experienced within its stores, cut return to discover new shopping experiences. new world order. Today’s leading brands knows firsthand how to manage down on shopping time, and optimized in- Top brands have leveraged multiple channels Store employees need to be ingrained in have become more sophisticated in their valuable retail brands. Today, she is store communication. The new plan included to become a consumer’s trusted resource and A good example is the SFR music flagship the brand so they can deliver the brand’s approach to finding growth, anticipating the CMO/Executive Vice President global in-store communication, wayfinding friend 24-hours a day. Brands are integrating store, Le Studio. SFR noted a trend toward promise and represent the values of the brand challenges before they even arise. of Interbrand Design Forum and guidelines, and an improved layout concept. e-commerce micro sites used by a niche the convergence of music and technology organization beyond reciting a tagline. continues to build one of the U.S.’s A deep focus on a shorter customer route market specific to the brand’s focus. They among a young and savvy audience. Its new Avon makes an effort to train all of its reps, Here are a few of the best practices: top retail consultancies. Lynn is a improved shoppers’ in-store experience. As are also providing informational editorial store is devoted to this shopper—offering so they understand and value the brand’s member of the Display and Design a result, Carrefour saw improved sales and a content, news, events of interest, or just a live music performances, opportunities for products. German’s Mediamarkt is another 01 Applying behavioral insights to the Ideas Editorial Advisory Board, more loyal customer base. way to buy when it’s midnight and a shopper shoppers to personalize mobile phones and example of a brand that has seen success by shopper’s journey. American Marketing Association, is worried about finding that perfect black demo new phone applications, a restaurant focusing on its employees. The brand lives and National Retail Federation. Wal-Mart has also improved its store dress to advance her career or spark her and Internet lounge bar, and a place to by the strategy: “All business is local.” Store New understandings of a shopper’s thought environment, in-store messaging, and love life. download music. The innovative store quickly managers make decisions with flexibility process and subsequent actions are product mix. With wider aisles and brighter became a destination for shoppers. and independence, focusing on regional providing brands with information to make lights, customers are staying an average of Additionally, brands are exploring ways to assortment, pricing, and marketing. Not only smart decisions around creating stores, or 14 minutes longer per trip. Additionally, create communities around their brands The sustainability trend is one that brands does the decentralized structure enable fast departments within stores, that are more in product decisions have been organized through the use of social networks, word in all categories have found to be especially adaptation to market changes, but the brand tune with shoppers’ wants and needs. around a new “win, play, show” strategy; of mouth, Web 2.0 tools, and influencers. successful. The concern about energy prices, benefits from the shared responsibility of a win includes items like flat panel TVs, play These brands understand that the better global warming, and desire for clean air is whole group. Its employees feel like a part of Specialized research methods clearly show includes apparel, and show includes those they present themselves as in touch with looking to be a long-term social movement. the brand, and when employees feel this way, how a brand fits into the consideration set as that apply to Wal-Mart’s one-stop shop consumer’s lives, the better the chance Brands like Toyota, IKEA, GE, and Target have they become the differentiating feature of a a shopper begins to make a decision about status. This new approach improves shoppers will invite the brand into their incorporated sustainability into their brand product or service. As Mediamarkt and Avon visiting the store. Retail ethnography allows shoppers’ in-store navigating experience. homes, even when they are not buying. promise, and integrated it in a way that demonstrate, the companies that focus on us to analyze a shopper’s journey, from the corresponds with their overall business goals. their brand’s attitude and vision throughout Biography: Françoise Novel decision to enter the store and even down to 02 Putting the store in the The Body Shop has taken a number the value chain (from the purchasing team to leads Interbrand’s European retail way a shopper looks for information at the customer’s path of steps to modernize its brand online. IKEA has decided to put an end to plastic the financial team) will often see the results practice, a highly creative and shelf. Armed with this insight, designers and To encourage shoppers to “think ethical” bag consumption, which is an easy and cost reflected in its company’s earnings. strategic team whose work helps planners can strategically position products Retailers have been ingeniously exploring when they purchase, it has launched a new effective way to go green. Proving that the clients to link their consumers’ to promote cross selling and drive larger non-traditional locations, smaller footprints, initiative on Facebook, requesting that move isn’t just another cost-cutting measure, Conclusion needs, the brand proposition, and baskets (i.e. purchases). And as a result, new formats, and modified assortments to members sign a “Together & Fair Pledge.” it is also investing in small and medium-sized a company’s sales-investment stores have higher performing store plans. interrupt the customer journey in new places. By signing up to the pledge, supporters enterprises, which can provide solar panels Although budgets may be tight and stealing capabilities in order to grow the make a commitment to tell at least one and new solutions to reduce water and market share may seem impossible, there retail brand as a business asset. Zara has been especially innovative about The Home Depot altered its format, offerings, person a week about a new ethical product energy consumption. Afterwards, IKEA will is still potential for growth. Brands need to Françoise is both a trained architect staying in tune with shoppers’ demands and and services to adapt to the urban needs of or service they have discovered. sell these products on its shelves. Toyota has adopt some of the practices outlined here, and a graduate of the EM Lyon desires. At headquarters in La Coruna, Spain, cities like Manhattan and Chicago. Retailers launched a zero emissions blog and a new and adapt them to their specific needs. In Business School of Economics. Zara has managers stationed at computers to from Louis Vuitton to Target have created Similarly, Boots has revamped its online hybrid pre-owned certification program to tough markets shoppers’ are evolving faster monitor sales around the world in real time. pop-up stores. Target ‘s pop-up stores appear presence at boots.com. One of its most leverage its hybrid car offer. than ever. The brands that evolve with them in the Bodega format in Manhattan to entice important new elements is the Boots Live will be the ones that will come out on top. urban dwellers inside to shop. Pharmacy service—an online health question and answer service. 14 Best Retail Brands 2009 Best Retail Brands 2009 15

The crisis paradox: how measuring return on brand investment, assessing risk, estimating outcomes, and clarifying the future scenarios with the highest probability of success. your brand. New customer behaviors emerge, competitors consolidate, and regulation changes. Because the knowledge used to manage brands during more stable business Case study #1: Banking on the brand Demand delivered intelligent branding can The two together—effectiveness and efficiency—promise what the recessionary brand owner needs: more from less. Far easier cycles becomes either suspect or irrelevant, it is essential for brands to unlearn, relearn, and refresh their brand strategies—and they can do this by using brand analytics tools, just in time. help you seize opportunities No one is feeling the current crunch said than done. Still, with advanced analytics, to quickly adjust to a shifting landscape and more than banks. Many of the current some process discipline, and the courage to make informed investments. challenges, from capitalization concerns move quickly, it is possible to achieve this goal. to reputation loss will take years to Below are some very recent examples of in a downturn repair. Our client didn’t want to wait. a variety of companies who have refreshed How to get there? their strategies to better manage their brands through the crisis. Starting earlier in 2008, we engaged with a leading diversified bank to by Josh Feldmeth recalibrate its brand portfolio for greater Brands who leveraged more value value. We investigated drivers of demand from current assets The right move depends on many factors: and existing brand equities in mature industry, strategy, customer targets, and and growth markets across each of the A global, diversified bank rebalanced its brand internal organization and culture. Here are client’s sub-branded businesses around Although the first solution of ignoring the portfolio toward a more efficient centralized some of the typical questions we are hearing the globe. brand may seem the simplest, the brands model based on the insight that drivers of Navigating that choose the second can seize unique right now from clients under pressure: choice were consolidating globally. (Read more Our research results ran counter to turbulent seas opportunities in challenging markets. These are the organizations that build • I need new sources of revenue, about this bank in the sidebar, Case study #1.) convention. Customer needs - from fast—how do I find it? retail customers Europe to new, money, unbeatable brands—and these are the After watching competitors experiment with and high net, worth individuals in brands that may even come out winning a new restaurant concepts, like McDonald’s • My 2009 budget is in jeopardy, and I Asia to investment bank customers in new and bigger piece of the pie by adapting R-Gym, an international quick-service Rising energy demand, food shortages, need to prove ROI—how do I do this? the US—unexpectedly demonstrated to the changing environment. restaurant chain recently questioned if they soaring raw materials costs, frozen financial How do I do more with less this year? considerable overlap. These very were over-investing in expensive facility markets, declining productivity, and waning different customers had very similar programs, and under-investing in marketing consumer confidence—these seismic shifts • How can I squeeze more value from my needs, and for a global bank, with far- Biography: Josh Feldmeth has are reshaping the financial sector and Effectiveness + brand portfolio, my retail network, or my and food promotions that can get to market more quickly. flung marketing, communication, and worked with leading retail brands all over the world. In his role as challenging players up and down the value chain to produce results. Few will remain efficiency = global chain of restaurants? sponsorship activities, it presented an invaluable opportunity to leverage brand European Practice Leader for untouched. Even industries like healthcare, more from less • How do I offset declining growth in my A big box US retailer reinvented its store into a more experiential destination, with broader investments for greater return. Interbrand’s Analytics team, Josh where demand is less sensitive to market category? How do I hit growth targets services and in-store resources, in order to helps to ensure that everything we fluctuations or ultra-luxury brands, whose when customers are cutting back? Using the data, we constructed a gain visits from cost-conscious shoppers do for clients, from strategy through customers tend to be insulated from structural equation model to identify looking for new (and cheaper) sources of creative, creates business value. economic downturns, will surely have to Well-positioned brands create value by • How can I continue to justify my brand interaction effects: how the entertainment. He helps colleagues and clients make some tough decisions in the coming driving demand. Smart brand owners price premium? What do I do given perceptions of one or more of the understand the mechanics of how weeks, months, and years. manage this value by building strong brands that my brand is at the premium end client’s brands created (and prevented) Brands who found new sources of growth brands create value and where that secure future revenue over time. The of the category? demand for other brands in the portfolio. capital should be deployed Management has snapped into action, current environment is demanding even This intelligence revealed a new set A major FMCG player mined its current to maximize that value. deploying the classic recessionary tools— greater returns, forcing brand owners to • We’re launching a major initiative, of portfolio management principles. consumer segmentation data for insights on consolidation, cuts in their workforce, quickly locate incremental value from the and in this market, there is no room for If followed, these principles would how target customers attach to the brand, spending caps, and budget reductions. And brands they manage. Unfortunately, even error—how do I ensure that nothing grow demand across the business. preventing private label and share erosion. yet, the question remains: How should organizations with strong brands can goes wrong? brands be managed in a crisis? What kinds struggle to capture incremental value for The so-called holy grail of branding— A global heavy equipment manufacturer of recessionary tools should marketers two big reasons. While the burning business questions may greater effectiveness and efficiency identified brand partnerships that leveraged be using? differ from client to client, all require a equals more for less—was delivered common brand equities, resulting in several 1. They lack a detailed understanding greater understanding of the mechanics in a spreadsheet, just in time for the million Euros of incremental brand revenue. Interestingly, the tools that may work in other of brand mechanics—how their brands of brand value creation (effectiveness). global financial meltdown. parts of the business don’t necessarily apply influence behavior and customer choice. This understanding will help brands create A UK-based retailer and global FMCG to branding. While you can downsize, right Greater insight into the mechanics of brand more value and improve decision-making player joined forces to re-orchestrate retail size, in-source, and outsource, you can’t fire value creation is essential for improving (efficiency), so brands can spend more wisely. shelving principles based on shopper needs, the brand. It won’t go away. Brand owners effectiveness during periods of market stimulating organic growth in the category. only have two options to navigate turbulent instability. The tools of brand analytics—tailored (Read more about this UK-based retailer in the seas. They can either ignore the brand (i.e. research, intelligence systems, risk and sidebar, Case study #2.) stop spending) or manage brand assets for 2. They are not equipped with the advanced probability models, capital optimization—are greater value. management tools required to make essential for winning in crisis markets. A crisis complicated and pressurized capital not only disrupts financial and consumer allocation decisions. Improved decision- markets, it also radically changes everything making can optimize brand efficiency by that you once may have held to be true about 16 Best Retail Brands 2009 Best Retail Brands 2009 17

Case study #2: Brands that improved their Case study #3: Attention shoppers decision-making The crisis paradox Proving the case There’s hidden value The corporate brand manager at a life and “Good thoughts are on aisle 5. chemical sciences company proved the Return on Brand Investment (ROBI). The no better than good concrete data encouraged support for an The current environment is challenging and the concerns that many are feeling are valid. dreams, unless they Food store and supercenter shoppers increase in his budget allocation. (Read more about this life and chemical sciences company in But this challenge also presents a singular be executed!” opportunity for brands to perform better are extraordinary creatures. Whether the sidebar, Case study #3.) - Ralph Waldo Emerson than ever before. sniffing out a bum melon, spotting a better deal across the aisle, making A global, consumer, electronics firm As markets contract and customers have adjustments when their product is out of optimized brand spend, resulting in 20 Marketers tend to get excited about less means to buy, they don’t just buy less, stock, or handling split-second volume/ percent greater efficiency of marketing brand strategy. It’s understandable—it’s a but change their choice behavior entirely. price calculations while simultaneously activity. fun conversation about a brighter future. Across the entire spectrum of markets, from juggling a baby and a mobile phone However, a brilliant new brand strategy contract logistics to commercial travel, conversation, they can do it all. And they A leading media company justified its brand has never earned or saved anyone money washing up powder to wealth management, have to, considering how insensibly the budget by identifying how the interaction until it was executed. nearly every decision, even the most routine, typical shelf is organized. between branded content and greater is now up for grabs. customer choice affected its brand value. Our client, a global life and chemical We recently helped our client, a global sciences company corporate brand This might be a terrifying competitive reality, consumer goods manufacturer and These examples represent the power of manager, had just minted a new particularly for market leaders and those its retail partners, turn insights about brand intelligence. All of the brands above corporate brand positioning when he operating at the premium end of a price shoppers into eight percent organic recognized that their knowledge about realized that the millions required to range. But it is also an opportunity for growth in a stable, household their brand no longer applied to the current execute it would not come unless he strong brands. needs category. market, and quickly updated their intelligence produced a business case for change. to detect and seize new opportunities. An Brands win because they drive choice. We spent time with shoppers in their understanding of brand mechanics showed By interviewing company employees Usually, the ability for brands to steal share is homes, learning what it was like for these brand owners how they could make and analyzing competitors for clues, we limited as customers buy on “auto pilot” with them to use the products and how their offer more attractive and grow revenue. identified three Brand Points of Impact unexamined brand loyalties and a narrow and why they organized their collection This refreshed brand intelligence in turn fed (BPIs)—areas within the organization functional decision criteria. But now, beset by of cleaning products. We then took investment models that supported better where a revitalized corporate brand could manifold crises, customers are reconsidering that insight into the store and re- financial decision-making. impact the business and create real value. almost every choice anew. True, the overall organized the shelves in terms of tasks These were hard metrics like revenue, pie might be flat-to-shrinking, but shares and benefits to match how shoppers Yes, times are tough. Yet, as these examples gross margin, employee retention rates within that pie, or the distribution of brand actually organized the category in their prove, brand intelligence can go a long way. and marketing efficiencies. choice, can be highly fluid and the brands mind. In the end, they didn’t notice the Brands need to rise to the challenge by with the strongest proposition will win. And Across the entire spectrum of markets, from contract logistics to commercial travel, washing up powder to wealth management, change, and that was the point. understanding their markets better than Scouring employee data, customer winning means a better future. Remember nearly every decision, even the most routine, is now up for grabs. ever before. They need to use their improved satisfaction surveys, recruiting profiles, downturns are always followed by upturns. The new organization mirrored shoppers’ insights to make stronger, more efficient, and company financials, and anything else Consider it this way: in a downturn, it is not As bad as times may seem, there is also the own approach to the category. It finally more effective decisions. we could get our hands on, we quantified You can call it the Crisis Paradox. The same that customers will stop buying altogether. opportunity to capture a share of customer made sense to them. And because it realistic estimates of potential brand extraordinary forces that are freezing The desire to buy and the psychological need choice that was previously unavailable. It may was easier to shop, it refocused their impact. We loaded these estimates into a liquidity, threatening solvency, and forcing for satisfaction is still very much there—it has be hard work to get there and you may need attention from simply finding what they financial model, and used risk simulation customers to cut back on purchases have to be, as just months ago consumerism was to reevaluate your approach, your audience, were looking for to discovering new, algorithms to estimate the benefit of a also opened up brand choice—the customer rampant. What’s changed is that consumers and even your product, but there’s always higher margin offerings from the brands new corporate brand in each point moment of truth. now have to buy on a budget. As a result, a way to remodel. Good news for strong they already trusted. of impact. customers will want more value for their brands; dark clouds for the weak ones. purchases; they become more demanding. Shoppers were delighted and our The result was a year-one discounted If a service or a product is sub-par, they will client saw organic category growth Return on Brand Investment (ROBI) go elsewhere—and with so many businesses without an expensive marketing and projection ranging from 170 to 260 desperate for their support, they will be sure communication program—now that’s percent. to find a brand that satisfies their needs. a bargain. For the client, this meant the difference And yet, there is a way to become the brand between defending an existing budget that satisfies consumer’s growing needs; request and proving the case for increased there’s a way to become the brand that Beset by manifold crises, captures a share of customer choice that was previously unavailable. Through a detailed investment—and the proof got him the green light. Who can argue with that? customers are reconsidering understanding of brand mechanics, you can make the decisions that will optimize brand efficiency and satisfy consumers’ needs. almost every choice anew. 18 Best Retail Brands 2009 Best Retail Brands 2009 19

Break away from the The simplest and easiest example is in the cereal category. Granted, the category is expanding with more health-conscious Where have all the Ultimately, the situation boils down to trust, understanding, and personal relationships. Designers have to fully comprehend the offerings, but even there, the rules of brand guardians gone? brand’s marketing objectives, as well as the pack: how transforming design are the same. How is the consumer supposed to shop the category if everything is the same—same color palette, same architecture, same silly cartoon character, competitive landscape. Moreover, clients have to trust the designers’ abilities to create white space within that arena—a process that can make both parties uncomfortable. category language This begs the obvious question: Where are same product delivery, same milk splash/ the design consultants in all of this mess? pour, and same spoon? The formula does not Unfortunately, failure to understand, listen, Are they so absorbed in producing hip and even change from country to country—it is and engage in constructive dialogue during current designs that they too get lost in the strictly followed ad nauseam. How is this the time of creation often leads to category keeps your brand safe language or, worse yet, the trend of the day? possible, and where are the agencies and malaise. Designers are actively encouraged Design consultancies have a fundamental advisors to command otherwise? to follow the trend of the day (no matter responsibility to advise and push back on how lame or obvious it is) in an attempt to a brief as they guide their clients to new placate or enthrall the client, who may see from substitutes levels of creative brand excellence. They the category language and opportunity, but must respect the rules of the category not the ultimate prize. In the end, this has while leveraging the opportunity to create left these brands particularly vulnerable to white space and ownable, defendable brand private label brands, which easily adopt a by Fred Richards and equities with which the brand and consumer category’s markers—and sell the product at identify. Easier said than done! a lower price. Bertrand Chovet Sadly, this blind design crime is committed in more categories than just cereal. Honey, power drinks, gourmet biscuits, laundry detergent, shampoo, pasta sauce, and motor oil (to name but a few) all fall prey to the same Beneﬁts claim Company stagnant and predictable thinking. logo For example, within the fabric softener Think back to your last trip to a category, Cajoline/Snuggle (Unilever) in supermarket. As you scanned France illustrates its packaging with a teddy bear playing with a towel. Soupline/Softlan the shelves, did you notice that (Colgate-Palmolive) takes an emotional Brand approach as well, showing a newborn baby some competitors within the or mother with a baby wrapped in a towel, logo same category use the same while Minidou/Silan (Henkel) enriched its packaging with a photograph of a mother design cues on packaging? If you kissing her baby. Moreover, Comfort (Unilever) in the UK uses an equal design of Biography: Dyfed “Fred” Richards Biography: Bertrand Chovet seeks did, it was no fluke occurrence. a mother with her baby, all encapsulated by Cute character is Interbrand’s Executive Creative to build brand distinctiveness and Director in Cincinnati. He has consumer loyalty in every single Within certain categories, there a heart, which the Soupline brand Colgate- Palmolive, Europe) has also recently added. traveled the world, creating and experiencing brands in diverse client engagement. As Managing Director of Interbrand Paris, his is a disturbing trend to follow Milk pour or splash cultures and categories. Constantly commitment to high performance what can only described as or spoon of product inventing new techniques for has resulted in many award-winning unlocking creativity, Fred has retail and package design programs. formula design principles. developed some of Interbrand’s For 15 years, Bertrand has worked breakthrough design methods, and with Interbrand clients on extensive Product his expertise in the FMCG category business issues across a wide range of in a bowl has helped to build some of the sectors, from FMCG to luxury brands. world’s leading brands. Fred is a prolific author and commentator on brands, and captures his insights in a weekly design review. Formulaic design principles 20 Best Retail Brands 2009 Best Retail Brands 2009 21

Carrefour: Private label brands: Consumer expectations Stand out or get out! Putting the shoppers’ stolen identity done right and brand substitution concerns first Carrefour achieved astounding growth Over the past 10 years, we have seen an Changes in consumer expectations also In order for a brand to minimize the private through its private label brands. improvement in private label brands due support the growth of private label brands. label takeover threat, it has to be itself—it to the lower cost of printing. Indeed, a Consumers now expect to get more and has to play up its unique strengths within any In 2005, Carrefour—the world’s second Nielsen report from late November 2008 pay less on a continuous basis. New to the given category. Following another brand’s largest retailer of groceries and consumers states that sales of private-label brands in purchase decision is the consumer’s hurdle language does not add value to a brand or the goods—launched a third generation of the U.S. grew to US$ 81 billion in 2008, a 10.2 for substitution. The perceived cost of the consumer’s experience. Designers need to products that would mix the lowest prices percent year-on-year growth versus 2007. additional time and effort that is required to clearly map out what the category is saying at in each market with a socially responsible That’s because private labels have, locate and acquire an unavailable product shelf level. How does the consumer approach proposition. and continue to, consolidate strong store from an alternate store or channel is great. the category? How do consumers choose brands that can extend well into different Indeed, consumers’ need for immediate from one brand to the next? Do they actively Based on shopper insights and category categories, and succeed in driving sales. purchase satisfaction often outweighs any engage with the package? Do they compare research, Carrefour organized its offer into (See more in the Carrefour sidebar.) perceived sacrifice in quality and brand one label to another or do they judge from three categories: Carrefour for Everyday, preference. Shoppers are striving to save the a distance and then select? In addition to Carrefour Agir (organic and ethical products), Private label brands appear more frequently “negative time/labor time” in supermarkets or thinking carefully about all of these factors, and Carrefour Selection (premium products). throughout a store, which multiply department stores in order to increase their designers need to communicate their Each category had a distinctive look that also touchpoints and create more occasions “positive time/enjoyment/family time.” thoughts clearly and concisely to capture corresponded with the larger master brand. for purchase. Frequent appearance also shoppers, who might be eager to adopt a creates more familiarity with the label, which Recent research only confirms this. An IGD- new trend. Creative differentiation can be Carrefour for Everyday included over 8,000 increases reputation, despite advertising that Consumer Research 2006 study shows that leveraged through various drivers: from a products and was given key shelf space, often is lower in comparison to manufacturers’ when a product is unavailable, 40 percent more effectively targeted message, a better on eye level. Carrefour Agir’s simple look and brands. Additionally, with private label of consumers buy it at another store, 17 conveyed value message (premium vs. private packaging evoked the sub-brand’s organic brands, shoppers can begin to look at a store percent delay purchase, 22 percent substitute label),to a stronger depiction of a brands’ and eco-conscious contents. A mix of classical as a destination to find their trusted brand a different brand, seven percent substitute social and lifestyle values, to an innovative and unexpected graphics was used to convey or brands. Formulaic design only helps these the same brand and eight percent do not message that answers new consumer Carrefour Selection’s premium, upscale range private label brands more by making it easy purchase the item. expectations. of products. and affordable to create a competitive look for their products. A key objective in manufacturers’ and Think about it this way: What makes a sports The launch of these private label brands was retailers’ promotions is to increase sales by star stand out from the rest of the team? a huge success. Nine out of ten shoppers are motivating brand substitution. Promotion Most likely, he or she understands the rules buying Carrefour products, which represents enables both retailer and manufacturer to of the game. However, at the same time, he more than 25 percent of the turnover. meet objectives when brand substitution or she distorts and surprises viewers with occurs. Brand substitution is investigated a new and inventive playing style. A brand by developing sales response models functions in the same way. It becomes relating each brand’s sales to its own and ingrained in our psyche by both playing and its competitors’ variables. Store price, subverting game rules. featuring, and display all come in to play with substitution. To illustrate, when a store On a long-term basis, brands need to build offers Brand C at a promoted price, Brand relevant difference and consumer preference A and Brand B will lose sales. The average in order to combat an increase in competition explained variance across brand-level models and a decrease in sales. Meaningful differ- is 42 percent: 26 percent price promotion, entiation and consumer loyalty will make 12 percent featuring, and 4 percent display. consumers look to your brand and create more value. With private labels, not only is the price is generally lower, but the brands are displayed more frequently in the store. So, in categories where all the brands look the same, they have a clear advantage in capturing the 19 percent Consumers now expect to of consumers’ that choose to substitute a brand that is unavailable. get more and pay less on a continuous basis. 22 Best Retail Brands 2009 Best Retail Brands 2009 23

Fast moving consumer goods While a look into the state of homegrown consumer product brands in the region is worthwhile simply for the opportunities this 02 Communicating 04 Developing locally market offers, it also tells a larger story about the right brand promise strong brands into in regional markets: trends, brands in all growth markets. The broader insights and success logics that these brands reveal can be applied to all regions with similar development patterns. A good place regional brand jewels challenges, and insights The growth of international FMCG brands to begin is with a look at the international in the Central & Eastern European region FMCG players that have seen success This strategy has become a major avenue for has very much been rooted in the growing building brands and business in the region. growth. It makes a lot of sense to cherish and convergence of consumers’ value systems These brands have succeeded in solidifying a utilize a local brand’s equity and heritage. The by Richard Veit and aspirations in Western and European presence in the region by adopting a brand- international companies that have succeeded societies. Despite substantial differences oriented strategy. Their successful expansion in this region have taken this one step in household net-incomes, the desired has put pressure on regional brands. further. They’ve redefined these local brands’ lifestyles in these regions are quite similar. personalities to create powerful pillars of Successful international brands have tapped identification beyond their local market. The into consumers’ desire for identification and 01 Acquiring and the need to communicate their belonging to combination of international and revamped national or regional brands is proving to be developing strong a new wealth and lifestyle community. The simple brand promise—to deliver a different an especially superior recipe for brands with local brand champions quality and way of life—has led to regional a strong local presence—for instance, the brewing industry with Inbev leveraging the The Central and Eastern European market is acceptance of these international brands. Czech Republic’s Staropramen. comprised of more than 300 million consumers. This includes all the countries of the former Soviet Global and European FMCG companies, particularly in the beverage, confectionery, 03 Establishing a strong 05 Using the global Union, as well as countries that were formerly a and dairy industry, have made their presence retail infrastructure communication felt in the market by establishing strong and retail concept networks to their part of the Warsaw pact. Together with China and marketing and distribution platforms for their India, the Central and Eastern European market is brands, as well as acquiring leading producers in their respective category. These companies advantage Biography: Richard Veit is a have skillfully combined international lead member of the Management one of the largest growth markets for the food and brands with strong local brands. For instance, Central and Eastern European countries have experienced a massive entry of major Board for Central & Eastern Europe. Richard is responsible for strategic beverage industry in the world. Heineken markets both its international brand (Heineken) and Zywiec, Poland’s national food retailers. Brands like Tesco, Carrefour, The major FMCG players have also been and Lidl have established a significant keen on securing the services of global development of the region’s Fast brand. ABInbev does the same with Beck’s and retail presence and highly efficient retail communication networks. The international Moving Consumer Goods practice. Borsodi Sör in Hungary and Carlsberg with infrastructure systems in the region. Better network agencies show a strong presence in He is also managing director of Baltika, plus further brands in Russia. roads and more cars have allowed for these the region and play a significant role in the Interbrand’s Hamburg office. major food retailers to occupy shopping malls communication arena. This allows invaluable Richard uses his wealth of and strip malls, thus driving and setting the local insights and an invaluable local network experience and knowledge to benchmark in food retailing. Meanwhile, to be paired with brand and communication help businesses evaluate and established and deepening partnerships specialists. In many cases, this network is assess their brands. between major retailers and major producers built on international brand accounts or have facilitated European purchasing framework agreements. Additionally, brand agreements. Additionally, we have seen the marketers have looked to brand experts in emergence of regional chains that follow major European branding capitals such as retail business models, similar to Western London, Paris, and Hamburg to bolster these European countries. The ongoing trend local insights. towards retail systems rather than stand- alone shops favors strong brands, but also stimulates the retailers’ interest to explore the potential of introducing retailer owned brand propositions. Heineken markets both its international brand (Heineken) and Zywiec, Poland’s national brand. 24 Best Retail Brands 2009 Best Retail Brands 2009 25

The local brands have trouble deriving Still, these brands’ strong positions in their However, in relation to the overall size of compelling brand ideas from genuine category are now tremendously challenged business, these brands have also added Insights about Central brand insight. They also have difficulty by the rise of international brands as management complexities. Productivity A regional brand in and Eastern European understanding how the idea links with a distinct brand identity and a properly well as by private label brands offered by retailers. As consumers’ value patterns and and innovation pressures in each category have multiplied. Unlike the growth food & beverage has its FMCG brands and segmented brand assortment. As such, preferences evolve and change due to the strategies practiced by major international own set of advantages brand management communicating the brand to an audience becomes difficult. Although branding is on influx of competition, local brands need to behave accordingly. In order for brands FMCG companies, the growth strategies practiced by these regional businesses are Small has its advantages. Size does not the way to becoming a recognized discipline, to stay on top of the consumer preference based on buying market share, rather than always matter. Small brands cater to International FMCG brands’ successful and the level of proficiency is steadily game, they will need to adapt to the change building market share. Over the last years, the consumers’ need for individualization expansion into the Central and Eastern improving, regional brands need to focus from supply-based to competition-based assortments of regional players have been and exclusivity. European market has challenged regional more on brand positioning. In particular, it is economy. They will also need to continue the growing tremendously, not only due to the and local brands. Despite the consumer of key importance that the brand personality brand relationship in the context of a more increased number of new product launches, Consumers do not always appreciate loyalty these brands inspire due to their is authentic and that the products live up sophisticated brand and retail environment. but also due to the reluctance of eliminating the effects of exorbitant communication strong presence in regional and local cultures, to the brand’s promise. Regional or local low turnover items. Regional brands need to power exercised by leading international they have had to adapt to new competition closeness can represent an interesting aspect Disruptive political developments and work on streamlining their portfolios, as well brands. Regional brands are perceived and shifts in the economy. of the brand’s positioning, but should not be changing preconditions to conduct business as building strong brands and propositions. to communicate at eye level with the overexploited. It should not be viewed as a put a lot of pressure on such brands as well. Managing the long tail of the assortment is consumer. They also create a less industrially Regional brands have responded to the new reliable and exclusive means to sufficiently The key challenge is to define future-oriented still an underestimated issue. Major FMCG manufactured impression that is often challenges in a variety of ways. While they create relevance and consumer preference. brand visions. While local brands need to take players are very skillful in defining the pace associated with targeting consumers in mass are on the right track, there is still much room existing brand equities into account, they and frequency of new product launches. This markets. Small brands project humanity. for improvement. cannot rely on the past in determining the being said, they also continuously question Because they are “made with human 02 While local and future brand personality. The speed of change in the environment and the consumers’ the size and structure of the assortment. care,” they are, at times, even perceived as courageous. With small brands, consumers 01 Branding is regional brands are willingness for change for the better generally turn the lack of ubiquity into an element of becoming a recognized upgrading their points to more courageous branding strategies. Although brand marketers in Success logics for uniqueness, helping consumers distinguish themselves from the crowd. discipline—but it still identities, insight Central and Eastern Europe have been taking regional FMCG brands needs to be understood driven innovation is key bigger steps in developing their brands, the realization beyond brand definition and brand One way for regional brands to build new The retailer needs products with a regional source, simply because consumers want it. as an integrated process design remains a challenging issue. brand propositions is to root innovation A recent study conducted by a major research in local consumer insights. While regional firm among German consumers reveals players are at a disadvantage in creating the that consumers would like to see far more Central and Eastern European brands have a A lot of branding homework has already been rich heritage because historically there were 03 Widening the difference in innovative brand propositions, regional brands can use their history to local and regional brands on retail shelves. Consumers appreciate retailers who are done on regional and local FMCG brands. only a few brands around in the respective region. Local and regional brands are part brand and product their advantage. familiar with regional food and beverage In general, the quality of branding has been greatly improved over the last few years. The of culture. They express closeness, and are portfolios is a way to Regional brands hold a privileged position. culture and are committed to offering regional brands. However, brands need to be importance of branding has become more a vehicle to identify and cherish local pride. Analysis of the equities of a number of brands grow, but it results They can interpret international trends and aware of the difference between a regional widely recognized as an essential concept to fuel the success of a brand. over the last few years in this region has in a more complex put them into a local context. When trends emerging in foreign countries are brought offer and a B or C league brand that is an endangered species among both consumers revealed that local brands are generally highly trusted in their respective categories. This brand and marketing to the local markets by foreign brands, they and retailers. However, based on our experience, it is also clear that in many cases, the concept respect was earned through many years of management seem to speak a different language. But when interpretations tuned towards local taste consumption experience and these brands of branding is only understood as either preferences are brought under the trusted the creation of a logo, a label, or a package tend to evoke fond and nostalgic associations. umbrella of a local brand, the product will Conclusion design. Many Central and Eastern European resonate with consumers. Still, this cannot FMCG brands in Central and Eastern Europe, local brands do not view branding as an be done without a deep understanding of the The success of major international FMCG if not owned by any international players, integrated concept. The systematic process product. If ethnic authenticity is expected or brands in the Central and Eastern European are often developed and managed by an still remains a challenge. the trend based product innovation is out of market has put pressure on regional brands. entrepreneurially oriented management. sync with the competence of the brand, the And yet, regional FMCG brands’ rich history Regional FMCG firms are actively product is likely to fail. and small size—particularly in the food and participating in the consolidation process beverage market—offer them an advantage. of the regional food and beverage industry. Food and beverage, in particular, have a If regional brands work on building innovative They are seizing opportunities for growth Regional brands hold a privileged position. cultural home in many ways. A culinary and brand propositions rooted in consumer by acquiring companies within a certain beverage heritage is a tremendous asset for insights, and continue to take increasingly product category, as well as additional regional brands. If they do not just focus on sophisticated branding measures to build They can interpret international trends and categories being sold through the same retail celebrating the brand’s heritage, and instead their brands, they will be more than prepared channels. As a result, brand portfolios and take a leading role in developing the food for the challenges that lie ahead. assortments are extended. put them into a local context. and beverage heritage—reinterpreting modern lifestyle consumption situations— regional brands will be able to legitimize their raison d’être. 26 Best Retail Brands 2009 Best Retail Brands 2009 27

Shifting winds: trends and insights for A new bloom for retail down payment. With more comfort and living Meanwhile, in China, memories of much space at home, people are less motivated tougher times are still fresh in the minds of to go out for meals, entertainment, and older consumers, and the seeds of caution the future of Asia’s major retail markets shopping. Hosting friends at home was once are deeply planted in their children. Today’s an impractical luxury, but now seems more economic crisis is a first for many young In the cycle of economic life, new fashionable. Chinese consumers, but their parent’s values opportunities will emerge from the by Burton Blume and Jonathan Chajet are finding a new relevance. Practicality, economic winter. If history is an indicator, At the same time, online shopping and TV savings, and a demand for value are the market leaders tend to gain market share shopping networks are offering more choices, new purchase drivers. Big-ticket items like in down economies. In uncertain times, better prices, and greater ease for those who cars, overseas vacations, and large screen quality is a measure of safety, and brands want to shop from the comfort of their home. televisions are being deferred, at least for the are measured by the promises they keep, While many consumers will visit retail stores time being, until the future is more certain. not the promises they make. to educate themselves about their desired On the top of the shopping list are little purchases, they will ultimately spend much luxuries like gold jewelry and small electronics Despite today’s air of apprehension, there more time online searching for the absolute that hold their value, and project a more may be real opportunities to build strong best price. This is sure to become an even sensible image. brands in this environment. The winners larger factor in today’s climate, when time will be those that symbolize stylish restraint, seems to be the only affordable luxury. Overall, more and more Asian consumers will Until recent months, retail in Asia seemed A new climate in Asia begin looking beyond the label, using strong authenticity, and value. Those that cut corners or expand beyond their core for the unstoppable. With disposable incomes personal criteria to evaluate merchandise sake of short-term gain will find their brands increasing and distribution flowing more instead. So while a downturn may affect freely than ever, Asian consumers have Trends and insights Asia’s new shopping mall paradises and the frosted beyond repair when shoppers are ready to spring into action. had the means and access to meet their In Asia, the highest need is status seeking. global brands that have set up flagship stores growing appetite for a higher standard of Group before individual, we before me, needs in the region, new doors are opening in the Asian retail shopping may become less living. Inexpensive land, low labor costs, of superiors before needs of self; these values market that will redefine retail experience in conspicuous and more personal as consumers favorable government policies and young, are the result of thousands of years of social The underlying values of Asian consumers, a very personal way. exercise caution and stay closer to home. upwardly mobile demographics in China and family norms. In marketing terms, Asian as well as these recent shifts in consumers’ But brands that are able to penetrate the and Southeast Asia contributed to a retail consumers seek brands that give them “face” lifestyles will dictate how Asian consumers 03 Continued growth of online retail layers of privacy and speak directly to the Biography: Burton Blume is boom that has shown no signs of ending. and convey status: “What does this brand are likely to react to the downturn. Let’s look The Internet will continue to feed the Asian needs, values, and aspirations of Asian Interbrand’s Executive Strategy On the other end of the spectrum, Japan make others think about me?” at where Asian retail is headed next. consumer’s shopping appetite. Online consumers may define the retail paradigm Director for Asia-Pacific. Burton and Korea saw the rise of sophisticated resources will aid shoppers’ evaluation of for the next big wave of Asian shopping. manages branding projects across brands that emphasized quality, unique And yet, the picture is more complex. Asian 01 Staying in products, and help them find products the Asia-Pacific region. Following a products, and high service standards. And consumers surround themselves with While the financial crisis may curb Asian at the lowest cost, creating challenges career in advertising and marketing with the emergence of shopping tourism, concentric rings that separate the external consumers’ appetite for recreational shopping and opportunities for entrepreneurs and communications, he joined in which affluent consumers travel outside world of society and business from the inner for the time being, the growing emphasis established brands alike. Interbrand in 2001 to lead the their home country for retail experiences, world of family and close friends. People share on the home and home decorating over the verbal identity and global branding other regions have benefited from the very little information with each other about last 10 years still holds firm. These changing While postponing excursions to other teams. An accomplished writer, boom as well. their private lives, and shop for many items in circumstances may suit the Japanese, in countries, consumers will flock to the web if he has lived and worked in Japan for a much less public fashion. particular, who appear to be retreating to the the experience is innovative and transporting. 30 years and is fluent in Japanese. Despite the recent prosperity, clouds have comforts of home to wait out the rain— Online retailing, although never a substitute formed on the horizon. As the economic Recent lifestyle changes in Asia also need to although they have not stopped spending for an afternoon at the mall or a week in crisis spreads, one industry after another be taken into account when predicting the altogether. It’s just that their shopping lists Tokyo or Shanghai, will rise to the challenge announces restructuring plans with next trends in Asian retail. Today, consumers have changed. Now they are spending on by creating interactive shopping experiences domino-like precision. It appears that no in Asia need not travel far from home to home entertainment, Nintendo Wii computer that are more dramatic and personalized than economy, including Asia, can find shelter find the things they desire. Following the games, quality beer, and large refrigerators. ever before. from the storm. Many brands are de- deregulation of zoning laws in 2000, new As in Western markets, the “staycation” has committing from capital investments in big box stores and large-scale malls have replaced the vacation. This includes online giants like Rakuten, new stores and promotional campaigns, proliferated in Japan and other parts of Asia. which sells products from independent and many others are taking a wait and The local Tesco, mini-mall, or cineplex is a 02 More personal retail experience vendors and offers everything from comic see approach. High-wealth individuals short commute away. Shoppers don’t have to As the market heads downward, it is likely books to organic eggs. Book Off and Gulliver are trying to be less conspicuous in their travel as far for their favorite goods, and as a that we will see cuts in label spending. are two other notable companies that do consumption habits. result, brands have become more intrinsic to We saw a similar trend emerge when the business both in stores and online. Gulliver, Biography: Jonathan Chajet is their lifestyle than ever before. The demand bubble burst in Japan in the 1990’s. While in particular, has leveraged online capabilities Managing Director of Interbrand This sudden reforecast has left many is there and now consumers have access to in the 1980’s, Japanese consumers were by using its high-tech networking to help China. His team delivers strategic wondering where the Asian retail market what they desire. extremely label-conscious and renowned for customers find the specific used cars they solutions to clients’ global and is headed next. But before we can chart the splurges on designer brand accessories are looking for, including expensive, foreign local branding issues.Jonathan the future, it is useful to understand Additionally, over the last ten years, and clothing, homegrown brands like MUJI models. These brands prove that Asia has no has helped create, enhance, and the past; specifically, how are Asian purchasing a home has become as much a and UNIQLO emerged after the downturn, short supply of online retail—and all of these manage some of the world’s most consumers unique? symbol of status as it is a wise investment offering consistent and affordable standards companies are holding their own against recognized brands. His expertise choice, and many newlyweds defer the costs of quality. strong competition from foreign retailers. and world view are invaluable to of starting a family so they can save for a building brands in the complex Chinese market. 28 Best Retail Brands 2009 Best Retail Brands 2009 29

The remaking of retail It’s hard to imagine Americans adopting Le Studio SFR frugality for its own sake, but with a larger Top brands regularly look at larger social goal in mind, a significant segment of the trends, profiling shoppers’ needs and by Lee Carpenter and population may shift the paradigm. And since taking the time to revitalize store models. retailers and shoppers mutually influence one Le Studio SFR builds on the trend towards another, retail may adapt to the change by the convergence of music and technology Greg Silverman helping shoppers to indulge in thrift. with its restaurant and Internet lounge bar. The space offers free WiFi, so shoppers can Thrift is a word rarely heard these days, listen through “sonic showers” and download but its original form is “thrive.” Thrift is a up to one million singles. means of thriving by wisely making purchase decisions, rather than blindly spending. This is something we routinely recommend that our clients keep in mind when catering to shoppers. Retailers should help their shoppers search for smarter ways to live well. According to behavioral economic theory, advance purchases like a case of wine are thought of as investments rather than Biography: Greg Silverman is the Global Practice Leader of Biography: Retail expert spending. And consumption of a good Analytics, leading a worldwide team in the measurement Lee Carpenter is Chairman and purchased earlier—a bottle of wine served of brand investment. Before joining Interbrand, Greg’s CEO of Interbrand Design Forum and at dinner—is considered a saving, and even appreciation of consumer and strategy issues led to a career CEO of Interbrand North America. thought of as free. as a strategy consultant. This experience proved invaluable to A noted speaker, Lee is frequently his current work, allowing him to understand the intricacies asked to address design, business, So the good news is, we’ll still be consuming, of managing and measuring a brand’s performance. and retail groups. just framing things differently. We’re leaving the buy now, pay later ethos behind while still feeling indulged. The new role of retail Even as we dig in for a prolonged of retail happening over the next several will be to associate itself with values and downturn, we’re already anxious to know years. Weaker players will continue to close practices that help people with the big picture what awaits us when the pain stops and underperforming stores or consolidate. And as of life, not just the solutions in its category. the dust settles. Will retail ever be the same usual, private equity will have its eyes on the Retail can help inspire people and incite their again? That, of course, depends on people real estate. optimism with moderate aspirations. and how they internalize the recession. The winning retail brands will be those The U.S. retailer AutoZone supports Americans, for example, are expected to that adopt strategies informed by shopper self-sufficiency by selling its auto parts as emerge from 2009 with two million more job insights to refresh their brands, invest in store complete project solutions, even loaning losses along with the overall loss of US $10 enhancements in key markets, and evolve necessary tools for free. More and more trillion in household assets. The confrontation the value proposition to meet the changed consumers will look to Wal-Mart as a trusted with our debt culture and broken health behaviors of their particular segment. For agent that advocates on their behalf, insurance system is having considerable example, upscale shoppers will have a new providing value offerings that improve life. impact. Will we, as a result, continue to see appreciation for the economical aspect of Whole Foods Market’s online cooking show shoppers question every purchase? Will they classic items of lasting quality, so brand teaches us how to entertain with healthful, continue to repair instead of replace, dine in messages will adapt accordingly. earth-friendly fare at home instead of instead of out, and continually revalidate their dining out with friends who may be facing brand experiences according to value—long New formats will most likely have smaller economic difficulties. We’ll see service after the recession? footprints, greater energy efficiency, and innovations, as well as more local ties and reduced inventory that offer shoppers community partnerships. Lee Scott, outgoing President and CEO of optimum choice instead of endless choice. Wal-Mart, believes that people have, indeed, Meanwhile, resources are limited fundamentally changed and are not “going to A differentiated experience with heightened and tension is high. The time is ripe for have the same immediate desire to go back customer service in more exciting innovation, and we may see a world upending to consumption and debt.” surroundings will be one of the strategies idea or two before we reach recovery. U.S. adopted to engage shoppers. We’re currently pundits keep comparing current conditions For many consumers, that will be true, especially among the younger generation advising our clients to allocate resources to improve the shopping experience, with to the Great Depression and more recent historic recessions. But it is too simple to The future is not simply an updated version of what whose habits are being formed during a time affordable but meaningful innovations see the future as an updated version of of financial insecurity. But for others, this designed to encourage an extra cash register what’s past. It’s a period of reinvention. is just a speed bump. They’ll return to their ring and inspire loyalty. It calls for entrepreneurship, creativity, has passed. It’s a period of favorite, ego-satisfying, class brands mixed and ingenuity to make your brand a relevant, with mass purchases as soon as they begin to It’s vital for retailers to inform their decisions feel-good experience. We’ve got new media, see their home and stock equity rebound. with shopper insights. This is because shoppers demographics, and ideologies—next is In the meantime, however, as stores vanish with consumer assets, we’ll see a recalibration might be looking at a cultural change as financial conservatism dovetails with another macrotrend: conservation and sustainability. new retail. reinvention. 30 Best Retail Brands 2009 Best Retail Brands 2009 31

How we value Methodology The Interbrand method for valuing brands Financial analysis Our approach to valuation starts by forecasting the current and future revenue Brand strength score This is a benchmark of the brand’s ability to secure ongoing customer demand retail brands is a proven, straightforward, and profound specifically attributable to the brand. The (loyalty, re-purchase, and retention) and formula that examines brands through cost of doing business (operating costs, thus sustain future earnings, translating the lens of financial strength, importance taxes) and intangibles such as patents and branded earnings into net present value. of driving consumer selection, and the management strength are subtracted to This assessment is a structured way of likelihood of ongoing branded revenue. assess what portion of those earnings are determining the specific risk to the strength Our method evaluates brands much due to brand. of the brand. We compare the brand against like any other asset: on the basis of how common factors of brand strength, such as much they are likely to earn in the future. All financial analysis is based on publicly market position, customer franchise, image, There are three core components to our available company information. Interbrand and support. proprietary methodology. selects from a range of analysts’ reports to build a consensus estimate for financial reporting. Criteria for 01 The aggregator 03 Product brands Role of brand analysis A measure of how the brand influences consideration These are brands that are primarily providers of manufacturer choice, environment, These are brands that are primarily providers of a private label proposition customer demand is applied to the intangible earnings to arrive at the branded earnings. and price to mass consumers. Examples with the majority of their product being Retailers come in all would include Wal-Mart, Tesco, Carrefour, distributed through third party retail For this study, retail industry benchmark sorts of shapes and and ASDA. brands. Examples would include Adidas, Sony, Levi’s, and Burberry. analysis for the role brand plays in driving sizes. Standing back 02 Branded own label customer demand, is derived from Interbrand’s database of more than 5,000 from the total retail These are brands that are primarily providers of a private-label proposition, Please note that our Best Retail Brands study focuses on models one and two. It is looking brand valuations conducted over the course market, we have environment, and price. Examples would be at brands as retailers, first and foremost. of 20 years. In-house market research is used to establish individual brand scores against identified three Zara, Abercrombie & Fitch, Marks & Spencer, Mango, and Aldi. These are the brands that become valuable our industry benchmarks. broad models. through the successful management and combination of any progressive retailers favorite subjects: finance, environment, and increasingly, brand. BRANDED OWN LABEL DRIVERS / BRAND STRENGTH SCORE ROLE OF BRAND Location FINANCIAL ANALYSIS BRAND VALUE CALCULATIONS Forecasted current and future Price revenue speciﬁcally attributable to the brand. Availability Range Role of Brand ROLE OF BRAND Branded Revenues analysis Spaces ANALYSIS A measure of how the brand Intangible Earnings Quality inﬂuences customer demand at the point of purchase. Brand Earnings Service Promotions Year 1 Year 2 Year 3 Year 4 Year 5 BRAND STRENGTH Image Brand strength Analysis BRAND ANALYSIS = Discount rate VALUE Branded Unbranded A benchmark of the brand’s ability to secure ongoing customer demand (loyalty, repurchase, retention). 32 Best Retail Brands 2009 Best Retail Brands 2009 33

The Most Valuable U.S. Rank Brand Value ($m) Rank Brand Value ($m) 1 Wal-Mart 129,809 26 Bed Bath & Beyond 2,568 Retail Brands 2009 2 3 Best Buy The Home Depot 21,981 20,809 27 28 Abercrombie & Fitch Old Navy 2,551 1,592 4 Target 17,111 29 American Eagle Outfitters 1,552 5 CVS/pharmacy 12,566 30 Banana Republic 1,545 6 Dell 11,695 31 PetSmart 1,523 Understanding brand dynamics through its Interbrand has been studying the world’s 7 Walgreens 11,145 32 Netflix 1,268 concerted analytics tools gives a company most valuable brands since 1984. Today brand the ability to measure the economic power decisions can be measured and thus held 8 Lowe’s 10,710 33 Radio Shack 1,254 of its brand and identify which business accountable for the investments that make elements create that power. The role brand a brand stronger. A strong brand ensures plays in any business decision versus the relationships that create future earnings by 9 Sam’s Club 9,478 34 Urban Outfitters 1,134 other components of that choice can be growing customer preference and loyalty. gauged and connected to strategy. Legacy 10 Coach 9,052 35 Bath & Body Works 1,124 biases can be overcome so that managers can Which brings us to the list—our first annual make smart decisions that take brand, space, report card of the most valuable retail brands 11 e-Bay 7,991 36 T.J.Maxx 1,112 and finance into account simultaneously. in the United States, plus the top five in Light can be shed on previously unrecognized Canada and Mexico. It’s an assessment of market opportunities and new investments the companies that are most successful 12 Staples 7,224 37 Marshalls 1,103 justified. Brand helps a retailer create at managing their brand. We’re delighted demand, not cater to demand. to share the lessons from the leaders, and 13 Nordstrom 6,753 38 Dick’s Sporting Goods 1,073 give some insight into how they tackle the challenges of today’s market. We also hope it 14 Amazon 6,434 39 J.Crew 959 provides a push to those who still cling to the outmoded operations-driven way of viewing their business. 15 Costco 5,718 40 Hollister 907 16 Victoria’s Secret 5,670 41 American Girl 641 17 Avon 5,264 42 Rent-A-Center 614 18 GameStop 5,078 43 Big Lots 603 19 Gap 4,357 44 Barnes & Noble 564 20 Tiffany & Co. 4,208 45 Men’s Wearhouse 557 21 Ralph Lauren 4,190 46 Tractor Supply Co 547 22 Kohl’s 3,282 47 Whole Foods Market 496 23 Sherwin-Williams 3,021 48 Gymboree 496 24 JCPenney 2,884 49 Aéropostale 447 25 AutoZone 2,825 50 Anthropologie 420 34 Best Retail Brands 2009 Best Retail Brands 2009 35 Best Retail Brands 2009 36

1 129,809 $m WAL-MART. Number one on the Most necessary to maintain Wal-Mart’s one-stop Valuable U.S. Retail Brands list by a huge shop status. The company’s goal is to be margin, the largest mass retailer in North entirely supplied by renewable energy; it’s America is making significant rebranding partnering with sustainability suppliers to efforts, including a new logo, the new tagline facilitate the creation of green jobs. Wal-Mart “Save Money, Live Better,” and rebranded continues to be well above the same store stores. The company is working to make sales of its competitors and has a strong brand touchpoints clear and relevant, introspective hold on its brand. especially those that have the most impact on mom. This includes store environment, website, in-store messaging, product mix, and sustainability. Customers are staying an average of 14 minutes longer per trip at stores with wider aisles and brighter lights. Shoppers will soon be able to check online for product availability at their local store. Targeted savings messages will be delivered via social networks and cell phones. The new “Eleven Moms” blog offers economizing tips and in-store media network Wal-Mart Smart presents customized content on 27,000 screens. This three-prong strategy will help determine how to best mix private label, exclusive label, and national brand Wal-Mart continues products into shelf sets. Product decisions to be well above the are organized according to “win, play, show.” The win categories are those the company same store sales of will grow with a broad assortment; e.g., its competitors. flat panel TVs. Play includes apparel, such as denim; not a full assortment but enough for incremental sales. Show products are those Wal-Mart Supercenter truck, Aurora, Colorado. Best Retail Brands 2009 38 Best Retail Brands 2009 39

2 21,981 $m 4 17,111 $m BEST BUY. Consumer electronics is the CDs, TVs, PCs, and video games cover emphasis on employee expertise and TARGET. Mass retailer Target is demonstrating its commitment to being Store formats are flexible, including multi- level stores in urban locations. In 2009, it will Target’s iconic largest and fastest growing retail sector a wide range of price points from the commitment. Rollout is complete for in the U.S. The current market size is US$ expanding top-line Magnolia products the high-performing Best Buy Mobile the industry leader by investing in expansion, technology, sourcing, and design. Target’s unveil a new prototype with expanded food sections, as well as new architectural and bullseye is 100 billion; the top 10 retailers by volume to more affordable brands. store-within-a-store, and its conversion to account for 70 percent of the market. thirty 3,000-square-foot mall stores has iconic bullseye is recognized by 96 percent of Americans and it claims a disproportionate visual elements. Currently, Target is focusing on domestic growth and performance, recognized Best Buy is the clear leader, stealing The company strives to differentiate its begun. It began a 12-airport test of robotic points from competitors. Its service brand experience through distinctive touch vending machines branded “Best Buy share of affluent shoppers under 45. The brand spends roughly US$ 1 billion a year expanding into Alaska and Hawaii. by 96 percent offerings from the Geek Squad to the points, like the Geek Squad VW Bugs. Express” carrying cell phones, computer new mobile in-store concept continue Store environments and selling styles are accessories and cameras this year. on advertising, well above their biggest competitor, Wal-Mart, and continues to of Americans. to find favor. A large selection of DVDs, tailored to customer insights, with current 4% steal share from the apparel industry by offering high-design “cheap chic” merchandise branded by major fashion designers. Target ranks 14th on BusinessWeek’s list of 119 Best Places to Launch a Career, has a very loyal and 96% satisfied shopper base, and scores high on the American Customer Satisfaction Index. The company is sensitive to the fact that shoppers are choosing their mass merchant based on its environmental footprint, and four of its Chicago stores have green roofs. 5 12,566 $m 6 11,695 $m 7 11,145 $m CVS/PHARMACY. The drugstore industry DELL. Despite the design influence of Apple WALGREENS. Walgreens is everywhere; is dominated by CVS, Walgreens, and and HP’s big advertising budget, it’s direct 139.1 million people live within two miles Rite Aid, which are forced to compete on seller Dell that makes the list. It’s a clear leader of one of its stores. Although its growth has both pharmacy and convenience with in computer products with roughly 30 percent slowed, it continues to adapt to new market supermarkets, mass, and warehouse clubs. of the market. Dell gets props for doing brand conditions, and will likely remain a top three CVS has adapted well to market conditions right. However, it makes a fairly standard pharmacy player for years to come. Same- and the need to stay relevant against online product, innovating only to the extent of store sales have been hit by generic drug pharmacies. The druggist fills or manages faster processors and new technology. The offerings from non-drug stores as well as the about one billion prescriptions per year and company concluded its attempts at retail growing popularity of mail order and online leads in revenue over Walgreens, which has in the form of inventory-less mall kiosks, pharmacies. Walgreens’ confidence may a slightly greater number of stores. With the deciding instead to allow outside retailers have slipped when it lost its bid for Long’s Home Depot is acquisition of Longs, CVS will substantially increase its fleet and gain instant presence in to carry the brand. It recently entered into agreements with Wal-Mart, Best Buy, Staples, to CVS, even though it offered more money than its rival. However, the company seeking a better 3 20,809 $m Hawaii and Southern California. Despite the downturn, it maintained consistent same and Costco Wholesale to sell products at appropriate price points for those retailers. recently merged with Option Care, enabling it to offer in-store nurse practitioners. understanding of store sales growth and revenue growth for While it is now faced with the challenge of The company has created an internal brand customers’ needs, THE HOME DEPOT. The home improvement seeking a better understanding of customers’ the first 26 weeks of 2008, attributed to the increased average front-store ticket size. More competing on price, the retail presence has given Dell increased shipments and share. police to protect and evaluate the quality and standard of their product offerings so market is highly fragmented; Home Depot needs, especially women, in order to align especially women, has the largest piece of the pie with 7.7 with them. It has succeeded in reinstituting than 65 percent of front-end sales use the its brand equities won’t become diluted as it store’s loyalty card. As a result, CVS continues tests new offerings. While the company still in order to align percent of the industry’s market share. The brand benefits from very high awareness, the regional-focused product mix it was once known for and has put more resources behind to grow and take a greater share of wallet. lags when it comes to shopping experience, CareMark and MinuteClinic, separate divisions Walgreens does excel at offering a variety with them. huge revenue streams, (historically) its private labels. Marketing strategy includes of CVS, add pharmacy benefit management of formats to meet the needs of each impressive sales, and very deep pockets, so it can afford to strengthen brand re-emphasis on in-store clinics and refreshed consumer relevance, moving from home and clinic services to the format. Exclusive Walgreens does community, such as smaller footprints in relevance during the downturn. Right improvement to home management. Having contracts with Lume, XCD, and Cristophe give it a cachet of “captive brands.” In addition, excel at offering a high density markets. Drive-thru pharmacies, 24-hour druggists, and online services now the company is concentrating on long-term growth and evolving the brand recently lost its competitive advantage on key brand drivers, The Home Depot has private label makes up 15 percent of front- variety of formats accommodate all customer types and needs. through product mix and pricing strategies. identified its weakest metrics and is working end sales, a reflection of both the downturn and the company’s brand strategy. There is to meet the needs Like its competitors, it lacks the ability to truly differentiate the experience since innovations Consumers have criticized the store’s shopping experience and in response HD is to generate preference and loyalty. some disconnect between the marketing of each community. in this category quickly become table -stakes. messages in the store versus those online. To differentiate the shopping experience, a new layout has been designed to make stores more consumer friendly. 40 Best Retail Brands 2009 Best Retail Brands 2009 41

8 10,710 $m 9 9,478 $m 11 7,991 $m 13 6,753 $m LOWE’S. Lowe’s created the service centered, SAM’S CLUB. Warehouse clubs as a group its marketing strategy is not seeing positive E-BAY. Even though e-Bay is one of the NORDSTROM. The fifth largest U.S. store. Nordstrom has always been on the value-add standard that set the pace in the have great potential to grow offerings, returns. In-store signage has improved, but largest advertising spenders on the BRB list, department store with net sales of US$ 8.8 forefront of buying quality, relevant products home improvement sector. Lowe’s is the expand locations, capture market share little is being done to get consumers in the it has been losing share in the online retail billion and a five year annual growth rate of and merchandising them in the store to best second home improvement market leader and improve consumer loyalty. While Sam’s door. Sam’s has tried to reproduce some of market for the past couple of years. Growth 8.12 percent, Nordstrom consistently hits all effect. Private label apparel accounts for 13 after The Home Depot with four percent of Club is second in market share to Costco, Costco’s value as a “treasure-hunt” but loses through acquisition succeeded in the case the big “best” lists. It is one of Fortune’s “100 percent of sales. Amenities include a spa, the market, winning on customer satisfaction its brand value is higher because of its niche on relevance since consumers do not expect of Paypal and Bill Me Later, but Skype has Best Companies to Work For,” and “Top 20” restaurant(s), in-store boutiques, and an and loyalty, and competing for market share within the small business market. However, it. Although Sam’s has altered its format, not proven to be a winner yet. The online most admired companies overall. Its store on-site tailor. A top priority for the company based on this metric. While same store sales Sam’s has had a hard time driving sales and revamped its planogram, and refreshed its auction business is slowing and e-Bay needs experience and customer service make it a remains devoting a significant portion have declined dramatically for both leaders stability. Product quality is viewed in terms logo, it needs to do a better job focusing on its to make a more concerted effort to fend destination for shoppers time and time again. of capital to store remodels to keep the due to the housing debacle, Lowe’s has a of simple low-price deals. Warehouse clubs’ target segment and the creation of a better off encroaching Amazon with something Due to economic conditions, shoppers are experience current for all customers. Online, promising proposition: concentrated efforts insulation from the recession is beginning shopping experience. If mass market and more in keeping with its brand roots rather buying less, but still visiting their favorite Nordstrom features lifestyle merchandising on customer service and in-store experience to thin; vendor pricing is increasing which discount retailers choose to compete in bulk than its move into fixed price selling. The with Head to Toe looks (9 to 5, Night Out, which could continue to steal share. Lowe’s hurts margins, the main draw for members and price, warehouse clubs could suffer. company has no customer loyalty system in Weekday Casual, and Ten Things to Evolve has the ability to shift product placement to renew. Membership fees account for the place but continues to maintain the quality The online auction Your Style Right Now). Juniors direct and mix from specialty items to conservative everyday items mirroring consumers need to majority of Sam’s income. The company has made some effort to increase membership of its sellers through customer reviews. The company’s touchpoints are also inconsistent business is slowing marketing includes a MySpace page/video channel, mobile phone and email alerts, manage—not dramatically overhaul—their ties and loyalty (for example, by allowing among the different groups which operate and e-Bay needs back-to-school fashion shows, and homes. Its message of value, convenience, and customer service/in-store experience is college memberships), but on the whole hasn’t innovated much. It has employed under its name. Despite a remarkably high level of awareness for the brand, it looks as to make a more partnerships with Teen Vogue. The retailer will soon have 109 full-line stores. Its integrated across all touchpoints. Further, few new merchandise mix strategies even though e-Bay’s long-term survival and ability concerted effort to longer-term plan is to have 140 to 150 the brand has been smart with its advertising during the downturn, cutting back on though there’s a high and growing demand across retail for private labels which make to maintain its place in the market hinges on its ownership of several payment services fend off encroaching stores by 2015. Its skill at balancing the department store format with luxury will promotional spending with low return and up 10 percent of its product mix. Moreover, that are becoming increasingly important in Amazon. keep it going strong. instead looking into new store formats. the marketplace. Lowe’s is unafraid to conform to a new market or take a smaller footprint. Although it is still ahead of the competition in maintaining and growing value-add in the store, it isn’t differentiating on products, inspiration, or 10 9,052 $m 12 7,224 $m 14 6,434 $m 15 5,718 $m price to protect its position. Its service is consistent, but not revolutionary. STAPLES. Staples is a clear leader in office AMAZON. Amazon owes its retail leadership COSTCO. Costco is the warehouse club COACH. Although luxury retailers can be they appear in the store. Although the supplies and services, but is unfortunately to pioneering technology, borrowing and market leader by revenue. Costco focuses on Lowe’s has a promising confident of their place with the upper customer’s perception of Coach as a the main runner in a dying sector. Margins are improving aspects of eBay’s review model, a high-income consumer, but the company class, the lower and upper end of the luxury brand has not changed, the brand typically low on office supplies. It’s very easy and growing its relevance among consumers is primarily focused on being a low price proposition: concentrated middle class is where they are currently has had to follow other top retailers by to enter the saturated market and almost any through an ever-expanding selection. provider and on the success of its popular efforts on customer losing customers. The recession is lowering its prices. Despite its exclusive retailer can add office supplies to its format. Additionally, it has its own branded product, Kirkland private label. The retailer enjoys high making it clear that even the strongest lines, brand differentiation may be on The company seems to have done everything the Amazon Kindle. It’s also a fairly big consumer satisfaction scores in a Colloquy service and in-store luxury brands can feel the pinch. the wane. right. The brand has taken on new formats advertising spender and reaps the benefit survey (based on a mix of quality, low price, experience which could Although Coach was ranked number one (stand alone copy stores, improved website), of co-op advertising. Its shipping programs and experience). However, vendor prices on BusinessWeek’s 50 Top Performers, new services (easy tech, installation services), are highly successful, often resulting in are increasing, which hurts margins (and continue to steal share. the company’s recent decision to new partnerships (Dell provider, recycling customers spending more on merchandise prices are the main draw for members to stop reporting outlet and retail sales Although the efforts, and green initiatives earned it fourth than they would have otherwise because renew). This subsequently hurts the club’s separately makes analysts suspect it of trying to hide weaker numbers. Coach customer’s place on Dow’s Sustainability Index). It also began the trend of higher-end, private of the perceived savings. Being exclusively online gives the brand control over its stability, as membership prices account for the majority (approximately 75 percent) of customers loyal to the brand do not perception of Coach label office supplies, something to delight experience from start to finish; it’s consistent revenue. However, Costco has tried its best to currently want to pay full price and catering to its more cost-conscious as a luxury brand the consumer. In advertising, Staples has integrated its messaging across TV, online, throughout all its touchpoints. The website is the same format regardless of country. protect that membership structure and keep prices low. The brand has done a solid job of consumers with less expensive items may has not changed, and in-store. It has remained brand-true It is difficult for an online retailer to own a evaluating trends across its store experience, detract from its allure. Its advertising conveys the same image experienced in the brand has had throughout by staying consistent to the brand’s core values. However, the brand protectable experience. Customers are drawn to the Internet for its convenience, product mix, and supply chain. Current marketing support is based solely on new its stores and on its website, making for to follow other has also reformatted to meet a changing and Amazon is just as convenient as the store openings and direct-mailings to target nice touchpoint integration. Coach is also experimenting with buzz marketing top retailers by consumer’s price-centered needs. Staples gets a big bump for its private label efforts next site. However, the company is strong on customization, and strives to make online area consumers. Costco has 518 stores in 39 states (compared to 594 of Sam’s in 48 states) by previewing new items online before lowering its prices. which account for 22 percent of total sales shopping as simple as possible. While some and invests in more premium real estate with a goal to hit 30 percent by 2009. Its in- consumers still aren’t that comfortable than its peer. It hasn’t changed store format, store and online experiences are relevant and buying products online, Internet usage is but has expanded offerings into banking, differentiating, but not particularly widely rampant and becoming even more so. pharmacy, and gas. It also has refreshed its resistant to imitation. online services. 42 Best Retail Brands 2009 Best Retail Brands 2009 43

16 5,670 $m 18 5,078 $m 21 4,190 $m 23 3,021 $m 25 2,825 $m VICTORIA’S SECRET. North America’s GAMESTOP. The only retailer whose GameInformer, connects the brand to POLO RALPH LAUREN. The brand’s SHERWIN-WILLIAMS. With 3,325 stores in AUTOZONE. The sale of automotive parts, top specialty retailer of women’s intimate entire focus is gaming, GameStop is its customers. The store also hosts remarkable brand discipline and its lifestyle the U.S. and Canada, Sherwin-Williams has accessories, and maintenance is highly apparel is the most influential brand in the small but mighty. Its knowledge and special opening nights for popular appeal continue to allow it to develop across exceptional success in its retail operation. competitive with challengers in just about category, continually launching new relevant service offerings are value adds their game releases and takes advantage an expanding number of products, price tiers, It has bridged manufacturing with retail every retail category. AutoZone is the products and brand extensions, such as competitors can’t match. It faces its of cooperative advertising. GameStop and markets without dilution. Polo Ralph sales to deliver highly relevant, quality goods leader with over 4,000 stores, more than Pink and VSX. Victoria’s Secret has become strongest competition from mass and recently acquired Electronics Boutique Lauren sells directly through 313 dedicated to their consumers, direct from its R&D US$ 5 billion in sales, and ranks 394 on the the back bone of Limited Brands’ company big box and the ever-present threat that which aids its aggressive goal of opening stores as well as on the parent company through its plants. The market is still sluggish Fortune 1000 list. It wins on the basis of profits, operating in about 1,300 mostly game manufacturers will begin offering 550 to 600 new stores in the near future. website, RalphLauren.com. Centralized because of the housing market slowdown, customer service, merchandise selection, mall-based stores, with thriving online and downloadable games. Video games are The company is currently testing a larger worldwide marketing ensures that customer but the brand is on top of the paints and and availability, price, product warranty, catalog channels. A recent revitalization of a US $20 billion a year industry whose prototype with more demo kiosks and touchpoints are fully integrated with themes varnish industry. Sherwin-Williams has store layouts, and location. Customer the shopping experience includes an increase growth depends on manufacturers’ touch screens that allow customers to and images of the brand. It also preserves increased its stock dividends for 29 years surveys show increased satisfaction scores in-store size and improved merchandising. new product rollouts. GameStop is the browse the 5,000 SKUs carried by most Polo’s distinctive image with its department and is hitting record revenue numbers for its in recent years. AutoZoners (employees) However, its aging core customers feel the leader in video game sales with 4,264 stores. The brand’s hardcore gaming fans store and licensing partners. Shop- 141-year legacy. The brand’s deep offerings in strive to put customers first to encourage brand may be abandoning them for younger, stores in the U.S. It continues to grow have declared it “awesome.” within-shops enhance brand recognition, automotive paints has helped those numbers. loyal relationships; a proprietary database less sophisticated shoppers. And although revenue despite the global slowdown. differentiation, and merchandising of the line. It continues to be highly relevant to its looks up everything needed for a job, and a the Victoria’s Secret runway show with Whereas mass and big box can compete While the brand’s agreement to outfit the consumers although there is nothing of free Loan- A-Tool program saves consumers its supermodels in thongs and wings has on price, GameStop has the advantage 2008 U.S. Olympic team struck some as more note in its shopping experience save the money. Advertising reminds consumers of generated massive amounts of awareness, of an in-store experience, featuring a elitist than athletic, Polo Ralph Lauren’s role exceptional product mix. The brand has an the importance of vehicle maintenance. the brand appeared to be catering to male loyalty card program and a very dedicated as the official 2008 outfitter of Wimbledon, ever-expanding portfolio of private label AutoZone intentionally keeps a similar tastes; similar images in the store itself tend knowledgeable staff. The retailer also the world’s oldest and most prestigious tennis brands, many trend-forward, that are major format across stores with 80-95 percent to make women less comfortable. There has buys and sells used games, a major tournament,suits it well. players in the industry. Store formats are selling space, 21,000 SKUs in inventory, also been a perceived drop in quality. The differentiation point. Its magazine, simple and service oriented. Advertising and overnight access to 750,000 SKUs. The company has acknowledged these challenges spend is relatively low; Sherwin-Williams retailer continues to improve assortment and is working to correct them. has a presence on channels such as HGTV, relevance and carries private labels Duralast 22 DIY, TLC, and the Food Network, but it’s and Valucraft. 3,282 $m the brand’s expansion, acquisitions, and market growth that help it gain stability and 17 19 20 recognition, beyond the depth of its offerings. 5,264 $m 4,357 $m 4,208 $m KOHL’S. Kohl’s focus on store productivity balanced with staying on-trend through 26 2,568 $m relevant exclusive labels to meet targeted AVON. The beauty market is growing even in a slow economy, but there is a high GAP. With 3,190 stores nationwide, Gap is the consistent fallback option for casual clothing TIFFANY & CO. Growth that looked positive for luxury has been put on hold considering needs (from the likes of Tony Hawk, Avril Lavigne, and Vera Wang) is its recipe for 24 2,884 $m BED BATH AND BEYOND. The retailer’s historic leadership in the category is due to degree of competition for moderately priced staples. Nevertheless, this once iconic brand the state of the world economy. However, success. Despite the recession, the retailer the depth and appropriateness of its product Avon coming from high end cosmetic lines has been losing ground for the last several the luxury retailer has been doing steadily continues to grow, offering low prices and mix. Bed Bath & Beyond is a steady player in entering the mass channel. Direct seller Avon years. Efforts to get back on track include well. While Tiffany does not appear to lead quality merchandise. From 81 stores in 1992 JCPENNEY. A major contender in the retail its category. Shopper loyalty is waning due has invested more than US $100 million in streamlining operations. One website carries the market, the company claims a large share with approximately US $1 billion in sales the industry, JCPenney is quick to launch new to the poor housing market and the brand its research and development operations, four of the parent company’s brands Gap, of mind, often mentioned in books, movies brand has grown to 1,000 stores in 2008 private labels, develop game-changing has not implemented anything substantial introducing more sophisticated skin-care Banana Republic, Old Navy, and Piperlime, and songs; its trademarked Tiffany blue box generating roughly US $16 billion. New stores advertising campaigns, and devote resources to further solidify its position; no new products including a new US $54 face cream. and encourages shopping across brands is unmistakable, and the company invests are LEED certified (Leadership in Energy and to improve the store experience. Its online marketing initiatives, no updated customer With fewer American women at home during shipping them together for a flat US $7 fee. in premiere real estate. Founded in 1837, Environmental Design), an important store continues to grow increasingly relevant, experience or store formats to its fleet of 800, the day to answer the doorbell when the Gap’s main distribution center boasts the the brand stands for quality and longevity. distinction in retail; and the concept is flexible with promotions and services that connect nor has it executed an integrated touchpoint “Avon lady” calls, the bulk of Avon’s sales now largest solar power installation in Northern The brand had to refocus a few years ago enough for 62 small-format stores in four key back to the store. Penney’s has 1,660 stores strategy. However, Bed Bath & Beyond comes from outside the U.S. The company is California, and its product RED (AIDS to reaffirm its high-end appeal, as some urban locations. The use of online marketing and a demonstrated ability to increase keeps doing what it’s done consistently and by far the world’s largest direct seller with 5.4 Foundation) campaign is part of a global merchandising mix drove the brand to novelty to develop a conversation with younger productivity. With an experience aimed at the efficiently. While the company does have a million representatives in over 100 countries. charitable movement. The company plans to level. This reaffirmation has worked well and shoppers helps maintain a loyal base and middle class mom who can find something number of private labels, these do not seem It boasts that every second of the day, a expand into Mexico as a joint venture with the brand’s positioning has recentered as generates traffic without relying solely on-trend for herself as she shops for her family, to be a major draw. Customer relevance (i.e., woman buys an Avon lipstick. a major department store, and is offering exclusive. Tiffany’s has expanded into eyewear on sales and promotions. The website the brand’s mantra is “Every Day Matters.” merchandise curated for newlyweds, franchise opportunities as far away as Egypt and reentered watches to drive revenue generates US$ 240 million in sales and has Its focus is on developing enduring shopper homeowners, college students) is solid and and Jordan. In the meantime, Gap has hired a and relevance to consumers. The company demonstrated 30 percent growth in one relationships and moving away from the The beauty market new head of design to revive the product. maintains exclusivity with a small number of year. Exclusive brands account for 35 percent promotional habits the retailer has become without surprises. Advertising support seems lacking—given the failure of Linens N Things, is growing even in a stores, currently 184, to keep from diluting the brand. New formats include a men’s only of total sales. While the in-store shopping experience isn’t remarkable, Kohl’s is still in known for. Initially, the new brand position helped increase perceptions and satisfaction the company may have had the opportunity slow economy, but store and a smaller footprint store for urban an excellent position to continue to grow and until the recent economic changes caused the to capitalize on its market presence and customer loyalty rather than settle into there is a high degree and offbeat areas such as college campuses obtain leadership status in its category. retailer to again rely on promotions versus lower costs and promotional advertising via which would carry Tiffany’s lower-end silver. lifestyle advertising. JCP has proven successful of competition for with the launch of American Living and circulars and mailings. However, the brand moderately priced Avon. other exclusive and private label brands, the has put forth great effort to expand into Canada and Mexico. expansion of Sephora inside the store, and the development of the Simply Green department. 44 Best Retail Brands 2009 Best Retail Brands 2009 45

27 2,551 $m 29 1,552 $m 31 1,523 $m 33 1,254 $m 35 1,124 $m 37 1,103 $m ABERCROMBIE & FITCH. The brand’s AMERICAN EAGLE OUTFITTERS. According PETSMART. In the heavily competitive pet RADIO SHACK. Radio Shack started in 1921, BATH & BODY WORKS. In spite of the slow MARSHALLS. The other major player in notoriety with adults and popularity with to Teen Research Unlimited, the American products sector, PetSmart is the largest surviving economic ups and downs including economy, fierce competition and little brand the TJX Group, Marshalls has 762 stores in young people comes from its club-like Eagle brand was recently considered the specialty pet store based on sales of US the strong threat of big box and mass loyalty in the personal care and beauty sector, 42 states and 14 in Puerto Rico. Though shopping experience and provocative “coolest” brand second to Nike. With that $4.7 billion a year in over 1,000 stores, merchandisers. Thus far the company Bath & Body Works is investing in its brand. both banners are synergistic in their imaging. The Canoe store design features accolade, 1,100 stores and US$ 3 billion in and growing. The company focuses on has successfully readjusted its strategy to Last year it improved the store experience, philosophies and operating platforms, white molding and black louvers on the revenue, this retailer of casual wear for the operational excellence to drive a great compete financially, closing underperforming creating a modern day apothecary to replace Marshalls differentiates itself from T.J. exterior, interiors are dim with a lingering 15- to 25-year old customer has a strong shopping experience for humans and their stores and making square footage more the original country store feel. The company Maxx with a larger shoe offering, a broader scent of “Fierce,” an Abercrombie & Fitch market position. Continually improved favorite creatures, which are encouraged to profitable. Although its product offering isn’t also updated its online and order fulfillment men’s selection, and an expanded juniors fragrance, and the blasting of electronic merchandise, recent store remodels, and an shop for their own toys and treats in clean always the most attractive, Radio Shack is capabilities, designed a new look for its department supported by youthful, energetic dance music at 80 decibels. A&F maintains aggressive marketing strategy that reaches stores with wide aisles and short check- the biggest national retailer that sells private signature lines, and zeroed in on the needs of marketing that touts the advantages of authenticity and exclusivity with 353 its target audience drives the brand’s success. out lines. Shoppers can find full service vet label wires and component audio and visual the core customer. The product assortment being “shamelessly shopportunisitic,” a fun locations in the U.S. and Canada, and three American Eagle created its own media hospitals in 685 of its facilities. Employees equipment. It has 7,000 stores (averaging was narrowed by 40 percent after smaller message that encourages frequency. Like T.J. flagships, one in London. Store associates company, 77Entertainment, to produce are trained for superior customer service 2,000 sq. ft.) as well as 700 wireless kiosks assortments tested well, and a new supply Maxx, buyers strategically source closeouts are called models, and an “Impact Team” and original content for its website, stores and and a portion of their incentive pay is linked in airports. This gives it a low rent structure chain system is poised to pay off, giving stores from designers and manufacturers to stay “Visual Managers” maintain store standards networks such as Facebook, MySpace, and to customer/pet satisfaction. The company that attracts browsers. The brand works the ability to stock shelves based on what is on trend. Sluggish sales growth at other of presentation. It works to imbue the YouTube in order to promote the brand to its operates almost 100 PetHotels with 24- very hard to remain relevant and innovative, selling at a particular location. A mall staple retailers mean plenty of inventory is available polo shirts and jeans with a mystique far customers. Promotional campaigns include a hour supervision, on-call vets, Doggie Day upgrading its stores to make its products for almost 20 years, Bath & Body Works has to resellers. Marshalls recently introduced beyond collegiate-inspired, casual clothing. free online concert with the Jonas Brothers, Camps, and climate controlled conditions. more interactive. It’s unclear, however, how around 1,600 U.S. stores and is expanding “The Cube” juniors fashion boutique into Role of brand is exceptionally high and the sponsored tailgates, and spring breaks. An “Eating Green” guide informs shoppers much credit consumers are giving the brand. into Canada. its stores and is integrating it online. Still, clothing demands a premium price. Although Because many of its young customers lack a about organic pet food. The brand promotes the store environment is challenged by the wayward sex appeal will always attract youth, credit card, website ae.com offers PayPal as animal charities and the adoption of strays. seemingly endless racks that are part of the if the recession brings frugality into vogue, an option. The brand sees itself approaching It offers a loyalty program and carries private off-price “treasure hunt” atmosphere. Since its 34 36 it may hasten the brand’s life cycle. Until maturity within the next three years in terms label foods at a variety of price points. As the business model is tied so closely to consumer then, even with a decline in same store sales of store expansion, when it intends to seek shopping experience evolves, many PetSmart 1,134 $m 1,112 $m spending, traffic is up and margins continue because of the recession, Abercrombie & Fitch growth with additional categories—lingerie, stores still need to be refreshed. And although to be strong. is still holding up as a hot retailer. lounge and workout wear, and personal care there is room for improvement, touchpoints products—much the same as every other appear to be integrated and work at keeping It works to imbue the URBAN OUTFITTERS. With 130 fashion T.J.MAXX.The off-price retailer is performing specialty apparel retailer. passionate pet parents happy and involved apparel stores in North America and Europe, well in the downturn. Its competitive polo shirts and jeans 38 with the brand. the brand’s retail strategy is to create an advantage comes from its price, selection, with a mystique far 1,073 $m emotional bond with the 18-30 urban dweller broad customer base, and the weak economy beyond collegiate-inspired, by making shopping a distinctive form of that’s driving bargain hunter traffic. The casual clothing. exploration. Urban Outfitters uses design as company is an opportunistic buyer, sourcing 30 1,545 $m 32 1,268 $m a business strategy. With no significant advertising, the brand depends on its stores, closeouts from 10,000 manufacturers in 60 countries and buying up some store DICK’S SPORTING GOODS. The brand has been extremely successful offering the widest as well as shopper and media buzz, to stock. They are also working on maintaining variety of products, and employing in-store 28 1,592 $m BANANA REPUBLIC. As consumer spending NETFLIX. The company has gotten used to generate business. Visual merchandisers and display artists develop a unique look for each inventory discipline and wider margins during the downturn by operating with leaner than boutique concepts to promote exclusive product lines,and establish its credibility as has decreased, Banana Republic has seen the hearing predictions of its death as an online store, which typically has multiple levels and a usual inventories and buying closer to need an expert. However, its primary competitor lowest decline in sales across the three stores system for renting DVDs delivered by mail. grand staircase that allows shoppers to make to increase return on inventory. Within its Sports Authority has copied the strategy, OLD NAVY. The most notable aspect of Old that make up Gap Inc. The brand is perceived Blockbuster is the market leader in DVD rentals; their own dramatic entrances onto a loggia stores, the brand has enhanced its visual and even a clear leader like Dick’s must Navy is its kitschy, satirical tone and retro as offering classic styles, unique detailing, Wal-Mart tried to take a piece of the business; overlooking the store. The brand has merchandising with lifestyle images, and compete with mass merchants and specialty feel while purveying value-priced trends and affordable luxury. With the fewest Apple and Amazon have announced movie developed a methodology for reinventing itself introduced a “Runway” section for designer shops. It wins by aligning with major for the family. It has the highest revenue stores of Gap Inc. (575), it has a loyal base of downloading services; cable companies and new for every teenage generation and continually brands—however, the clutter typical in off- sporting organizations and is now focusing of all the brands in Gap Inc.’s portfolio. Old customers among stylish urban professionals, products promise the delivery of Internet video hunts cool through countercultures, taking price environments is still apparent. Online, on services. The marketing budget is spent Navy faces wide competition and has been 25-49. Banana Republic recently launched an to television sets. However, Netflix shows how an style risks and resisting “chain store” behavior, customers can sign up for “What’s In” alerts very efficiently, the brand touchpoints are undergoing an identity crisis for the past eco-friendly line of apparel made from organic innovator can establish and maintain such strong i.e., duplication of stores. Analysts attribute from other shoppers via mobile phone who consistent, and its message is clear. Dick’s several years. Refocusing on hip young and soy materials. A new merchandise brand equity that it’s valued higher than its bigger last year’s double-digit growth to the delivery spot designers like Dooney & Bourke and recently acquired sporting goods retailer moms will help reestablish the brand, as planning system will allow it to deliver its competitors. The brand boasts 12 percent of the of spot on merchandise where it previously Roberta Gandolfi at the local store. T.J. Maxx Chick’s to expand its presence on the West will its planned joint ventures with MTV. offering more efficiently. Furthermore, in US$ 8.4 billion annual DVD rental market which it had been too fashion-forward. The brand has 847 stores in 48 states and plans to Coast. It has yet to experiment with different However, the chain is beginning to get an attempt to integrate the brand into local expects to be large and lucrative for a long time. seems to be learning to manage the downside expand. It differentiates itself from Marshalls formats, sticking to the big box. a negative quality perception. Target’s experience, it is offering a City Insider Guide However, the company recently introduced a of risk and share best practices between its with expanded accessories and fine jewelry. designer fast fashion has definitely hurt the booklet which outlines the best restaurants, service to deliver movies and TV shows to PCs sister stores (Anthropologie and Free People). Old Navy position. Its recent introduction bars, and museums in major cities across as streaming video, an early and important As a result, the retailer looks to be in better of a faster product development process the world. Banana Republic continues to step in the transition to movie distribution control of its inventory, the design of which will allow them to better compete. Old Navy remain relevant to its customers by bringing via the Internet—a shift that probably won’t will continue to be the ongoing challenge for has just over 1,000 stores nationwide and them a sophisticated, yet still affordable, come quickly due to technology barriers and its merchants. an outlet chain. It is looking at the size of shopping experience. the entertainment industry’s fear of piracy and the box and determining better ways in cannibalization. The category will be a mix of which it can use the space to be more DVDs, streaming, and downloads much the way operationally efficient. music is accessed via radio, CDs, and iPods. 46 Best Retail Brands 2009 Best Retail Brands 2009 47

39 959 $m 41 641 $m 43 603 $m 45 557 $m 47 496 $m 49 447 $m J. CREW. This specialty apparel company AMERICAN GIRL. A wholly-owned subsidiary BIG LOTS. The economy favors discount MEN’S WEARHOUSE. In the specialty men’s WHOLE FOODS MARKET. Despite the AÉROPOSTALE. Since its spin off from offers heritage classics with a modern twist of Mattel, American Girl has devoted its stores and Big Lots is doing well meeting sector, suits are still selling despite the recent growth in natural and organic food, its role as a Macy’s store brand in the 80s, but without elitism. Everything is J. Crew business to building strong character in girls the needs of those on a low or fixed income, economy, but sales are fewer and suits sold the brand’s success lies in its skill as a retailer. Aéropostale has become a very successful mall labeled; its 285 stores, catalog, and website 3 -12 through the sales of historical 18-inch as well as middle class bargain hunters. But are of lesser quality. Men’s Wearhouse has Tasked with redefining the existing food destination. It designs, markets, and sells its are brand consistent. The stores are located in dolls, their storybooks, and accessories. the company has also experienced declining the number one market share in suits in the marketplace, the brand changed what own merchandise to 14 to 17 year olds. It has upscale malls and shopping centers and carry The dolls provide a child’s perspective of inventory turnover which could render it out U.S. and Canada, and has been on Fortune’s many perceive as an uneventful chore into a fleet of 850 stores in 47 states, Puerto Rico very high quality clothing with a solid pricing significant events that helped to shape of sync with the current trends and reduce its list of “100 Best Companies to Work For.” It a memorable experience. Shoppers are and Canada, has been named a “hot growth structure and little need for markdowns. the United States. A visit to one of only margins. However, Big Lots has an edge over continues to grow by opening new locations, immersed in the abundance and color that company” by BusinessWeek (2003-2006) and Renowned CEO Mickey Drexler works with his six American Girl Places is the ultimate in the competition in economies of scale and as well as the acquisition of AfterHours fills shelves for a visual sensation known is faring well financially with its sweet spot design teams to keep the merchandise fresh experiential retail. Wreathed in nostalgia, pricing. It claims its food, health and beauty, tuxedo rentals. To become relevant for to inspire people. Decomposable shopping pricing. Although the brand has little category and popular for its targeted 25-40 year olds. they are idealized versions of the luxurious home products, and hardware are “cheaper a younger customer, it is concentrating bags, value tours where customers learn to influence and takes design and trend cues from Drexler is betting big-name designers are department stores of yesteryear. A day at than Wal-Mart.” However, its low market share marketing efforts and merchandise offerings shop the store on a budget, organic and value other retailers, young people are loyal to its played out, repositioning his brand as quality the store buying matching outfits for doll (1.1 percent) demonstrates that the brand has to appeal to the more trend-conscious private labels, and Whole Foods’ commitment prices which continue to attract business and goods at a fair price. The company is leery of and daughter, then having tea and finger not managed to capture enough attention to customer. The brand has systems in place to helping local and global food economies buoy the company in tough economic times. a store building binge that would induce the sandwiches can cost a parent several hundred be considered influential. With 1,353 stores to communicate with each customer make it a leading innovator in the category. Millenials, who tend not to shop in department brand to over-promise and under deliver, like dollars. The offering is freshened occasionally concentrated in California, Ohio, Texas, and through promotions and loyalty programs, US $45 million of corporate support is in stores or where their mothers shop, prefer Starbucks and Gap. Last year, J. Crew’s sales through the introduction of new dolls and its Florida, some analysts believe the company and maintains consistency throughout place for the rebranding efforts of the Wild Aéropostale’s smaller boutique-like format per square foot were US $569, well above the stories, and the retirement of others. has already maximized its growth potential. shopper touchpoints. It strives to deliver Oats acquisition. With just under 300 stores that emphasizes value as well as ambiance. US $400 average for the sector; 28 percent of The company has allocated capital to open 15 a differentiated experience by showing located in the U.S., U.K. and Canada, Whole Finding bargains and fashion has great appeal total revenues came from web and catalog A visit to the new stores per year and remodel others over how products work together in its classic Foods is also experimenting with the size of to its teenage core. Aéropostale is a fast sales, also markedly higher than competitors. the next three years. Big Lots is upgrading its uncluttered environment. Every consultant is its box. A smaller store concept is being tested growing retailer with plans to open 76 more American Girl Place shopping experience, testing a new layout trained to understand the customer, how to on a college campus; it’s also testing a new stores in 2009, and remodel others in the new is the ultimate in that highlights brand name products and international foods, similar to its competitors. present merchandise, and how to suggestion- sell. The complete store experience is spa concept devoted to wellness and apparel. With all that, data suggests that Whole Foods design launched in 2006. The brand applies the cookie-cutter approach to stores, floor experiential retail. designed for the ultimate objective: building a customer for the long-term. has the highest quality in the industry but the weakest customer loyalty, perhaps due to the sets are updated frequently according to visual merchandising directives pushed out from prices being beyond what many shoppers can headquarters in an effort to maintain afford to spend every week. consistency from store to store. 40 907 $m 42 614 $m 44 564 $m HOLLISTER. The brand strength of this RENT-A-CENTER. The outlook for the rent- BARNES & NOBLE. Although there is no 46 547 $m 48 496 $m 50 420 $m California surfer-inspired retail chain to-own market is positive as economic issues growth expected for this market, bookstores has thus far enabled it to avoid reducing push a growing segment of the population get bonus points for being able to defend TRACTOR SUPPLY CO. Although Tractor GYMBOREE. Over 30 years ago, Gymboree ANTHROPOLOGIE. The word “anthropology” prices in the face of competition and a to look to it for solutions. Although store their territory against mass merchandisers Supply Co. doesn’t sell tractors, it does sell launched one of the first structured play means the study of people and cultures, and tightening economy. The company believes consolidation last year demonstrated some and online retailers. With 798 locations tractor equipment. Everything for the health centers for preschoolers, Play &Music centers. being perceived as international is important that full price is essential to preserving its of the potential weaknesses of the business across 50 states and a growing web presence, and containment of livestock and pets can be In 1986, responding to demand from parents, to this brand’s positioning. The success of the aspirational stance. A recent study by U.S. and brand, Rent-A-Center is the largest Barnes & Noble is the leading book retailer found at the store as well as tools, hardware, the company entered the apparel business chain comes from its ability to entice 25- to Bancorp Piper Jaffray ranked it first for four player in the market in terms of store count in the U.S. with Amazon and Borders in hot lawn and garden supplies, and work clothes with a line of wholesome high-quality 40-year-old wealthier women, who are consecutive seasons as Teens’ Top Clothing (3,050 stores in 50 states) and revenue. The pursuit. It maintains low inventories and is The brand is well-developed, intelligent, and clothes for kids up to 12 years old. It currently more immune to economic downturns. Brand. The store has developed standards brand differentiates itself with clear benefit reducing promotional activity while delivering highly relevant to its rural niche. With around operates over 600 Gymboree stores in the Anthropologie’s 118 stores sell not just apparel, for every aspect of the shopping experience: messaging and has plans in place to upgrade strong customer satisfaction ratings. Barnes 800 stores in over 40 states, it expands into U.S. and Canada. The brand has experienced gifts, and home décor in a romantic storybook product design and presentation, marketing its shopping experience with a more engaging & Noble’s aggressive pricing and in-house smaller towns where it won’t compete with remarkable recent growth. Every function cottage atmosphere (as well as a catalog and imagery, music and lighting, fragrance format, intended to help establish loyalty and publishing creates industry advantages; the big box home improvement. Tractor Supply in this nimble company has set quantifiable online), but the idea of a lifestyle described as and energetic associates. Live images from reinforce its strong repeat customer base. website is in the top 15 for multi-channel has several well supported private brands, a goals that contribute to the company’s casually charming garden teas, bohemian travel Huntington Beach stream to a five-foot- RAC’s service offerings continue to evolve retailers. Overall, the brand is maintaining magazine, a credit card, and an online channel bottom line, from sales to operations. It adventures, eclectic and witty dinner parties, wide flat screen “window” in 366 Hollister with the introduction of new products as influence in the category by creating new since 2007. The business is susceptible to continually searches for ways to improve sales and, yes, coffee sipped in a Parisian cafe after beach cottage stores that target 14- to well as services (e.g. financial), and over time, services aligned with selling more books. It changes in weather and housing markets, and customer satisfaction. Play & Music is a trip to a flea market. “That’s why I shop at 17-year-olds. The brand has plans for three the brand quality has continued to improve spends minimally on advertising, instead but a laser-like focus on its niche provides the a natural way for Gymboree to acquire new Anthropologie,” declares a typical customer. stores in Canada, and a rollout of bath and both actually and in terms of perception. investing in the stores and its website. brand some insulation. Even at the end of customers; it also plans to expand with more “I want the clothes, objects, and assorted body products across the operation. Although there remains some inconsistency BarnesandNoble.com works to attract new an economically tough 2008, Tractor Supply boy-focused business. Although the economy fripperies that would complement a lifestyle across executions of the brand touchpoints, customers, drive add-on sales, and link back reported same store sales increases. The is impacting everybody, Gymboree sees most I very much don’t have.” Only recently has the the company’s brand investment far outpaces to store events. The shopping experience company likes to say, “You can buy everything parents as reluctant to stop spending on their company begun to integrate the systems and competitors. The market opportunity may lie is impressive, with extensive service on the we carry someplace else, but you can’t find children. The company is marked by a culture structures of its direct and in-store businesses; in overcoming cultural barriers to attract the floor, cafes, areas to relax, and soft selling. The someplace else that sells everything we carry,” that celebrates progress and makes sure shoppers were frustrated when merchandise Hispanic customer. brand is representative of best-in-class retail. which speaks to a realistic branding approach employees feel rewarded for their enthusiasm did not cross over from the catalog to the store. and consumer relevance. and energy. Shoppers will no longer be frustrated. 48 Best Retail Brands 2009 Best Retail Brands 2009 49

Canada’s Mexico’s Soriana has drawn nearly level with direct competitor Wal-Mart de Mexico. The two retailers carry on a brisk competition in prices Most Valuable Most Valuable and services. Soriana promotes itself as 100 percent Mexican owned and effectively uses a “Tarjeta del aprecio” frequency and rewards card to drive loyalty. Retail Brands 2009 Retail Brands 2009 4 127 U$m In today’s interconnected “always on” Over the last 15 years Mexico has enjoyed 2 4 2 LIVERPOOL. The only aspirational brand world, no one seems to be immune to a unprecedented economic growth, new 1,828.5 C$m 368.4 C$m 515 U$m on the list, this well-known department downturn, even a country like Canada opportunities for its people, and a gradual store operates under two names, Liverpool which was originally expected to remain rise in the standard of living. Retailers and Fábricas de Francia. Both offer relatively unscathed back in September. worked hard to differentiate themselves CANADIAN TIRE. A major player with an SOBEY’S. Sobey’s is trying to set itself apart BODEGA AURRERÁ. By 1991, when parent designer clothing, famous name cosmetics, Stores may be chasing fewer dollars as and attract the rising middle class. excellent reputation in its home country, from the rest of the traditional grocery company Cifra entered a joint venture with appliances, and home furnishings to an the Canadian economy moderates. Retail Indicators suggest that the economy Canadian Tire has over 1,100 retail outlets category with a food-focused strategy Wal-Mart to create Wal-Mart de Mexico, upper income shopper, with over 80 stores sales and consumer confidence have is now slowing down: fewer exports, a across the country. Nine out of ten Canadians relevant to its customers’ changing needs. Bodega Aurrerá had built 30 years of valuable divided between its two banners. They also been trending downward. Whatever the decrease in investments and tourism, and shop its home improvement, sporting It has opened up Sobey’s Express stores to brand equity. Since then, the original brand share the same website. Liverpool’s flagship outlook, these five brands are poised to a slowdown in the remittances Mexican goods, and automotive products. It also has serve time-pressed consumers, and co- name and store format have seen continued in Mexico City is an iconic art deco landmark; rise to the challenge with continued great immigrants send home from the U.S. offerings in general merchandise, apparel, branded a nutritional food line with Disney expansion. There are now over 300 units, most stores are multi-level mall anchors. The brand management. Because they have learned how to thrive in gas, and financial services. A heritage brand targeting kids aged 3 to 12 and their parents. which include the Bodega Aurrerá warehouse- designs are clean, modern, and sophisticated, a rapidly changing and uneven economy, with 97 percent awareness levels, the retailer By extending its hours and leveraging its style stores that sell groceries, clothing, and in the manner of Macy’s. Its “Fashion Fest of these five brands are ready to successfully operates a big box format in populated areas, private label brands, Sobey’s aims to maintain general merchandise, as well as Mi Bodega Liverpool” presents new trends with all the tackle the challenges ahead. 1 but has developed stores one-third that its reputation as one of Canada’s best Aurrerá, a smaller general merchandise fanfare of a Victoria’s Secret fashion show and 3,137.5 C$m size in small rural communities to alleviate grocery shopping experiences. Meanwhile, format for less populated regions. Wal-Mart’s many of the same supermodels. The company customers’ travel cost burden. After 90 years, the company is investing heavily in store expertise has been especially important in is expanding by developing malls and opening 1 the company decided to move its catalog expansion and the remodeling of its network, the construction of regional distribution new stores throughout Mexico, including a SHOPPERS DRUG MART. Shoppers is from print to online to reduce costs and be with an eye on adapting its offering to serve 1,344 U$m centers. The brand is notable for its animated duty free concept in tourist areas. It also has Canada’s largest retailer of home healthcare more socially responsible. As the largest the rapidly evolving urban markets with superhero mascot who battles high prices, plans to bring Sfera fast fashion apparel stores products and services with over 1,000 retail full-service retailer in Canada, customers medium to high population densities. Mamá Lucha. She represents the iconic to Mexico through a new joint venture with drug stores, more than 60 Shoppers Home continue to prefer it over rivals such as The ELEKTRA. The dazzling yellow and red personality of a traditional Mexican mom: Spain’s Corté Inglés. Healthcare stores and nine million members Home Depot, Rona, Lowe’s and Wal-Mart. façade of the Elektra store is a common sight warm, caring, and fiercely protective. She in its Optimum loyalty program. Shoppers throughout Mexico. Often described as a appears on the company’s website which has Drug Mart (operating as Pharmaprix in Quebec) operates in prime locations, with 5 352 C$m blend of Sears and Best Buy, the retailer sells furniture, appliances, consumer electronics, clear family appeal. Initiatives to emphasize low prices in the store include posted signs 5 104 U$m clean well-organized stores and a robust product offering. It has plans to expand by 10 3 485.8 C$m and motorcycles— and now cars, thanks to the brand’s recent alliance with Chinese carrying dated cashier receipts comparing prices of Aurrerá’s items with the same items percent a year, which includes 150 Shoppers LULULEMON. Hailed for its grassroots automaker, FAW. The retailer sells one out of from competitors. Aurrerá’s prices are favored. Simply Pharmacy stores, a format designed approach, authenticity, socially responsible every four television sets in Mexico. Banco SUBURBIA. Suburbia is becoming a staple to work within hospitals. Innovative new RONA. Rona has nearly 700 stores selling values, and unique company culture, active Azteca, its microlender arm, has a branch in in the gleaming new malls being built prototypes have included smaller formats for hardware, home renovation, and gardening wear retailer Lululemon Athletica downplays every store. The combination of credit and throughout Mexico. Owned by Wal-Mart pharmacy only and beauty only. The original Shoppers Drug Mart concept has equity in its products; it is less established in English Canada than it is in its home province its role as an apparel store in favor of selling its garments as a component of personal affordable prices make it possible to buy hard goods—even a car—and pay in very small 3 310 U$m de Mexico, the 80-plus department stores offer mostly private label apparel and luxurious beauty department. A high level of of Quebec. The four-prong approach to well-being. It promotes health consciousness, weekly payments. It’s a prime example of the targets middle-income families. Suburbia dedication to private labels will help the brand serve its segment includes expanding environmental awareness and human retail-to-banking model other companies, recently refreshed its brand image with a retain higher margins as consumer spending existing store networks, building new potential. Its authentic yoga garments are such as Wal-Mart, appear to be copying. SORIANA. The second largest food retailer in new pink and purple logo, and a modern, slows. Shoppers has earned its reputation as stores, recruiting independent dealers, and made from its own specialized fabric blends. Its stores are no-frill affairs; however, its the nation, Soriana operates more than 200 fresh female-centric image which is being one of the best managed brands in Canada. making acquisitions. To keep ahead of the Lululemon’s impressive growth has been website has a clean modern feel with a stores in three formats: Soriana hypermarkets integrated into its marketing, website, and competition, the retailer is expanding rapidly cultivated through its loyal customer base. lifestyle message. Within Mexico’s burgeoning selling apparel, general merchandise, and store environment. Its new slogan, “More with its upscale, well-designed, and easy- By testing its products with local athletes retail scene, Elektra has the opportunity to groceries with optical, medical, photographic, than expected for less” emphasizes the to-shop stores. Multiple store layouts and and fitness instructors before opening shop grow well beyond its more than 800 stores. and financial services; Mercado Soriana value proposition and makes the retailer formats give Rona the flexibility to efficiently in a market, Lululemon has built unique Elektra’s parent company, Grupo Azteca, superstores serving middle-income shoppers more relevant and engaging to its shopper. operate in communities of different sizes. and powerful relationships with brand owns Televisión Azteca; as a result Elektra in small cities; and City Club which wholesales Although Suburbia stores have felt a Feeling the heat from The Home Depot and advocates—most stores even offer free yoga benefits from plenty of airtime. to small businesses, similar to Sam’s Club. slight impact as spending has contracted Lowe’s, Rona is leveraging its native identity classes. Whether this is a sustainable business Soriana also franchises a chain of convenience somewhat, the company celebrated three to differentiate itself from competitors. It model in the fickle world of apparel, only time stores known as Super City. In 2007, it added new store openings in November 2008. also plans to increase support of its private will tell. But for now, Lululemon is a rising almost 200 more stores with the acquisition Wal-Mart de Mexico plans to continue the labels, which are recognized for quality like star with 40 stores in Canada, 36 in the U.S., of one of its chief rivals, Grupo Gigante. The strategic expansion of its brands, including the brand itself. two in Australia, and four in Japan and plans resulting expansion has raised revenue but Suburbia, across the country. to grow carefully to 250 stores worldwide lowered the retailer’s profit. Nevertheless, by 2012. 50 Best Retail Brands 2009 Best Retail Brands 2009 51

Rank Brand Country of origin Value (€m) 1 H&M Sweden 11,125 Europe’s 25 2 Carrefour France 9,523 Most Valuable 3 4 Ikea Tesco Sweden UK 7,373 5,502 Retail Brands 2009 5 Zara Spain 4,469 6 M&S UK 4,197 Working on your brand’s strengths will mean the difference between the weak 7 Aldi Germany 3,348 and the strong. 8 Boots UK 1,961 9 Auchan France 1,930 10 El Corte Inglés Spain 1,808 11 ASDA UK 1,273 12 Lidl Germany 1,146 13 MediaMarkt Germany 1,025 14 Edeka Germany 880 The launch of our second annual rankings In the end, the retailers that seek to do this of Europe’s 25 Best Retail Brands is set will not only be better equipped to weather 15 C&A Netherlands 779 against the backdrop of a rapidly shifting the storm, but stronger than ever when the marketplace. And yet, while the economic market turns. crisis is no doubt challenging for retail brands, 16 Sephora France 774 it also offers new opportunities that might not be immediately apparent to retailers. 17 Mango Spain 747 Whether it is leveraging the web to build brands and empower loyal customers, 18 The Body Shop UK 696 optimizing store formats, using private labels to differentiate and capture share 19 Argos UK 664 in a troubled market, extending into new related activities, or committing to incorporating sustainability into your 20 Sainsbury’s UK 542 business strategy, working on your brand’s strengths will mean the difference between 21 Mercadona Spain 422 the weak and the strong. 22 FNAC France 384 23 Kauﬂand Germany 373 24 REWE Germany 290 25 OBI Germany 286 52 Best Retail Brands 2009 Best Retail Brands 2009 53

1 11,125 €m H&M hopes to revolutionize the way style-savvy consumers shop for home textiles, offering shoppers the opportunity to stylishly transform their homes. H&M. As the most valuable European retail Garçones). The next year will see continued brand, H&M continues to expand its offer of innovations for the retailer, with a new fashion cutting edge fashion at low prices. It has grown concept COS (Collection of Style), offering from 1,522 global stores in November 2007 fashion essentials at a slightly higher price point to 1,738 in November 2008. While Germany (now available in approximately 13 stores) and is its biggest market, followed by the UK and the February 2009 launch of its first foray into Sweden, it has seen success in areas such as the home interiors arena. Available online and Hong Kong, where customers queued for 48 by catalogue, H&M hopes to revolutionize the hours ahead of the first store opening, and way style-savvy consumers shop for home will soon be opening its first store in Israel. textiles, offering shoppers the opportunity to Although the brand has lost its status as the stylishly transform every room of the home. largest fashion retailer in Europe (by sales) to Zara, the brand still maintains a strong image, with its once-a-year collaboration with famous fashion designers (this year with Comme des 54 Best Retail Brands 2009 Best Retail Brands 2009 55

2 9,523 €m 3 7,373 €m CARREFOUR. Although this year saw IKEA. Year after year, the world’s largest with T-mobile), and cost reduction due to hypermarket, supermarket, convenience furniture manufacturer has shaped its sourcing in China, IKEA saw a seven percent store, hard discount store, and cash and carry stores into an out of town destination. It sales increase in 2008. While the year was also giant Carrefour Group facing deteriorating provides well-priced, good quality Nordic marked by accusations of animal cruelty for global consumption trends, particularly in design furniture (3,000 new products filled selling reindeer meat, and blinds that tragically Europe, the brand’s aggressive promotional with inspiration and new ideas), often contributed to the death of a one-year-old- policy helped the group stabilize its market complete with services like restaurants girl (which IKEA immediately recalled), it has share in France and improved its position serving Swedish food, a mini-shop selling enhanced its reputation by putting an end to in Spain. Critical factors that also helped Swedish style groceries, and a free of charge plastic bag consumption in all US stores, and drive performance up 44 percent include its play area for children. With more than 20 has promised to invest 50 million Euros in five decision to rebrand its Champion & Shoppi new store openings, increased presence in years to small and medium-sized enterprises brands name stores under the Carrefour Asian markets, the steady growth of online that provide solar panels and new solutions to banner, as well as its expansion into emerging shopping in the US, a new virtual mobile reduce water and energy consumption (which markets like India and Russia. Additionally, phone network in the UK (a partnership IKEA will eventually sell in its stores). its move to offer green electricity in all of its stores in Belgium (with hopes of expanding to France), have helped to freshen up its reputation. The arrival of Lars Olofsson, an experienced leader and specialist of the 4 5,502 €m fast moving consumer industry, accelerates Carrefour’s strategic focus to adopt different TESCO. The international grocery and general and Tesco personal finance, and a 30 percent formats to new trends on the market. In merchandising retail chain with a UK base is growth in online sales all contributed to the order to find similar success in the year ahead, still number one in the UK, providing simple brand’s success this year. Still, despite a solid Carrefour will have to fix its negative price and quality products at low prices with reputation among a diverse range of shoppers perception among shoppers while managing great range and diversity in each category and a well-established and consistent the success of its accessible locations, and and division. Tesco successfully launched strategy for growth (to follow the customer improve the quality of its private label and Tesco Digital and a new 350-strong range of into large, expanding markets at home and double loyalty program. low-cost products featuring two private label new markets in Central Europe, Asia, and the lines: Market Value (a new fruit and veggie US), Tesco saw a weak holiday season, losing line) and Discounter (dry grocery, frozen, out to competitors Aldi and Lidl as shoppers’ health, beauty, and dairy). Robust growth in tighten their belts. newer areas, strong growth in Tesco mobile 5 4,469 €m 6 4,197 €m ZARA. In the last year, Zara has overtaken MARKS & SPENCER. Leading international behavior away from quality to value. H&M as Europe’s largest retailer. It has opened department chain Marks & Spencer is the In 2009, M&S announced it will cut back 186 new stores during the fiscal year and largest UK clothing retailer, and sells items advertising spending by 20 percent. diversified by moving into home furnishing that include clothing, food, homewares, As consumer spending continues to change, and a “Zara for Mum” line. Additionally, its furniture, and technology. This year, it will be interesting to see if M&S’s core Meco logistics platform in Madrid, introduced M&S invested heavily in updating its store offer remains relevant. in 2006, lets Zara introduce new items every environments to make them more attractive week. Zara has stuck to a strategy that has to customers and focused on improving its proved to work: strategically located stores, online platform. Although M&S is growing layouts that take advantage of each store’s ahead of the market and maintains a strong unique visual and functional space, and a brand image—it set a trend toward the brand message “Buy it now or regret it later” environmental and ethical—its reliance on that builds on its ability to translate trends the UK market makes the brand vulnerable into merchandise, from drawing board to to current economic conditions. While it is shelf in just two weeks. Improved efficiency, still the leader in general merchandise and logistics, and cost-consciousness, as well as has achieved an increased market share entrance in the Russian and Asia markets, in a number of categories, the economic resulted in a nine percent increase in brand downturn has brought a shift in consumer growth. Its globally diverse position and low cost products place it in a better position than most of its European retail competitors. 56 Best Retail Brands 2009 Best Retail Brands 2009 57

7 3,348 €m 8 1,961 €m 9 1,930 €m 10 1,808 €m 12 1,146 €m 14 880 €m ALDI. This no-frills grocery chain and deepest BOOTS. Boots continues to lead the AUCHAN. The privately owned merchandise EL CORTE INGLÉS. Over the last few LIDL. The primarily European grocery retailer EDEKA. Germany’s largest supermarket discounter in food retailing has successfully pharmacy retail category, maintaining its retailer of apparel, groceries, fast food, years, Spain’s largest department store and Lidl, headquartered in Germany, operates corporation currently holds a market share elevated its status with its improved brand status as the specialist in healthcare. Over consumer electronics, real estate, and banking supermarket chain owner has successfully its supermarkets under the trading name, of 26 percent. Its large assortment of private message “the store for smart shoppers.” And the last few years, the brand has started to services is known for offering discount prices, enhanced its relevance to younger Kaufland and its discount food stores under labels and product lines, good service, and thanks to its “Aldi Principle” strategy—the behave more and more like a category leader. choice, diversity, and adaptability. This year, generations, with A-list celebrities for Lidl. Lidl carries a large selection of products takeover of 2300 stores from competitor lowest prices with the highest quality Following the roll out of its new “local Boots it maintained a loyal audience and increased campaigns and brands like Sfera. Despite its at a low price point, which has contributed to Tengelmann, as well as an aggressive implemented in every store, a clear product pharmacies,” it has increased innovation, credibility as a sustainable brand by halting already impressive scale, the business has its growth. This, matched with an aggressive attack on discount giants Aldi and Lidl have range, a private label smartly displayed, and particularly in beauty, and developed a more the sale of red tuna (a fish in danger of ambitious growth targets and plans to have a strategy to develop geographic presence contributed to Edeka’s continued growth. savvy expansion—it has seen a significant coherent point of view regarding healthcare. extinction) in all of its stores, which was well presence in every city in Spain, in addition to internationally and nationally, and the Although Edeka showed a huge increase in increase in brand value over the past few 2008 saw increased overseas expansion, received by customers. Other key highlights rolling out its stores across Southern Europe. launch of new private labels such as Bioness image perception from 2006 to 2008, several years. This year alone, Aldi increased market provision of health and optical services to an in 2008 included improvements to its private The brand has also made moves to balance its and Linessa, have helped drive the brand’s scandals weakened brand perception in share by 19 percent, entered into hotel and increasingly aging population, regular retail label brands. Packaging was updated to portfolio, and although it faced some issues performance. While it was a good year for 2008, including employee spying, pesticide shopping malls in the UK, and increased promotions to drive store traffic, and a solid clarify nutritional information, recipes were with private brand names such as Emilio the brand, its reputation was put in jeopardy residues in grapes and paprika powder, the stores throughout the foreign market. Its performance by its private label products. modified so they were healthier, and Auchan Tucci (similar to Emilio Pucci) and Boomerang when the press leaked that the store had sale of falsely labeled free-range eggs, and efforts have paid off; it received 99 percent In 2009, the market leader may feel even introduced an organic cosmetics line to build (similar to Boomerang TV) it found a hit with been spying on employees at work and during rotten meat. Edeka plans further expansion brand recognition—a notable increase from more of a squeeze by outside competitors, on its green image. Auchan also diversified. “Bricor” a DIY interior design category killer. A breaks. To improve its image, Lidl launched despite the economic climate, with a highly the year before. While this year proved to including smaller pharmacies and groceries It set up a joint venture with Nakheel Retail, gloomy 2009 outlook for the European retail an emotionally driven TV campaign, a major anticipated growth rate. be a great one for the brand, the overall with an in-store pharmacy. a real estate developer belonging to the Dubai market has forced the brand to down-trade, turn for the brand. In 2009, Lidl may see the influence of the financial crisis may stifle its World group, and launched its mobile network by creating the private label brand “Aliada,” overall financial crisis harm its international international expansion. “Hyperclair” in France. In 2009, Auchan may which offers products at a price far cheaper expansion, and the dioxin crisis in pork meat see its leading presence in China challenged than any other brand at the supermarket. from Ireland reduce meat sales. by the multinational retail giant Wal-Mart. Using celebrity 11 1,273 €m 13 1,025 €m 15 779 €m chef Phil Vickery as the face of its ASDA. The British supermarket, a subsidiary MEDIAMARKT. The German Mediamarkt C&A. In addition to developing its main latest UK advertising of Wal-Mart since 1999, which retails food, clothing, toys, and general merchandise, is is Europe’s largest retailer of consumer electronics. A high volume of advertising, and markets of Germany, Netherlands, Belgium, and France, apparel brand C&A has been campaign clearly the second largest chain in the UK after Tesco. relevant marketing campaigns with special stretching its values of family life into new Today, it covers more than 90 percent of the offers supports its strong brand image. markets, including China. In 2008, the brand demonstrates Aldi’s UK population. It continues to drive its low Mediamarkt lives by the strategy: “All business launched AVANTI, a low cost clothing brand, new ambitions cost agenda, enabling it to fund lower prices for customers, and capture market share. is local.” Store managers make decisions with flexibility and independence, focusing on and updated the look and feel of its stores in Germany. It also added a 3D body scanner stretch well A shift toward premium private label food regional assortment, pricing, and marketing. service to customize clothing, and launched products made a huge impact in November, The decentralized structure enables fast a new eco, energy-saving collection, using beyond price. when an estimated 22 million switched from adaptation to market changes and the renewable materials. As C&A continues to rival Tesco to ASDA. General merchandise brand benefits from the shared network of reinforce its presence in Germany, one of outperformed all major retailers during this a whole group. And yet, although the brand its main markets, the main issue will be the period as well, and ASDA also saw 56 percent is well positioned and equipped to adapt to economic crisis. The brand’s broad appeal and growth in the home shopping market. changing shopper decisions, it suffers from price position will be hard to defend as the Increasing competition with retailers like Lidl copycats like Eldorado in Russia, Poland, and economy slows down. and Aldi, as well as Asda’s legal battles with Romania. Next year, the brand will focus on the OFT and GMB could be a challenge for the making improvements to its business model, brand in 2009. in hopes that this will help it continue to generate sales. 58 Best Retail Brands 2009 Best Retail Brands 2009 59

16 774 €m 18 696 €m 19 664 €m 21 422 €m 23 373 €m 25 286 €m SEPHORA. In 2008, the leading retail beauty THE BODY SHOP. The Body Shop’s natural ARGOS. The market leader in many MERCADONA. Currently the largest KAUFLAND. The hypermarket Kaufland, OBI. The German do-it-yourself chain chain in Europe saw growth in emerging inspired beauty products have seen growth in categories, Argos benefits from its scale and supermarket operator in Spain with a market which is operated by grocery retailer Lidl, is that offers goods for homebuilding, repair, markets like the Middle-East and China, emerging markets like India, Russia, the Middle logistical advantages. It can price products share of 12.7 percent, Mercadona is devoted known for long hours, good accessibility, a gardening, and home design, is constantly improvements to its private labels, an East, and Asia. It continues to be viewed as very competitively across categories, to its brand strategy—the “Top Quality Model” pleasant buying atmosphere, and a great increasing market share, extending to increased US presence, and a new 45 percent a leader in the sustainability movement, but passing on purchasing efficiencies to the end in which the customer is the boss.” It even variety of products, with both private label families as well as the classic DIY shopper. stake in the Russian perfumery chain “Ile de the brand is not as recognizable as it could customers. Its multi-channel offering—ability involves customers in the development of its and consumer brands. It has experienced It has seen success with a more emotionally Beaute.” It was also forced to close seven be among young consumers. The business to buy online, by phone or text, then collect supermarkets. Before it opens a new store, continuous national and international driven package and design for its private label stores in Japan, due to high property prices has taken note, investing in modernizing the in the store or have the product delivered—is it asks potential clients to try the store out growth. Kaufland benefits from its emphasis brand, as well as TV spots and bulk mailings. in city centers and an indifference to its brand both in-store and online. Additionally, also compelling to customers. Each year since and offer feedback on layout, products, and on service, which differentiates it from The high content and easy navigability of its self-service offer in the market. It plans to it has plans to launch baby products and “The 2000, the brand has opened an average of policies. It scheduled more than 83,000 competitors like Aldi and Lidl. It has also new, friendly website has helped support its counter the closing by opening 100 stores in Body Shop at Home,” an initiative similar to 30 stores a year, with a total of 707 based meetings like this in 2007. It also worked benefited from its private label brand, accessible and fun image. OBI is currently one China. Additionally, it made improvements Tupperware parties. With more and more in the UK and Ireland. While the brand has to integrate stores in traditional markets, K-Classic—although recalls on its marmelade of the best known brands in Germany, where to its website in the US, offering clients more competing beauty products that also play a distinctive business model with no clear respecting customs and original architecture, in January 2008 has harmed its reputation. it gets 50 percent of its sales. Next year, it information about the brands, launched on sustainable values, The Body Shop may direct competitors, it is not considered a while also helping storekeepers recover their In 2009, Kaufland may see its international will continue to expand into foreign markets an in-house spa concept in the Gulf region, have difficulty maintaining its loyal audience. leader in each product category. The brand businesses. Overall, it has an excellent brand expansion stifled, as well as reduction in and will work on extending and improving its and focused on improving the quality of its Moreover, it will have to compete with lower is working on increasing value perceptions, image, which has only been enhanced by its meat sales due to the dioxin crisis in pork private label brand. salespeople by launching “Sephora University.” consumption in stores in the United Kingdom having acquired the Bush and Alba brands participation in sustainability forums with Al meat in Ireland. In 2009, the brand will be testing out selling and the United States as a result of the in 2008. Argos will launch its concept Gore. Currently, sales are increasing due to its products on television in France, a strategy economic environment. As The Body Shop internationally after a test in India. the economic crisis and its recognized and that may ultimately devalue the positioning begins to adopt more mainstream advertising valued private label brand, Hacendado. The of its brand. channels in 2009, shifting from its origins as brand has also started finding ways to cut an activist brand—an equity that would be price, like removing cardboard boxes from its dangerous to lose—it will be interesting to see line of toothpastes. how it affects brand perceptions. 17 747 €m 20 542 €m 22 384 €m 24 290 €m MANGO. This Catalonian brand’s strength SAINSBURY’S. The third largest supermarket the emotional benefits of shopping, rather FNAC. French book, music, and electronic REWE. REWE is the second largest lies in its ability to quickly translate trends chain has lost market share over the last eight than undeliverable brand promises. Despite retailer FNAC operates in six European supermarket chain in Germany and the third into merchandise for the masses. Like Zara months, due to Tesco’s aggressive marketing a strong location performance in London countries and Brazil. International revenues largest in Europe. Its combination of brand and H&M, it has a fast turnover of stock campaigns and the rise of Morrison in the and South East England, the economic grew two digits (particularly in Italian and name products and strong private label so there is always something new in the South. After closing 49 of its convenience condition of the company remains unsteady. Brazilian stores). During the second half of products, as well as its assortment of fresh store. But while it continues to grow, with stores, Sainsbury’s has attempted to gain Because the brand rests comfortably between 2008, FNAC.com relaunched as a full-fledged, meats, has helped leverage its image as a “time an extensive expansion plan to penetrate back market share through a recovery the more up-market brands like M&S and user-friendly online shopping site and FNAC saving and consumer friendly one-stop-shop.” new markets, it still remains far away program, “Making Sainsbury’s Great Again.” Waitrose, and the cheaper players like Tesco saw the benefits. The company also launched Self-employed merchants lead the majority of from the two fast fashion leaders. 2008 The slogan, “try something new today” was and ASDA, it risks “death of the middle” as a new product that allows viewers to access its stores, which has further leveraged REWE’s marked a continued expansion strategy, in launched to get consumers to purchase more price sensitivity hardens. FNAC videos on demand from their TVs, and positive image. It is beginning to catch up which Mango opened its second store in varied goods, and keep shoppers focused on saw success in many of its new store formats. with market leader Edeka through takeovers New York (they expect to reach 240), the Still, with CD sales sliding, and pressure and expansion, including its acquisition of development of flagship stores, as well as from new competitors like Apple, Orange, 245 “Extra” stores from Metro in Germany. partnerships with different brands in order and Amazon, FNAC is reducing the number REWE also has ambitious plans to expand to create what they called “Mango shopping of planned store openings. To combat the into Austria, Italy, and Eastern Europe. Its experience.” Clients can shop while sipping economic crisis, FNAC will have to continue expansion—coupled with a strong marketing complimentary champagne, snack on free to improve its product offer. campaign and its partnership with Germany’s chocolate, and take home a free fashion national women’s soccer team—worked in magazine with each purchase. While Mango REWE’s favor this year. However, REWE faces has seen success expanding into the US and tough competition from Aldi and Lidl in the China, it has experienced some setbacks with future, as customers continue to become its franchise in the UK and Ireland due to a more price-conscious. poorly managed supply chain (wrong stock in the wrong place due to a lack of a proper technology system). 2009 will mark a new face for the brand—model Dakota Johnson. 60 Best Retail Brands 2009 Best Retail Brands 2009 61

Answers to the most 01 What is brand value? 03 How does Interbrand derive the with an assurance of quality and attractive Brand value is the dollar value of a brand, value of brands? range of offer. Even if a real comparison calculated as Net Present Value (NPV) or Our valuation approach is a derivative of is difficult, most customers believe that today’s value of the earnings the brand the way businesses and financial assets are they cannot find this range in any other commonly asked questions is expected to generate in the future. Like any other financial value, brand value is at a point in time based on the assumptions and information available valued. It fits with current corporate finance theory and practice. There are three key elements and they are detailed below: store. In the case of Mediamarkt, on the other hand, demand is mainly driven by the company’s tangible price positioning, which is communicated in a simple and coherent at that point in time. Brand value is Financial Forecasting manner, that customers comprehend as calculated according to the most widely We identify the revenues from products or soon as they enter the shop. accepted and used valuation principles. services that are generated with the brand. This makes brand value comparable to From these branded revenues we deduct The Role of Brands is derived as a percentage. business, and all NPV-based asset values. operating costs, applicable taxes, and a Thus, if it is 50 percent, we take 50 percent The purpose of this document is to address the charge for the capital employed to derive of the intangible economic earnings as The valuations of brands appearing in intangible earnings. Intangible earnings brand earnings. If it is 10 percent, we only questions that you are most likely to be asking the Best Retail Brands are calculated are the earnings that are generated by take 10 percent of the intangible earnings in their current use to their current all of the business’ intangibles including as economic earnings. in relation to the Best Retail Brands. owner. Therefore, these valuations do brands, patents, R&D, and management not necessarily represent the potential expertise, (i.e. the economic value that is Brand Strength purchase, extension, or licensing value of generated by all tangible and intangible To derive the net present value of the the brands. business assets of the branded business). forecast brand earnings, we need a discount 01 What is brand value? 63 This is a prudent and conservative approach rate that represents the risk profile of these as it only rewards the intangible assets earnings. There are two factors at play: 02 Why publish brand value rankings? 63 after the tangible assets have received their first, the time value of money (i.e. US$ 100 02 Why publish brand value rankings? required return. The concept of intangible today is more valuable than US$ 100 in five The purpose of these valuations is to 03 How does Interbrand derive 63 earnings is therefore similar to value based years because one can earn interest on the demonstrate to the business community the value of brands? management concepts such as economic money in the meantime); and second, the that brands are very important business profit or EVA (Economic Value Added is risk that the forecast earnings will actually assets and in many cases the single 04 What was the basis of 64 Stern Stuart’s branded concept). EVA is a materialize. The discount rate represents most valuable company asset. We also the financial assessments? value based management concept and is these factors as it provides an asset specific aim to make branding and marketing a generally accepted principle to measure risk rate. The higher the risk of the future key business issues that have direct 05 What was the basis for the 64 the ability of a business to generate returns earnings stream, the higher the discount shareholder value impact. Through ten marketing assessments? over and above its invested capital. Based on rate will be. To derive today’s value of a years of publishing Best Global Brands reports from financial analysts, we prepare future expected earnings stream, it needs in BusinessWeek magazine, we have 06 Why are certain brands 64 a financial forecast of intangible earnings to be discounted by a rate that reflects the created the world’s most significant and not on the list? for six years and calculate the economic risk of the earnings actually materializing influential brand and marketing study. In earnings of the branded business. and the time for which it is expected. For fact, PRWeek magazine produced a study 07 What is the relationship between 64 example, H&M and Zara illustrate how that showed that the BusinessWeek/ the following terms: brand awareness, Role of Branding business risk is lessened due to a strong Interbrand Best Global Brands ranking brand equity, brand share and brand value? Since the economic earnings include the brand. Both brands implement a consistent was the third most sought after returns for all intangible assets employed retail experience all over the world. Their benchmark report by CEOs. Interbrand 08 Do the valuations reflect the 64 in the business, we need to identify the strong presence in key economic regions continues to publish various regional underlying state of the economy? earnings that are specifically attributable has led to their easy expansion into growing and sector studies to elevate the to the brand. Through our proprietary markets such as Asia. discussion on brands as business assets 09 Is it possible to recognize brand 64 analytical framework called Role of across geographies and industries. value on a balance sheet? Branding we calculate the percentage of The assessment of Brand Strength is a economic value that is entirely generated structured way of assessing the specific 10 What is Interbrand’s view 65 by the brand. Generally in some businesses, risk of the brand. We compare the brand on brands appearing on balance sheets? e.g., fragrances or packaged goods, the against a notional ideal and score it against role of branding is very high — as the brand common factors of brand strength. The ideal 11 Why is Interbrand an expert 65 is the predominant driver of the customer brand is virtually risk free and is discounted in assessing brand value? purchase decision. In other businesses (such at a rate as low as government bonds or a as the pharmaceutical or airline industries) similar risk- free investment. The lower the 12 What is the difference between 65 the brand is only one purchase driver among brand strength, the further it is from the the valuations in public studies and many and the Role of Branding is therefore risk free investment and so the higher the consulting valuations for clients? lower. Looking at the retail brands, people discount rate (and therefore the lower the are, for example, buying Marks & Spencer Net Present Value). because the brand intuitively provides them 62 Best Retail Brands 2009 Best Retail Brands 2009 63

04 What was the basis of the 06 Why are certain brands not 08 Do the valuations reflect the 10 What is Interbrand’s view on 11 Why is Interbrand an expert in 12 What is the difference between financial assessments? on the list? underlying state of the economy? brands appearing on balance sheets? assessing brand value? the valuations in public studies Published annual reports were used This is a frequent question especially Yes—in two ways. The forecasts are Interbrand supports the notion of In 1984, Interbrand developed and and consulting valuations for to examine the revenues, earnings from companies who would expect their prepared with an overall view on different accounting standards to introduced the first valuation of a Interbrand clients? and balance sheets of the brand- brands to be on the list. There are five economic growth at a point in time. recognize the value of brands on portfolio of brands that used a brand The valuation methodology is the same, owning companies. Analyst reports common reasons: The formula for converting the brand the balance sheet. Interbrand has specific valuation approach. Since then however, the level of detail and the data from Citigroup, JP Morgan Chase, strength score into a discount rate is been leading the debate on this issue we have continuously updated and input significantly differ. The public and Morgan Stanley are used as the The brand has a pure B2B single tied to the underlying government for many years. However, current improved our valuation approach to study valuations are based on publicly basis for identifying the specific brand audience and has no wider public bond yield. accounting standards allow only for make it the global industry standard of available marketing and financial data. revenues and earnings for forecasting profile and awareness. the recognition of acquired brands brand valuation. The Interbrand brand Also, the regional and sectors study future earnings. not internally developed brands. Also, valuation methodology is the most valuations are mostly consolidated top The company does not produce public the impairment test for brands on the widely endorsed and employed valuation line assessments, although we recognize 09 Is it possible to recognize brand data that enables us to identify the balance sheet allows only for a potential approach around the world. Interbrand segment differences for diversified value on a balance sheet? branded business (the company has value reduction but not increase. The alone has valued more than 5,000 brands brands by product or service but not 05 What was the basis for the Several accounting standards—such as multiple brands or has unbranded acquisition criterion means, for example, in all industries worldwide. geography or any other classification marketing assessments? International Accounting Standards (IAS) production). that the Gucci brand is recognized on (e.g. financial services or technology). Unlike other brand value league tables, 36 and 38, US GAAP, FASB 141, UK FRS the balance sheet of PPR as an intangible Our valuations have been endorsed by As the valuations are based on publicly Interbrand does not rely on a single 10—allow and/or require the recognition The brand is not big enough (brand asset, while the Louis Vuitton brand leading academic institutions including available data they are only as reliable source of marketing information. Using of acquired goodwill, including brands, value falls below the number of brands does not show up on the balance sheet Harvard, Thunderbird, Columbia, Emory, as the data that the brand-owning a single brand study would limit the on the balance sheet. The standards featured in the ranking). of LVMH. and St. Gallen. Our valuation approach companies publish about themselves type of information (usually limited clearly identify brands as intangible has a wide range of applications (in annual reports, analysts briefings, to perceptual data) and the type of assets with an infinite economic life. This The business is driven by a number of We conclude that the recognition of including strategic brand management, press articles, syndicated market customer (usually general public) that means, unlike other intangible assets intangible factors and it is difficult to acquired brands on the balance sheet is marketing budget allocation, marketing research, etc). can be considered. Interbrand refers to (e.g. patents, databases) or goodwill, separate the brand from the rest. a step in the right direction for providing ROI, portfolio management, brand a wide array of primary and secondary (e.g. training, workforce) brand value shareholders with better information extensions, M&A, balance sheet Consulting valuations are based on sources, which are applicable to each does not have to be amortized through about the assets they have invested in. recognition, licensing, transfer pricing, detailed customer segmentations, brand. These include, among others, the income statement. However, it However, it’s still not sufficient, as the and investor relations. Our valuations as well as in-depth marketing and ACNielsen, Datamonitor, Gartner, and 07 What is the relationship between is subject to an annual impairment value of internally generated brands have been audited for inclusion on the financial analyses. They have a much Hall & Partners. Moreover, Interbrand the following terms: brand awareness, test and its carrying value needs to be cannot be disclosed, despite making up balance sheet by all leading accounting higher level of accuracy and granularity. utilizes its network of brand valuation brand equity, brand share, and reduced if the value has declined. The the vast majority of the most valuable firms. Also, many tax authorities and law The purpose of a consulting valuation experts from offices around the world brand value? technique is consistent with the way in brands around the world. courts around the world have accepted goes well beyond assessing financial to ensure that the ranking considers the Brand value is the only measure that looks which Interbrand has assessed brands our valuation approach. numbers to identifying and quantifying brands from a global perspective. at the economic benefit of the brand to for balance sheet inclusion—though value drivers and to managing brands its owner. In other words, it is an end in of course using more extensive and for increasing the shareholder value of itself. Brand awareness and brand equity proprietary data. the underlying businesses. However, if are a means to an end. Brand awareness clients undertake consulting valuations is simply knowledge that a brand exists, we are in a much better position to thus brand awareness may prompt identify publicly available data that are customers to consider buying a product. likely to align the public study valuation Brand equity is a measure of customer with the consulting valuation. In cases perceptions of a brand; thus it may give a where companies make our consulting customer reason to prefer a product over valuations publicly available, for example the alternatives. Brand share is simply through a note in the balance sheet, the market share achieved by the brand. these values will also be published as Thus brand awareness, equity, and share the public ranking value. are all measures of what a customer thinks or does. It is not an assessment of the economic value created by those thought or actions. Signage, the creation of curb appeal, a signature air fragrance, a clutter-free check-in, and a luxurious bedding and bath experience were created to complement Holiday Inn’s new brand vision. 64 Best Retail Brands 2009 Best Retail Brands 2009 65

About Interbrand About our brand studies Interbrand was founded in 1974 when Voted the third most influential industry the world still thought of brands as just benchmark study by business leaders, another word for logo. We have changed Best Global Brands, published in partnership the dialogue, defined the meaning of with BusinessWeek, is our annual report on the brand management and continue to lead world’s most valuable brands and the insights the debate on understanding brands as that can be drawn from how these global valuable business assets. organizations create and manage brand value. This report has spawned a variety With 38 offices we are the world’s largest of regional tables that highlight the value brand consultancy. Our practice brings of brands within particular geographical together a diverse range of insightful right boundaries. and left brain thinkers making our business both rigorously analytical and highly creative. We pioneered the technique for valuing Our work creates and manages brand value brands in 1984 and have continued to for clients by making the brand central to the improve upon the methodology and set the business’ strategic goals. pace for other approaches. Our valuation techniques have long been recognized by We’re not interested in simply being the business, academics and regulatory bodies world’s biggest brand consultancy. We want as a uniquely valuable strategic tool. Today, to be the most valued. we have conducted over 5,000 valuations for clients to provide guidance in managing their most valuable asset—their brand. Thought leadership is a continual process, and almost inevitably, collaborative. We’re happy to share our knowledge, in the belief that widening the understanding and appreciation of brands as primary business assets benefits us all. Contact us General inquiries: Media inquiries: Jez Frampton Lisa Marsala Global Chief Executive Officer Global Communications Manager Tel UK: +44 (0) 20 7554 1000 Tel: + 1 212 798 7646 Tel US: +1 212 798 7777 lisa.marsala@interbrand.com jez.frampton@interbrand.com Additional information on brands Graham Hales www.interbrand.com Global Chief Communications Officer www.brandchannel.com Tel UK: +44 (0) 20 7554 1169 Tel US: +1 212 798 7581 For reprint permission of this report or its graham.hales@interbrand.com articles, please contact Lisa Marsala. 66 Best Retail Brands 2009

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Best Retail Brands 2009

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Best Retail Brands 2009 — Presentation Transcript