BrandZ Top 20 Retail Brands

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BrandZ Top 20 Retail Brands 2011

BrandZ Top 20 Retail Brands 2011

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  • 1. The Top 20 Most Valuable Global RetailDigital Brands 2011reshapesretailThe newcustomerjourneyBrandperformancemeasuresForwardinsights &implicationsBrand valuations byBrand analysis byCommentary by WPP Operating Companies Edition
  • 2. Welcome and thank When we introduced the first BrandZ™ Most Valuable Global Retail Brands study in 2009, retail brands were struggling to This study draws on our expertise. Millward Brown Optimor provided the valuations based on BrandZ™, the world’s largestyou for your interest in navigate through the recession, unsure when the consumer appetite for spending would return and what shape it would take. and most comprehensive brand equity tool. Since its creation 13 years ago, over 2 million consumers and B2B customersthis third annual WPP Amazon ranked third with a valuation of $21.3 billion, about half of Walmart’s, which topped the chart. across more than 30 countries have shared their opinions about thousands of brands. Kantar Retail interpreted key retail brandBrandZ™ Most Valuable This year, with a brand value of $37.6 billion, Amazon overtook Walmart for developments and provided insights into competitive advantages and challenges.Global Retail Brands study. first place. That achievement reflects the extraordinary vision and performance of Amazon, of course. But it also crystallizes New this year, several other WPP companies added commentary to further illuminate the impact of digital on the the transformative influence of digital on path to purchase and shopper marketing shopper habits and portends much more practices, including: FITCH, TNS, to come. eCommera, I-Behavior and G2. The study contains insight that can One thing is certain. All the assumptions strengthen your business. of shopper marketing are in flux. Understanding the possibilities requires the I invite you to contact me directly with kind of extensive global knowledge across any questions or to learn more about how the communications disciplines offered WPP can help you better understand and by WPP. We have offices in more than compete successfully in the ever-changing 100 countries and a retail practice across world of retailing. our operating companies that extends from insight to activation. It includes research, advertising, marketing, digital, communications planning and media, PR, shopper marketing and retail. Sincerely, David Roth WPP droth@wpp.comValuations Millward Brown OptimorAnalysis Kantar RetailDesign Lambie-NairnWriting Ken Schept The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 2
  • 3. Contents INTRODUCTION Welcome 1 Contents 4 Preface 5 Overview 7 PROFILES/COmmENTaRy uNDeRSTANDiNG The NeW CuSTOMeR JOuRNeY 13 Amazon 17 Walmart 19 Tesco 21 Carrefour 23 ShOPPeR MARKeTiNG AND DiGiTAL 25 Target 29 eBay 31 Home Depot 33 Aldi 35 MANAGiNG AN e-COMMeRCe BuSiNeSS 37 Auchan 41 Ikea 43 Lowe’s 45 Marks & Spencer 47 FROM BROWSiNG TO PuRChASe 49 Best Buy 53 Costco 55 Lidl 57 Kohl’s 59 ZeRO-WASTe ADVeRTiSiNG 61 Asda 65 Sam’s Club 67 Sainsbury’s 69 Safeway 71 CONCLUSION The Top 20 summary chart 73 Take Outs 75 Methodology 77 Resources 813 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 4
  • 4. Preface This third annual WPP BrandZ study of the Top 20 Most Valuable Global Retail These thought pieces discuss how retailers and brand marketers can most effectively approach shopper marketing in a world where the online and physicalRetail itself is becoming a bit Brands considers many of the salient forces acting realms are interconnected and shoppers, empowered with a digital mobile devices, can be reached anywhere anytime. Thelike the path to purchase— on retailing today and distills key themes that commentaries topics include:unpredictable, fast changing help explain events and • Ways to understand the new consumer journeyand difficult to summarize. anticipate the future. The key themes include a shift to smaller • Research revealing when browsers become purchasers store formats, especially in mature markets, the intensifying search for growth in fast- • Purchase behavior viewed across growing markets and the transformative retail channels impact of digital as shopping becomes a seamless multichannel activity. • Key prerequisites for making money with e-commerce The themes, of course, impact not just the Top 20 retail brands, but retailers of all • The interconnection of shopper sizes and in most parts of the world. And marketing, digital and e-commerce because digital may be the most ubiquitous of all the trends, this study includes a As in prior BrandZ retail studies, each collection of useful commentaries on the of the Top 20 brands is summarized with revolutionary impact of digital on the path a review of strategies, highlights of key retail to purchase. developments during the past year and forward-looking insights and implications.5 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 6
  • 5. Overview Amazon grew 37 percent in brand value in 2010, surpassing Walmart as Unable to rely on new stores to drive sales growth, retailers must maximize sales productivity from existing customers to grow “share of wallet.” Similarly, the Consumer shopping habits and disruptive power of digital, especially the world’s most valuable mobile, requires that retailers astutely retail brand. engage shoppers anywhere and anytime digital access change retailing The Amazon performance occurred in a to grow “share of decision.” These imperatives are reflected in several retail year when retail brand value appreciated by trends including: only 2 percent overall and few other brands increased sharply in value. Examples of • Growth of smaller stores: Especially in significant brand value growth, such as mature markets, retailers are opening IKEA’s 28 percent rise, mostly reflected smaller formats to reach customers in recovery from recession lows. urban or rural areas. Since its inception in 1994, Amazon has • Focus on discount and private label: grown to be worth $37.6 billion in brand To respond to shopper price sensitivity, value, reflecting the commercial success retailers are emphasizing discount Amazon has enjoyed and its revolutionary formats and private label ranges. impact on retailing worldwide. Because of Amazon’s influence, the path to purchase • Multichannel presence: With retail no longer moves linearly to a physical store space no longer defined by four walls, but exists in time and space wherever merchants are trying to seamlessly link shoppers view products, promotions and their physical and virtual operations. purchasing suggestions. These trends are present globally. They’re The disappearance of the superstore unfolding as retail growth shifts dramatically bookseller Borders during the summer of to fast-growing markets. Markets other 2011 symbolized the vulnerability of chains than the US, Western Europe and Japan trading in this altered retail universe while are expected to drive more than 67 percent weighted with real estate acquired when of retail sales growth over the next five consumers favored large footprint stores years, according to Kantar Retail. China with myriad SKUs. It also reflected the alone will account for over 21 percent of hyper competition for the patronage of growth during that period, Kantar predicts. frugal, recession-chastened consumers. Meanwhile, Walmart’s purchase of the Massmart chain in South Africa suggests a new chapter has opened in global retailing.7 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 8
  • 6. OVeRVieW In the US, Costco continued to have greatSmaller stores The shift to smaller stores extends beyond food. Two US home improvement warehouse success with its Kirkland Signature brand,The shift to smaller stores is most evident retailers, Home Depot and Lowe’s, are a private label recognized by consumers asamong major chains in North America and opening smaller units. Best Buy, the a national brand. Target strengthened theWestern and Eastern Europe, but it reflects electronics retailer, is opening small stores Up & Up line, which it introduced severallessons learned from experience gained based on knowledge gained in a venture years ago. The brand operates mostly asin emerging markets. While the trend cuts with the UK’s Carphone Warehouse. a “reflective” private label, meaning that itacross all product categories, it is especially Most notably, IKEA, known for its giant, helps drive margin while depending on theprevalent in food, a trend that Kantar Retail labyrinthine outlets, is planning smaller, multi- adjacent national brand for authority.identifies as proximity food retailing. level stores to penetrate urban locations. In general, retailers calibrated the balanceWith growth from its supercenters flattening Discount and private label between private label and national brands to build margin while benefiting from thein the US, Walmart continues to experimentwith smaller formats. Its most recent entry is Carrefour unified its many convenience traffic-drawing power of national brandWalmart Express, an outlet of about 14,000 store brands under the Carrefour City and promotions. As both private label andsq. ft. compared with an average size of Carrefour Contact banners. While the change national brand promotions reduce prices,almost 200,000 sq. ft. for the roughly 3,000 should help Carrefour expand into smaller it becomes especially important to forsuperstores that Walmart operates in the US. markets, opportunities to better leverage its retailers to persuade each customer to private label, marketing and merchandising buy more merchandise, ensuring sufficientWalmart gained experience operating small programs drove this development. “share of wallet.”stores with its Bodega Aurrera banner inMexico. Through its UK holding, Asda, It acknowledges the ubiquitousWalmart acquired Netto, a small-store chain presence of deep discounters Lidlthat will be rebranded Asda Supermarket.These outlets, which average 8,000 sq. ft., and Aldi across Europe and thewill help Asda reach locations inaccessible diminishing appeal of hypermarkets,with its supercenters, which average 85,000 which lack discount’s focusedsq. ft., or even its superstores of about price message and convenience.45,000 sq. ft. Tesco also is relying on smaller hypermarkets and convenienceAlso in the UK, the grocer Sainsbury’soperates convenience stores called banners as it fills in its presence inSainsbury’s Local, and Marks & Spencer Central and Eastern Europe.intends to accelerate the rollout of itsM&S Simply Food convenience stores. Meanwhile, Lidl added more brandedConvenience stores are among Tesco’s product to its overwhelmingly private-labelmany formats, too. Having entered the US product mix to position itself as a discountin 2007, with 10,000-sq. ft. Fresh & Easy supermarket and increase its share of fullstores in California, the company now is shopping trips. And Marks & Spencer,testing an even smaller space called Fresh known as a purveyor of premium private& Easy Express. label products, added branded items to its offering to compete with other supermarket leaders.9 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 10
  • 7. OVeRVieW The Top 20 Most Valuable Global Retail Brands 2011 Position # change Brand Parent Company Brand Brand Brand Brand from Value Value Contribution Momentum 2010 $US Changeexpansion of Billion YOYmultichannel retailing 1. +1 US Amazon.com, Inc. $37, 628 37% 3 10Even the food retailers are aggressively 2. -1 US Wal-Mart Stores, Inc. $37,277 -5% 2 5refining their multichannel presence,looking for ways to better serve shoppers 3. = UK Tesco plc $21,834 -15% 4 7and distinguish themselves from thecompetition. 4. = France Carrefour SA $13,754 -8% 3 7Several retailers are experimenting withvariations of online purchasing with the 5. = US Target Corp. $12,471 3% 3 3order delivered directly to the customer’shome or to the customer’s store where 6. = US eBay, Inc. $10,731 15% 2 8it’s available for easy pick-up. Auchanintroduced the store pick-up idea several 7. = US Home Depot, Inc. $9,877 10% 2 3years ago with its successful Chronodriveprogram. Walmart is experimenting with 8. = Germany Aldi Einkauf GmbH $9,251 6% 2 4a home delivery program called WalmartTo Go and a store delivery option called 9. = France Auchan SA $7,796 -1% 3 7the Pick Up Today program. 10. +2 Sweden Ikea International $7,293 28% 2 6Sainsbury’s combines its home deliveryand in-store pick-up options into one 11. -1 US Lowe’s Cos., Inc. $6,522 -7% 2 3program called Sainsbury’s Direct, whichis intended to drive non-food sales. Home 12. +1 UK Marks & Spencer plc $5,252 -8% 3 4Depot introduced several mobile apps andexplored the possibility of payment on its 13. -2 US Best Buy Co., Inc. $5,104 -12% 3 3Facebook page as social media movestoward social commerce. 14. +3 US Costco Wholesale Corp. $4,544 17% 1 4 15. +1 Germany Lidl & Schwarz $4,240 3% 1 4 16. -1 US Kohl’s Corp. $4,003 -8% 3 4 17. -3 UK Wal-Mart Stores, Inc. $3,975 -19% 2 4 18. = US Wal-Mart Stores, Inc. $2,935 -10% 2 2 19. +1 UK J Sainsbury Plc $2.685 -2% 3 5 20. -1 US Safeway, Inc. $2.012 -37% 2 3 Sources: Kantar Retail, Millward Brown Optimor. Brand contribution measures the degree to which brand plays a role in generating earnings. It is displayed as an index from 1 to 5, 5 being the greatest brand contribution. Brand Momentum measures the growth potential of brand-driven earnings. It is displayed as an index from 1 to 10, 10 being the greatest potential. See Methodology and the end of the report for full details. See the At-a-Glance charts for footnotes.11 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 12
  • 8. Commentary In this new technology-enabled world, how can brand marketers and retailers Understanding capture the imagination and retain the loyalty of their customers? the New Seamless retail experiences require a new approach. By Tim Greenhalgh Chief Creative Officer, FITCH Life gets complicated Customer in the beginning, there were shops. We’d pop to the Life was simple until 1991, when Tim Berners-Lee is credited with inventing the Journey World Wide Web. He handed us the keys shops, pick up our stuff, go to online connectivity. Then, we could shop home. Things were simple. from within our own homes. ‘Popping to the shops’ was a mere click away. Then, with the internet, we From simple to splintered to seamless shopped from home. Now, The world became a little less simple, but a whole lot more fun. mobile brings the shops Now more game changing still, mobile to us, wherever we are. brings the shops to the shopper, wherever The options are endless. they are – even while sitting on a bus. The emergence of the ‘always on’ The customer journey has consumer means the way shoppers think become splintered. about, validate and act on their purchasing decisions has become splintered. What was simple – “I’m just popping to the shops…” – has become splintered – “…shopping is anywhere and everywhere, as are my friends, all 1500 of them!” So, I can now buy in a shop, on a website, via an app on a laptop, tablet, smart phone or through my games console. Alongside traditional and still powerful catalogues and direct mail I browse deals and promotions via QR codes, or view an augmented world through my phone’s camera, which places exciting products in my path or simply points to where I can find a pint in a new neighborhood.13 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 14
  • 9. COMMeNTARYPoked and prodded by friends as I peruse This is good news for retailers, becausetheir personal views on social networking Shopping in the mind… given moment, often switching from one to another in an instant, depending on their there’s the potential to get more value out ofsites, I can buy products with new Internet- dreaming, exploring, particular shopping mission. their customers. By redefining the customerbased currencies, like Facebook Credits, locating journey in this way, confident decisions canwhich let me buy virtual goods in games The trick is to both understand how best be made about how to engage shopperson the Facebook platform. Now I can earn We believe that the process of simply to serve these mind states, as well as the in different mind states, and help themeven more credits when shopping in the finding something you need, today or triggers which daisy chain between them. upgrade from relatively low value “locating”real world through the multi-retailer reward fantasizing about a purchase over several to higher value “exploring” and “dreaming.”program Shopkick. I am happy to take months, is governed by three universal Traditional shopping journeys used to bea recommendation to buy something from 21st century mind states: predominantly location based – from leaving We are gradually seeing a movementsomeone I’ve never met and who lives home, to crossing a threshold, to leaving from the departmental silos of marketing,5,000 miles away. RedLaser lets me price- 1. Locating: In this mind state, consumers a store with a bag in hand. Whereas the merchandising, digital, buying and realcheck on the go, and I can get location- are looking for a specific brand, product new seamless journey is multichannel and estate to an integrated approach alignedbased deals from Foursquare by becoming or service. They have a short attention often marked by a period of time between around the customer point of view.a Mayor, or join a collective buying group to span, are usually replenishing their own triggers – a glance at Facebook, anget discounts on just about anything from stock, or already know the specific item interactive window display, a QR code in Seamless retail means that stores are noGroupon. Shops now pop up and pop off, they’re looking for – “I want Nike Airs, a magazine. longer solely places of transaction. Lookingconvenience stores are more convenient size 7.” after the “locators” remains important, butas they become an event or viral installation, The three mind states have major focus can also be given to creating moreand if all this wasn’t enough, I can actually 2. Exploring: Here, the consumer is open- implications for a store’s design, layout and engaging and rewarding experiences forstream my products for a day as 21C minded but has category-specific communication. And just as importantly for customers. These shoppers will then showconsumption may not be about ownership purchase intent – “I want running shoes.” how we think about the entire customer loyalty – online, in-store and inline.anymore (Netflix, Spotify) – phew! They have a longer attention span, may journey and that Holy Grail - the purchase. have a few options in mind, but are openTo some, this splintering of the shopping to suggestions and want to be inspired Popping to the shops in thejourney is exciting and liberating because and informed in equal measure. With itsthe options available to a Regular Joe open ability to easily compare and contrast a 21st century… seamlessup variety, choice and value. Whereas, wide range of products, online retail can customer journeys "FITCH is a global retail designto others, these splinters can be a sharp quickly grow loyalty in this area. However, consultancy that specializes inreminder that the retail world has moved a key component of the “exploring” As online shopping grows, it’s the translating brand into consumeron and as such this variety of options mindset is trial, and being able to touch, replenishment purchases made in “locating” experience. With a presence inneeds to be understood – and embraced – feel and test drive products is crucial – an mode that will continue to move off the 12 countries, clients include Dell,in today’s new shopping environment. advantage the store has over the virtual. high street and away from the malls. To HSBC, Morrisons, Microsoft, Nokia, accommodate this, there will be strong and Target and Vodafone."We need to understand the effect it 3. Dreaming: In this mind state, consumers seamless links between the shops and their www.fitch.comhas had on today’s customers, as their actively look for new ideas and inspiration. online experience. Uniqlo’s CEO recentlyshopping experience has moved from They have undefined needs and wants, announced that the company’s next majorsimple to splintered. In doing so we can and are skipping between categories flagship opening would be its website.further understand how to respond and and brands to find inspiration and the The future of bricks and mortar lies increate a seamless customer journey. fulfillment of as yet undefined desires – shifting the attention towards people in the “I want to get fit”. “exploring” and “dreaming” mind states. By setting stores up to encourage “exploring” The new seamless customer journey and “dreaming,” the retailer can build loyalty acknowledges that any individual can all the way through the journey to purchase exhibit these different mind states at any by truly responding to their customers’ desires and aspirations.15 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 16
  • 10. The TOP 201. Amazon In a development that evoked Amazon’s Ultimately, the success of Amazon resultsmost valuable roots in book retailing, the company’s from empowering retailer intuition with the sales of electronic books surpassed its complicated algorithms that recognized sales of paper books for the first time, shopper purchasing patterns andretail brand driven in part by the success of Amazon’s recommend related products. Leveraging Kindle and a strategic price reduction that its technological resources and credibility, made the electronic reading device more Amazon also sells cloud computing widely accessible. With the introduction capacity on its servers. of the Kindle, in 2007, Amazon evolvedWith an increase of 37 percent, Amazon’s from exclusively a purveyor of branded merchandise created by others tobrand value surpassed Walmart’s. a product developer as well. Above: Subscribe & Save Below: Amazon reduced Kindle drove shopper visits by prices last year, which increased focusing on frequently sales of the devise and drove At a glance replenished products. electronic book sales. Brand Value $37.6 billion Brand Value Change 37% Total Corporate Sales $34.2 billion Total Corporate Store s 0 AMAZON Brand Sales $33.2 billionIn the relatively short period since AMAZON Brand Store s 0its founding as an online book Countries of Operatio n 7 Amazon brand sales inclmerchant, Amazon—with no amazon.de, amazon.c ude amazon.com, am o.jp, amazon.fr, amazo azon.co.uk, amazon.ca. Sources: n.cn andstores—has grown to be the most Kantar Retail, Millward Brown Optimo rvaluable retail brand in the worldand a disruptive force transformingretailing into a multichannel Amazon also expanded Subscribe & Save,phenomenon. Amazon sales rose a program that offers regular replenishment insights &32.1 percent to $34.2 billion in 2010on the strength of its unequaled with free shipping in categories such as grocery, office products and supplies and implications health and beauty. The brand continued toproduct range and constant benefit from Amazon Prime, the program in • Amazon continues to expand into new geographies and new categories. Backed up withinnovations that widen its customer which shoppers pay an annual fee, similar its strong reputation in fulfillment and customerbase and grow sales. to a warehouse club membership, and service, the retailer is only just scratching the receive free shipping on all items. surface of its eventual scale and reach.The company launched Amazon Mom late • One category that has been limited to third-partyin 2010, for example. The program offers 30 Flexing its power on behalf of consumers, vendors and a modest trial in Seattle is freshpercent off on diaper orders as well as other Amazon influenced its suppliers to redesign grocery. Can Amazon crack this market and become a genuine online supermarket? Or doesdiscounts and two-day free shipping. It’s its packaging to be easier for customers it need to acquire this expertise?part of an ongoing strategy to drive shopper to open and more environmentally friendly. • While Amazon is only capturing a small partloyalty and frequency with subscription Originally aimed at electronics and toys, of certain markets, its influence as a disrupterprograms providing discounts and free Amazon has expanded the initiative to of shopping trips to traditional retailers isshipping on consumables. other categories. potentially seismic.17 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 18
  • 11. The TOP 202. Walmart Walmart quickly recalibrated. It started toReversing course restore 8,500 SKUs in grocery alone, after the product range was cut by 9 percent storewide and as high as 26 percent in some categories. As the chain rebuilds the assortment, it intends to reclaim itsWalmart returned to its proven low price well-earned reputation for market basketand broad assortment proposition. price leadership. But even as Walmart’s supercenter format rebounds, it may not be the engine of future growth, at least not in store-saturated markets like the US. Drawing on experience At a gla gained Mexico, and from Asda in the UK, nce Walmart is rolling out smaller stores, called Brand V alue Brand V Walmart Express, for expansion into rural or alue Ch $37.3 b Total C ange illion urban locations. orporate -5% Total C Sales orporate $419 b WALMA RT Bran Stores illion With other innovations, Walmart d Sales 8,535Although the discounter’s attempt WALMA RT Bran responded to the challenge of Amazon, d Store $294.9 Countrie s billion the e-commerce pioneer that supersededto become more aspirational Walmart s of Op brand s eration 4,450 it as the world’s most valuable retail 15made sense as a strategy to add Walmart A : Kanta ales inc Sources sda, Superme lude Wa lm rcado d art, Walmart S brand. Walmart leveraged its multichannel Above: Flip flop sandals are Below: Price and assortment r Retail, e up displayed with fashion flair incustomers and strengthen margins, Millward Walmart and W ercenters, Brown O ptimor almart.c om capabilities by rolling out a Pick Up Today North Bergen, New Jersey. dominate the landscape in the Secaucus, New Jersey, store.the execution was ill timed and program for in-store fulfillment of onlineunevenly executed. It left some shopping. It also experimented with a fresh grocery home delivery initiativecore customers feeling abandoned.While international sales rose, sales called Walmart To Go. insights &in the US were flat at $260 billionand same-store results declined Meanwhile, Walmart’s international division spent 2010 preparing to purchase implications1.6 percent. Walmart’s brand value Massmart, the South African retail and • Walmart has yet to regain momentum in the USdropped 5 percent. wholesale conglomerate. Completed in after a record number of quarters of negative June 2011, the acquisition eventually could same-store growth. Its store remodeling efforts were long overdue, but other components ofThe removal of merchandise bins from Reduced assortment and display area also establish Walmart in Sub-Saharan Africa. Project Impact – such as the range rationalizationhigh-traffic aisles, for example, softened limited promotion opportunities for local programme – backfired, leaving Walmart with a lotWalmart’s low price message at a time specials and for certain categories, such of work to do to regain disenchanted shoppers.when recession-shocked shoppers sought as soft drinks or toilet tissues, which • All eyes are on small store development andbargains. In trimming slower-moving SKUs depend on bulk displays for incremental e-commerce for Walmart’s great leap forward in the US, particularly with respect to whether or notfrom its assortment, Walmart unintentionally impulse purchases. Competitors, these initiatives will help Walmart penetrate keyeliminated some important traffic drivers, particularly the dollar stores, eagerly took urban markets.losing not only item sales, but also entire advantage of Walmart’s miscalculations by • Realistically, the big growth opportunity for Walmartshopping trips. adding SKUs to attract value shoppers. is through its International division. Already the world’s third largest retailer in its own right, Walmart International is well positioned for growth in Latin America, Asia, Africa and – possibly – Europe.19 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 20
  • 12. The TOP 203. Tesco The company strengthened its focusCultivating loyal on growth outside of the UK, with the appointment of Philip Clarke, a former head of Tesco International, who succeeded Terryshoppers Leahy as Tesco CEO in March 2011. Tesco is active in 12 countries outside of the UK, with the greatest proportion of sales driven by operations in Asia, including, China, Japan, South Korea, Thailand and Malaysia.Tesco continued to strengthen its business in Central and Eastern Europe make the next greatest contribution to sales followed bythe UK, while expanding abroad. Sales grew the US.6.4 percent to $94 billion in 2010, from 5,380 Tesco is present in China with itsstores. Same-stores results rose 2.6 percent. hypermarket and express formats. The chain entered the US in 2007, with an upscale convenience format called Fresh & Easy. It is about to launch a smaller “Express” variation. In China, Tesco At a glance already has changed its expansion model, n $21.8 billio developing rent-producing shopping malls e Brand Valu -15% and making Tesco its anchor tenant. Four Change B rand Value $94 billion such developments already exist. TescoThe UK drives 70 percent of Total Corporate Sales 5,380 s is searching for a local partner in India,Tesco’s business. With twice Total Corp orate Store $79.2 billio n where opportunity could be great but more Salesthe selling space of the second- TESCO Bra nd s 3,969 long-term, and it has not entered Russia or Above: Tesco dominates Below: Price remained an TESCO Brand Store grocery sales in the UK, essential part of the brandlargest UK competitor, Tesco gains peration 13 es), Tesco Brazil, which currently is not on the radar. with several formats. message during 2010. Co untries of O o (superstorabout one-third of all the country’s Tesco bran clude Tesco, d sales in Tesc z, Tesco Ex Metro, Tesc tra, Tesco o ct and es/Express , Tesco Dire press/Expr ter, Tesco.iegrocery sales primarily from three Ex (compact), Tesc o Supercen ces: Kantar Retail, Millw ar d Brown O ptimor Sour tesco.com.different formats—hypermarkets,supermarkets and conveniencestores, but also from smallerconcepts, such as garden centers,and from e-commerce. As the market’s most diverse multi-formatTo leverage this dominance and reinforce retailer, Tesco also cultivated shopperloyalty during a period when economicstress threatened shopper defection, Tesco loyalty with a broad offer intended to fill most needs. Along with grocery, Tesco’s insights & implicationsdoubled the points earned for use of its menu of retail services includes insurance, • Tesco’s strategy of gaining shopper lifetime loyalty continues to drive theClubcard. Reflecting its willingness to invest banking, travel and real estate. The chain is business, but now needs to be applied across all divisions, from grocery storessignificantly to retain customers, Tesco opening bank branches within hypermarkets to non-food and to banking and insurance services.also purchased the outstanding stake in and rolling out Tesco Mobile. Still, sales • As UK sales growth slows, international business becomes more important,Dunnhumby, the customer insight company growth pressure in the UK and currency particularly China.that manages the card. Tesco had been fluctuations affected Tesco’s brand value, • To lower costs, Tesco continues to centralize its operations, with the latestmajority owner. which declined. focus on Central and Eastern Europe.21 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 22
  • 13. The TOP 204. Carrefour Above: Carrefour City servesUnifying the brand London, Paris and other urban locations. Below: Barcelona location displays fresh fish.Carrefour attempted to strengthen its corebusiness and also sell under-performing partsof the company to raise cash. In France and Spain Carrefour also unified At a glance its convenience store operations under Brand Value $13.8 billion the Carrefour City and Carrefour Contact Brand Value Change -8% banners. Using the Carrefour brand in these Total Corporate Sales $116.4 billion 5,000-to-8,000 sq. ft. stores, as well as Total Corporate Stores 14,038 in the hypermarkets and supermarkets, CARREFOUR Brand Sales $99.7 billion enables Carrefour to coordinate its private CARREFOUR Brand Stores 5,244The combination of investment 40 label, marketing and merchandising Countries of Operationand divestment activities reflected Carrefour brand sales include Carrefour, Carrefour Bairro, strategies. Leveraging the Carrefour brandthe simultaneous objectives of the Carrefour City, Carrefour City Café, Carrefour (Compact), works globally, but is especially relevant in Carrefour Contact, Carrefour Drive Carrefour.es, Carrefour mature markets, where hypermarket growthchain’s primary shareholders, private Express, Carrefour Market, Carrefour Marinopoulos, Carrefour Montagne, Carrefour Mini, and Carrefour Planet. has slowed. The company is looking toequity partners interested both Sources: Kantar Retail, Millward Brown Optimor the BRICs for growth with the exception ofin short-term results and top-line Russia, which it exited in 2009.performance. Sales declined 2.8percent to percent to $116.4 billion Meanwhile, Carrefour management continued to divest assets to gain cash.in 2010. The decline resulted fromweakness in France, Carrefour’s In November 2010, the company sold its insights &home market, and the rest of business in Thailand to the Casino Group. Similarly, in March 2011, the company implicationsEurope. Brand value declined announced the spinoff of its Dia discount • Carrefour is rolling out its latest hypermarket8 percent. To fortify its position in Western Europe, store division, which operates in eight concept “Planet” across Europe, hoping to drive Carrefour launched a new hypermarket country markets and accounts for about more people into its stores and abate the traffic-To introduce greater management format called Planet with six test stores 10 percent of total Carrefour sales. Merger decline has been one of the main challenges ofefficiency as it pursued its objectives, in Belgium, France and Spain. Aimed at discussions in Brazil ended unsuccessfully. the hypermarket format in recent years.Carrefour recruited two executives from the reviving hypermarket sales, Carrefour • At the same time, Carrefour is not neglecting itscompetition, Walmart and Tesco. These designed the large stores of about Carrefour operates six formats, including small-store concepts, with supermarkets and 100,000 sq. ft. to be shopper driven, hypermarkets, supermarkets and discount, convenience channels receiving significantwell-laid plans suffered an unexpected investment as Carrefour implements moresetback, however, when one of the new with merchandise organized thematically, under six banners in 40 countries. coherent strategies.leaders departed after less than 12 months integrating food and non-food. Carrefour Worldwide, hypermarkets accounted for • Short-term objectives continue to drive someleading Carrefour in Europe outside of intends to rollout these stores in Italy and about 60 percent of the chain’s sales in of the corporate decisions (divestment of Dia),France. Subsequently, the head of France, Greece, ending 2011 with a total of almost 2010, and an even higher percentage and Carrefour probably will divest more of itsanother high-profile recruit, also departed. 100 units. outside of Europe. operations in the coming months and years.23 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 24
  • 14. Commentary This change is well illustrated by the critical intersection of shopper marketing, digital Shopper and e-commerce present in a case study for G2’s long-standing client P&G and its CoverGirl brand in the US. marketing and By Jonathan Dodd The assumption about the cosmetics category might be that it’s a fairly simple equation; that agencies produce beautiful Digital Global Strategy Director, G2 thematic communications predominately in above-the-line media, and those activities until just a few years drive consumers to the store and shoppers ago, shopper marketing make their purchases. and digital were treated A critical intersection for brand success as separate disciplines. In reality, that is not the case. In the cosmetics category, and in CoverGirl as Today, considering shopper a range, the consumer is faced with an marketing and digital ocean of choice. Often the consumer requires a combination of products to together is essential for achieve an overall end look. Digital begins brand success. to play a significant role in easing the shopping process and facilitating a better experience for the consumer. Because CoverGirl is sold in mass channels in the US, it is not available at a counter where the shopper can find assistance. The original role of digital was to act as a surrogate beauty consultant. Consumers were driven to a website where they could find information about the major products, inspiration for the look they sought and direction about which product was right for them to purchase. A number of utilities were developed, such as a virtual make-up mirror. The consumer could upload a photo of her face and find the shades and tones that suited her best. Although a commerce connection was created, initially the relationship was based on bricks and mortar. There was a store locator to find out where to purchase. As the site evolved, we enabled the shopper to click through and purchase online.25 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 26
  • 15. COMMeNTARYAs social media increased in popularity, A full range of touch points are employed, In the US, there are now 1.4 million activeFacebook and YouTube elements were from traditional mass media to in-store CoverGirl subscribers with 75 percent ofadded to the integrated program enabling retail—with digital media playing a those customers using the color-matchinga new path to purchase. With the recent significant role across the entire purchase utility, demonstrating that cosmetics is adevelopment of a new discipline—social decision journey. Multiple digital strategies, high involvement category. There are nowe-commerce—functionality was created that activations, channels and platforms are over 1 million Facebook fans. And thereenables a Facebook user to stay within the employed. In the search phase the Cover are thousands of live chat conversations,Facebook platform and access the utilities. Girl shopper is connected to the brand and product reviews and an increasing numberOriginally provided to the shopper on to the right products. Relevant and targeted of product sales going through online.Covergirl.com, a customer now can access information is served to the consumer.these same utilities on mobile and interact CRMs help personalize recommendations. The integration of shopper marketing andwith the category and the brand within E-commerce enables easy access to digital has proved extremely effective for thethose media. content to inspire and assist. With social CoverGirl brand. engagement opportunities are created forThe purchase consumers to swap their stories.decision journey The purchase phaseThe role of digital was determined using thesame approach G2 takes to the integration In the purchase phase, it is now easier for "G2 Worldwide is a global brandof all communications. We look at the shoppers to go to traditional bricks and activation agency networkpurchase decision journey first. Within mortar from e-commerce with the basket of that helps marketers maximizethis particular case study there are many goods they’ve identified as right for them. Brand Commitment SM. G2 offerssteps, from learning how to apply make- direct marketing, data analytics,up correctly to sharing that experience. Mobile is now the connective tissue along shopper marketing, branding andNot long ago each step would have been the purchase decision journey. Mobile design, promotional marketingdiscrete, taking place at various locations, integrates digital in-store and out of the communications planning andacross differing media or channels. store, online and offline. For example, if digital/interactive marketing."Sometimes that remains the case. But it’s a shopper is in the store and sees a new jdodd@g2.comalso true that at other times all those steps and unfamiliar product, the virtual make- www.g2.com/emeacan take place at the same time in a single up mirror utility gives the shopper thedigital channel—just on mobile, for example, opportunity to find the right color and shadeor on a laptop or tablet or just within a while actually in the aisles.particular environment such as Facebook. A YouTube channel has been created whereThe communications architecture that the shopper can find tips on ensuring thedrives this result is about easing the make-up is being applied correctly. Thereshopping experience. The goal is to inspire are user reviews to connect the shoppershoppers and help them learn about the with friends. Recently, those reviews werelatest trends and the right look for them. published in-store, so the peer experienceShoppers are then helped to navigate the is immediately available and moredecision-making process and provided information is accessible on mobile.with helpful tips on using the products formaximum advantage. Then the consumeris guided to focus on reflection, and askedto consider, rate and share her experienceswith Cover Girl.27 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 28
  • 16. The TOP 205. Target Changes probably were most obvious in Target also extended its private labelDelivering on food, where Target continued the roll out strategy, particularly in consumables, of the PFresh prototype store offering with value-priced food and drink branded a full selection of fresh food along side Market Pantry and the premium selectionexpectations the packaged food and drink offering. designated Archers Farms. In addition, the The carefully edited range of chilled, frozen chain expanded its Up & Up private brand, and perishable items helped drive traffic which enabled Target to present a more and reinforce Target’s competitive position price-driven face to shoppers while against Walmart, its chief rival and enjoying higher margins. Target effectivelyTarget reconnected with its customers. America’s largest food merchant. communicated these changes with messages that emphasized a combination of quality with greater affordability. The company also sought expansion opportunities and announced that it would open its first stores outside of the US, in Canada, taking over leases of the Hudson Bay Company’s Zellers stores. Like Walmart, Target developed smaller stores designed specifically for urban markets, At a glance which matches well with its trendy $12.5 billion sensibility. The chain plans to open its first Some shoppers abandoned the Brand Value 3% small format store, called City Target, in chain during the depths of the Brand Value Ch ange $65.8 billion downtown Chicago. City Target is expected ate Sales recession because the brand, Total Corpor Stores 1,750 to be about 54,000 sq. ft. or roughly half Total Corporate known for its trendy interpretation of Sales $65.8 billion the size of a typical Target store. TARGET Brand well-priced merchandise, seemed Stores 1,750 TARGET Brand 1 poorly positioned during a period Countries of Op eration t and target.com es include Targe of consumer spending withdrawal. Target brand sal Sources: Kantar Retail, Mi llward Brown Op timor Much of the merchandise mix focused on “wants” when consumers retreated to “needs.” insights & As shoppers regained discretionary income, or when they no longer could postpone implications spending on basics, they returned to • Target’s first venture outside the US will test Target and found a somewhat different whether Canadians prefer the style of Target to Walmart, which is ramping up its SupercenterAbove: Target expanded the chain, working harder to honor the doublepresence of its Up & Up private expansion in the market.label, positioning it against promise of its strapline: “Expect More. Pay • With savvy marketing and private label, Targetnational brands. Less.” Especially the “Pay Less.” The effort has successfully balanced upscale trendinessBelow: The store in the Harlem produced a 3.8 percent increase in sales and affordability, positioning itself well for futureneighborhood of New YorkCity includes a fresh food to $65.8 billion and a 2.1 percent rise in economic swings.department. same-store-results following two years of • Urban store development portends a significant same-store declines. Brand value increased opportunity for growth and another challenging 3 percent. head-to-head clash with Walmart.29 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 30
  • 17. The TOP 206. eBay Ebay strengthened its marketplace Ebay also invested in acquisitions lastNew fix on pricing businesses last year with new programs year. It agreed to purchase brands4friends, intended to promote trust in the site and Germany’s largest online shopping club with encourage buying big-ticket items. The customers across Europe and in Japan. company moved toward fixed pricing, which The company acquired RedLaser, a barAs the recession receded, eBay emerged accounted for 60 percent of merchandise volume. It also added more branded code reading application for comparison- shopping, and integrated it into its mobilebetter positioned for the rise in mobile retail merchandise, with an emphasis on fashion. With Microsoft’s purchase of Skype in May device apps. The company also bought Milo, an Internet site that enables usersand the declining interest in online auctions, 2011, eBay ended its ownership of a brand purchased in 2005 and substantially spun to search for merchandise by store and inventory level. In 2010, eBay’s salesthe company’s core business. off in 2009. generated from mobile transactions reached almost $2 billion. At a glance Brand Value $10.7 billion Brand Value Change 15% Total Corporate Sales $61.8 billion Total Corporate Stores 0 EBAY Brand Sales $61.8 billion EBAY Brand Stores 0 Countries of Operation 30 The eBay sales figure is the repor ted sales value of transactions between buyers and sellers on the eBay website. The company reported corporate revenue of $9.2 billion. The eBay country count includes only the online e-com merce operation. Sources: Kantar Retail, Millward Brown Optimor insights & implications • Ebay has been remarkably nimble and forward The company generates revenue from fees thinking with a number of its recent acquisitions.Revenue improved 5 percent to $9.2 and advertising. It operates its marketplaces • The business seems to be readying itself forbillion in 2010. The company ended a gradual transition away from being a quasi- to connect buyers and sellers more efficientlythe year with more than 94 million in an online environment that cultivates retailer to becoming a B2B service provider.users worldwide and eBay’s brand trust and facilitates financial transactions. • While the core auction business has growthvalue appreciated by 15 percent. Along with eBay.com, the marketplaces potential, eBay is definitely taking the right steps by diversifying into new areas.The company experienced growth include StubHub (ticket sales), Shopping.across all its businesses, which it com (comparison shopping), Rent.com (apartments), and Half.com (books andbroadly divides into two categories: entertainment for fixed prices). The payments Above: The daily deals drive traffic to the eBay site. Below: The auction business continues, but eBay nowmarketplaces, including its auction businesses include Bill Me Later, which emphasizes fixed prices.site; and payments, which includes enables customers to obtain credit at thePayPal, the online payment facility. point of sale, and PayPal.31 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 32
  • 18. The TOP 207. Home Depot In a departure from its direct-ship supply With a re-launch of its website and theBack to the future chain philosophy, Home Depot added a introduction of mobile apps, Home Depot network of cross-docking locations, where strengthened its multichannel presence and merchandise received from vendors was investigated the possibility of payment on assembled into full-load store shipments its Facebook page. As the chain looks toHome improvement shoppers returned to improve store in-stock positions and raise margins. Similarly, the chain that drive store productivity toward pre-recession levels, it will increase investments inand Home Depot was ready. invented the home improvement warehouse store, which average 105,000 sq. ft., is e-commerce to more fully engage shoppers whenever and wherever they shop. testing smaller units of 60,000-to-80, 000 sq. ft., or roughly the size of some if its earliest warehouse store prototypes. At a glance $9.9 billion Brand Value ange 10% Brand Value Ch Sales $68 billion Total CorporateThe chain benefited from Total Corporat e Stores 2,248 and Sales $68 billionimprovements, made during the HOME DEPOT Br 2,248 and Storesrecession, in customer service, HOME DEPOT Br eration 7 Countries of Opmarketing and logistics. Although Home Depot bra nd sales include Home Depot andconsumers spent disproportionately homedepot.com Sources: Kantar Retail, Millward Bro wn Optimoron repair and maintenance ratherthan major projects, sales grew2.8 percent to $68 billion. Averageticket, around $52, and customertransactions increased. Same-stores sales grew 2.9 percent. Andthe value of the Home Depot brandrebounded 10 percent. Left: The New York City store on Right: In the North Bergen, 23rd Street in Manhattan features New Jersey, store Home DepotThe results reflected the shift back to the High unemployment among contractors dramatic décor displays. demonstrates its authority in thebrand’s core drivers: price, selection and enabled Home Depot to improve service tool category.service. Although Frank Blake initiated the to DIY customers by hiring out-of-workstrategic reset when he become CEO in professionals to staff stores, particularly in2007, it took time to implement and the the highly technical electrical and plumbingdifficult economy obscured the impact. departments. The company also increasedThe recession exposed Home Depot’svulnerability to the fluctuations of the investment in employee training, shifting more sessions to in-store from online. insights & implicationshousing market. Contractors comprise And Home Depot reinstituted the “Homer” • Growth will depend more on international sales as the net US store count inonly a small part of the chain’s customer badge, patches sewn on the aprons of 2011 remains unchanged for the third straight year.base, but they account for as much as 35 associates who demonstrate outstanding • Home Depot is developing new merchandising tools to better target keypercent of sales. Home Depot explored customer service. customer segments on a market-by-market basis.programs that recognize and reward high- • The in-store environment will continue to evolve as the retailer implements newspending contractors. digital shopping technologies.33 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 34
  • 19. The TOP 208. Aldi Unlike Lidl, another German-based deepBroadening discounter with which Aldi competes head- to-head across Europe, Aldi also operates outside of Europe, in Australia and in thethe brand US, where it is represented under the Aldi banner and the somewhat more upscale and trendier Trader Joe’s. Generally, Aldi enters markets relativelyEconomic weakness in Europe impacted results. late, believing that in a mature market its low-price, high-quality message offers a differentiated and compelling counterpoint to existing players. The company also benefits from entering after sufficient infrastructure is in place. Above: The stores carry an Below: The Aldi storefront narrow range of 800 SKUs, projects the brands no-frills Aldi was founded in 1948 by two bothers, mostly private label. image. Theo and Karl Albrecht, who operated the At a glance brand as two separate companies, Aldi Nord and Aldi Süd, since the 1960s. Brand Value $9.3 billion Theo Albrecht, owner of Aldi Nord, died Brand Value Change 6% last year but had not been recently Total Corporate Sales $65.9 billion involved in running the business. Total Corporate Stores 9,666 ALDI Brand Sales $54.2 billion ALDI Brand Stores 8,738Growth, mostly from new stores Countries of Operation Aldi brands sales include Aldi 18 insights & implications Nord and Aldi Süd and aldi.rather than like-for-like sales, Sources: Kantar Retail, Millw ard Brown Optimor comdepended primarily on the strengthof the economy in Germany, Aldi’s • Similar to Lidl, Aldi has increased promotionalhome market, where the brand activities. Although mainly focused on private label, the promotions also include brands for shortis most evolved and is viewed as periods (a week or 10 days).offering both quality grocery as well • To strengthen its reputation for quality andas low prices. convenience, Aldi is developing co-branded promotions with suppliers.Still, the Aldi brand value grew 6 percent, The company includes a few national • The retailer is considering new market entries,as the company increased its investment brands in its assortment for tactical mainly across Central and Eastern Europe.in traditional media to broaden the image reasons, to offer an option when itsof Aldi outside of Germany, where most own label cannot provide the requiredconsumers view Aldi as a deep discounter combination of price and quality. Thesebased on its competitive pricing and limited national brands sometimes are promoted onrange of 800 SKUs, 95 percent private a limited “in-and-out” basis to build trafficlabel. Aldi asserted that its private label and offer suppliers a relatively risk-freeproducts not only beat national brands avenue for driving volume as Aldi pursuesin price, but also in quality. a high-frequency-low-basket strategy.35 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 36
  • 20. Commentary Physical retailers see their businesses as quite simple. The activities have been managing an going on for a long time and they’re well understood and codified within organizations. Physical retailers make e-commerce money on a store-by-store basis. You grow through like-for-like improvements and new By Michael Ross store openings. business Director and Co-founder, eCommera Zara, for example, has opened a store a day for the past four years. It’s a difficult Digital is great. But how do strategy to execute, but it’s an easy one you actually make money to conceive. Retail also is about turning from it? inventory into cash. And retailers always will And actually making money say that they either have too much stock or not enough. It’s very binary. The short answer is that in retail you make money quite So identifying problems in retail is easy. differently online than you If you look over your like-for-likes and all the stores but one are up 5 percent, you do in physical stores. here’s don’t need a PhD to say there’s probably a the longer answer. problem in that store. Solving the problem may be more difficult than identifying it, however. The store may be in a bad location. It could be the wrong size. And the big bets in retail—the store, the location, the shop fit—are made up-front. Once you’ve made your big bet, you can manage based on outcome. You can look at what happened and work out what to do. Online is much different In some ways the challenges online are reversed. In the physical world it’s easy to spot a problem but difficult to fix it. Online, in contrast, the problem often is obscured by overwhelming amounts of data. Once you identify the problem, however, it’s much easier to fix it.37 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 38
  • 21. COMMeNTARYHere’s what I mean. You make money Complexity comes with the inter- Because the challenge of running an There’s too much data in the online world,online on an order-by-order basis. You grow connectedness of these factors. The key is online enterprise is about acquiring and which can be overwhelming and misleadingthrough customer acquisition and retention. looking in the right place for the problem. retaining customers, the business model if it’s analyzed in isolation and not with aIt’s not better or worse than the physical For example, at one company I worked with is similar to that of FMCG companies. It’s holistic view.retailing model. It’s just very different. And we experienced a high level of customer the way FMCG brands trial products andif you try to apply the methodologies and complaint for being out of stock. But our measure what percentage of trials become And there’s the tyranny of averages.dogmas for making money in the physical in-stock position was well over 90 percent. repeaters and what percentage of repeaters E-commerce businesses are awash withworld to the online world you simply make Because we were in an online business, become loyalists. That’s the evolution of an averages: gross margin, conversion rate, forbad decisions. however, we were able to check what e-commerce business. example. The problem with averages is that customers were viewing. And in those items generally they’re pretty meaningless. It’s theIn the online world, traffic is a trading lever. our in-stock position was at about 75 percent. The default position is that most variations that drive actions.In the physical store, once you’ve paid e-commerce businesses will stop growing,your rent, the cost of a marginal visitor is The way you make money is a new and it’s normally a shock when it happens. Finally, the challenge online is to managezero. Whether you have a hundred people fundamental KPI for e-commerce. Profit- To drive growth over time requires gaining the things you can do something about. Itor a thousand in the store, you pay the per-order is the measurement. That’s new customers. That generally requires means measuring and acting on what cansame in rent. Not so online. Online it’s calculated as the gross profit plus or minus expanding internationally and expanding be controlled rather than fixating on non-extremely easy to spend much more on delivery (revenue or cost), less promotion product range. actionable outcomes.generating traffic than you gain in margin. and marketing. The delivery charge is aAnd managing has other challenges. You marketing decision, not an operational Differences between thecan’t walk the store or review the staff the decision.way you can in the physical world. An online physical and online worldsorganization is staffed by a lot of people People often ask, “What’s a goodsitting in front of PCs. It’s often difficult to conversion rate?” But that’s the wrong Here are three fundamental differences: "eCommera is a pioneering providerspot a problem. question. Conversion is an outcome, not of intelligent e-commerce trading something to get fixated on. Conversion 1. Knowing what shoppers have looked solutions, enabling brand owners at: It may seem obvious but online, and retailers to sell efficiently andRunning an rates will fluctuate depending on many factors, including pricing, availability and when a product isn’t selling, you can intelligently across multiple channels. "e-commerce business promotions. distinguish between a product that isn’t michael@ecommera.co.uk selling because shoppers looked at it and www.ecommera.comThese are the four blocks of business for rejected it or because shoppers haven’trunning an e-commerce business: Growing an seen it. e-commerce business- Marketing activity: Channel optimization, 2. The economics of marketing. When partnerships with Facebook or other And when you’re running both physical and you’re spending per click to generate social media sites and other activities to online businesses you’ve stepped up the traffic it’s easy to spend more on acquire and retain customers complexity to another order of magnitude. marketing than you earn in gross margin. Macys.com in the US can connect the- The website: A place that’s accessed from number of people who search online 3. Link to customers. Sometimes poor many key customer touch points including with the transactions completed in-store. sellers, which don’t seem to be worth PCs, kiosks, mobile devices This information enables the company to keeping in the range, actually may serve and tablets measure the effectiveness of its online an important function. While they may not marketing investment. earn a place in the range because of their- Product: Range, price, availability, content sales volume, they may be the reason that your best customers shop you.- Operations: Order processing, delivery to consumers and returns39 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 40
  • 22. The TOP 209. Auchan Although not present in Brazil or India, More typically, Auchan expansion drivesFamily culture Auchan maintains a strong presence in a virtuous circle of family owned the other two BRIC markets. Its 86 stores businesses. The company often acts as in Russia produce 10 percent of Auchan’s a real estate developer, securing landdrives results annual sales, a number that’s expected to early and pursuing a deliberate expansion double by 2015. Auchan’s decentralized strategy of developing shopping malls that it management and discount business model anchors with Auchan hypermarkets and fills enabled the company to effectively meet the with specialty store tenants many of which preferences of Russian consumers. it owns. Sometimes the tenants includeAuchan generated greater profit than its larger Auchan operates 176 stores in China, its financial holding, Bank Accord, which finances Auchan ventures.rival Carrefour last year. some of which it owns in a joint venture with a Taiwanese partner, RT Mart. Auchan plans to raise cash for local market expansion with an IPO on the Hong Kong Stock Exchange. While this approach seems to contradict the company’s predilection for family-ownership, it is consistent with its pragmatism and acknowledges the need to rapidly achieve scale in such an ce At a glan $7.8 billi on important market. alue -1% Brand V nge lion alue Cha $54.9 bil Brand V Sales rporate 2,575 Total Co te Store s lion l Corpora $38.0 bil TotaAt least three factors accounted Brand S ales 336 AUCHAN resfor the chain’s strong results: its rand Sto 13 AU CHAN B ration Les Halle spresence in fast-growing markets; s of Ope Auchan, Auchan City,n.com.cn Countrie inclu les de nd a ucha ve a brand sa irect, AuchanDrithe synergies of its interconnected Auchan d’Auch an, Auch and n Optimo r Auchan.it ard Browbusinesses; and the strength of and Drive ntar Retail, Millwits culture and continuity of its Sources: Ka insights &family management. Family and implicationsemployee ownership enable the • Auchan has been a pioneer in developing Above: Auchan uses the Alcampo banner in Spain,company to operate with a more e-commerce and drive/pick-up concepts. In as in this Barcelona store. France alone, this channel is expected to deliverlong-term perspective compared Auchan’s employees own 15 percent of close to 20 percent of retailer growth in the Below: This Moscow store suggests the strengthwith its publicly traded competitors the company. Employee ownership is part coming three years. of Auchan in Russia.that must respond to the pressures of a successful effort to inspire innovations • The success of the Auchan’s pending IPO with itsof reporting their results quarterly. in merchandising and operations. An idea Chinese partner RT Mart could enable the retailer to significantly outpace the largest competitorsBecause the company uses many suggested by a hypermarket manager (either national or foreign) within one of the world’s several years ago, for example, is drivingdifferent banners, it does not fully fastest growing retail markets. e-commerce growth and drawing imitators.leverage the Auchan brand, which Called, Chronodrive, the approach enables • Auchan’s long-term ROI vision continues to drive the business. A commercial strategy based onmay account in part for the slight customers to shop online and pick up at lower commercial margins and high inventorydecline in brand value last year. a local store. turnover is expected to remain core to its model.41 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 42
  • 23. The TOP 2010. IkeaSales rise oncautious spending Left: Known for enormous out-of-town stores like this one in the UK, Ikea is experimenting with smaller locations for urban centers.Ikea’s brand value rose 28 percent as Right: The Ikea brand is the worldwide leader in home furnishings.housing strengthened. The store redesign may be related to The global reach of the company opens it to the simultaneous development of a close scrutiny, and it responded to negative compelling e-commerce site that features press about a complex corporate structure At a glance a home delivery service. Implementation that helps minimize its tax obligations $7.3 billion of the online service challenges Ikea to and to questions about the environmental Brand Value 28%The increase followed a brand Brand Value Ch ange $33.5 billion complement rather than cannibalize its impact of its timber sourcing.value decline of 15 percent a year Total Corporate Sales in-store offer. e Stores 316earlier. Sales of the Ikea Group grew Total Corporat $33.5 billion IKEA Brand Sale s Ikea enjoys the unusual distinction of7.7 percent to roughly $30 billion IKEA Brand Stores 316 facing no equivalent global competitor in 38in 2010, with like-for-like sales up Countries of Op eration Group, Ikea partn ers its category. Rather, the chain faces local include The Ikea2.4 percent, although shoppers Ikea brand sales and ikea.com wn Optimor competitors in a variety of related categories Retail, Millward Broremained cautious. The Group Sources: Kantar including furniture, home improvementoperated 280 stores in 26 countries. and home furnishings. Ikea believes it has growth potential, even in its more matureThe Group, with a variety of markets, such as the Nordic countries.partnerships, produced Ikea brandsales of $33.5 billion from stores in38 countries. insights &Perhaps driven by weaker post-recession The change, being tested in Sweden and implicationsdemand and by a determination to reach the UK, should improve satisfaction with • E-commerce remains a channel that Ikea needsdeeper into its mature markets, Ikea the shopping experience. However, it to tackle more effectively, introducing rangescontinued to plan smaller, multi-level stores may reduce the inspiration and impulse and a shopping experience different from its physical stores.for central urban locations. In a related purchasing that results when shoppersdevelopment, the company experimented traveling the full store circuit are exposed • As Ikea moves into city centers as part of its European expansion strategy, it also couldwith a more open, lighter and accessible to the complete merchandise assortment. consider shopping mall locations to gain visibilitybig-store format to provide shoppers with The chain hopes to reduce shopper and traffic.more freedom to navigate the layout without frustration while building on the loyalty • Corporate initiatives aimed at restoring therestriction to a shopping path that winds customers feel toward the Ikea brand retailer’s image also can be expected, followingthrough every department. because of the broad assortment and recent negative publicity about tax and value-for-money it represents. environmental issues.43 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 44
  • 24. The TOP 2011. Lowe’s The chain implemented several changes Known for large warehouse stores, theRedefining itself that should strengthen performance. It company is testing other options, including added more staff dedicated to helping a 66,000 sq. ft. store to facilitate expansion contractor customers. It also introduced into smaller markets. Along with its bricks a new category of associate to visit and mortar stores, Lowe’s also is improving customers in their homes and sell outdoor its website to reinforce its position asThe ongoing slump in housing— products including gutters, siding, fencing a multichannel retailer. Lowe’s alreadyand a resurgent Home Depot—hurt the and landscaping. With people staying longer in their current homes because of offers the possibility of ordering online and collecting at a local store, with a guaranteebrand value of Lowe’s. the weak economy, this initiative urges them to protect their investment. that the order will be ready within 20 minutes. Lowe’s entered Mexico in 2010, opening Lowe’s also adjusted its range of products two of what it expects eventually will be a and services to compensate for the total of about 50 stores. It also boosted its slowdown in major project activity, which store count to 24 in Canada and anticipates traditionally drives warehouse store volume. an aggressive store-opening program Lowe’s is testing auto and pet supplies. in Australia through a joint venture with It prominently displays consumables, Woolworths. such as cleaning supplies. And Lowe’s emphasizes home décor categories, such as home furnishings and housewares, with a particular focus on its private brand Allen + Roth. At a glance Left: The Lowes storefront signals the chains home Brand Value $6.5 billion improvement mission. Brand Value Change -7% Right: The paint department, in Total Corporate Sales the North Bergen, New Jersey, $48.8 billion store expresses the Lowes Total Corporate Stores 1,749 commitment to home décor. LOWES Brand Sales $48.8 billionPerhaps because Lowe’s was LOWES Brand Stores 1,749better positioned at the start of the Countries of Operation 3recession than its bigger rival, thechain made fewer major adjustments Lowe’s brand sales include Lowe’s and lowes.com Sources: Kantar Retail, Millward Brown Optimor insights &and has not yet enjoyed a rebound implicationsin brand value as the economy • Lowe’s intends to reinvigorate its stores with newrecovers. That said, sales increased And Lowe’s articulated a new vision to categories, enhanced merchandise presentations,3.4 percent to $48.8 billion from buffer itself better from future fluctuations and stronger value propositions. of the housing market. Calling itself a home1,749 stores. Same store sales rose improvement company rather than retailer, • Private label products will be a larger factor in strategic planning, particularly in home décor.1.3 percent, or less than half the Lowe’s added new product categories and • A closer alignment of its physical stores and digitalpace achieved by Home Depot, and strengthened its multichannel connection investments will become more critical toprofit improved 12 percent. with customers. fulfilling Lowe’s brand presence.45 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 46
  • 25. The TOP 2012. Marks & Spencer M&S also introduced more branded M&S will accelerate the rollout of the SimplyHeritage brand products into its non-food business, where Food convenience stores during the next the firmly established Marks & Spencer few years, especially in high traffic locations, private label is known for quality. Facing such as train stations, where it will partnershifts attention fierce competition from fast fashion retailers, with franchisees. M&S operated 155 Simply M&S softened its premium image with Food shops and the end of 2010, and plans promotional strategies that escalated to have a total of 190 by 2015. savings with the size of purchase. Although M&S operates 1,022 stores inMarks & Spencer focused on While the food and non-food promotional activities worked well separately, they 29 countries, the brand is less well known outside of the UK, which generates thefood last year. remained inadequately integrated. The food majority of the company’s sales and profit. and non-food customer bases of M&S only Brand value declined somewhat last year, partially overlap, and the physical layout of in part because of currency fluctuations. the retailer’s multi-story department stores does not encourage cross shopping. At a glance $5.3 billion Brand Value ange -8% Brand Value Ch Sales $15.0 billion Total Corporate Stores 1,022 Total Corporate s $15.0 billion M&S Brand Sale es 1,022 M&S Brand Stor eration 29 Countries of Op lude Marks & Sp encer r brand sales inc Marks & SpenceWhile the department store business and marksandspe So ncer.com urces: Kantar Re tail, Millward Bro wn Optimorremained of central importance forthe venerable British brand, for thefirst time food rather than non-foodproduced a greater share of the insights &chain’s revenue. implicationsThe growth of the M&S food business By introducing branded products in food, • Having introduced brands into its primarily privatereflected several developments, including M&S acknowledged that its private label label assortment, the retailer will need to clarify itsthe emphasis on the company’s Simply range in food, although strong in ready- price positioning against competition and couldFood specialty stores, the launch of meals, was weaker in other parts of the intensify promotional activities.branded products and the relative food category. To meet this challenge, • Better integration between the food and non-food Above: For the first time, sales Below: In non-food, the brand of food, rather than non-food faced fierce competition fromweakness in non-food during the recession. M&S known for relatively premium pricing, offering would boost the retailer’s performances. contributed the greater share of fast fashion retailers.The food focus coincided with the arrival of Marks & Spencers revenue. already had introduced an entry price point • As the rollout of the mostly franchise-run Simplynew CEO Marc Bolland, who formerly led label in food, about 18 months ago. Food convenience format continues across the UK,the UK supermarket Morrison’s. ensuring consistent execution will be key.47 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 48
  • 26. Commentary To gain these insights, we recently completed two studies: Digital Life and From browsing Mobile life. These studies offer a definitive look into how people are using digital and mobile today. For the Digital Life research to purchase we connected with 48,800 consumers across 46 countries, representing By Raja halabi approximately 88 percent of the global Head of Digital, TNS UK Internet population. The Mobile Life research includes 34,000 consumers in How consumers shop in Digital, and mobile in 43 countries. the digital world particular, is transforming As the Internet matures, brands need to how people shop. The try harder to engage and connect with consumers online, necessitating an in-depth change offers tremendous understanding of the needs, motivations opportunities for retailers and attitudes underlying consumer behavior. and brand manufacturers. In both surveys TNS deployed cutting- edge techniques to accomplish these But realizing these goals, looking beyond behavior into the opportunities requires emotional reasons why people do what they do. Both surveys are geared to address understanding the rapid business challenges at both strategic and changes in consumer tactical levels. We also look at market behavior. understanding and brand attitudes. Here are some important results pertaining to online retail: Pre-purchase browsing: Powerful implications for retailers and brands We looked closely at pre-purchase browsing behavior as an important indicator of purchasing. We define pre-purchase browsing as actually looking for things to buy. It’s purposeful, not casual window- shopping. And the results are eye opening. • Almost a quarter of the people surveyed say they browse daily for something to buy. This seems like a high figure compared to how frequently people browse in bricks-and-mortar stores. Moreover, these people are not all from49 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 50
  • 27. COMMeNTARY the US or other developed consumer societies. Countries such as Turkey, Advancing the brand Mobile possibilities Thailand and Brazil are included. To us message during the One in five people globally uses a computer. this is indicative of the immense utility pre-purchase experience But four out of five consumers are in the "TNS is the global leader in that the Internet brings to consumers in mobile ecosystem. So the question is, custom market research, the shopping cycle. We asked consumers when they find the how do we reach those people? This is a delivering actionable insights presence of a brand intrusive and when particularly important factor in developing and research-based business• On a weekly basis, sixty percent of they find it useful. We found that during the advice to clients around the globe markets where people use their mobile people say they’re browsing. That pre-shop browsing period consumers are so they can make more effective phones like Swiss Army knives, convenient, equates to well over two hours per most open to brand messaging. business decisions. " handheld devices with multiple utilities that person of pre-purchase browsing per span communication and entertainment. raja.halabi@tnsglobal.com week. Only 13 percent of people say they Brand-generated information is important never browse for products or services but user-generated information, such www.tnsglobal.com Over 60 percent of people worldwide claim to buy online. Countries like Uganda or as blogs, plays a key role, particularly in they engage in pre-purchase browsing Tanzania, places perhaps where Internet high involvement categories. The best-in- on their mobile device. Strong consumer infrastructures are less developed, are class brands embrace the user-generated demand in mobile financial services will included in this figure. experience. User-generated information bring the mobile even closer to the shopping is especially important in the fast-growing experience, opening new opportunities forThough we may think that people are going markets of Asia. engagement. Similarly, tablet computingto social media sites for information, we provides the consumer with a differentdiscovered that the branded site of the Consumers worldwide engage in pre- experience and other opportunities.retailer and manufacturer continues to purchase browsing, but the meaningbe important to people for this browsing of the activity differs by region. In China, The point is that we need to see shoppingactivity. And the traditional offline touch consumers associate pre-purchase as a rich experience that combines both thepoints remain important as well. Word-of- browsing with fun and pleasure. In contrast, digital and real worlds. We need to createmouth will not be easily replaced. When you consumers in Southern and Eastern Europe seamless experiences. We also need tolook across categories, the more complex, are seeking to be knowledgeable and think differently about our ROI measures,less frequently purchased categories are informed. The tone and content we how we understand the payback from theskewed towards more information online. present need to match the expectation investment we make in digital since much of of our audience. the revenue is recorded in stores. The valueMoving from pre-purchase to purchase, of digital is much greater than we believe.80 percent of consumers claim to have The pre-purchase browsing period is anpurchased something online; 36 percent optimal time to invite consumers to join aclaim to buy something weekly. Interestingly, brand community. Consumers say their topthe conversion rate between pre-purchase two motivations for joining a brandbrowsing and actual purchase is not directly community are because they’re respondingcorrelated. For example, only 60 percent of to or seeking a promotion or special offer.people who claim to research exclusively This is the entry ticket that consumersonline for products and services actually command to follow a brand. Retail ispurchase offline at bricks and mortar stores. optimally placed for this kind ofThe online world has a significant impact in engagement.driving offline sales.51 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 52
  • 28. The TOP 2013. Best Buy In a retail sector dominated by shops The chain closed its nine Best Buy brandedTo the victor, owned by specific telecom providers, stores in China. After several years Best Buy offers a range of suppliers attempting to establish the Best Buy brand, and handsets, advancing the Carphone it instead will open stores under the namenew challenges Warehouse argument that it provides of its Chinese company, Five Star. At the consumers with objective advice and, end of 2010, the partnership included 174 ultimately, the best available solution. Chinese stores. Best Buy also retreated from Turkey where it operated The move to smaller, technology-led two stores.Best Buy emerged as America’s surviving stores with a relatively high level of service corresponds to the chain’s efforthome electronics superstore. to differentiate Best Buy as a provider of expertise and not simply commodity merchandise. The Geek Squad, as the staff of technology experts is called, produces some At a glance of Best Buy’s highest margins. The company also runs a strong e-commerce business. Brand Value Brand Value $5.1 billion Change Total Corpora -12% te Sales Total Corpora $50.3 billion te Stores BEST BUY B 4,220 rand Sales BEST BUY B $38.8 billion rand Stores Countries of 1,190 Operation Best Buy bran 14That status was insufficient to bestbuy.com d sales includ , bestbuy.ca e Best Buy, Be st Buy Mobil, Sources: Kant and bestbuy.cguarantee unqualified success, ar Retail, Millw o.uk ard Brown Op timorhowever, because Best Buy Above: Best Buy is attemptingdominated a severely diminished to complement shelves ofcategory. Its like-for-like sales merchandise with teams of experts.declined 1.8 percent, although Below: The chain isrevenue increased 1 percent to experimenting with ways to fill unproductive space in its$50.3 billion. Brand value dropped distinctive superstores.12 percent.As technology transformed the Best Buy responded proactively, enteringentertainment business, with digital new categories, such as musicaldownload and DVD rental usurping the instruments, and accelerating the rollout ofpurchase of CDs and DVDs, Best Buylost an important profit and traffic-driving smaller Best Buy Mobile outlets. In a clever strategic move, the company integrated the insights & implicationsdepartment and opened potentially knowledge it gained from a joint venture • Best Buy has the scale and capability to become a genuine global player, but it will need to be more flexibleunproductive space in its large stores. with Carphone Warehouse Group plc, and adaptive to realize this potential.Meanwhile, margins continued to tighten a British retailer. As Best Buy Europe, • Problems in China, defeat in Turkey and massive underachievement in the UK have taught Best Buy thatas Amazon, Walmart and other mass- the organizations operate about 2,500 a cookie-cutter approach is not the formula for global success.market leaders fiercely competed for home shops in the UK and on the continent. • The brand should benefit from an integrated multichannel strategy, the introduction of new, adjacent productelectronics spending. categories and expansion of private label.53 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 54
  • 29. The TOP 2014. Costco Often regarded as a playground forBoomers are back boomers with time and money to spend, Costco seemed to actively court a new generation of shoppers with its use of social media and messages about being a full- solution provider for weddings, with food,Costco’s increases in traffic, trip frequency flowers, gifts and even the honeymoonand merchandise sales suggested that the and ring.customer mood had lightened. Brand value The company continued to draw members that measured higher than average inrebounded 17 percent. household income, education level and home ownership. Typical shoppers spend an average of just over $100 per trip. Costco expects to enter two or three new markets in Europe during the next couple At a glance of years. The chain ended 2010 with 572 Brand Value clubs, including 491 in the US and Canada $4.5 billion and 32 in Mexico. Overseas, it maintained Brand Value Change 17% its largest presence in the UK, with 22 Total Corporate Sales $76.3 billion clubs, followed by Japan (9), Korea (7), Above: Sharp wine prices Total Corporate Stores suggest both the chain’s 572 COSTCO Brand Sales Taiwan (6), Puerto Rico (4) and Australia (1). value proposition andDuring the recession, Costco $76.3 billion treasure hunt appeal. COSTCO Brand Storeswas negatively impacted by its Countries of Operation 572 Below: Costco warehousesgeography, with many stores Costco brand sales include 9 Costco, costco.com, cost average 143,000 sq. ft. in size and offer about 3,900 SKUs. and Costco Business Cen co.calocated in economically hurting ter. Sources: Kantar Retail, Millw ard Brown Optimorwestern states; 26 percent of itsclubs are in California. Its warehouseclub dependence on bulk sales tosmall businesses and homeownersalso was mismatched with the insights &economic climate. implicationsSome customers remained reluctant to tie Costco sustained its authority in key • Costco’s exclusive focus on the warehouse clubup limited cash reserves in inventories of categories like home electronics, apparel concept, accompanied by e-commerce in certainhousehold paper goods. And many lacked and consumables, and continued to markets, distinguishes it in a world of multiformat promote its well-respected Kirkland retailers.the discretionary income required for buyingthe well-priced but expensive jewelry Signature private label in both food and • The chain’s market entry impact always isand other relative bargains that enhance non-food, expanding the brand into new significant, as Costco impresses consumers and small businesses with its operational excellenceCostco’s appeal as a place for treasure categories. Responding to changing and winning blend of quality and value.hunt shopping. Customers remained loyal, demand, the chain increased emphasis • While Costco’s international expansion has beenhowever, with a 2010 membership renewal on organic food. slow, renewed European plans and plenty ofrate of 87.7 percent. Like-for-like sales headroom in the Americas and Asia suggest strongimproved 7 percent. future growth.55 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 56
  • 30. The TOP 2015. LidlPromotion pushesgrowth Left: Lidl projects a double message of quality and price.Lidl prospered last year, in a difficult economy, Right: The chain can be extremely price aggressive, aswith 4.1 percent sales increase to $54.2 in this store in the UK.billion from 9,281 stores. At a glance $4.2 billion Brand Value ange 3% Brand Value Ch $54.2 billion In most of its markets, Lidl increased Like other parts of the Schwarz Group, Total Corpor ate Sales Stores 9,281 promotional activity, particularly on its corporate parent, Lidl has no stores in Total CorporateThat performance was not true les $54.2 billion branded special offers, advertising twice any of the BRIC countries or in any other of LIDL’S Brand Sa 9,281 a week rather than only on Monday. And the world’s fastest growing country markets,of the discount channel generally, LIDL’S Brand St ores 24 eration it deployed its private label to introduce nor is the chain present in North America.with added competition from Countries of Op the Lidl grocery stores and Lidl.co m sites. new products and gain volume and margin As its growth in Western Europe slows, Lidl bra nd sales include wn Optim orhypermarkets and traditional Sources: Kantar Retail, Millward Bro with a price message. Lidl will feel pressure to perform well insupermarkets that adjusted Central and Eastern Europe and to considerdownward, emphasizing opening With more than 9,000 stores in 24 further expansion.price points and private label. European countries, Lidl continued toLidl and its rival Aldi continued to benefit from its overwhelming presence, the economies of central buying and thegain share, however, because of efficiencies of its distribution network. Thetheir dominance and the relative infrastructure that enabled Lidl to roll outeconomic stability of their home quickly across Europe also confined itsmarket, Germany. Lidl brand value expansion, however.grew 3 percent.Lidl benefited from an ongoing strategicshift intended to increase shopping In the UK, Lidl referred to itself as a discount supermarket, rather than a insights & implicationsfrequency and grow average basket size. discounter. The chain adhered closer • Lidl growth continues to be strong across Europe, and the power of its brandWhile retaining its discount image, Lidl has to its discount roots in Eastern Europe and its capacity to attract new higher income shoppers has been key.begun to behave like a full-line grocer with because of the less evolved nature of the • Because Lidl’s presence for now is limited to existing country markets, thean offering about 2,000 SKUs, more than retailing there and the ferocity of discount focus on like-for-like sales is expected to increase.twice the Aldi range, and a mix that is competition from organizations such as • Recent activity suggests Lidl’s intention of shifting from traffic-buildingabout 35 percent branded products. Poland’s Biedronka. mechanics (10 percent off) to more basket-building strategies (multipacks).57 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 58
  • 31. The TOP 2016. Kohl’s Kohl’s effectively flexed up or down in With stores in 49 states, Kohl’s is morePrice and product price and assortment as necessary. It was geographically dispersed than some of especially nimble both at adding private its competitors. The company added 25 brands to generate demand and raise stores, ending the year with 1,083 outlets.draw shoppers margins, and also at offering promotions Known for maintaining high in-store and discounts appealing to value-driven housekeeping standards, Kohl’s continued shoppers. But no matter which way it went, its ongoing remodeling of existing stores. Kohl’s faced enormous competition from Kohl’s also invested in improvements to its discounters, department stores and apparel online presence and its supply chain.Kohl’s performed well as US shoppers specialists, including the rapidly expanding fast fashion brands.ventured back into stores, willing to spendon new apparel and other items forthe first time since the start of the recession. At a glance Brand Value $4.0 billion Brand Value Change -8% Total Corporate Sales $18.4 billion Total Corporate Stores 1,083 KOHLS Brand Sales $18.4 billion Left: The company draws women shoppers with licensed KOHLS Brand Stores 1,083 designer brands, such as Countries of Operation 1 Vera Wang. Kohl’s brand sales include Kohl’s and kohls.com Right: Kohl’s usually locates Sources: Kantar Retail, Millward Brown Optimor its department stores in free-standing locations near major malls.Well positioned as a one-stopshopping location for the entire family,Kohl’s benefited from its strength Despite these financial results, Kohl’s brand value declined somewhat, perhapsin basic commodity merchandise reflecting the difficulties of the retailand contemporary fashion and its category overall, which improved only 2reputation for consistent quality andaffordability. These factors, combined percent in brand value after a decline of 1 percent a year earlier. In addition, the insights & implicationswith heavy promotion and well- chain’s mid-market position in price and • Kohl’s occupies the middle ground between the discounters, with which it shares many characteristics andpriced, licensed designer brands fashion appeal can be dangerous a during shoppers, and more upscale department store chains. periods of transition, like last year, asdrove traffic and results, with sales some consumers feeling more confident • While this positioning should leave Kohl’s in the vulnerable middle, the retailer continues to impress through its commitment to the in-store experience, constant reinvention of ranges and extreme responsiveness ingrowth of 7.1 percent to $18.4 billion. about the economy traded up, while others terms of promotions.Like-for-like sales experienced a 4.4 traded down, fearful of the high rate of • With a very credible presence in e-commerce and much growth opportunity left in North America, Kohl’spercent improvement. unemployment and housing weakness. short-term future looks bright.59 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 60
  • 32. Commentary But it’s about more than just the data. What we’re really doing is helping retailers Zero-Waste improve the efficiency of their marketing and advertising campaigns by targeting only qualified candidates. Because we aggregate advertising™ data across a large range of merchants, we bring a more holistic view of purchase By Dave DeMarsh activity beyond what an individual merchant President and Chief Operating Officer, I-Behavior can see. Our approach is analytics driven, and has provided consistent results to Connecting brands with i-Behavior specializes in clients for more than a decade. connecting brands with the the right consumers right consumers. Seeing the full customer picture We do that across all Why would a retailer provide its data to channels. We have a unique the I-Behavior data cooperative? They do it because they see a return on their data asset because we work OLD NEW investment. The merchants participate as with 2,000 multichannel long as they choose – they may quit at merchants who contribute any time, if they no longer see a profitable return. When merchants join our database, their transactional data to they typically might only have a view into the i-Behavior cooperative two-and-a-half purchases annually from any one individual. This is what we call database. We aggregate narrow relevance. They only understand the this data, which represents individual in terms of what he or she’s done $365 billion based on more with them. than 9 billion SKu-level With I-Behavior, we provide the merchant transactions, and use it with a broad picture of what that customer to do modeling to predict is really about. For example, we may see that a consumer has purchases across things like identifying the many different channels. We can see what consumers most likely she’s buying in home furnishings, or if she’s donating to a not-for-profit. We know to respond to upcoming her magazine subscriptions and whether campaigns. she participates in wine clubs. All that information helps to build a more complete picture of that individual consumer’s purchase habits and interests. And since the best indicator of future behavior is past behavior, this information helps us identify the best consumers to reach in a targeting strategy.61 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 62
  • 33. COMMeNTARYHow do we achieve this goal? We’re a data The holistic view showed us the Webcooperative. We invite people to participate. behavior of Godiva prospects. We couldEverything is linked back to the individual look across our 2,000 retailers and seeconsumer. We have over 180 million what else these people bought. We added "I-Behavior is a US-based data andindividuals in the US and Canada and 70 some demographic data about income and analytics company that providesmillion business contacts. The over 9 billion lifestyle. We identified an audience based consumer and business transactionSKU-level transactions in the I-Behavior on keywords, and searches across brands data to help multichannel merchantsdatabase are performed online, in physical and websites to understand the interests of invest marketing dollars morestores and over the phone. We’re largely the chocolate lovers and where they spend effectively."service merchants selling hard goods, their time. ddemarsh@i-behavior.comhome furnishings, apparel, beauty, and gift www.i-behavior.comproducts. We build hundreds of models We found that chocolate lovers index higheach week to help our retailer customers on travel and food and diet. We saw a greatefficiently target consumers. correlation in the shopping domain. We also found correlations with where chocolateCase study: Godiva lovers shop offline. This information enabled us to build a predictive audienceAt the end of the day, we identify a list of for the client.prospects that retailers want to target.In addition to the data, our reach makes With the insights in place, we went to aus unique. We have 330 million email campaign execution. We executed an onlineaddresses. Accepting that there are gaps campaign where we potentially can reachin what we know about individuals, we 105 million individuals in our database. Atenhance the data with demographics. the core of the initiative, we took the 25,000We can add to the profile over 185 CPG Godiva brand loyalists and built a look-alikecategories across 4,600 brands. With model to target 21 million prospects onlinelinking technology we can associate our and eventually targeted 8.4 million peopledata with online consumer behavior. in that group, based on the client’s desires. The point is that with a small sample of dataWe looked at three different audiences for we identified a large prospect universe.Godiva Chocolate. Godiva had the namesand addresses of roughly 25,000 brand We call this Zero-Waste Advertising™.loyal customers. We looked at chocolatelovers based on search data and onlinebehavior. And we also looked at chocolatebuyers geographically. Ultimately,we used this information to supporta media campaign.63 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 64
  • 34. The TOP 2017. Asda The Netto stores sold a combination of Meanwhile, the Asda supercenters willBig plans for private label and branded product that was continue to offer a combination of food and weighted more heavily toward private label, non-food including apparel and featuring about 60 percent, than Asda. The stores also the successful George private label. Thesmaller stores were more promotional than Asda which, like chain last year promoted aggressively to its corporate parent Walmart, pursues more its core customer with offers such as a of an Everyday Low Price strategy. The man’s suit for £10 ($16). It now faces the small Netto stores challenge Asda’s food challenge of aligning its brand and pricing suppliers to recalibrate their assortments communication across all of its formats,Asda shifted its attention to small stores last and cost structures. Conversely, the suppliers have an opportunity to help Asda which along with 470 supermarkets, 31 supercenters and the Netto convenienceyear with the acquisition of Netto. learn how to operate a retail format with stores, also includes 24 non-food specialty which it has little experience. stores called Asda Living. At a glance Brand Value Brand Value Chan $4.0 billion ge -19% Total Corporate Sa les $30.3 billion Total Corporate St ores 385 ASDA Brand Sales ASDA Brand Stores $30.3 billion Left: Asda associates the Right: Asda promotes its own 385 Countries of Oper brand with its corporate parent, brand wtih a price message. ation 1 Walmart, and its successful Asda brand sales inc insights & lude Asda and asd Sources: Kantar Re a.com private label, George. tail, Millward Brown OptimorA food discounter, Netto, like After divesting 30 stores to comply with implicationsAsda, appeals to price sensitive regulatory requirements, Asda retained • As Asda integrates the Netto acquisition, it willcustomers. Viewed as a price leader 163 of the 193 acquired Netto outlets, pay particular attention to supply-chain issues which will help Asda even its geographical while learning to cost-effectively operate smallerin food, Adsa operates only in the coverage throughout the UK, especially urban stores.UK, including Northern Ireland, and in the Southeast where it has been • Asda will need to clarify its marketing andit’s the second largest UK retailer by underrepresented. Asda’s brand value merchandising proposition as it seeks the rightturnover. declined during this transition period. balance between EDLP and the need to be promotional and price-competitive in more urban areas.The smaller stores, which average about The acquisition roughly coincided with the arrival of new CEO Andy Clarke, who • The focus on non-food sales within supercenters8,000 sq. ft., will be rebranded Asda should increase, as the future of the Asda LivingSupermarket. They should help Asda earn rose from the Asda ranks and will lead the stores appears to be in jeopardy.consideration for topping-up shopping trips integration of a small-store concept into aand enable the chain to expand into urban big-store operation. Asda is expected tolocations unsuitable for its 100,000 sq. ft. change some of the Netto marketing andsupercenters. merchandising approaches.65 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 66
  • 35. The TOP 2018. Sam’s Club In strengthening its merchandise In a related effort, Sam’s is remodelingGaining momentum assortment, Sam’s is attempting to stores into its Project Portfolio prototype, emphasize categories that are both designed to accommodate merchandise relevant to shoppers and different from the changes and improve the shopping competition. It expanded its commitment experience. Sam’s is adding more in-storeSam’s Club worked hard to deliver on its in fresh grocery, health and wellness, and electronics, for example, and looked to fill demonstrations and events and WiFi so that customers can use their mobile devicesbrand promise, “Savings Made Simple.” out the range of both everyday and unique items, possibly at the expense of furniture while shopping.And results looked promising. and large appliances. Sam’s currently operates 139 clubs outside of the US, in China, Mexico and Brazil, and intends become more of a presence in those countries and beyond. At a glance Brand Value $2.9 billion Brand Value Change -10% Total Corporate Sales $50.5 billion Total Corporate Stores 608 SAM’S CLUB Brand Sales $50.5 billion SAM’S CLUB Brand Stores 608 Countries of Operation 4 Sam’s Club brand sales include Sam’s Club and samsclub.com Sources: Kantar Retail, Millward Brown OptimorSales rose 6 percent to $50.5 Left: Sams continued its Project Portfolio store Right: The company has enjoyed success growing itsbillion from 608 clubs last year, with remodeling, reallocating space to categories including health Plus membership category, which costs more but promisessame-store results up in each of fourconsecutive quarters. Brand value and beauty and fresh food. greater savings. insights &had not caught up and remained off implications10 percent. • Often seen as the poor cousin of Costco, Sam’s Club has improved its brand positioning and in-Renewed marketing, merchandising and In an effort to improve historically low store experience.operational strategies drove this growth. membership renewal rates, the chain is • These improvements and increased marketingUnder the leadership of new CEO Brian particularly focused on expanding the have strengthened member retention rates andCornell, formerly of Safeway, Sam’s is number of Plus members, its category broadened the brand’s appeal.attempting to grow membership as well for premium business customers who are • Sam’s international prospects look good, too.as “share of wallet.” A typical shopper likely to spend more than other customers It was selected as the vehicle for Walmart’sspends an average of just over $80 per on a combination of personal and e-commerce launch in China and its cash and carry expertise should be useful in Africa.trip. The company also is improving service business purchases.to members with new and expandedassortments and remodeled stores.67 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 68
  • 36. The TOP 2019. Sainsburys and added new ones, with special attention The Nectar card helped differentiate theNew products, to home electronics and apparel, which are Sainsbury’s brand, too, because points not well represented in Sainsbury’s stores. shoppers earned from purchasing a variety Sainsbury’s Direct offered customers the of products and services, including flightsservices broaden options of home delivery or in-store pick- and car rentals, could be redeemed for up. It reinforced the brand against the savings in Sainsbury’s stores. In contrast, incursions of Amazon and the multichannel shoppers accrue points on the renowned appeal of Tesco and Asda. Tesco Clubcard only when shoppingbrand appeal at Tesco. In addition, Sainsbury’s devoted more space to non-food categories in its largest stores. Effective promotion activity enabledSainsbury’s innovations in operations, range Sainsbury’s to recruit shoppers trading down from some of the more premium UKand promotion helped reinforce the brand grocery brands, such as Marks & Spencer and Waitrose. It also gained shoppersamong existing shoppers and broaden its trading up.appeal to new customers. Improved geographic reach, with 353 Sainsbury’s Local convenience stores supplementing 554 supermarket locations, also helped performance. The company plans to add 20 to 25 convenience At a glance stores annually with a total of 440 by Brand Value 2015, compared with only 32 additional Brand Value Ch $2.7 billion supermarkets by 2015, reflecting a shift in ange -2% Total Corporate expansion investment. Sales $32.5 billion Total Corporate Stores 907 SAINSBURYS Br and Sales $32.5 billion SAINSBURYS Br and Stores 907 Countries of Op eration 1 insights & Sainsburys brandSales increased 4.2 percent to $32.5 Sainsbury’s Centr Sources: Kantar sales include Sa al and Sainsburys insbury’s, Sainsbu .com. ry’s Local,billion. Like-for-like results improved Retail, Millward Bro implications wn Optimor2.3 percent. Perhaps reflecting thedifficulty of the retail sector overall, • Having delivered solid growth because of a focusbrand value declined 2 percent. on promotion and private label, Sainsbury’s now needs a more sustainable model to continue Above: The Sainsbury Fresh Below: Sainsbury has Kitchen extends the quality effectively used its private label delivering profit too.The chain especially focused on two growth grocery brands competed for its customers. values of the brand to fast food. to send a price message.drivers: extending the non-food assortment Sales of non-food grew at three times the • Focus on the non-food offering within its rate of food. larger stores continues to drive the businessand enhancing shopping convenience with as Sainsbury’s adds selling surface anda small-store format. The moves reflected promotional activities.the ongoing pressure for Sainsbury’s to Sainsbury’s launched Sainsbury’s Direct, an • As the chain accelerates the opening of its smallmodulate its quality-for-a-price reputation e-commerce program especially intended Sainsbury’s Local stores, it faces the challengeduring a period of economic weakness to grow sales of non-food products. The of coordinating promotional and merchandisingwhen both more premium and discount program both enhanced existing categories strategies with its core supermarket format.69 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 70
  • 37. The TOP 2020. SafewayPremium imagein frugal timesSustained unemployment in its core marketcontinued to impact Safeway. Left: The deli counter of Right: Safeway features its prepared foods reflects private label O Organics brand Safeways up-scale positioning. on an endcap. Margins generally held, however, reflecting a label brands include Eating Right, a cross- mentality infused into Safeway when private category offering of healthy items and At a glance equity investors purchased it more than 20 meal options, and O Organics, which $2.0 billion years ago. The chain now is publicly traded. Safeway sells in its own stores and Brand Value ange -37% In addition, Safeway continued to leverage those of non-competing grocery chains. Brand Value Ch Sales $41.1 billion its core skills, including an extensive Competitors, such as Kroger, have higher Total CorporateThe US chain traditionally appealed Stores 1,699 proprietary database called Optura that levels of private label development. Total Corporateto shoppers able to afford stores d Sales $26.2 billion can yield important insights into shopper SAFEWAY Bran 1,151with up-scale ambiance and SAFEWAY Bran d Stores 2 behavior and market basket analysis. The company also enjoys an unusualproducts known for healthy quality Countries of Op eration and revenue stream called Blackhawk Network. ay supermarkets es include Safew Safeway brand sal ent names. Safeway continues to be known for its Blackhawk supplies the gift cards that manyand margins. In a well-intended safeway.com, no t other ho ldings with differ Retail, Millward Bro wn Optimor creative development of private labels, retailers feature, and also serves as the Sources: Kantarbut poorly timed initiative, Safeway some of which do not have national brand clearinghouse for many of the cards.launched a major store upgrade equivalents. The most prominent privatecalled “lifestyle” and remodeled themajority of its stores.But beautiful stores implied higher prices Based near San Francisco, Safeway’sat a moment when even Safeway’s core strong market position west of the Rocky insights & implicationsaffluent shopper felt financially stressed. Mountains historically fortified Safeway,The chain responded with a strategy even when it experienced problems in other • Safeway should be focused on turn-around strategies as the chain cycles into its third consecutive year of declining same-store sales.it called EDV, Everyday Value. The regions where the chain is less dominantimplementation involved a complicated and operates mostly under a variety of • Safeway lost price relevance and shopper price trust, and until this is addressed Safeway’s other strengths remain muted.menu of price reductions that confused acquired banners. Not this time. Sales wereshoppers and encouraged cherry picking, flat at about $40 billion and like-for-like • Safeway may not recover until its relatively wealthy shopper base regains its sense of affluence.which impacted the chain as a destination sales declined 1.8 percent, continuing afor full market basket shopping. Safeway two-year trend. The Safeway brand valuelost a small but significant portion of full- declined 37 percent.basket trips in favor of smaller fill-in trips.71 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 72
  • 38. The Top 20 Most Valuable Global Retail Brands 2011 # Company/ Brand Value Brand Sector(s) Total Corp. Sales Total Corp. Stores Brand Sales Brand Stores Country home Value Markets Country Change YOY 1. US $37,628,000,000 37% E-commerce $34,204,000,000 0 $33,230,000,000 0 7 2. US $37,277,000,000 -5% Discount, Food $418,952,000,000 8,535 $294,851,030,000 4,450 15 3. UK $21,834,000,000 -15% Hypermarket, Other $93,954,347,537 5,380 $79,177,200,000 3,969 13 4. France $13,754,000,000 -8% Hypermarket, Other $116,393,618,869 14,038 $99,665,500,000 5,244 40 5. US $12,471,000,000 3% Discount, Food $65,786,000,000 1,750 $65,786,000,000 1,750 1 6. US $10,731,000,000 15% E-commerce $61,819,000,000 0 $61,819,000,000 0 30 7. US $9,877,000,000 10% Home Improvement $67,997,000,000 2,248 $67,997,000,000 2,248 7 8. Germany $9,251,000,000 6% Hard Discount Food $65,930,000,000 9,666 $54,230,000,000 8,738 18 9. France $7,796,000,000 -1% Hypermarket, Other $54,892,925,038 2,575 $38,020,780,000 336 13 10. Sweden $7,293,000,000 28% Home Furnishing $33,470,000,000 316 $33,470,000,000 316 38 11. US $6,522,000,000 -7% Home Improvement $48,815,000,000 1,749 $48,815,000,000 1,749 3 12. UK $5,252,000,000 -8% Department Store, Food $15,019,342,064 1,022 $15,019,342,064 1,022 29 13. US $5,104,000,000 -12% Consumer Electronics $50,272,000,000 4,220 $38,831,210,000 1,190 14 14. US $4,544,000,000 17% Warehouse Club $76,255,000,000 572 $76,255,000,000 572 9 15. Germany $4,240,000,000 3% Hard Discount Food $54,240,000,000 9,281 $54,240,000,000 9,281 24 16. US $4,003,000,000 -8% Department Store $18,391,000,000 1,083 $18,391,000,000 1,083 1 17. UK $3,975,000,000 -19% Discount, Food $30,270,000,000 385 $30,270,000,000 385 1 18. US $2,935,000,000 -10% Warehouse Club $50,460,000,000 608 $50,460,000,000 608 4 19. UK $2,685,000,000 -2% Food $32,538,849,546 907 $32,538,849,546 907 1 20. US $2,012,000,000 -37% Food $41,050,000,000 1,699 $26,235,210,000 1,151 2 Sources: Kantar Retail and Millward Brown Optimor. See the At a Glance charts for footnotes.73 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 74
  • 39. 3 Slower markets require gaining 7 Finding the elusive “moment of truth.” “share of wallet.” As retailers open It sometimes seems as if the wired fewer new stores, sales improvement consumer is constantly shopping— depends less on adding new checking promotions with a smart shoppers and more on growing the phone, searching for sales on a tablet baskets of existing customers. That during the work commute or surfing means understanding the shopping in the evening. With the linear path to occasion, meeting the shopper’s purchase disrupted, the moment of needs and providing the best truth is difficult to identify. Recognizing possible service. it depends on empowering merchant intuition with data and analysis that identifies exactly when browsers 4 Supplier operational expertise become shoppers. becomes invaluable asset. In an attempt to find new customers and control operating costs, big-box 8 Responsiveness builds long-term retailers are opening smaller spaces, relationships. Constant connectivity often in urban areas. As retailers can lead to retail promiscuity—or struggle to understand this new serious commitment. Digital enables operating model, suppliers have an the shopper to quickly click through opportunity to share their expertise myriad temptations. It also enables and strengthen relationships with the retailer to recognize and respond Key key retail customers. to the shopper’s core desires with the right size, color, style, price or take innovative service. Brand leaders 5 Brands remain vital. Even hard- nurture mutual loyalty. discount retailers are recalibrating outs the balance between private label and brands. While drawn to the added margin private label can 9 Social responsibility: more than PR. It’s a component of the long-term yield, retailers also know that retailer-customer relationship. national brands drive loyalty and Especially in difficult economic signify quality and value, even to times, customers may not happily the most price-conscious customers. pay a premium for assurances of environmental responsibility or acceptable labor standards, but they 6 Retail brands confront the multiple may quickly turn against a brand that challenges of multichannel. violates these expectations. 1 Retailer flexibility draws shoppers. 2 Fast-growing markets lure retailers. Multichannel used to be about supplementing store sales with Retailers continue to flex price and Consumer confidence and spending a website and catalogue. Today 10 Future growth horizons expand. assortment trying to understand remains uneven region-by-region with it’s about embracing the digital age With Walmart’s acquisition of the whether the post-recession consumer many of the fast-growing markets, and being present on any device South African retailer Massmart, sub- is determined to buy less or just buy such as China and Brazil, continuing consumers use to shop. Success Saharan Africa becomes the newest on sale. While it may be more difficult to experience strong retail sales as in part requires offering “select and potential expansion venue to trigger the urge to purchase, many incomes rise and consumers gain collect” options that seamlessly for European and US retailers. successful retail brands, often through access to merchandise and cultivate combine online purchasing with trial and error, have rediscovered the desire for global and local brands. in-store pickup. consumer’s hot buttons.75 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 76
  • 40. Methodology Millward Brown Optimor applies an economic use approach to brand valuation, using a methodology similar to that employed by analysts and accountants. The Valuation Process The brand value is calculated in three steps:How brand value is calculated. The brand value published is based on the intrinsic value of the brand – derived from its Branded earnings What proportion of a company’s earnings is ability to generate demand. The dollar value generated “under the banner of the brand”? of each brand in the ranking is the sum of all future earnings that brand is forecast to First, we identify the portion of total generate, discounted to a present-day value. company earnings generated by each business that carries the brand. For The Data Sources example, in the case of Coca-Cola, some earnings are not branded Coca-Cola, but Brand equity come from Fanta, Sprite, or Minute Maid. Insights into customer behavior and brand From these branded earnings, we subtract perceptions come from WPP’s BrandZ, an capital charges. This ensures that we only annual quantitative brand equity study in capture value above and beyond what which consumers and business customers investors would require any investment in familiar with a category evaluate brands. the brand to earn – the value the brand Since the inception of BrandZ 13 years ago, adds to the business. This provides a over two million consumers and business- bottom-up view of the earnings of the to-business customers across more than branded business. 30 countries have shared their opinions about thousands of brands. It is the most comprehensive, global, and consistent study of brand equity. Financial Performance Financial data is sourced from Bloomberg, analyst and industry reports, as well as company filings with regulatory bodies. Additionally, we use Kantar Worldpanel for sales data for certain categories. A team of Millward Brown Optimor analysts then prepares financial models for each brand that link brand perceptions to company earnings and valuation, and ultimately shareholder and brand value.77 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 78
  • 41. MeThODOLOGY2. Brand Contribution cars, or beer, brand is very important. Over MobileHow much of these branded earnings are the past five years, the importance of brandgenerated due to the brand’s close bond has risen. Brand Contribution is calculated Free downloads for smart phones and tabletswith its customers? as a percentage, but displayed as an index from 1 to 5 (5 is the highest). The BrandZ™ Top 20 Most Valuable Retail Brands 2011 is available free on your smart phone or tablet.Only a portion of these earnings can be The Retail Top 20 is part of a growing library of brand studies powered by BrandZ™, the world’s largest and mostconsidered as driven by brand equity. This 3. Brand Multiple comprehensive brand valuation tool. All the studies are available free on mobile devices. They include:is the “Brand Contribution,” the measure What is the growth potential of the brand-that describes the degree to which brand driven earnings?plays a role in generating earnings. This isestablished through analysis of country-, In the final step, the growth potential of these The Top 100 most Valuable Global Brands 2011 Top 100 2011market-, and brand-specific customer branded earnings is taken into account. Both Valuations and analysis of top brands with insights intoresearch from the BrandZ database. financial projections and consumer data is worldwide market dynamics across 15 product categories. used . This provides an earnings multipleThis guarantees that the Brand Contribution aligned with the methods used by the analystis rooted in real-life customer perceptions community. It also takes into account brand-and behavior, not spurious “expert opinion.” specific growth opportunities and barriers.The Brand Contribution allows us to capture The Top 50 most Valuable Chinesedifferences in the importance of brands by Brands 2011category and by country, the role of brand Profiles of the leading Chinese brands with commentary on theversus other factors such as price and growing influence of Chinese brands at home and abroad.location, and changing customer priorities.In some categories, such as luxury goods, The Top 50 most Valuable Brazilian Brands 2011 Top 50 Profiles of the leading Brazilian brands with expert guidance about the growing influence of local and global brands. To see if your device is supported simply enter the following link into your mobile browser: http://app.brandz.com. For iPhone, iPad & andriod Devices Nokia & Blackberry Devices The BrandZ™ studies are available from the iTunes store The application can be downloaded directly from your handset (for Apple devices) and the Marketplace (for Android devices). by simply entering the following link into your mobile browser: Simply search for BrandZ. The size of the download is over http://app.brandz.com. The size of the download is under 1MB, 1MB so you will need to be connected to a WiFi network. which will be charged at your network operator’s rates. Please see your operator data plan for more information. IconMobile developed the mobile applications for all the BrandZ™ studies. To find out more about Iconmobile visit website: www.iconmobile.com.79 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 80
  • 42. WPP Resources The brand valuations in this report Millward Brown Optimor is the global brand are based on WPPs BrandZ™, the strategy and financial consultancy of Millward worlds largest and most reliable and Brown. The organization helps companies comprehensive brand analytics and equity maximize the financial returns on their brandfor retail and database. It includes more than 2 million and marketing investments. Millward Brown in-depth consumer interviews about over Optimor produces the BrandZ™ Top 100 7,000 brands in 30 countries. Most Valuable Global Brands report, the most comprehensive annual ranking of brand value.brand expertise For further information about BrandZ™, Millward Brown is part of the Kantar Group, please contact: the insight, information and consultancy division Peter Walshe of WPP. peter.walshe@millwardbrown.com www.millwardbrown.com Cristiana Pearson cristiana.pearson@millwardbrown.com www.brandz.com Kantar Retail helps clients increase sales and profit through practical but transformational solutions. By focusing on insight through activation, Kantar Retail enables clients to achieve both major shifts in their business and incremental change. The organization was formed from bringing together four retail consultancy leaders: Cannondale, Glendinning, MVI and Retail Forward. Kantar Retail is part of the Kantar Group, the insight, information and consultancy division of WPP. www.kantarretail.com81 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 82
  • 43. WPP is the world’s leadingcommunications services group.WPP companies, which include some ofthe most eminent agencies in the business,provides national, multinational and globalclients with:AdvertisingMedia Investment ManagementConsumer InsightPublic Relations & Public AffairsBranding & IdentityHealthcare CommunicationsDirect, Digital, Promotion& Relationship MarketingWPP companies provide communicationsservices to clients worldwide including354 of the Fortune Global 500; 60 of theNASDAQ 100 and 33 of the Fortune e50.Collectively, WPP employs over 146,000people (including associates) in 2,400offices in 107 countries.www.wpp.comFor further information about WPP, pleasecontact:David Rothdroth@wpp.com83 The BRANDZ™ MOST VALuABLe GLOBAL ReTAiL BRANDS 2011 84
  • 44. Grand Opening…The One-Stop Storefor Shopper MarketingFinding shoppers on the path to purchase has gotten harder. But finding the bestresources to match your specific needs just got a lot easier.The Store WPP Shopper Marketing network.With the network, you select the exact Shopper Marketing expertisemost relevant to your needs. Pick from 50 disciplines in 15 WPPagencies, but get only one account leader, dedicated to your needs.Whatever you need – shopper insights, CRM, packaging, digitalshopper marketing, retail store design, in-store communication,experiential/sampling, merchandising and mix, category/aisleleadership and more – you get power of 15 agencies workingtogether with single-minded efficiency.You get the best brains pre-wired to communicate with each otherand work together effectively on your behalf. Better Talent More Resources Tight Coordination True Efficiency One Agenda Com ing SoonStart by going to The Store WPP Shopper Marketing website www.shopper.wpp.com1. Review the extensive 2. Match the resources and 3. Design the bespoke team resources and talent. talent to your needs. that works for you.Contact us to find out more about this innovative initiative and how to customize our shoppermarketing resources for your competitive advantage.Carl Hartman (chartman@wpp.com) David Roth (droth@wpp.com)