The Top 20                                        Most Valuable                                        Global RetailDigita...
Welcome and thank                     When we introduced the first BrandZ™                                      Most Valua...
Contents    INTRODUCTION    Welcome                          1    Contents                         4    Preface           ...
Preface                           This third annual WPP                                  BrandZ study of the Top 20       ...
Overview                          Amazon grew 37 percent                                      in brand value in 2010,     ...
OVeRVieW                                                                                                      In the US, C...
OVeRVieW                                               The Top 20 Most Valuable Global Retail Brands 2011                 ...
Commentary                                                                     In this new technology-enabled world,      ...
COMMeNTARYPoked and prodded by friends as I peruse                                                                        ...
The TOP 201. Amazon                                                                                                       ...
The TOP 202. Walmart                                                                                                      ...
The TOP 203. Tesco                                                                                                        ...
The TOP 204. Carrefour                                                                                                    ...
Commentary                                                                        This change is well illustrated by the c...
COMMeNTARYAs social media increased in popularity,        A full range of touch points are employed,       In the US, ther...
The TOP 205. Target                                                                        Changes probably were most obvi...
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
BrandZ Top 20 Retail Brands
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BrandZ Top 20 Retail Brands

  1. 1. The Top 20 Most Valuable Global RetailDigital Brands 2011reshapesretailThe newcustomerjourneyBrandperformancemeasuresForwardinsights &implicationsBrand valuations byBrand analysis byCommentary by WPP Operating Companies Edition
  2. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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

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