Making the Case for Strong Brands

There is no substitute for a strong brand — whatever the sales channel. That’s the basic underlying premise of Interbrand’s annual “Best Retail Brands” report, which ranks the top 50 North American and international retailers by brand value. It’s a premise worth keeping in mind amid all the online versus offline talk. As Interbrand global CEO Jez Frampton puts it: “In the end, it is the brand, not the footprint, that will endure.”

This year’s report once again finds Wal-Mart Stores firmly ensconced in the No. 1 spot, as both the most valuable brand in North America and in the world. Even with a 6% decline in value, the chain is so far out in front, with an estimated brand value of $131.8 billion, that it’s unlikely another retailer will catch it any time soon, advised Dirk Defenbaugh, managing director, Interbrand Design Forum, Dayton, Ohio, which produced the report in collaboration with parent company Interbrand.

“Looking at the 150 retail brands that we valued from around the world, the next closest brand [after Wal-Mart] is Target, at $27 billion,” he said. “And of all the brands that Interbrand values, not just retail, Apple is next closest, at $98 billion in brand value.”

The top five North American brands remain unchanged from last year: Walmart, Target, Amazon, The Home Depot and CVS/pharmacy. But there are also surprises in the rankings, most notably a big jump by Macy’s, whose brand value skyrocketed 383%, the most of any retailer on the list.

“The incredible rise of Macy’s is most significant this year,” Defenbaugh said. “It’s a great example of a retailer that has effectively managed its brand. Macy’s has been quick to respond to shoppers’ new digital behaviors, rapidly becoming a leader in omnichannel retailing. Also, Macy’s has kept its brand well protected through the use of private label and shown commitment to elevating the store experience.”

Five brands fell off the list: Guess, Big Lots, Rent-A-Center, Radio Shack and Anthropologie. Best Buy made the Top 50, at No. 20, but its brand value plunged 41%, the most of any retailer. Defenbaugh sees the declines as an issue of “relevance.”

“Brands need to continually adapt to changing consumer behaviors,” he explained. “The brands that declined, including Best Buy, Guess and RadioShack, are all caught in a position where their current proposition isn’t as compelling to today’s customer.”

As to some of the key insights from the study, Defenbaugh called out Amazon’s goal of becoming the “everything store.”

“It’s predicted that Amazon will soon carry more than 85% of the products sold at leading retailers — including groceries with Amazon Fresh — at better prices, with more delivery methods and payment options,” he said. “The takeaway here is that retailers need to find a way to make their experiences better because Amazon is only getting stronger.”

The full Interbrand report can be downloaded at BestRetailBrands.com. More than just a ranking, the study is a great overview of the retail scene around the globe, with capsule summaries of all the leading retail brands.

Marianne Wilson

mwilson@chainstoreage.com

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