Having a brand that engages consumers on an emotional level is crucial. Charlotte Dennis-Jones finds out which retailers are succeeding
If you think consumers simply buy your products, you’re wrong. Consumers buy your products because of what your retail business means to them. And image and reputation is what makes the most powerful retail brands in the world.In one of the biggest surveys of its kind, global marketing communications giant WPP talked to 100,000 consumers in 22 countries to form the annual BrandZ list, charting the top 100 consumer brands. Here, we look at the top 25 retail brands that were singled out by consumers, of which 13 made the overall top 100.
It’s perhaps no surprise that those retailers topping the list are also some of the biggest in the world – Wal-Mart, Tesco, Home Depot and Carrefour. Equally notable is the fact that it is dominated by grocery retailers. Some might argue that these retailers’ size – and the fact that supermarkets are used so frequently by consumers – automatically makes them a powerful brand. But the point is, they didn’t get as big as they are today on product alone.
As Martin Butler, author of the book People Don’t Buy What You Sell, They Buy What You Stand For, points out: “People can copy whatever you’re doing in a matter of weeks.” But, if you give shoppers other, more emotional and often subconscious reasons to visit your shop day in, day out, that’s when people start to value your brand. And, says Butler: “That’s when you can start charging a premium.”
David Roth, chief executive of The Store, WPP’s retail practice and a former marketing director of B&Q, says this emotional bond is the key difference between a strong brand and a weak one, which helps explain why the supermarkets feature particularly highly in the results. Many consumers may not think they are emotionally attached to a supermarket, but the grocers’ ability to engage their customers on this level cannot be underestimated.
A brand’s essence must be credible, unique and differentiate a retailer from its rivals. That involves the age-old – but nevertheless often overlooked – adage of understanding the consumer and understanding the competition. Nearly all of the supermarkets have this down to a fine art – and they have to, considering the level of competition and the volumes at stake.
As Stonell Direct chairman Neil Kennedy points out: “Why are there passionate loyalists for each supermarket? Because they stand for different things. Sainsbury’s is about food authority. Tesco is about going that extra mile to help you, and so on.”
Millward Brown – WPP’s research arm, which carried out the research – considered factors such as brand recognition, consumers’ brand experience, whether those surveyed perceive it to be a leader and what the brand stands for. The ratings then take into account the extent to which a retailer’s brand impacts on its financial performance.
Marks & Spencer merits discussion here. It may not be enjoying the easiest of trading times, but when consumers were asked about brand clarity, M&S was one of the top retail performers. Roth says: “It shows the phenomenal goodwill that UK consumers have towards the brand. There is a tremendous will for it to succeed, which pulls it through the bad times.”
It’s not good news for all those on the list, though. EBay was one of the biggest fallers, slipping 13 per cent. The online auction site has received some bad press in the past year, after products sold as genuine turned out to be fake. Luxury jeweller Tiffany is embroiled in a legal case with eBay after claiming it is “simply turning a blind eye” to reports of counterfeit sales.
But is having 13 retail brands in this year’s top 100 a good enough representation? BRC director-general Stephen Robertson, who served as marketing director at Woolworths and WHSmith, considers it an achievement. “It shows the coming of age of retail,” he says. “If you went back 50 years, it would have been dominated by household brands. This list shows how customers increasingly understand and respect what these brands are about.”
But Roth feels that, given how large the retail sector is on a global level, 13 seems a little paltry. He believes this could well be because retailers are “very late in the game in terms of internationalisation”. And what better example of the positive effects of going global than Tesco? Its increased brand presence – a 39 per cent lift – has been aided, in part, by its expansion into new territories such as China.
Another notable achievement is Amazon’s meteoric leap up the table. It was nowhere to be seen on the list last year, but this year came in at 61st overall and seventh among its fellow retailers – an outstanding result for a retailer with no physical presence on the high street.
Amazon UK managing director Brian McBride attributes its increased brand power largely to two factors: its consistent drive to provide value and its expansion into categories such as shoes, jewellery and watches. And, he adds: “The work we have done on our offering over the past 12 months has coincided with an increase in consumer take-up of internet shopping.”
One measure of each retailer’s brand rating is how much consumers would recommend it to others. Of those surveyed, 64 per cent said they would recommend Amazon to a friend, compared with an average of 38 per cent. McBride says that such public faith in the retailer would be impossible without focusing on the customer. “A strong brand engenders loyalty and an emotional attachment from its customers by providing a unique and compelling offer that continually evolves to the benefit of its customers. Customers become our brand messengers by repeat business and word of mouth,” he explains.
Aldi UK managing director Paul Foley agrees. “Advocacy for Aldi is strong because when customers experience us, they are surprised by their discovery and want to share the secret,” he says.
So, for those who aspire to reach the level of brand recognition achieved by these 25 retailers, what do they need to do?
Firstly, Roth says it is vital to communicate on issues other than price, tempting though that may be in the economic turmoil. “That’s the biggest lesson. Without a more emotional proposition, you’re not going to get anywhere,” he says. If you asked consumers on the street what certain brands stand for – particularly those in furniture – many might respond that they simply stand for getting a bargain. And, as Kennedy warns: “A deal is not a brand essence. A deal is just a thousand price cuts.”
It’s also important to note the huge difference between price and value. Shoppers will judge a product’s value based on a series of emotional decisions that are far more complex than the numbers on the price tag.
Retailers must also ensure that they continue to evolve their brand message. Butler says: “Retail is all about change and, if you’re changing, you have to communicate.” Marks & Spencer is a case in point. The “Your M&S” revitalisation masterminded by Sir Stuart Rose and his team has resulted in a huge upsurge in brand power – 214 per cent over the past two years.
Sainsbury’s realignment under Justin King is also reflected in the BrandZ results. The grocer came second only to Amazon in terms of increase in brand power, at 69 per cent. The year before, it increased by 111 per cent.
Sainsbury’s director of brand communications Helen Buck says this coincides with a repositioning drive that began in 2005, as well as the launch of its “Try something new today” initiative in September that year. She explains: “A successful brand is something that has heritage and is consistent, but it’s also about moving with what customers want.”
She adds that the grocer’s new brand message – “Feed your family for a fiver” – is an example of how it is striving to connect with its customers in these difficult financial times.
The ability to evolve is perhaps even more important for more niche brands. Kennedy says: “Brands come and go in popularity and the anomaly is that the more popular something becomes, the more people strive to find a different brand to be more exclusive. Brands have to reinvent themselves and those that end up in the graveyard are the ones that don’t do anything about it.”
Retailers will also find it very difficult to gain brand prominence if they forget to involve their workforce, which Pete Champion, director at branding consultancy i-Am Associates, believes many retailers fail to understand. He says: “You need to look at the brand experience as a whole and a lot comes down to the people side of what happens.” Because budgets are tight, he says retailers will pour their resources into areas where the results can be more tangibly monitored, such as IT or marketing, and overlook staff development.
Buck says involving Sainsbury’s workforce in brand communications is a priority. “We’re proud of our customer service and helping colleagues believe in what the brands stands for,” she says. The grocer has, for instance, got shopfloor colleagues to taste the “Feed your family for a fiver” recipes.
Finally, says Foley, do not underestimate your customers. “Avoid smoke and mirrors and avoid gimmicks,” he warns. “Aldi will never state intention with certain policies just to generate positive column inches; we work on getting it right and then initiate. Consumers are savvy and want brands to be honest.”
McBride says that, ultimately, a strong brand presence and financial success “usually go hand in hand”. What’s more, the investor community understands that, too. To get people to buy your products, you have to stand for something. And, as Sir Philip Green once said: “If you don’t stand for something, you stand for nothing.”