Retail Branding - UK

ISSUES IN THE MARKET

KEY THEMES AND ISSUES

What matters in retail branding?

What is retail branding doing well, not so well, not doing at all?

How is it performing, and who is performing well?

How could retail brands improve?

BRAND ELEMENTS

Research methodology

BRAND MP

ABBREVIATIONS

INSIGHTS AND OPPORTUNITIES

Investment in brand and proposition development

Over dependence on price

Where’s is the excitement and innovation?

MARKET IN BRIEF

When the going gets tough, the tough get going

Insularity dominant?

Relevant consumer orientation

Breakout thinking

Never mind the differences look at the similarities

Visionary leadership

Star retail brands - movers and shakers

What now for retail?

RETAIL INDUSTRY IN CONTEXT

Figure 1: Industry category averages, 2007

Figure 2: Retail categories compared to all categories, 2007

Sameness pervades consumers’ perceptions

Figure 3: Retail category average KPIs compared to all categories, 2007

Cross-category comparison

Figure 4: Retail category brand map, 2007

Average category indicators don’t do credit to brand stars

Homewares kick up to hyper drive

Department stores opting for quality

Wine - is its future rosé?

Clothing needs to accessorise some style and purpose

Books dominated by specialists

DIY or Do it for me?

Home shopping companies especially vulnerable

Telecommunications providers the least trusted category

Manufacturers pull better than retailers in portable technology

Electrical needs higher voltage

Convenience stores close to our heart

Food on trial

Non-food unrealised

Own-label from budget to finest and beyond

BRAND ANALYSIS

Figure 5: Retail brands footprint, based on brands surveyed, 2007

Putting the brand effort in the right place

Figure 6: Topline performance summary KPI, retail brands footprint, based on brands surveyed, 2007

Quadrant 1 - Immature growth brands

Figure 7: Immature brands’ KPIs, based on all brands surveyed, 2007

Low ratings for innovation, service and quality a common feature

Worth paying more for, consideration and recommendation are levers to develop brand strength

‘Immature’ growth brands, what’s driving their momentum?

Figure 8: Growth brands with momentum, based on all brands surveyed, 2007

Specsavers not as trusted as it might think

Goldsmiths is proud of its reputation

HMV customers are very satisfied

Fired Earth needs to fire up quality awareness online

Topps Tiles with unmet consideration could top up its coverage

Figure 9: Growth brands with momentum KPIs, based on all brands surveyed, 2007

Consideration and recommendation give these brands momentum

Above-average retail innovation and poor service are inhibitors

Developing points of difference to escape

MATURE GROWTH BRANDS, BUT LOWER RECOMMENDATION

Quality and innovation need attention

Lack of differentiation typical of Signet-owned jewellery brands

Virgin Megastores - fresh start as Zavvi

Time for Habitat to come out of hiding?

Figure 10: Q1 established brands’ KPI gaining ground, poor recommendation, of brands surveyed, 2007

High consideration gives these brands momentum

Low recommendation and poor perceptions of service are the main inhibitors

BRANDS STANDING STILL - GOOD RECOMMENDATION

Figure 11: Q1 brands standing still, based on brands surveyed, 2007

Life in the price war zone

Fashion brands have to deliver affordability

Laura Ashley leveraging quality to escape

Arcadia flagship brands tired and losing relevance

Primark in danger of losing momentum

Service and recommendation important for mobile phone brands

Wilkinson’s cheap and cheerful neighbourhood retailing

Figure 12: Q1 standing still brands’ KPIs, based on brands surveyed, 2007

BRANDS STANDING STILL - LACKING RECOMMENDATION

Figure 13: Retail brands Q1 standing still, lacking recommendation, from all brands surveyed, 2007

Value is the only merit

Topshop - striving for breakout from value sector

Improving relevance to strengthen George at Asda

Bhs - what’s the vision?

High adspend not a solution for a weak brand or proposition

TK Maxx - proposition mis-match?

Peacocks’ brand development: a work in progress

Commodity electrical brands architects of their own-brand weakness

Figure 14: Q1 value brands’ KPIs, from all brands surveyed, 2007

Value is the only merit

IMMATURE, LOSING GROUND BRANDS

Figure 15: Q1 unfocused and losing ground brands’ KPIs, based on brands surveyed, 2007

Two more Arcadia fashion brands failing to achieve standout

Strong-performing companies with weak brands

MFI brand values damaged beyond repair?

Not all brands with a distinct proposition achieve standout

JJB Sports finding it hard to deliver on its distinctive positioning

Traditional mail order brands losing relevance

Undifferentiated convenience stores highly vulnerable to encroachment

Underperforming on a range of attributes

Littlewoods - where next?

TJ Hughes - unique format but with limited differentiation

Round-up: I’m not a value brand - get me out of here!

Developing other brand values

Quality discounters - a contradiction in terms?

Breaking away from obsessive use of price

Raising service standards to improve the shopping experience

So what’s wrong with being a value brand?

Price-led brands are highly vulnerable as in electrical goods

QUADRANT 2 - MATURING, ASPIRATIONAL AND CHALLENGER BRANDS

Figure 16: Quadrant 2 - aspirational and challenger retail brands based on all brands surveyed, 2007

Young, dynamic brands

Below-average trust linked to lack of awareness

Strongly differentiated proposition is worth paying extra

Brand profit is also aspirational

ESR credentials gives these brands a strong reputation

Orange - triumph of image over reality?

The Body Shop most vulnerable to loss of momentum

IKEA also in the leadership quadrant

Figure 17: Quadrant 2 KPIs - maturing retail brands surveyed, 2007

Realising potential through sustained momentum

Fashion energy to sustain relevance

QUADRANT 2 - ROUND-UP

QUADRANT 3 - MATURE BRANDS LOSING RELEVANCE

QUADRANT 3 - MATURE BRANDS - GAINING GROUND

Figure 18: Mature retail brands with limited relevance, gaining ground, 2007

Directional dilemma

Brand elements point the way forward

New technology brands peaking?

Figure 19: Mature brands’ KPI, gaining ground, based on brands surveyed, 2007

MATURE BRANDS STANDING STILL

Figure 20: Mature brands standing still, based on brands surveyed, 2007

Caught napping?

Complacency - few compelling points of difference

Debenhams not delivering

Sainsbury’s - restoring credibility

Tesco - super state becoming a victim of its own success

Figure 21: Mature brands standing still KPI based on brands surveyed, 2007

MATURE BRANDS LOSING GROUND

Figure 22: Mature retail brands losing ground, from brands surveyed, 2007

Crisis looming for brands with no strong points of difference

Correlation between these ailing brands and weak profitability

Low ESR ratings reflect concern about profitability

Loss of authority particularly damaging to specialist drinks retailers

House of Fraser, house of brands

Figure 23: Mature brands losing ground KPI based on brands surveyed, 2007

QUADRANT 3 ROUND-UP - IS THERE A WAY BACK?

In need of revitalising

Re-inventing the differences that make a brand special

Personality profile needs work

QUADRANT 4 - LEADERSHIP BRANDS

Figure 24: Q4 leadership brands based on all brands surveyed, 2007

Highly trusted brands distancing themselves from the pack

Defending quality against the challenger brands

Building a point of difference into a point of view - ’Plan A - because there is no Plan B’

Emotional engagement reinforces points of difference

IKEA rated highest for differentiation

Waterstone’s holding its own against Amazon

Boots

Q4 ROUND-UP - CONSISTENCY, QUALITY AND INNOVATION REQUIRED

Maintaining position by avoiding complacency

Maintaining vitality through innovation and new ideas

Customer retention is paramount

Figure 25: Q4 leadership brands’ KPIs, based on all brands surveyed, 2007

So what we’ve found is

BENCHMARKING

THEMES AND ISSUES

Financial performers

Figure 26: Retail profit growth based on brands surveyed, 2007

Figure 27: Retail profit growth based on brands surveyed where only 2006 figures available, 2007

Figure 28: Retail sales growth based on brands surveyed, 2007

Biggest-spending brands

Figure 29: Top ten retail advertising expenditure, based on brands surveyed, 2003-07

DFS sings loudest in a disappointing Christmas

Figure 30: Top ten retail advertising expenditure 2007, based on brands surveyed, 2007

River Island shrugs off the consumer caution

Figure 31: Top ten retail advertising expenditure 2003-07, based on brands surveyed in 2007

Amazon revs up in 2007 on the Internet

Figure 32: Top ten retail advertising expenditure, based on brands surveyed, 2006-07

Vision Express can see opportunity

Figure 33: Top 20 retail adspend ratios in 2007, based on brands surveyed in 2007

M&S best reputation contrasts to Tesco’s best value

Figure 34: Best reputation and profits orientation of brands surveyed, 2007

M&S is quality: premiumisation and consistency

Figure 35: Retail top ten for high quality, premium retail brands surveyed, 2007

M&S dominates top service

Figure 36: Top 20 retail brands’ aspects rated on service from the brands surveyed, 2007

Figure 37: Top 20 retail brands rated on best service achieved from brands surveyed, 2007

Figure 38: Retail service vs innovation in brands surveyed, 2007

IKEA brings dynamism in both differentiation and innovation

Figure 39: Top ten retail differentiation and innovation of brands surveyed, 2007

M&S and The Body Shop lead on ESR

Figure 40: Retail category average KPIs compared to all categories, 2007

The Body Shop still hot on ethical and environmentally friendly leadership

Figure 41: Top ten ESR rankings for ethical and environmentally friendly, 2007

Amazon leads M&S as the most trusted brand

Figure 42: Top ten retail ESR: social responsibility and trust, 2007

The ultimate satisfaction!

Figure 43: Top ten retail satisfaction of all the brands surveyed, 2007

Figure 44: Top retail brand quality vs excellent satisfaction of brands surveyed, 2007

Commitment

Figure 45: Top ten rankings of retail loyalty, retention and preference of brands surveyed, 2007

DFS and Amazon show most momentum

Figure 46: Top ten retail consideration and recommendation of all brands surveyed, 2007

Monsoon vibrancy leads Zara

Figure 47: Top ten rankings of retail energy of brands surveyed, 2007

Conclusion: the strongest brands

Appendix

Figure 48: Fastest-growing sales for retail brands surveyed, 2007

Figure 49: All retail brands surveyed profit growth, for retail brands surveyed, 2003-07

Figure 50: Adspend of all retail brands surveyed, 2007

Figure 51: Advertising expenditure and adspend ratio of all retail brands surveyed, 2007

Figure 52: Most differentiated and innovative of all retail brands surveyed, 2007

CONCLUSIONS

Insularity dominant?

Never mind the differences look at the similarities

Relevant consumer orientation

Breakout thinking

Visionary leadership

Star retail brands - movers and shakers

Conclusion - What now for retail?

APPENDIX: RESEARCH METHODOLOGY