BrandZ™ Category Analysis: Retail
Despite technological disruption,
retail scores high in key metrics
Retail is the canary in the coal mine for categories, an indicator of the disruptive power of technology. The numbers tell the story. Over the past 12 years, the BrandZ™ Retail Top 20 increased 162 percent in value, a strong performance, except when compared to the No. 1 brand in the category, Amazon, which increased 2,228 percent in value over the same period.
Of all the categories studied in this BrandZ™ report, retail restructured most dramatically over the past 12 years. E-commerce today represents 54 percent of the BrandZ™ Retail Top 20 brand value, compared with only 14 percent in 2006. Squeezed between e-commerce brands, which increased in value 388 percent, and retail specialists, which increased modestly, are the traditional food merchants and hypermarkets, which declined 23 percent in value.
Still, retail was the second-highest scoring category, after technology, in the BrandZ™ Vital Signs of brand health: Brand Purpose, Innovation, Communications, Brand Experience, and Love. The retail category scored 113. Amazon scored 126. An average score is 100. Retail is about connecting with consumers, and the Retail Top 20 set a high bar.
The traditional retailers score above average in being Different (distinctive and trendsetting, Meaningful (meeting needs in relevant ways), and providing a positive Brand Experience. Specialists score high in being Meaningful, because a home improvement or drug store brand meets well-defined needs. The e-commerce brands score exceptionally high in being Different, 147.
Technology-related structural issues, including changing consumer shopping habits and the need to adjust the size and locations of physical stores, continue to impact the retail category. As retailers confront these issues, reimagining the physical store, it is important to sustain the Brand Experience. And as retailers struggle with the financial implications of finding the right online and offline balance, they need to protect the brand, the intangible asset that will help sustain them through a difficult transition and give them more time to get it right.
… Retail restructures dramatically…
Retail restructured dramatically over the past 12 years. E-commerce today represents 54 percent of the BrandZ™ Retail Top 20 brand value, compared with only 14 percent in 2006.
… And brands score high in key metrics
Traditional, specialist, and e-commerce brands all score well above average on being seen by consumers as Different and Meaningful and providing a positive Brand Experience.