Sizing up Brand Value
How much is a brand worth? If the brand in question happens to be Walmart, the answer is an eye-popping $139 billion, according to Interbrand Design Forum’s ranking of the top 50 U.S. retail brands by brand value. The study calculates the financial net worth of retail brands based on three metrics: the brand’s financial performance, the role the brand plays in driving consumer selection, and the ability of the brand to secure the delivery of expected future earnings.
Compared with last year, there weren’t all that many shifts in the top 10 ranking. Although Walmart slipped a bit in value from last year, it kept its No. 1 position by such a huge margin that no other retailer is even in the realm of striking distance. The brand value of Target, once again No. 2 on the list, is put at $23 billion. The Home Depot retained the third spot, followed by CVS/pharmacy and Best Buy. Walgreens, Coach, Sam’s Club, Amazon.com and eBay round out the top 10. Only one newcomer cracked the top 10: eBay, which replaced Dell (no longer eligible as it has shifted its focus to its enterprise business).
But if the brands on the list have exhibited staying power, there is a reason for it.
“One of the most compelling lessons from the list is that the best brands didn’t stand idly by, waiting for further signs of recovery,” commented Bruce Dybvad, CEO, Interbrand Design Forum, Dayton, Ohio. “They contributed to it by anticipating their customer’s desire to return, not to shopping as usual, but to something better. For the most part, these companies have invested in better store experiences and put more capabilities into the hands of their shoppers.”
The U.S. rankings are part of the annual “Best Retail Brands 2012” report, by global brand consultancy Interbrand (parent company of Interbrand Design Forum). The full report also ranks the most valuable retail brands from Asia Pacific (Woolworths), the United Kingdom (Tesco), France (Carrefour), Germany (Aldi) and Spain (Zara). All are holdovers from last year.
Reading the report, I was struck by a few things. One is that despite all the lip service retailers are playing to the integrated omni-channel environment, they still have a long way to go before mastering it. According to the study, the state of cross-channel commerce remains poor, plagued by information silos, organization issues and non-interoperable programs that frustrate customers. For individual retailers, such as Walmart and Target, online revenue accounts for less than 2%.
The Brands Report also makes a strong case for the still-crucial role that physical stores have in brand success. It’s a timely observation — at presstime, online giants Google and Amazon were both reportedly planning to open their first freestanding stores.
“The store does what technology cannot — allows us the full usage of our senses,” stated Jez Frampton, global CEO, Interbrand. “Brick-and-mortar is where every dimension of the brand comes alive for us to see, feel, smell, touch, taste and hear.”
The Retail Brands Report makes for a great retail read. Each of the brands gets its own succinct summary. For more information, go to interbranddesignforum.com.