By Henry Heywood, head of brand at Kantar
It has been well documented that traditional sectors like retail and banking are under pressure in a changing world and where customer expectations are constantly evolving. For our high street there is a growing list of pressures, especially when it comes to consumer demand for convenience, range, speed of delivery and competitive pricing, and while this is a wake up call for UK brands, growth is still possible to find as UK retail continues to evolve.
Well-known names have disappeared from the UK’s high streets in recent years, including Maplin, Toys R Us and Poundworld – and more recently Mothercare while other retailers are moving from what used to be expensive prime high street sites to new shopping areas, such as train stations, airports and shopping centres that attract higher footfall and charge lower rents and rates. Visa has addressed this head on with their 2019 Christmas Ad #whereyoushopmatters – encouraging high street shopping.
Kantar’s research reveals that the value growth of the UK’s top retail brands is now falling behind the leading global retail brands, according to the 2019 BrandZ Top 75 Most Valuable UK Brands ranking. While UK retailers in the Top 75 grew their combined value by 4% in the last 12 months, their performance is significantly lower than that of the retail brands globally.
Of the 14 retail brands that made the Top 75 ranking, Tesco was the most valuable retail brand, followed by Next, Asda and Sainsbury’s. Interestingly, it’s the online-only retailers, like Ocado and Very, which are emerging as the real drivers of growth. Without them, the combined value of the UK’s top retail brands would have increased by just 2%.
The pressure on the high street will only intensify, especially as online retailers start to take on the high street by opening physical stores. Amazon, for example, launched its Clicks & Mortar initiative in Manchester, offering shoppers the chance to see and feel products on the shelves for the first time, which is still very much part of the shopping experience. This evolution of online/offline could herald a new brighter future for the retail industry.
But the fact is that many retail brands continue to live off their fame or salience. Take Comet, the electronics chain and high street stalwart for nearly 80 years, which was very well known with a salience score of 191 – almost double that of the average brand. Fame is no longer enough. Salience has kept brands buoyant, but without ‘meaningful difference’ this is not sustainable; salience alone is not enough to foster growth.
To avoid losing more ground, retailers will need to reinvigorate themselves by investing in long-term brand building, while communicating better to a less engaged and less loyal consumer about why they are still relevant.
This could be building a unique experience or simply improving the main drivers of a positive customer experience like T2 Tea, Apple and most recently M&S with their new immersive and interactive food store layout in southwest London. It could be about better integrating offline and online experiences. Or it could be simply though an effective integrated marketing campaign based on a clear brand purpose and aligned across all touchpoints. John Lewis has achieved this with their Christmas campaign #ExcitableEdgar – mixing the TV and online ad with branded merchandise and in-store experiences. Marketing your brand must be seen as an investment not a cost to the business.
Another retailer, Primark, which although not a UK retail brand, has flourished on the high street, driven by its ability to create meaningful difference around the single concept of value-for-money fashion. While it has had to face the same pressures as other high street names – changing customer expectations, the cost of operating physical stores and increased online competition – it has flourished. But how?
Celebrating 50 years in business, Primark has succeeded where others have failed developing a strong emotional connection with young consumers. It keeps the brand relevant to a new generation, while focusing on marketing with celebrity influencers, via collaborations and other paid partnerships. Its brand power has steadily risen from 130 in 2007 to 205 in 2018. Interestingly, Primark offers no online ordering service, showing that you don’t have to be an online brand to be meaningful different and relevant today.
Online retailers like asos, boohoo, Misguided and Very also stand out from the crowd. They are especially strong on difference, which tends to be a lead indicator of growth. These brands also over-index other retail brands when it comes to being perceived as creative, innovative and different.
Retail is a complex and uncertain world today; there are no guarantees and retailers must use their brand as a lever for growth. It must have meaningful difference and not just rely on salience to survive. But at the same time that brand must deliver a consistently good consumer experience across all brand touch points for a whole new generation of shoppers, while connecting with them at an emotional level.
For more information on the 2019 BrandZTM Top 75 Most Valuable UK Brands ranking announced today by WPP and Kantar: http://www.millwardbrown.com/brandz/rankings-and-reports/top-uk-brands/2019