Loss Prevention Research Council Weekly Series - Episode 109 - Top 5 Most Valuable Retail Brands and Inflation Impact
With Dr. Read Hayes, Tony D'Onofrio, and Tom Meehan
The World’s 2022 Top 5 Most Valuable Retail Brands
https://www.tonydonofrio.com/blog/retail/the-world-s-2022-top-5-most-valuable-retail-brands.html
Let me start this week with the summary of an article that I just published on the world’s top 5 most valuable retail brands for 2022.
For quite some time, I have been predicting that the future of retail will be driven by stronger branding and increased digitally influenced immersive customer experiences. COVID-19 became a major accelerator of digital transformation trends with technology often becoming the differentiator to changes in consumer loyalty.
“The pandemic ushered in an unprecedented level of channel switching and brand loyalty disruption. A whopping 75 percent of consumers tried new shopping behaviors, with many of them citing convenience and value. Fully 39 percent of them, mainly Gen Z and millennials, deserted trusted brands for new ones. That restlessness is reflected in the fact that many younger consumers say that they are still searching for brands that reflect their values.”
According to McKinsey, “the world’s 40 strongest brands yielded almost twice the total return to shareholders (TRS) of an investment in a Morgan Stanley Capital International (MSCI) World index certificate over the course of the 20-year period ending in 2019.”
Some other interesting statistics about the value of branding:
- It takes 5 to 7 impressions for people to remember brand.
- 73% of consumers love a brand because of helpful customer service
- Presenting a brand consistently across all platforms can increase revenue by up to 23%.
- Brands with poor company branding pay 10% higher salary.
- 89% of shoppers stay loyal to brands that share their values.
- 73% of people prefer brands that personalize shopping experiences.
Consumers expect brands to demonstrate they know them on a personal level.
As McKinsey summarized, “personalization is a force multiplier—and business necessity—one that more than 70 percent of consumers now consider a basic expectation. Organizations able to build and activate the capability at scale can put customer lifetime value on a new trajectory—driving double-digit revenue growth, superior retention, and richer, more nurturing long-term relationships.”
The top 5 most valuable global retail brands for 2022 are:
- Amazon
- Walmart
- The Home Depot
- Taobao from China
- T-Mall from China
According to the 2020 Brand Finance retail research, “American and European retail brands are leading the global retail sector in bouncing back better from the pandemic, with Amazon (brand value up 38% to US$350.3 billion) and Walmart (brand value up 20% to US$111.9 billion) leading the way. In a world of changing customer demand and disrupted supply chains, these big retailers are applying their logistics expertise to adapt in innovative ways to the ‘new normal’. Increasingly, these mega retail brands are bringing logistics operations in-house and using their vertical integration to deliver – literally –for customers.”
Seven out of the 10 highest value brands are from the United States. The other three in the top 10 are from China. Note that the two Chinese brands in the top 5 have low brand value growth.
The USA department store retailer Burlington with a brand value of $2.6 billion, up 80%, is the world’s fastest growing retail brand. Chinese retailer JD.com and USA retailer Target broke into the top 10 in the 2022 report.
This year I also listed the top 5 most valuable technology brands:
- Apple
- Amazon
- Microsoft
Interesting this year is the crossover of Amazon as the Number 2 most valuable technology brand.
Not surprising is Apple being number one and Google, Microsoft, and Facebook appearing in the top 5. The Chinese retailers Taobao and Tmall also make an appearance on the technology brand value leadership list at number 10 and 11, respectively. Outside Samsung (Number 6 technology brand), USA and Chinese brands dominate the top 10 most valuable technology brands in the world.
Retail and technology are forever linked. Continued innovation coupled with strong branding is what will deliver a prosperous future of retail.
Just keep your returns: Stores weigh paying you not to bring back unwanted items
https://www.cnn.com/2022/06/26/business/retail-returns/index.html
Another interesting story this week from CNN.
The chaotic mix of record fuel prices and an unending supply chain crisis have retailers considering the unthinkable: Instead of returning your unwanted items, just keep them.
In recent weeks, some of the biggest store chains, including Target (TGT), Walmart, (WMT) Gap (GPS), American Eagle Outfitters (AEO) and others have reported in their latest earnings calls that they have too much inventory of stuff ranging from workout clothes, spring-time jackets and hoodies to garden furniture and bulky kids' toys. It's costing them tons of money to store it.
Now add on to that glut another category of product that stores have to deal with: returns.
So instead of piling returned merchandise onto this growing inventory heap, stores are considering just handing customers their money back and letting them hang onto the stuff they don't want.
According to a consultant cited by CNN, For every dollar in sales, a retailer's net profit is between a cent to five cents. With returns, for every dollar in returned merchandise, it costs a retailer between 15 cents to 30 cents to handle it.
We will have to see if this one sticks with consumers.
Grocery inflation having big impact on household budgets
https://chainstoreage.com/grocery-inflation-having-big-impact-household-budgets
Finally, some news this week from Chain Store Age on how consumers are having an impact on grocery stores.
Seventy-two percent of Americans said that increased grocery prices were having an impact on their household budgets, with 34% citing a very significant impact and 38% citing a somewhat significant impact.
To account for increased costs to their household budgets, more Americans are holding off on purchasing or cutting spending or consumption in other areas. The biggest cutbacks are in driving (52%), large purchases (47%), travel (46%), entertainment (50%) and clothing or other goods (42%).
In my view tough times will continue for some time.
LPRC Team had a Great Time Connecting with Members at NRF Protect! FusionNet is ready to go in case of any new protests! In this week’s episode, our co-hosts discuss an LPRC mapping project in South Florida, the world’s top 5 most valuable retail and technology brands, the impact of inflation on consumers, and the new return procedures that Retailers are testing out.
Listen in to stay updated on hot topics in the industry and more!
