A Retail Publication
Issue 1 • 2012
How Design Drives Retail Brand Value
Design has ascended to great importance By studying the companies that do it best, Shopper empathy
in the 21st century. It’s practically taking the Interbrand team has identified five Design succeeds best when it is conceived
over the marketplace with its influence. principles that when applied bring the and delivered through the eyes of the
We could argue, in fact, that design is the relationship between design and value to life. shopper. They naturally respond to gestures
retail experience since design is both of empathy. Does your customer need
sensorial and cognitive in nature. Simplicity wins inspiration or enlightenment? Provide
“Although jumble and intrigue has its place, it through design and merchandising.
Because shoppers make purchase decisions complexity doesn’t work in retail,” says Do they need new ideas to address the
every day based on sensory experience, Jeffrey. “Simple intuitive design wins every day-to-day challenges of modern life?
a strong design sensibility is a vital time. You may think simple equals boring, Create a store organized by solutions or
component of a healthy brand experience. but that’s not how human sensibility offer ultra convenience at every touchpoint.
works. Use design to tell your brand story
“Design enhances communication and as simply but as compellingly as possible, Shoppers will credit your brand for its relevance
identity. It conveys meaning and values,” and the audience — your shopper — will and responsiveness. Think of how beautifully
says Scott Jeffrey, Chief Creative Officer, provide its own interpretation.” The Container Store speaks to the shopper’s
Interbrand Design Forum. “There are brands need for life-improving organization.
that clearly value design, both expressing Japan’s Uniqlo apparel store is an excellent
and protecting it across every touchpoint.” example of zen-like simplicity. Shoppers get Retailers are learning to respond quickly to
it. The environment asks the shopper to consumer behavior changes induced by
“There are other brands where design takes slow down, become aware of the offerings’ technology, economic and time pressures.
a back seat to operational effectiveness or quality, variety, affordability and beauty. Last season, Sears gave the overburdened,
efficiency,” says Justin Wartell, Executive harried holiday shopper a break by putting
Director, Strategy and Analytics, Interbrand “The store in total is a powerful medium for virtual toy shopping walls in airports, malls
Design Forum. “But regardless of how an communication through forms, materials, and movie theaters. QR code purchases
organization views it, we’ve seen clear textures, light and color,” says Jeffrey. made from smartphones were delivered
connections between a strong, compelling “If Uniqlo didn’t speak in a unique and to the doorstep. Empathy raises a brand
design and brand value creation.” recognizable language through these above commodity status to true relevance.
universal forms, it would be just another
trendy college clothing store.”
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2. Retail Observations
Almost Human: The Four Internal
Factors of Brand Strength
• Protection: proprietary elements, scale and
geographical spread help secure the brand.
It won’t surprise you that the brands that score
highest on these four internal attributes are
the most valuable brands in the U.S., according
to Interbrand’s 2012 list of Best Retail Brands.
Take clarity. Target’s brand partnerships and
house brand developments all revolve around
the notion of “Expect More. Pay Less.” It’s clear
the brand intends to stay strong in this rite.
Walmart’s high score on commitment
translates directly into shopper loyalty.
Great brands, like great people, start from • Relevance: does the brand fit you, its The merchant’s 2010 media spend was
within. The friends you most admire are customer? $869 million. The culture fits the brand.
most likely smart, self-aware, honest and • Authenticity: is the brand based on a Walmart thoroughly communicates its
live their lives with integrity. According defined heritage or truth? beliefs and values internally—respect,
to Interbrand’s study of the nation’s top • Differentiation: the degree you perceive service and excellence.
retailers, the brands Americans rely on most it to be different from its competitors.
have a similar strength of character. But at • Consistency: across all touchpoints, not CVS/pharmacy is a great example of a brand
Interbrand we refer to it as “brand strength.” just in every store. strong on scale, geographical spread and
• Presence: is it seen and talked about the proprietary elements of protection. The
While we don’t measure the character of positively everywhere? drugstore takes care to protect the equity
individuals, we do apply our very useful • Understanding: do you have an in-depth of its banner brand as it continues to expand
valuation methods to brands. Why? To knowledge of its distinctive qualities? its portfolio of private labels. Its new urban
determine a brand’s ability to generate format is helping it compete in denser markets.
demand for the future. Even though a With just that brief exercise, you can see
brand has intangible attributes, it can be that even your favorite brand has room Amazon.com is tops in responsiveness, built
valued as an asset, often worth millions. to improve. But the factors I find most to transform when it finds opportunities
And like any asset, it can be put to work interesting — most humanistic — are to compete in new markets or serve new
to drive business. But first, a company internal to an organization’s workings. customers through technological innovation,
must understand the way its brand They serve as the foundation of brand more convenience and better prices.
works. That’s where we come in. strength. Remember how Toyota
disastrously abandoned its fundamental Studying a company through the lens
Interbrand’s valuation methodology uses internal principles in pursuit of market of brand is incredibly enlightening. It’s a
three elements: financial performance, the share? That’s how important this is. holistic and accurate way of understanding
Role of Brand (the portion of the purchase how brand makes money for business. The
decision attributable to brand) and Brand • Clarity: Everyone from the CEO to ten components of brand strength provide
Strength (the ability of a brand to secure the mail clerk knows what the brand a multi-faceted perspective that help you
future earnings). stands for and understands its values, focus and recalibrate. The marketplace
positioning and proposition. keeps changing, but the principles of
There are ten Brand Strength factors. Six • Commitment: the company invests in strong brands hold true.
are external—meaning they are defined by its brand.
public perception. Think about these factors • Responsiveness: the brand is able to
in regard to your favorite retail brand: evolve and renew itself despite shifts
in the marketplace. Bruce Dybvad
3. Lessons from the Best
Five takeaways from Interbrand’s 2012
Best Retail Brands
Interbrand’s annual study of the world’s Today’s customers gravitate toward simple Be multidimensional
move valuable retail brands provides some solutions and more efficient shopping. Over time every brand achieves a level of
keen insight into matters at the heart of In that respect, most retailers still have maturity and reliability that gives it less
the retail industry. Here are the leading unrealized opportunity to delight their surprise and relevance. Where do you go
thoughts around five top issues: customers with or without digital. after that? How does a brand develop,
Improved customer service, easier year after year, a renewed experience
Be less predictable, more agile merchandise returns and a reduction with enough depth to triumph?
Now that commerce is available all the in out of stocks, which still reach up
time, any place, online or off, levels of to ten percent in stores on average, By developing beyond a shopper’s need
business predictability have been reduced. could have far more relevance. for function and identity by adding more
For retailers, a fluid and uncertain emotion, richer texture and dimension.
market is the new normal. Understand the new pathway Brands can revive their relevance by going
to purchase deep into their original attributes to find a
Responsiveness now trumps efficiency. For many years, marketers had a distinct fresh connection that turns the ordinary
When a brand is responsive to its shoppers’ way of examining consumers’ decision into something meaningful.
behaviors and expectations, it adds value process. In theory, when need arose, the
to its goods and services. Added value consumer would consider a range of It’s been said, if shoppers were only
allows a brand to earn more. “Location” brands and methodically narrow their interested in price, there wouldn’t be much
is redefined as reach and responsiveness options to a final choice. In response, retail. The variety of retail we have today
through store count in combination with brands addressed their points of proves that different people value different
online impressions and mobile transactions, awareness and purchase through things when it comes to acquiring goods.
as well as real-life social interactions. advertising and promotional spending. The trick is to find the value beyond the
transaction. The world’s best brands know
It’s a major challenge for an agile brand The pathway today is more complex what the customer values, and work
to keep all touchpoints connected and as consumers connect digitally with relentlessly to provide it for them.
aligned. So is maintaining the expected myriad brands through channels outside
level of customer service, which in the marketer’s influence. They spend Think omnichannel
today’s competitive landscape becomes significantly more time in the research Many a traditional retailer has treated
exponentially more critical in helping every phase. Thanks to social media and online its e-commerce operation almost as an
shopper interaction lead to brand adoption. reviews, consumers remain engaged with afterthought, leaving it without resources
products for an extended period of time or commitment. The typical state of cross
Use digital to simplify after the purchase, evaluating and channel commerce remains poor, plagued
Just because you’re digital doesn’t mean sometimes advocating for the brand. as it is by information silos, organization
you’re helpful. The prevalence of low-utility issues, and non-interoperable programs
apps, and gimmicks like augmented reality Smart retailers are studying this path to that frustrate customers.
fitting room mirrors are usually short-lived find leverage and insights they can profitably
experiments. Consumers find that such act on. It requires devoting resources to The best retail brands are taking steps
things merely complicate their lives. identify the pathway and study its intricacies, to fix the problem, but there is a long
then applying the insights to revise strategy, way to go and not much time. It’s estimated
However, digital tactics used in the service of media spending and organizational roles. that by 2014, almost every mobile phone
targeting and segmentation can help deliver However, simply watching and listening will be an internet-connected smartphone
something shoppers value as much as price; to shoppers still works because despite all and 40 percent of Americans will
such as advance notices, personal reviews the digital research, many decisions are use tablets.
or recommendations from peer shoppers. still made in the store.
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