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This report helps illuminate the radical changes reshaping retail as shoppers, chastened by the recession and empowered with technology, think differently about what and how they purchase. Here are just three of many critical considerations: First, brand is a prerequisite of retail success. How retailers build their brands impacts all aspects of their business.
The Top 20
Welcome to this Kantar This report helps illuminate the radical
changes reshaping retail as shoppers,
chastened by the recession and empowered
Third, retail is becoming even more
competitive. In developing markets, retailers
face tough competition both from traditional
Retail analysis of the with technology, think differently about what
and how they purchase. Here are just three
of many critical considerations:
outlets and the modern trade. In saturated
“post-modern” markets, hyper competition
for share of wallet has replaced expanding
Top 20 Most Valuable First, brand is a prerequisite of retail
success. How retailers build their brands
square footage as the engine of growth.
Suppliers play a critical role in helping
retailers succeed amid the local
Global Retail Brands impacts all aspects of their business. Brand
is key to effective merchandising. It converts
private label from a margin-building tactic
This report elaborates on these
to a strategic symbol of brand equity. Brand considerations and many others. It provides
alone secures an enduring place in the mind the ingredients needed in order to thrive in
of the consumer. It is fundamental to the this new retail environment: the best data,
supplier-retailer relationship. original insights and compelling ideas that
will drive our businesses forward.
Second, retailers own the conversation with
shoppers. Through their loyalty programs Kantar Retail is pleased to provide this
and daily interactions with shoppers, report. We believe that it will help you
retailers have the most authentic and think differently about your business, its
perpetually updated understanding of challenges and opportunities.
the shopper. This knowledge is critical to
suppliers who need to engage with their Sincerely,
retailer customers to actively participate
in the conversation.
CEO Kantar Retail
Analysis by Kantar Retail from Bryan Gildenberg and Ethan Sinick
Design by Lambie-Nairn
Writing by Ken Schept
GLOBAL RETAiL BRANDS 2010 3
The Top 20 Profiles 22
The Top 20 Summary Chart 62
10 Key Takeaways 68
About Kantar Retail 74
4 GLOBAL RETAiL BRANDS 2010 5
iNTRODUCTiON in a turbulent economy,
when flat was the new up,
that performance signified
the resilience of brands
The report also corroborates the stability
of retail brand value over time. In 2006,
The BrandZ ranking of the Top 100 Most
Valuable Global brands included 10
retail brands. And those 10 retail brands
The overall brand value of the and their importance in
comprised about 9 percent of the total
brand value of the Top 100. In 2010, 9
helping to stabilize and
retail category declined by just
retail brands are among the Top 100,
sustain a strong bond representing about 8 percent of the total
value. The difficult economy primarily
1 percent last year. with customers, even as
customers reset their
accounts for the slight decline.
In fact, the Top 10 most valuable global
priorities and restrained retail brands remained quite consistent over
spending. the past five years, although the relative
ranking shifted somewhat. Two instances
This key conclusion emerges from this of dramatic brand value growth – Amazon
second annual report about the leading and ALDI – illuminate major trends. On
global retail brands. The report combines the strength of a 359 percent increase in
the broad retail knowledge and analytical brand value Amazon moved from Number
skill of Kantar Retail with the definitive 8 to Number 2, indicating the revolutionary
global top 100 most valuable global brands impact of e-commerce. ALDI’s 241 percent
valuations produced annually by Millward increased in brand value signifies the
Brown Optimor drawing on financial data consumer’s increased concern with price
and the WPP proprietary BrandZ database. and embrace of private label.
6 GLOBAL RETAiL BRANDS 2010 7
Especially during periods of economic
Expanded report uncertainty, like the last several years, both 5-Year Review of Retail Brand Value
This report examines these trends and consumers and businesses increasingly
other dynamics that last year drove overall rely on strong brands for the reassurance
retail industry brand value and the value of and reliability they represent. Knowing the
# 2010 Rank 2010 Value 2006 2006 Value % Change
individual retail brands. More than twice the value of this intangible asset, a brand, helps $US Bil. RANK $US Bil. in value
size of the inaugural Most Valuable Global corporate leadership and stakeholders
Retail Brands report, this edition includes: make more informed decisions. 1. Walmart $39.421 1 $37.567 5%
2. Amazon $ 27.459 8 $ 5.983 359%
• An overview that interprets how post- To determine a brand’s value, WPP’s
3. Tesco $25.741 3 $15.532 66%
recession consumer attitudes and Millward Brown Optimor relies on BrandZ,
the most reliable and comprehensive 4. Carrefour $14.980 5 $10.803 39%
emerging trends will reshape retailing.
brand equity database available anywhere. 5. Target $12.148 7 $6.135 98%
• Commentaries that explore the impact of Started 12 years ago, BrandZ contains 6. eBay $9.328 4 $13.191 -29%
e-commerce and the enduring power and information from more than one million
7. Home Depot $8.971 2 $27.312 -67%
profitability of brands. consumers in 30 countries. The brand value
calculation combines the BrandZ consumer 8. ALDi $ 8.747 16 $ 2,566 241%
• Profiles of the Top 20 most valuable global information with financial data from both 9. Auchan $7.848 9 $5.354 47%
retail brands including analysis, forward- company and independent sources. For 10. Lowe’s $7.008 -- -- --
looking insights, statistical summaries and complete methodology details, please turn Sources: Millward Brown Optimor
photographs illustrating current formats to page 70.
The growth of Amazon and Aldi respectively
• Takeaways that recommend specific reveal the growth of e-commerce and the
practical actions to help assure success in importance of value. The decline of eBay and
the post-recession retail world. Home Depot reflect the difficult economy.
Get the full BrandZ Top 100 report
To access the complete BrandZ Top 100 Most Valuable Global Brands 2010 report,
go to www.BrandZ.com. For a free download of any of the BrandZ 2010 smart phone
apps, go to www.BrandZ.com/mobile.
8 GLOBAL RETAiL BRANDS 2010 9
OVERViEW Retailing emerged from Indeed, the retail brand that grew most in
value last year operated no stores. While
the recession changed by the retail category as a whole declined 1
the consumer’s virtually percent in brand value, the value of the
Amazon brand appreciated 29 percent to
unrestricted access to
Forget location, location, location. information and products
$27.5 billion, moving it into second place
behind Walmart, which does operate
and a revised view of stores—8,000 of them worldwide—and has
Retailing is becoming more spending and material
a brand value of $39.4 billion.
complicated. well-being. Factor in the dramatic rise in smart phones
and data transmission and it becomes clear
Having spent 18 months tightening that the future of retailing will emerge from
budgets, consumers now seem ready the tension between location, location,
to resume discretionary purchasing. But location and algorithm, algorithm, algorithm.
they remain cautious. While excited to Success will require both merchants adept
replenish wardrobes and replace durables, at massaging customer egos and analysts
consumers are more considerate of the skilled at massaging customer data.
impact that their purchases have on the
earth and its people. And they’ve learned As brands heavily invested in bricks and
to live with less. mortar seek ways to keep stores relevant,
store size will shrink. Because of the costs
They’ve also learned to shop and challenges of adding new stores,
retailers will attempt to extract more cash
differently. E-commerce has grown
flow from their existing stores. These
in just a few years from an ancillary initiatives could improve large stores,
retailer revenue stream to a central which sometimes are inconvenient to shop,
place in the shopper’s repertoire offering more selection than customers can
of purchasing options, redefining process at the shelf but less than they can
the role of stores themselves. It’s a find online. At the same time, retailers risk
oversimplifying their stores and eroding the
rapidly growing global phenomenon,
best illustrated by the US, where
online transactions account for Here’s the takeaway: Competitive
around 6 percent of annual advantage in retailing no longer can be
retail sales. accomplished simply by saturating markets
with stores and attracting customers
with a combination of range, price and
service. Success requires a thoughtful
portfolio of shopping venues—physical and
virtual—that appeal to specific shopper
segments. Every retail brand needs to find
a proposition that makes visiting these retail
spaces worth the shopper’s time.
10 GLOBAL RETAiL BRANDS 2010 11
The e-commerce and mobile revolution
Share of wallet Share of decision is a major opportunity for retailers that
It’s always easier and more capital and In a multi-channel world, consumers have successfully reorganize their businesses
cost efficient to sell more to an existing a lot of choice. Share of decision is about for a digital world. A large part of winning
customer. That truism becomes a retail getting them to choose you. in this world is being the platform people
imperative now. turn to when making purchasing decisions.
When retailing was exclusively about Retailers need to become part of the
And precisely understanding that opening and operating stores, retailers active conversation that goes on around
customer becomes more important strongly influenced the shopper’s these purchases. Digital also poses an
than understanding trading areas and understanding of price and assortment existential threat. Either retailers win their
geographies. The era of growing the top in key categories. They mediated the share of decision or risk becoming simply
line and market share by opening ever decision-making process. That mediation points of distribution and pickup. In the
more stores is over. The primary strategy role is threatened as technology enables future, a retailer not engaged in the digital
for building a retail business is shifting from consumers to enjoy almost unlimited access conversations impacting the business could
growing market share to growing wallet to products and product information. be reduced to just a box of stuff with a
share—from saturating a trading area with roof—a brand positioning to avoid.
square feet of space to selling as much as With mobile commerce, customers
possible to the shoppers loyal to the brand. are increasingly able to receive real-
This shift can be explained in part by
time information in their hands as
demographics in developed markets. In the they shop. When a mobile phone
US, for example, economic recovery will be empowers a shopper at the point
moderated by high unemployment among of sale with as much information—
the young, a dearth of people in their prime or more—than is available to the
wealth-creation years and the bulge of baby retailer, the retailer’s role in that
boomer with reduced net wealth nearing
under-funded retirements. In Europe and
transaction fundamentally changes.
Japan, retailers face aging populations with Shoppers are less influenced by
formats that may not be configured for the location, price messaging and
childless households that will comprise store experience if, with the push
most of the foot traffic. of a button, they can find a desired
product at the best price.
Some of the challenge is attitudinal.
Consumers in developed markets remain The shopper’s immediate access
concerned about the future. And while to this information neutralizes
they still expect mass market prices, the retailer’s role as the arbiter
they’re increasingly unsatisfied by mass of price and assortment.
market products. In general, they prefer
more personalized items, but without the
premium that personalization implies. And
consumers, of course, can obtain products
through many channels other than stores.
12 GLOBAL RETAiL BRANDS 2010 13
The Top 20 Most Valuable Global Retail Brands 2010 2010
# Position Brand Parent Company Brand Brand Brand Brand
change Value Value Contribution Momentum
from $US Bill Change
These brands had few options except to
Renewing the brand emphasize affordability and prepare for
But first steps first. Many retail brands post-recession spending. Retailer success 1. = US Wal-Mart Stores, Inc $39.421 -4% 2 8
adapted extremely promotional tactics to in that environment will require a more
cope with the recession. As brands enter nuanced understanding of customer needs 2. 1 US Amazon.com, Inc $27.459 29% 4 9
the recovery, they’ll need to consolidate or and wants and an offering of products,
modify some of those tactics. services and formats to match them.
3. -1 UK Tesco plc $25.741 12% 5 4
Especially in the early days of the recession, Leveraging the brand 4. = France Carrefour SA $14.980 0% 5 7
reflexive discounting and cautious buying
reduced excessive inventory. Consumers To fortify their brands and leverage their
5. 1 US Target Corporation $12.148 -1% 4 7
enjoyed the savings and understood equity, retailers implemented private label
the tactics, especially from brands that solutions while at the same time relying
symbolized value in more normal times. on national brands to drive traffic, which 6. -1 US ebay Inc $9.328 -28% 3 7
Discounts by up-market or even luxury becomes even more important as shopping
retailers delighted shoppers but risked trips decline. While much retailer private 7. 1 US The Home Depot, Inc $8.971 -3% 2 3
stretching brand credibility. label continued to depend on the reflective
glow of adjacent national brands, retailers 8. 1 Germany ALDI Group $8.747 1% 1 6
For example, Sainsbury’s, the UK grocer, increasingly introduced incandescent
uncharacteristically promoted value with private labels that emitted their own light 9. -2 France Auchan S.A. $7.848 -26% 4 7
campaigns like “Feed your family on a and power—with equity derived from the
‘fiver.’” Sainsbury’s success suggests that retailer’s brand. 10. 1 US Lowe’s Companies $7.008 10% 2 5
great retail brands do not retreat from value
but rather integrate it into the brand as a IKEA and ALDI, the deep discount grocer, 11. 4 US Best Buy Co Inc $5.807 18% 3 8
strategic attribute rather than an expedient remained strong examples of retail brands
tactic. It helped, of course, that Sainsbury’s that have become synonymous with the 12. -2 Sweden IKEA International A/S $5.710 -15% 3 8
was in the food business at a time when products they sell. Lidl, an ALDI competitor,
consumers were focused almost exclusively continued to balance its strong private Marks and Spencer
13. -1 UK $5.699 -5% 5 3
label with national brands. Target, the US Group Plc
on needs over wants.
discount department store, adopted that 14. -1 UK Wal-Mart Stores, Inc $4.922 -9% 3 7
For brands selling wants during the hybrid approach in the rollout of its new up
recession, the message hardly mattered. & up private label, which uses an upward 15. 2 US Kohl’s Corporation $4.371 12% 4 5
A steep decline in the brand value of pointing arrow as a logo signifying the
eBay reflects how much the online retailer brand’s commitment to quality and price. Lidl & Schwartz Stiftung &
16. = Germany $4.102 -1% 1 5
depends on discretionary spending. The The UK’s Marks & Spencer began to offer Co KG
evaporation of home equity and tightened selected national brands side-by-side with Costco Wholesale
17. -3 US $3.875 -26% 1 4
credit impacted sales—and brand value— its iconic St. Michael’s private label. Corporation
for home furnishings and improvement
18. = US Wal-Mart Stores, Inc $3.255 -7% 1 6
leaders like IKEA, Home Depot and Lowe’s.
19. = US Sureway Inc $3.173 -8% 2 4
20. = UK J Sainsbury Plc $2.728 -4% 5 4
Sources: Kantar Retail, Millward Brown Optimor. See the At a glance charts for brand footnotes and see
Methodology on page 70 for explanations of Brand Contribution and Brand Momentum.
14 GLOBAL RETAiL BRANDS 2010 15
The changing consumer A global perspective
Brands also need to acknowledge Finally, as retailing becomes more
the shifting values of the post- complicated and challenging in developed
markets, retail brands increasingly will
recession consumer. Concerned seek growth in BRIC and other emerging
about the impact that their material economies.
well-being has on the planet and on
people at every stage of the supply They will find consumers more eager to
chain, consumers are moderating spend money. But they’ll also encounter
indulgence and excess with a increasingly powerful local competitors that
have recognized the same opportunities.
binary view of spending that pairs However, because Brazil, Russia, India and
entitlement with responsibility and China are in such different places in their
individuality with community. retail evolution, their conflation into the
acronym BRIC adds confusion rather
Retailers respond to these consumer than insight.
concerns for a variety of reasons: because
sustainability improvements reduce costs; It’s more illuminating to consider how each
because good citizenship strengthens the country sits along a continuum of retail
customer bond and drives shareholder market evolution. The continuum begins
value; or because of genuine commitment. when pioneer brands arrive to organize
Whatever the reason, retailers must an informal and fragmented market of
respond. And their commitment needs to family-owned businesses. It stretches until
be credible and consistent with their brand’s consumers shop at both the informal trade
overall ethos. and in a well established organized trade
that consists of modern stores serving
European retail brands may be somewhat many product sectors.
more responsive to these consumer
concerns, particularly sustainability. But In this context, the Brazilian market already
sustainability has become a bit more is intensely concentrated into three modern
mainstream everywhere and the notion that retailers: Carrefour, Casino’s CBD Group
it commands a price premium is beginning and Walmart. China remains fragmented
to disappear. Being in touch with these but is rapidly moving toward concentration,
long-term shifts is part of understanding the particularly in the coastal cities. The Russian
post-recession world. And retailers who get market is intensely influenced by “disruptive
that right are most likely to flourish. factors” (government and the lack thereof)
that drive a unique pattern of concentration.
Similarly, regulation has kept India a nation
of shopkeepers with only 3 percent of retail
coming from the organized trade.
16 GLOBAL RETAiL BRANDS 2010 17
1. Thinking differently about problem
solving. Bricks and mortar problems often
are easy to identify but difficult to fix.
Knowing that comp sales are down in five
E-commerce is no longer just stores may isolate a management problem.
Fixing it is something else. In e-commerce
a nice way to top-up sales.
the opposite is true. The overwhelming
by Michael Ross
amount of data about customers, orders,
clicks, and fulfilment can obscure the
problem. When the problem is isolated,
Organizations that still however, the solution can often be easy.
regard e-commerce as a
Example: You may discover that a large
bolt-on are squandering a volume of customers is being directed to
major opportunity to gain an out-of-stock product. That should be a
insight and grow revenue two-minute fix.
and profit. And they’re 2. Thinking differently about decision-
placing themselves at a making. In a physical store it’s not easy to
dangerous disadvantage. know exactly what products customers
are looking at. In e-commerce you know
Moreover, in today’s exactly what every customers views, adds
slow-growth economy, to cart and buys. More precise information
is powerful. It enables you to determine
e-commerce needs to be whether a product isn’t moving because
an integral part of any retail people aren’t looking at it or because
enterprise. But success people are looking at it but not buying.
An accurate diagnosis leads to a fast and
requires thinking differently effective solution.
in many ways:
Example: Without accurate information,
you’re left with a trial and error response.
Discounting, the default response, can
waste a lot of time and produce no
extra turns if shoppers aren’t looking at
18 GLOBAL RETAiL BRANDS 2010 19
3. Thinking differently about business Even more important, e-commerce analysts who can sift data to discern why
organization. Retailers typically structure will change retailing. The stores of the
Not the end of shops a product turns—or not. Such unions will
management according to traditional (near) future will be much changed from The rise of e-commerce does not presume require wisdom and humility. But they will
functions such as marketing, merchandising today’s shelf-lined boxes stuffed with the end of shops. People like shops. We produce remarkable competitive advantage.
and finance. In e-commerce that’s expensive inventory. We’ll see fewer and love to touch the merchandise. But it does
often sub-optimal. While the traditional smaller stores. Ultimately, stores may Michael Ross is director and co-founder
mean that the most successful retailers
management structure maps neatly onto become experiential showrooms. Such a of Ecommera, a leading e-commerce
will be those who understand both the
an existing retail organization structure, development would completely change the solution provider delivering technology
physical and virtual channels profoundly and
it often makes it hard to make rapid economics of retailing, as the merchant and insight. email@example.com
learn the lessons from each to build and
trading decisions. wouldn’t need to have stock sitting in operate a solid and integrated multi-channel
hundreds of different locations. presence. Brilliant merchants always will Ecommera is a WPP Digital Partner
Example: Sales of a particular product are Company
have an important place, but they’ll need
underperforming. Do I spend more on a Retailers heavily invested in bricks and
to marry their intuitive feel for buying and
search engine? Do I discount the product? mortar real estate might fairly argue that
selling with the technical knowledge of
Do I discount delivery? When each function it’s difficult to turn the battleship around.
has a different budget and reporting line, I would agree. But I’d add that if you’re
the lengthy decision-making process often not looking at the horizon, you won’t have
results in lost opportunity. a battleship to turn around. Consider the
e-commerce implications for brands. In the
implications for retailers past, brands relied on retailers for national
distribution. With a few flagship stores and
and brands a wholesale program brand marketers could
cover the whole country, even the world.
As you can see from the preceding E-commerce enables brands to sell directly
examples, even thinking like an e-commerce to consumers, make higher margins, have
merchant will sharpen your business. You’ll more control and no longer need to deal
ask better questions and expect faster and with a lot of stores. Brands can radically
more useful answers. reshape their distribution strategies. And
retailers who make money today selling
And you’ll have a more accurate handle these brands will need to rethink their role
on performance. In the bricks and mortar in the retail landscape or risk waking up one
world, profit per square foot is a key day to find they have no products to sell.
performance indicator. That’s not the case
in e-commerce. E-commerce retailers
need to understand the trade-off between
profit-per-order and volume of orders. This
allows them to understand whether the next
dollar should be invested in retail prices,
marketing, discounting delivery or
20 GLOBAL RETAiL BRANDS 2010 21
ThE TOP 20
1.WALMART Plus, shopper attitude changed a bit last
year. While shoppers continued to spend
cautiously because of the economy,
they’d passed their initial panic and fear.
Less dependent on Walmart’s low prices,
Meanwhile, Walmart invested in the brand’s
online presence because its greatest
threat comes not from bricks and mortar
competitors but from online operators,
specifically Amazon. Scale and global reach
shoppers probably felt less grateful. At should help. Though the Walmart brand
Wal-Mart relaunched its brand the same time, assortment changes may
have confused or alienated some shoppers
value declined slightly, last year the Walmart
Corporation posted sales of over $400
as Walmart last year. looking for a more complete grocery
trip. Walmart remained the consumer’s
billion from over 8,000 stores, in 12 formats,
operating in 15 countries. And 25 percent of
advocate, however, as it continued to its sales came from outside the US.
convert operational cost savings into
price reductions. And with well publicized
reform of its labor practices, commitment
to sustainability and advocacy for health
reform Walmart continued to repair the
broader pillars of its brand.
The subtle spelling revision signified
shifts in brand positioning and store
execution that may have provoked
At a glance
shopper confusion, as brand value $39.4 billion
declined slightly. Brand Value Ch
ange YOY% -4%
Sales $406.4 billion
Expansion slowed and sales grew modestly. Stores 8,051
But the discount superstore chain, which The new Walmart logo, intro d Sales $294.6 billion
duced last year, appears
here on a store in Mt. Prospe WALMART Bran
operates about 4,500 stores worldwide ct, Illinois, a northern d Stores 4,577
suburb of Chicago.
under the Walmart banner, posted strong eration 15
Countries of Op art, Walmart Supe
profit. The results reflected both effective es include Walm Optimor
Walmart brand sal tai l, Millward Brown
urces: Kantar Re
management of the business and a tangible
Throughout the store, Walmart reassessed
benefit of a brand that enriched its core ct store in North
Bergen, New Jerse
entire categories and departments, At a Project Impa and improved fas
hion reflects the
proposition from “Low Prices, Always” to price
combination of low “Save money. Live better.”
designating them as win, play or show, new Walmart tag
“Save Money. Live Better.”
depending on their growth potential,
and assigning appropriate space and
Walmart continued to implement its “Project
merchandising investment. The store
Impact” initiative aimed at simplifying
program helped clarify the evolution of
in-store execution to produce a more
Walmart from its roots as a hardlines
consistent brand expression. The specific insights & implications
discount store to its next phase as a general
goals included: removing clutter and
merchandise retailer selling groceries to • Walmart’s influence is weakened as shoppers become less reliant on the brand for price and product
improving signage to make shopping easier; information that they increasingly access on their computers and mobile devices.
its current iteration as a grocery retailer
reducing labor, stock keeping units, and
with a large general merchandise range. • Walmart needs to achieve the right balance between two somewhat conflicting imperatives: removing
inventory to lower costs; and increasing items from the assortment to gain store efficiency and operational savings; and adding items to the
However, Walmart’s decentralized culture,
private label to improve earnings. assortment to satisfy customer needs and expectations.
which thrives on local entrepreneurship, can
produce store-to-store inconsistencies and • As Walmart broadens its brand beyond price, the company needs to be clear that price remains
sometimes shopper confusion. a core aspect of the proposition.
22 GLOBAL RETAiL BRANDS 2010 23
ThE TOP 20
2. AMAZON Amazon and Zappos share a problem-
solving ethos. The formation of each
company depended on asking – and
answering – the same question: what’s hard
about buying this product? For Amazon
As consumers slowed spending last year,
Amazon also benefited from its many
revenue streams other than retail sales,
which include: advertising, third-party
licensing arrangement, rebates, Prime
the product was books. The physical Membership dues, Kindle sales and
Amazon grew 29 percent in brand layout of a library or bookstore prevented
books relevant to the individual patron from
royalties from electronic book sales.
value last year making it one of being in convenient proximity. The problem
with purchasing shoes online was that
the fastest growing global brands
the product often did not fit, a customer
concern until Zappos offered unlimited free
returns. Both companies provided digital
across all categories. interface solutions.
At a glance
With improvements in price, Brand Value
nge YOY% +29%
selection and service Amazon Brand Value Cha $24.5 billion
achieved a retailing trifecta. Total Company
By combining its online data into This Amazon home page prom
AM AZON Brand Sa
complex algorithms Amazon AMAZON Brand
otes the Kindle while
showing the brand’s broad
product category range.
ascertained the bottom of the Countries of Ope azon.c om/ca/co.jp/co.uk
les include am
Amazon brand sa wn Optimor
market faster than most retailers So urces: Kantar Re
tail, Millward Bro
and priced accordingly. Unparalleled
selection also helped Amazon Amazon continues
to revolutionize the
book category wh
dominate the holiday season. brand began.
Easier to open packaging and Amazon’s brand value growth last year
free two-day shipping for its Prime also resulted from the introduction of
Membership subscribers improved Kindle 2 and the acquisition of Zappos,
the service experience. developments that fortified the company’s
market position. With the Kindle 2, Amazon
Having invented a better idea, Amazon leveraged the consumer trust earned as a insights & implications
has invested heavily in the technology book merchant to expand into electronic
• Amazon has an opportunity to expand its model into other aspects of people’s lives by offering more
and distribution required to sustain it. reading devices. Amazon has defined the product categories and venturing into services. It could add a bricks and mortar presence.
The brand now looms as a revolutionary distribution medium for electronic books
• The company’s success will draw more intense competition from highly efficient retail competitors that
force of engineers and mathematicians in the way Apple’s iTunes impacted music.
understand complicated distribution and technology, such as Walmart.
posing an existential threat to traditional Although Zappos still trades under the
Zappos name, acquisition of the online • Since Amazon operates only in six countries, it has a tremendous international expansion opportunity.
retailers invested in bricks and mortar and
still depending on the mantra of location, shoe and apparel retailer strengthened the
location, location for competitive advantage. Amazon brand at least indirectly.
24 GLOBAL RETAiL BRANDS 2010 25
ThE TOP 20
3. TESCO The exceptions to the company’s strategy
of branding all business Tesco occur during
international expansion when acquisition
of a strong local brand facilitates market
entry. Ironically, the Tesco brand is absent
With the rise of food discounters, like ALDI
and Lidl, Tesco returned to its discount
roots while at the same time keeping
the broad brand approach. It launched
a discount own label brand in the UK.
from its most successful international However, in central and eastern Europe,
The Tesco brand appreciated market, Korea, where the company trades
as Homeplus. Tesco decided to establish a
where the discount brands are strong,
Tesco operates many large hypermarkets.
in value last year despite the new brand when it launched Fresh & Easy,
a food discount operation, in the US.
In the US, Tesco’s Fresh & Easy is modelled
after low-priced Trader Joe’s, which is
owned by ALDI. In 2009, Tesco operated
about half of its over 4,500 stores outside
the UK in 14 other countries.
That performance reflected the At a glance
strength of the brand, particularly $25.7 billion
in the UK, Tesco’s home market, Brand Value Ch
where consumers view the grocer Total Company
as the place to fulfil a wide range les $77.3 billion The Tesco loyalty
card, used with 60
TESCO Brand Sa transactions, provid -to-80 percent of
of monthly household shopping
es valuable custom
ores 3,396 advantage. er data and compe
TESCO Brand St
needs. The UK contributes about Countries of Op
include Tesco Ex er demand,
75 percent of Tesco’s total turnover. Tesco brand sales
Tesco Metro, tes
th e recession
its discount approach.
its broad brand
Last year’s performance also was indicative
of Tesco’s ability to formulate a broad
master brand, encompassing both food
and non-food and priced from discount
to premium, that appeals to consumers
at all income levels. In the UK, where shape the own-brand strategy. Outside of
Tesco operated 2,440 stores last year, the UK, with weaker brand heritage, own-
the brand appears in a variety in formats, label business is harder to develop. insights & implications
primarily supermarkets, hypermarkets and
• With further investment in the supply chain, Tesco could experience in non-food categories the
convenience outlets, while maintaining Founded as a discount food merchant in e-commerce success it enjoys in grocery.
brand consistency and purchasing and 1919, Tesco expanded into various grocer
• Because of Tesco’s dominance as a grocer in UK, growth requires leveraging the brand into new
distribution efficiency. formats and non-food businesses that now formats for selling non-food products and offering services such as banking.
include financial services and mobile phone
Tesco offers an own-label option on about • As Tesco expands beyond its core business, it needs to narrow the brand proposition because the
operations. After forming Tesco Financial company lacks the fundamental competitive advantages.
40 percent of the grocery range and at Services in a joint venture with RBS (Royal
every price point, including premium, in the Bank of Scotland) in 1997, Tesco bought
UK. Tesco loyalty cards, used on 60-to-80 the RBS share during the financial crisis and
percent of UK transactions, provide data to rebranded the entity Tesco Bank.
26 GLOBAL RETAiL BRANDS 2010 27
ThE TOP 20
4.CARREFOUR In Europe, the Carrefour brand remains
strong in France and Spain and somewhat
weaker in Belgium and Italy. Although the
company operates some of its largest
stores in Eastern Europe, the brand makes
should enable Carrefour to leverage
marketing and advertising spending and
develop private label.
Being managed for short-term objectives
less impression there. In contrast, the brand will place Carrefour at a competitive
The value of the Carrefour brand is well established in certain emerging
markets including China, Argentina and
disadvantage against is peer operators,
however, as retailers like Walmart and Tesco
remained flat last year. Brazil, where a recent acquisition produces
some the company’s fastest growth.
continue to grow with long-term vision. If
pieces of Carrefour were sold eventually,
they would be logical buyers.
Eventually, consolidating the various
businesses under the Carrefour brand
may facilitate the sale of all or parts of
the company. Meanwhile, a unified brand
At a glance
ange YOY% 0%
Brand Value Ch
Sales $131.5 billion
In the midst of a deep global Total Company
CARREFOUR Brand Sales
recession, protecting value was and Stores 3,489
a significant accomplishment for Countries of Op
rrefour Bairro, Ca
the world’s second largest Carrefour brand
sales include Ca
t, Carrefour Marke
Carrefour Express, urces: Kantar Re
retailer in annual sales. And The Carrefour brand remains
strong in France, its
Carrefour Mini an
home market. Millward Brown
it was not accidental.
The company is unifying many of 40 country
nd in many of its
to leverage the bra
its disparate retail holdings under the Carre four is attempting
France, such as Po
land sho wn here.
markets outside of
Carrefour banner. The branding is part of an
effort to increase asset value implemented
by Blue Capital, a private equity group
that has controlled Carrefour for the last
several years. Through acquisitions made over 40 insights & implications
years, Carrefour evolved from a French
• The ongoing effort to unify the brand across country markets should leverage marketing investment
Until just over a decade ago, Carrefour was hypermarket to a presence in 41 countries and strengthen brand awareness.
known as a premium retailer with first-rate operating a conglomeration of almost
• The company operates with a short-term mentality at a time when major structural changes happening
locations and competitive prices facilitated 15,000 stores under various fascias. in retailing demand long-term vision.
by world-class buying. The focus began to Historically, about 60 percent of revenue
• The need to build and sustain a credible presence in e-commerce and the BRIC markets requires
change after the 1999 merger with French has come from the hypermarket segment significant investment. Reluctance to invest would put Carrefour at a disadvantage.
retailer Promodès and the subsequent of the business, which is almost entirely
death of one of the principals. branded Carrefour.
28 GLOBAL RETAiL BRANDS 2010 29