A new ranking of the top retail brands shows that the largest chains are bouncing back nicely from the recession, with Walmart, Target, the Home Depot, Best Buy and CVS emerging as the strongest U.S. store brands.
Walmart retains its position as the most valuable retail brand for the third consecutive year, according to the Interbrand ranking, despite an 8% drop in its valuation. "U.S. same-store sales have suffered a slight decrease, an indication that customers are spreading their spending to other stores as the economy recovers," the report notes. And while it came in at No. 2, Target's brand valuation declined even more, slipping 9% this year. Third-ranked The Home Depot saw a 19% gain, in part due to its ability to distinguish itself from competitors and engage shoppers via its Web site.
Walgreens, Sam's Club, Coach, Amazon.com, Dell, and Nordstrom rounded out the top 10, and this year's ranking welcomed Publix, Ross Dress for Less, Toys R Us, Dollar Tree, Anthropologie, and Michael's to the list for the first time.
But between the rough economy and merchandising missteps, there were losers, too: Buckle, Abercrombie & Fitch, JC Penney, Rent A Center and Advance Auto Parts all fell out of the rankings.
Interbrand found that technology played a key role in how brands evolved over the year, with chains like Macy's and Whole Foods combining customer feedback with R&D, extending their brand to new iPad apps, and interactive microsites.
And the "Big city, small world" movement continues to be a defining trend, as urban migration dramatically impacts the way retailers can expand, with more than half the world's population now living in cities. "In addition to the challenges climate change presents, cadres of city planners, design engineers, and architects are grappling with waste and inefficiency, faced with the need to transform tomorrow's cities into lean, clean, people-friendly places. As such, the pressure is on for retailers to ensure that their stores adapt to the new city model," the report notes.
"It's here that big-box retailers in particular may find themselves in the zoning crosshairs -- subject to bans, or at least building limitations that prevent them from executing their traditional strategies and sizes," forcing brands to experiment with new formats.
Though the methodology used to create this ranking of top retail brands is not clearly described in the article, it does appear Interbrand evaluated candidates across several dimensions. It’s interesting to see how closely this presumably complex analysis correlates with a simple evaluation of social health.
Since last July, Media Logic has been tracking the social growth and fan engagement of 100 retail brands, including 7 of the 11 brands listed in this article as among the “top 10.” We are not tracking Sam’s Club, Amazon.com, or Dell. But our ongoing Retail Marketing Report (March update at: http://bit.ly/hKEtSU) also ranks Walmart, Target, Best Buy, CVS, Coach and Nordstrom among top U.S. brands. We also rank Home Depot and Walgreens as healthly, but place them on a second tier. And we note that the social health of Buckle, Abercrombie & Fitch and JC Penny has slid a bit, though the label “loser” might be a bit too strong.
Social health as measured by social media engagement appears to correlate with brand health. And that leads to a very important question. Is social health merely a reflection of brand health, or does investment in social media drive brand value?