Walmart, Best Buy Among Most Valuable Brands

Walmart/BestBuy/HomeDepotThe best-known brands aren't always the most valuable, and a new ranking from Interbrand Design Forum proves it: Walmart comes in first, with its brand value estimated at $129.8 billion, followed by Best Buy, at $22 billion, and the Home Depot at $20.8 billion. But many household names - including Kroger, Macy's and Sears - don't even crack the top 50.

Walmart is doing so well, says Greg Silverman, SVP of strategy for Interbrand Design Forum, a retail consultancy based in Dayton, Ohio, not just because of its enormity and timely value positioning, but because "it's really proven itself to be a learning organization, taking cues from many of its competitors, including Target." Best Buy, which sells many of the same brands as its rivals, including Walmart, Target and the now-kaput Circuit City, has successfully established itself as a rewarding, special place to shop, he says.



The Home Depot, he points out, is a different case, earning its ranking on the basis of scale rather than brand innovation. "To me, it's not surprising that they came in as high as No. 3, and I wouldn't call that a strong performance for them. After all, it's the world's third-largest retailer. When you look at its brand valuation as compared to sales, it's a much lower percentage than Lowe's." Lowe's comes in at No. 8, with the brand valued at $10.7 billion. "Home Depot may be winning based on its operational advantages, but it hasn't delivered the brand management that Lowe's has."

Silverman says that the way consumers feel about a brand accounts "for up to 80% of the decision to shop at a particular store." Brand plays a much lesser role in grocery-store selection, where chains score low in terms of customer loyalty and brand strength. (Whole Foods Market, No. 47, is the lone grocer in the Top 50.) And department stores didn't score well because of their financial woes.

Interbrand Design Forum computes its ranking by combining how much chains are likely to earn in the future with its valuation of brand strength, and reports that the traits the most valuable brands share are clarity of purpose, a relevant shopping experience, delivering on the brand's promise, and staying consistent over time.

Consistency during a period of economic flux is tricky, he concedes. Target, for example, which is No. 4 on the list with a brand valuation of $17.1 billion, recently launched a TV campaign emphasizing the price of specific goods - a first for the company, and a major departure from its image-driven advertising history. With some 96% of Americans able to recognize its bull's-eye logo, the brand has some wiggle room. "Every brand management decision involves a bit of a trade-off," he says. "In this case, the company is trading off a little brand equity to generate short-tem traffic. It could be a misstep, but it's not going to kill the brand - Target is just spending down some of its brand equity."

Like many retail experts, Silverman agrees that the current downturn will result in a shakeout. "Without dedication to brand management, there's going to be a lot of companies exiting the market, and lots of consolidation. But those who are focusing on the long-term brand strategies - not just 'What are we going to do about January?' - are going to win disproportionately," he says, adding that the recession is sparking big brand changes. "We're on the verge of a creative renaissance in brand management in retail. Once they've squeezed all the costs out, stores have to find new ways to get customers to fall back in love with them."

1 comment about "Walmart, Best Buy Among Most Valuable Brands ".
Check to receive email when comments are posted.
  1. Michael Kaplan from Blue Sky Creative, January 23, 2009 at 12:30 p.m.

    Dell is listed as a top retail brand... but not Microsoft? Or HP? Or even Apple? I don't get it.

    Dell is a fraction of the size of those other computer giants, and they don't have their own retail presence (as Apple does). They have a shoddy record for customer service and satisfaction, and other than their once-innovative inventory-control systems, offer little new or innovative to customers.

    How in the world does Dell rank so high? Very bizarre, if you ask me.

Next story loading loading..