Methodology and Valuation by Insights and Data by

7 Welcome David Roth, CEO, The Store WPP, EMEA & Asia 01 02 03 04 05 Introduction The BrandZ™ Focus on China Thought Leadership WPP Shopper

10 Overview Global Retail Top 25 70 Focus on China - The World’s 82 “Profitably Delivering Relevance” Marketing and E-commerce Hotspot by Bryan Gildenberg, Chief Knowledge Officer, 20 The BrandZ™ Global E-commerce 17 Implications for Kantar Retail Retail Top 25 Ranking Brands & Marketers 73 Our Insights Capability 86 “Win-Win-Win In The New Retail Era” 24 The BrandZ™ Global by Emma-Jane Steele, Shop+ Global Director, Mindshare 108 Introduction Retail Top 25 Brand Profiles Sir Martin Sorrell, CEO, WPP 88 “Of Machines and Men” by Hugh Fletcher, Digital Business Consultant, 110 WPP Shopper Salmon Marketing Expertise and Disciplines 92 “Opportunities For Growth In A Decelerating Economy” by Jason Yu, General Manager, 112 WPP Shopper Kantar Worldpanel China Marketing Agencies

96 “OMG & OBE: Panic And A Path 128 BrandZ™ Valuation Forward For Retail Brands Today” Methodology by Jon Bird, Managing Director, Retail & Shopper, VML and Labstore

100 Retail Trends Roundtable BrandZ™ Top 25 Most Valuable Global Retail Brands 2016

WELCOME

[email protected] Twitter: davidrothlondon Blog: www.davidroth.com

WELCOME TO THE NEW E-RA

Welcome, and thank you for your interest Consumer loyalty is now that much 2 million consumers and B2B customers in the BrandZ™ Most Valuable Global harder to win, but with new ways of across more than 30 countries have Retail Brands 2016/2017 study. reaching people, and the ability to not shared their opinions about thousands of only meet their needs but to anticipate brands. In the 11 years that we at WPP have been them, the prize is potentially that much Kantar Retail has interpreted key retail valuing brands, never have we known a greater. brand developments and in this report time of such rapid and dramatic change. provide their insights into competitive And, in retailing, it seems the pressures As you will see in this report, the most advantages and challenges. affecting all business sectors are valuable retail brands are adapting their especially intense. services - and entire business models - to This year, several other WPP companies the fast-changing landscape in which have added commentary on the impact It was only four years ago that Amazon they find themselves. on retail brands of omni-channel took top spot in the retail brand rankings shopping, changing consumer paths from Walmart, a brand with immense Understanding what’s necessary and to purchase and the potential of the scale and more than 50 years’ experience what’s possible requires the kind of Internet-of-Things to automate shopping. in the sector. extensive global knowledge across These companies include: FITCH, sectors, markets and communications Salmon, Mindshare, Labstore and Kantar In the 2016/2017 rankings, the top two disciplines that WPP offers. Worldpanel. retail brands are both e-commerce TOP TWO RETAIL businesses, and there are three digital- We have offices in more than 112 I invite you to contact me directly with any first brands in the top 10. countries and a retail practice across questions, or to learn more about how BRANDS ARE our operating companies that extends WPP can help you better compete in E-COMMERCE These three brands – Amazon, Alibaba from insight to activation. It includes the fast-changing world of retailing and and eBay – together account for 40 research, advertising, marketing, digital, shopper marketing. BUSINESSES percent of the total brand value of the communications planning and media, PR, top 25 global retail brands. We are shopper marketing and retail. seeing that it’s difficult to overstate the THREE DIGITAL- significance of what this says about the This study draws on that expertise. Kantar way the world is being transformed. Millward Brown provided the valuations FIRST BRANDS based on the WPP’s proprietary BrandZ™ David Roth IN THE TOP 10 Never have challenges come from so research, the world’s largest and most CEO many directions. But then, neither have comprehensive brand equity tool. Over The Store WPP, EMEA and Asia opportunities.

7 Introduction BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

OVERVIEW

AS CONSUMERS RETHINK NOT JUST THE THINGS THEY BUY BUT THE LIVES THEY LEAD, SO TOO HAVE RETAIL BRANDS BEEN RE-EVALUATING THE ROLE THEY PLAY IN THOSE LIVES, AND THE WAY IN ALL CHANGE WHICH THEY DO IT. THE FORCES OF CHANGE ARE HUGE, AND THE EFFECT ON ALL BUSINESSES – NOT JUST AS CONSUMERS What BrandZ™ data on brand value shows, however, is that many retailers THOSE IN RETAIL – ARE SIMILARLY VAST. are weathering the storm. The value of retail brands rose 7 percent between 2015 and 2016, and four of the Top SEEK BRANDS 10 fastest-rising brands across all categories in the Top 100 Most Valuable Global Brands were e-commerce brands, including the number one riser, Space is being reconfigured; The retail brands with the fastest Amazon. unproductive space is being disposed growing brand value are those that are THAT ALLOW of as many shoppers switch from big reading the signs and responding – or Analysis by Kantar Retail, WPP’s global shopping trips to a focus on frequent anticipating – accordingly. retail and shopper consultancy, shows quick trips and e-commerce. Kantar that retailers are investing in optimizing Worldpanel data shows that in the 12 The most valuable brand in the THEM NOT productivity, improving the retail months to June 2016, while FMCG sales sector, Amazon, posted 59 percent experience and increasing shopper globally grew by just 1.6 percent, grocery brand value growth in 2016, further engagement. General retailers are e-commerce sales were up 15 percent. extending its lead in the rankings. enhancing cross-merchandising and Kantar Worldpanel predicts that by 2025, The brand is significant not just for adding in-store delivery options for online will account for 9 percent of all consistently setting new standards JUST TO BUY, online orders in an effort to improve FMCG sales, up from 4 percent now. for the industry in terms of service, convenience in big box stores originally but also for elevating consumers’ intended as dense, self-service In other cases, space is being turned expectations of choice, price and environments. over from a place for stacking stock fulfilment. JD.com, China’s second- into somewhere that can offer services largest e-commerce specialist, also BUT TO BE Many are reducing store footprints and or create an experience that enables outperformed the market with 37 repurposing space as they reassess the brands to connect with shoppers in richer, percent growth in brand value in 2016. role of physical retail in an increasingly more interesting ways. Consumers are omni-channel world. No longer is retail beginning to look at retailers as places not But the rankings also show that nimble space simply a place to maximize the just for buying, but for being. retail brands with a heritage in physical number of SKUs. The gradual slide of stores can grow in this market. Home Walmart – pioneer of the ‘Everyday low This change applies to digital retail Depot, the DIY retailer, and Costco, the prices’ approach to sales – from first to brands as well; Amazon is a dominant warehouse club, posted 32 percent fourth place in the BrandZ™ ranking of force in categories well beyond retailing, and 29 percent increases in brand the most valuable global retail brands in capturing not only a share of sales but value respectively. just four years is symptomatic of this. also a growing share of people’s lives. >> 10 11 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

OVERVIEW AISLE BE BACK THE MOST EFFICIENT RETAILERS ARE THOSE THAT FOCUS ON THE FASTEST-SELLING PRODUCTS THAT JUSTIFY THE SPACE THEY OCCUPY. SLOWER MOVERS, AND THE ITEMS CONSUMERS ARE HAPPY TO ORDER WITHOUT SEEING THEM FIRST IN THE FLESH, CAN SOMETIMES BE DELIVERED MORE EFFICIENTLY THROUGH E-COMMERCE.

What that means is that stores have an browsing and buying. Too many retail experience, to seek help and confirmation opportunity to become places of retail brands are still trapped in separate from an expert, to taste something, to theatre; destinations for immersion in the channels or streams for online and offline, touch it, to try it on. It is a superior venue brand, something brands such as Apple and this distinction jars with consumers for the act of browsing and comparing. It have become expert in. The idea of the for whom the difference is no longer can often, however, be a time-consuming physical store design serving as a lasting relevant. Presenting omni-channel buying and unpleasant way to actually make a monument is disappearing, as is the idea options is one thing for a retail brand, but transaction. that all stores serve the same function. omni-channel thinking is quite another. There is a difference in consumers’ minds This is the challenge for brands in the – and increasingly in the retail world – At the moment, the Internet is an excellent future: to improve the shopping online, between the everyday and the iconic. destination for the act of buying. Sites and the buying in-store, and coordinate And, just as consumers expect their and cookies know the shopper, their both of them as seamlessly as possible. mobile apps to get updated regularly, they preferences, their credit card details, and The answer – at least for those retailers expect physical stores to offer something where to send their stuff. The process not entirely operating online - is a true new or to reconfigure the experience they is becoming frictionless. And yet, the omni-channel approach. Done well, this provide on a regular basis. Internet remains a frustrating place for combines the pleasure of browsing, browsing and discovery. exploring and discovering that tends Shoppers are now comfortable moving to come from physical retail with the seamlessly between media and Well-executed physical stores, on the convenience of e-commerce. Omni- marketplaces that are online and offline, other hand, enable shoppers to readily channel retailing allows the consumer to using both to achieve their twin goals of seek and find new things, to have an use both store and screen as they wish.

>> 12 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

OVERVIEW

Never before has brand been such an important differentiator between retailers A YEAR IN THE DEPARTMENT STORES Department stores faced falling traffic at mall locations, but fared better with their flagship stores, where a more immersive BUSINESS brand experience is possible.

OF RETAIL ONLINE TO OFFLINE CROSSING BOUNDARIES

Online brands moved offline, with The BrandZ™ retail category includes Never before has brand been such an Amazon opening a bookstore near URBAN STORES Boundaries are being crossed. physical and digital distribution channels important differentiator between retailers; we Seattle and making plans for a Kroger has opened a new concept in grocery and department stores and see many cases in which stores carrying similar second in California, while Alibaba Urban stores are growing in store with a wine bar and craft beer specialists in drug, electrical, DIY and home goods in a similar format fare very differently in opened its first physical store in number. Localized selections of assortment and a limited apparel furnishings. Brand value growth between terms of brand value growth. This is because Tianjin, in northern China. goods at inner-city locations are offering, and discount supermarkets 2015 and 2016 varied significantly, not only the experience of shopping is about so much finding a ready market of millennial Lidl and Aldi have broadened their by retail channel, category and geography, more than the goods in the basket; it is about consumers. Tesco and Carrefour are non-food assortment. but also within sectors, as brands the overall proposition for consumers – a among the leading supermarket and responded differently to the conditions they combination of range, value, experience and SHRINKING STORES hypermarket brands to be highly face. the meaning of a retail brand to the individual. focused on small urban stores with GROWING SERVICES Stores continued to shrink, reflecting an assortment that varies significantly consumers’ changing shopping habits, by location. IKEA is opening inner- Selling is only part of the equation. but many offered more services, such city pick-up outlets, and organic food Services are a growing part of the FOOD RETAILERS as click-and-collect. Walmart was specialist Whole Foods has also retail brand offering. Drugstore chain among the big-box retail brands that launched a pared-down version of CVS, for instance, is growing the Food retailers in the past year have has closed some of its larger stores its larger stores, with a customized number of in-store clinics it operates, expanded offerings of fresh and and expanded its online offering, assortment and lower prices, called while Amazon and Alibaba are organic food, and increased pick-up and has launched its hugely popular 365 by Whole Foods Market. expanding their ‘share of life’ with and delivery options. Kroger, a US store pick-up service, modelled on cloud computing services and, in the grocery chain with more than 3,700 similar services operated by European case of Amazon, voice-controlled stores, is a stand-out example of this hypermarket and supermarket chains. search devices and the Dash trend in action. Kroger, which is also a automated ordering system. significant investor in data analytics, this year enters the BrandZ™ Retail Top 25 for the first time. >> 14 15 The BrandZ™ Global Retail Top 25 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17 #1 #2 #3

™ Brand Value Brand Value Brand Value $98,988 mil. $49,298 mil. $36,440 mil. THE BRANDZ Brand Value Change Brand Value Change Brand Value Change +59% -26% +32% TOP 25 MOST Brand Contribution 3 Brand Contribution 2 Brand Contribution 2 VALUABLE #4 #5 #6

GLOBAL Brand Value Brand Value Brand Value $27,275 mil. $18,082 mil. $14,461 mil.

Brand Value Change Brand Value Change Brand Value Change RETAIL -23% +6% +29% BRANDS Brand Contribution 2 Brand Contribution 3 Brand Contribution 2 #7 #8 #9

2016/17

Brand Value Brand Value Brand Value $13,001 mil. $12,077 mil. $12,074 mil.

Brand Value Change Brand Value Change Brand Value Change

Source: BrandZ™ / Kantar Millward Brown (including data from Bloomberg) +21% +4% +17% Brand contribution measures the influence of brand alone on financial value, on a scale of 1 to 5, 5 highest.

20 Brand Contribution 2 Brand Contribution 2 Brand Contribution 3 #10 #11 #12 #18 #19 #20

Brand Value Brand Value Brand Value Brand Value Brand Value Brand Value $11,509 mil. $10,496 mil. $10,364 mil. $7,459 mil. $6,846 mil. $5,419 mil.

Brand Value Change Brand Value Change Brand Value Change Brand Value Change Brand Value Change Brand Value Change -19% +37% +22% -37% +14% -24%

Brand Contribution 2 Brand Contribution 2 Brand Contribution 3 Brand Contribution 3 Brand Contribution 2 Brand Contribution 3

# THE # # THE # 13 BRANDZ™ 14 21 BRANDZ™ 22 TOP 25 TOP 25

MOST MOST

VALUABLE VALUABLE Brand Value GLOBAL Brand Value Brand Value GLOBAL Brand Value $9,360 mil. RETAIL $9,301 mil. $5,372 mil. RETAIL $5,305 mil. Brand Value Change Brand Value Change Brand Value Change Brand Value Change +25% BRANDS +11% -23% BRANDS -10% Brand Contribution 3 2016/17 Brand Contribution 2 Brand Contribution 4 2016/17 Brand Contribution 4 #15 #16 #17 #23 #24 #25

Brand Value Brand Value Brand Value Brand Value Brand Value Brand Value $8,923 mil. $7,905 mil. $7,736 mil. $5,086 mil. $4,790 mil. $4,575 mil.

Brand Value Change Brand Value Change Brand Value Change Brand Value Change Brand Value Change Brand Value Change -5% New Entrant -3% -11% -10% -2%

Brand Contribution 3 Brand Contribution 3 Brand Contribution 3 Brand Contribution 3 Brand Contribution 3 Brand Contribution 2

Source: BrandZ™ / Kantar Millward Brown (including data from Bloomberg). Brand contribution measures the influence of brand alone on financial value, on a scale of 1 to 5, 5 highest. BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

The Amazon ecosystem covers logistics, Germany, Japan, France, Italy, Brazil, music, film and television production as Australia and Canada. Its most recent well as the grocery market. The business international launch was in India in 2013, INSIGHTS & BRAND VALUE: $98,988 million is now as much a technology and media where it has rapidly become the most % CHANGE YOY: +59% company as it is a retailer; it offers music popular e-commerce company in the IMPLICATIONS GLOBAL RETAIL SALES: $104,060 million streaming by subscription, was behind 16 country, against strong local competition GLOBAL RETAIL SALES GROWTH YOY: 29.0% Emmy nominations for original content in and against Chinese rival Alibaba, which Amazon continues to look to new 1 GLOBAL RETAIL STORES: 2016, and Amazon Studios has released bought local brand Flipkart. China is 1 bookstore and approx. 30 pop-ups its first Original Movie Chi-Raq, directed one of the few markets where Amazon geographies and new categories by Spike Lee. CFO Bryan Olsavsky said in is not the e-commerce leader; Alibaba in which to trade. Its scale and its Source: BrandZ™/Kantar Retail (including data from Bloomberg) 2016 the company was “nearly doubling and JD.Com dominate here. Amazon strong reputation for customer our content spend in the second half of in mid-2016 announced a US$3 billion service and fulfilment make it a this year versus 2015. And we’re nearly investment in India on top of $2 billion it serious player in all aspects of ONLINE tripling our number of new Amazon allocated in 2014. retailing, including fresh grocery. Original shows – TV shows and movies compared with the second half of last Grocery, an area in which for years year.” observers doubted Amazon could INNOVATOR succeed, is now a growing part of the While it is known as an Amazon has experimented with physical business, particularly in cities where the e-commerce site, at its heart retail stores, opening its first bookshop company can offer fast delivery. In areas Amazon is a technology in Seattle, the city where the business is where Prime Now is available, products business. It is now disrupting the TOPS TABLE headquartered, and has been launching are delivered within an hour of ordering. entertainment and IT sectors in a range of subscription and delivery Since launching in 2014, Prime Now has the way it disrupted physical retail packages which promise next-day, grown to cover more than 25 metropolitan stores a decade ago. same-day and even two-hour delivery areas across the US, the UK, Italy and AGAIN slots in selected areas. These innovations Japan. typically launch in the US and then are rolled out to other major markets. In 2015, As it moves into territory previously As Amazon moves into business worldwide paid Prime memberships held by supermarkets, Amazon is also services, private-label grocery, WHAT BEGAN AS AN ONLINE increased 51 percent — 47 percent in the expanding into the lucrative world of electronics, FMCGs and the BOOKSELLER IN 1994 IS NOW THE US and even faster in other markets. private label for food and household Internet of Things, it is difficult to supplies. Private label names include imagine a business sector in which BRANDZ™ MOST VALUABLE RETAIL In August 2016, Amazon launched its Happy Belly, for food, Wickedly Prime Amazon could not find a place. Dash Button scheme in the US, UK and snacks and Mama Bear baby items. BRAND, MAKING MORE THAN $100 Watch for Amazon to continue parts of Europe, allowing Prime customers to march into the order-by-voice BILLION A YEAR IN SALES AND – subscribers who pay for delivery Amazon reported lower-than-expected SERVING 300 MILLION CUSTOMERS privileges and access to online content profits in Q3 2016 after three previous ecosystem pushing Echo and the AROUND THE WORLD. – to place orders for dozens of brands quarters of record gains, but it is seeing smaller Dot version deeper into at the touch of a button. Amazon’s Alexa growing margins from its web services, household penetration. digital hands-free personal assistant which are a growing proportion of AS ITS INVENTORY AND SUPPLIER is launched in the UK in late 2016 after profits. These services capitalize on LIST HAVE GROWN, SO TOO HAS THE huge success in the US. On Prime Day the technological infrastructure has 2016, a one-day global shopping event created for its e-commerce network, and LIST OF MARKETS IT COVERS, THE giving Prime members exclusive deals repurpose that capability for business CONVENIENCE-DRIVEN SERVICES and discounts, more than 85,000 items and consumer use. Amazon Business IT OFFERS, AND THE TECHNOLOGY- were sold in the US through Alexa voice- serves more than 200,000 small and activation alone. Subscriptions taken out large companies, including Fortune 500 BASED INNOVATIONS IT PRESENTS. on Prime Day in 2016 were up more than companies. Amazon WorkMail offers 30 percent over 2015. email and calendar services, and Amazon Web Services’ cloud computing is now Amazon has launched country-specific available in 12 markets and is due for sites in large markets; these include rollout to a further five by the end of 2016.

24 25 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

The e-commerce company has no Investment in content creation and physical stores, but provides digital distribution has been an Alibaba focus portals for B2B, B2C and C2C services in the past two years and includes the INSIGHTS & BRAND VALUE: $49,298 million through Alibaba.com and its Tmall.com Xiami music streaming service, which % CHANGE YOY: -26% and Taobao Marketplace sites. These allows shoppers to listen to music while IMPLICATIONS 2 GLOBAL RETAIL SALES: $454,949 million sites are all supported by Alipay, the fee- they browse. More sizeable investments GLOBAL RETAIL SALES GROWTH YOY: 29.0% free online payment platform it launched include the purchase of the Hong Alibaba has always looked beyond GLOBAL RETAIL STORES: 0 in 2004, which now accounts for half of all Kong-based South China Morning Post the transactional element of retail Source: BrandZ™/Kantar Retail (including data from Bloomberg) online payments made in China. newspaper group in late 2015, and the establishment of film production and to raise revenue. The value of The brand is the force that has taken distribution company Alibaba Pictures. strong content as a driver of traffic ‘Singles Day’, which began as a small In mid-2106, Alibaba created a ‘smart has been at the heart of business movement in a Chinese university, and car’, integrating its own digital operating growth. turned it into the biggest single shopping system into a Roewe brand compact SUV, day in the world and a national shopping so the car could automatically pay for fuel, AD FOCUS frenzy. On Singles Day 2016 – it is parking and road tolls. always on November 11 (11/11) – Alibaba Much of what shoppers love about generated sales of $14.3 billion on that The digital infrastructure that has allowed Alibaba’s sites is the sense of one day, a 60 percent increase over Alibaba and its many offshoots to flourish excitement around great deals and DRIVES CHINA’S 2015. High-profile marketing around the is itself now a source of revenue, with being part of a shared experience. day included a three-hour TV special on the Alibaba Cloud hosting and data Shoppers may be alone with their the eve of the sale, featuring Hollywood processing service sold to individuals and smartphone, but they feel part of big hitters such as Kevin Spacey, Daniel small businesses. This is a growing area something much bigger. Craig and a host of prominent Chinese for Alibaba; in its Q1 2016 results, cloud BIGGEST entertainers. computing accounted for only 4 percent of total revenue, but was the fastest- Alibaba has given Chinese consumers growing element, up 175 percent over the From the beginning, Alibaba has beyond the tier-one major cities a choice previous year. worked to take out the pain points of E-TAILER of brands that physical retail has never e-commerce by providing solutions offered. In remote cities and towns, now Alibaba began as a way to connect of its own. Payment and logistics they have millions of options. overseas businesses with Chinese services have all come from a focus ALIBABA IS UNIQUE AMONG THE WORLD’S product suppliers, and its Tmall platform on the total customer experience. What sets Alibaba apart from other retail is a place for global brands and Chinese BIGGEST RETAIL BRANDS IN THAT IT brands – aside from its sheer scale and consumers to interact. But by far the GENERATES ITS PROFITS NOT FROM MARGIN the range of sectors in which it operates bulk of e-commerce revenue has been – is that profits come not from margin or generated in China (8 percent in Q1 2016). ON TRANSACTIONS BUT PRIMARILY FROM commission on the sale of goods through Founder Jack Ma has stated an intention ADVERTISING AROUND E-COMMERCE. its sites, but rather from advertising to generate half of revenue from outside around the sale content. The sites attract China, and in April 2016 the company THE BUSINESS, FOUNDED IN 1999 BY huge volumes of traffic – in Q2 2016, 434 took a $1 billion step into Southeast million people had used Alibaba sites in Asia. Its investment in the Singapore- FORMER TEACHER JACK MA IN THE EASTERN the past 12 months – and that traffic is based Lazada e-commerce group gives CHINESE CITY OF HANGZHOU, OPERATES AS monetized through ads. It offers travel, it coverage in Indonesia, Malaysia, the health, insurance and entertainment Philippines, Singapore, Thailand, and A SERIES OF CONCENTRIC CIRCLES, WITH Photograph courtesy of Alibabagroup.com content online, all of which generates Vietnam. India is another key growth ONLINE PRODUCTS THAT SERVE NOT JUST more web traffic and, in turn, ad sales. market for Alibaba; it has taken a stake in TO CONNECT BUYERS AND SELLERS BUT, Indian e-commerce company Snapdeal, INCREASINGLY, PROVIDE A BROADER RANGE as well as a payments business, Paytm. OF CONSUMER AND BUSINESS SERVICES.

26 27 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

Sales have been strong in the past reviews. In stores, there has been a shift year – the company reported a 4.7 towards presenting home-improvement percent increase in sales in Q2 2016 solutions and inspiration rather than in comparable stores – largely due simply an extensive range of products. INSIGHTS & BRAND VALUE: $36,440 million to a recovering US housing market Displays often resemble vignettes of IMPLICATIONS % CHANGE YOY: +32% and growing homeowner confidence. family life, with collections of goods 3 GLOBAL RETAIL SALES: $88,621 million Consumers in a rising market tend to feel curated in each department, to show GLOBAL RETAIL SALES GROWTH YOY: +6.5% encouraged to invest in improving their what can be achieved, not just what is for Investment in digital technology GLOBAL RETAIL STORES: 2,274 homes, and this growth is being seen sale. Creating a seamless link between is targeted and truly useful to Source: BrandZ™/Kantar Retail (including data from Bloomberg) across the home-improvement sector. online and offline is especially important shoppers. Online content helps Home Depot reports especially strong in this sector, where consumers want to people make informed decisions, growth in the past year in sales of big- do in-depth research before they set foot and digitization in-store makes DIGITAL ticket items such as appliances, roofing, in a store, but, especially when they’re big stores and huge ranges more and heating and cooling systems. investing a lot of money, also want to navigable. Augmented reality see and feel the real thing before they lends a cool factor. The business is driven by what Home buy. Home Depot’s digital push helps PUSH PAYING Depot describes as its ‘three-legged extend the brand to a younger audience stool’ strategy, through which value is of first-time homeowners who often lack created by providing: a strong customer knowledge about home improvement and At a time when many big-box experience, authority on products, and are seeking guidance and reassurance. retailers are shutting or shrinking OFF FOR DIY efficient capital allocation, linked together About half of Home Depot’s online traffic stores, Home Depot is rethinking by an ‘interconnecting retail’ strategy comes via mobile devices. the value of the showroom, and aiming for seamless omni-channel how it can work in a real omni- experiences. In mid-2015, Home Depot extended its channel offering. CHAIN reach to more pro contractor shoppers The ‘customer experience’ and through the $1.6 billion acquisition of ‘interconnecting retail’ pieces of the stool Interline Brands, a wholesale distributor have been particular areas of focus in of products such as security supplies, Home Depot’s push for younger THE HOME DEPOT IS THE the past year, with digital technology plumbing equipment and heating and shoppers is likely to bring not WORLD’S LARGEST HOME- creating a true omni-channel experience cooling systems. The retailer has strong just sales in the short term that is not just making shopping simpler, brand equity with the pro contractor but build valuable long-term IMPROVEMENT RETAILER, AND it’s also bringing in the next generation of shopper base. loyalty. That will pay dividends home improvers. Home Depot’s mobile ITS WAREHOUSE-STYLE STORES as today’s young shoppers later app allows users to take a photo of, say, In its push for operational efficiency, in the buy their second or third homes, SELL EVERYTHING FROM a feature at a friend’s house; the app will US Home Depot has not been opening and extend and adapt homes to TOOLS AND PAINT TO GARDEN find a match from the online database new stores but rather focusing on its of more than one million items for sale. existing real estate. It has been expanding changing family circumstances. FURNITURE AND POOL SUPPLIES. The matching item can be superimposed in Canada, however, where it now has on an image of the customer’s own 182 stores, and in Mexico, where it has 115 SINCE 1978 THE CHAIN HAS home, using augmented reality, so they and is growing fast as demand there for ESTABLISHED A STRONG can see how their friend’s French doors home improvement soars. The brand has would look in their home, for instance. dabbled in other markets, most notably in RELATIONSHIP NOT ONLY WITH If the shopper then visits a store, digital China, which it entered in 2006 through HOUSEHOLD CONSUMERS BUT mapping will direct them to the exact acquiring a local retailer; it struggled to place in that particular outlet where they’ll convince Chinese consumers to take up ALSO PROFESSIONALS WORKING find the item. DIY and has closed all of its big-box stores IN THE BUILDING TRADE, WHO there, but retains a decorating center and ACCOUNT FOR AROUND 35 TO 40 Online, there are chat portals through a paint and flooring store. Expansion into which consumers can seek advice, along Chile and Argentina in the late 1990s was PERCENT OF TOTAL SALES. with detailed product information and short-lived and unprofitable.

28 29 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

BRAND VALUE: $27,275 million % CHANGE YOY: -23% 4 GLOBAL RETAIL SALES: $434,158 million GLOBAL RETAIL SALES GROWTH YOY: +3.9% GLOBAL RETAIL STORES: 10,761 Source: BrandZ™/Kantar Retail (including data from Bloomberg) President and CEO Doug McMillon store, such as ‘everything you need for took up his post in 2014, at a time a barbecue’, can now be found in one STORE when Walmart was coming under display. Deli produce and prepared food increasing pressure from Amazon and is being improved, stores are being made INSIGHTS & from discounters and chains of smaller easier to navigate, and services such IMPLICATIONS stores in the US, and from discounters as click-and-collect are proving highly GIANT competing in other key markets such popular for the convenience they offer, as the UK, home to its Asda stores. particularly to people with children. The company has been focusing Under his leadership, the company has on what’s profitable, whether that’s pursued a focus on the most profitable Under McMillon, Walmart has raised staff business divisions or geographical FOCUSES ON parts of the business and has shut down wages in the US with the intention of markets, and being ruthless about non-performing areas, such as many in- improving service, and announced in 2015 making cuts where the long-term store restaurants and specialist apparel that Walmart would invest more than US$1 health of the business is at stake. sections. Private label, which provides billion in the coming year in developing its higher margins, is gaining prominence in e-commerce capabilities. The company HIGH-PROFIT the US in particular. operates e-commerce web sites in 10 countries; the largest, Walmart.com, gets Walmart is behind in e-commerce In February 2016, Walmart took the 80 million visits per month and is still and is investing heavily in improving unprecedented step of closing 154 growing. Mobile apps cater to shoppers on its offering and capability in this key SECTORS stores in the US and 269 worldwide as the move, and there is a range of delivery area, launching click-and-collect it reappraised its offering. It has also and pick-up options. The seriousness with from its physical store network, and diversified the portfolio, especially in which Walmart regards e-commerce is in-store lockers for collection. the US, with stores of different sizes evident in the August 2016 announcement WALMART IS THE ORIGINAL ‘EVERYDAY LOW PRICE’ RETAILER, and formats to cater to a range of that it would acquire Jet.com, a young, FOCUSING ON EVERY DAY LOW PRICES AND LARGE VOLUME shopping trips – not just the big weekly US-based e-commerce company, for $3.3 or fortnightly visit but also top-up trips. billion. This gives the company not just Keen to give shoppers a reason to SALES TO BUILD A REPUTATION FOR VARIETY AND VALUE. The business has also been focusing on added online capabilities but also brings in visit, Walmart and its other brands the most profitable geographies; rather high-tech talent to guide expansion. have been working on improving IT NOW OPERATES HYPERMARKETS, DISCOUNT DEPARTMENT than being big everywhere, it has been the in-store experience, considering STORES AND SMALLER NEIGHBORHOOD GROCERY STORES focusing on the US, China, Canada, Because many of Walmart’s market entries solutions that meet consumer AROUND THE WORLD, BOTH UNDER THE WALMART BANNER AND Mexico and the UK. were through acquisitions, it continues to needs as well as clusters of enjoy operational efficiencies as inventory ingredients by type. Shoppers visit In the US, the Walmart slogan has long and supply chain systems become THE BRAND NAMES OF BUSINESSES IT HAS ACQUIRED. to prepare for the ideal family picnic been ‘Save money. Live better’, and integrated, a process recently completed or great day out at the baseball while everyday low prices remain key to in Brazil. As the retailer continues to field; they don’t want to have to IT IS THE LARGEST GROCERY RETAILER IN THE US, AND the offer to consumers, the emphasis is mature in e-commerce, it is strategically GENERATES 62 PERCENT OF WORLDWIDE SALES FROM ITS shifting towards the ‘Live better’ part of choosing its market approaches, such as walk down every aisle of the store HOME MARKET. THE COMPANY WAS FOUNDED IN 1962 BY THE the promise. Smart shopping solutions are through its partnership with JD.com in to meet those needs. being introduced to help busy families, so China, and the expansion of third-party LEGENDARY SAM WALTON AND THE WALTON FAMILY BEHIND baby and fresh food sections are being marketplaces. Walmart’s International THAT LAUNCH STILL CONTROLS 50 PERCENT OF THE BUSINESS. redesigned, and groups of products segment is the world’s second-largest that would normally be placed around a retailer in the world by sales.

30 31 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

BRAND VALUE: $18,082 million % CHANGE YOY: +6% 5 GLOBAL RETAIL SALES: $42,839 million GLOBAL RETAIL SALES GROWTH YOY: +9.3% GLOBAL RETAIL STORES: 376 GLOBAL Source: BrandZ™/Kantar Retail (including data from Bloomberg) GROWTH FOR The businesses behind the IKEA brand solutions, stand to gain if IKEA doesn’t are multiple and inter-connected. In adapt the model. In the UK, IKEA has been FIRST NAME September 2016, the business structure looking at opening a smaller-format order- INSIGHTS & changed to create a simplified and and-collect store in London’s prestigious improved franchise system under a new Oxford Street, and has opened a click-and- IMPLICATIONS Inter IKEA Group. The group said the collect point in the eastern city of Norwich new structure enabled the brand to more that it has described as bridging the gap IN FLAT-PACK readily focus on consumers’ needs, and between online and in-store shopping. IKEA has for years been a leader in help position IKEA for further growth and A pop-up store that functions as private demonstrating to shoppers not just expansion. dining room has also been deployed. the products it sells but the rooms IKEA IS THE WORLD’S LARGEST FURNITURE RETAIL BRAND AND that those products can help create. The restructuring came as a result of a IKEA executives say the new formats will IS FAMOUS FOR ITS FLAT-PACKED, READY-TO-ASSEMBLE BEDS, 2011 consultancy study done for Inter enable the business to improve its online IKEA that said the previous organizational offering, an area in which the brand has CHAIRS, DESKS AND HOME ACCESSORIES. Growth is coming from emerging system made it more difficult for IKEA lagged other retail brands because it has than its competitors to adapt to changing been uncertain about how to achieve markets where urbanization and FOUNDED IN SWEDEN IN 1943, THE IKEA BRAND IS KNOWN FOR market conditions. IKEA has been online the same strong impulse buys that a growing middle classes are fuelling DEMOCRATIZING STYLE AND DESIGN, AND IS NOW PRESENT outperforming the market in terms of visit to the physical store delivers. demand, and from more affluent IN 48 COUNTRIES AROUND THE WORLD; STORES ARE LARGELY margin for many years – margins have China is home to eight of IKEA’s 10 largest markets where IKEA represents typically been over 14 percent for the past stores, and the rise of the middle classes affordable style. BIG-BOX, OUT-OF-TOWN WAREHOUSES FEATURING THE BLUE five years, compared to other DIY groups has fuelled strong growth there. Australia, AND YELLOW OF THE SWEDISH FLAG, AND MOST INCLUDE which tend to be under 5 percent. IKEA Canada and Poland continue to be the reported a 5.5 percent increase in net fastest-growing markets for IKEA, while Experimentation has begun with RESTAURANTS FOR WHICH IKEA’S SWEDISH MEATBALLS HAVE profit in 2015, and an 11.2 percent jump in Germany, closely followed by the US, are BECOME WORLD-RENOWNED. sales value. the largest and continue to post strong smaller formats, a digitally enabled growth. The first IKEA stores in India and path to purchase and direct IKEA HAD 783 MILLION VISITS TO ITS STORES IN THE YEAR TO But IKEA is wary of the consumer shift Serbia are due to open in 2016-17. fulfilment – a significant departure away from out-of-town stores and the To celebrate the brand’s heritage, an IKEA from the huge IKEA warehouses AUGUST 2016. IN FY 2014/15 IT HAD 1.9 BILLION VISITS TO ITS desire for smaller, urban shopping Museum opened in June 2016 on the with which the brand has become WEB SITES AND 771 MILLION STORE VISITS. experiences. Convenience-focused site of the very first IKEA store in Älmhult; synonymous. retailers such as Amazon, with same- it contains 20,000 objects, temporary day home delivery and click-and-collect exhibitions and, naturally, a shop.

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BRAND VALUE: $14,461 million % CHANGE YOY: +29% 6 GLOBAL RETAIL SALES: $116,366 million GLOBAL RETAIL SALES GROWTH YOY: +3.2% GLOBAL RETAIL STORES: 686 Source: BrandZ™/Kantar Retail (including data from Bloomberg) INSIGHTS & RETAIL IMPLICATIONS

Consistency of brand mission CLUB PROMISES and a message targeted toward a specific segment of shoppers over The membership scheme works States, Canada, Mexico, Australia, the many years means consumers on a tiered basis, which gives users UK, Spain, Taiwan, South Korea, Japan access and discounts for a range of and, through a two-year-old partnership are in no doubt as to what Costco VALUE AND benefits beyond the box. These include with Alibaba’s T-Mall, mainland China. stands for and provides, even as the payroll services and online financial There are plans to launch in Iceland and assortment and services change. management for business customers, France in 2016-17, and to launch a physical and for individuals there are discounts on presence in mainland China over the VARIETY insurance premiums and phone services. longer term. Non-US markets in 2015 Good timing has been part of Membership worldwide reached 81.3 accounted for 27 percent of sales, having Costco’s success – entering new million total cardholders in fiscal 2015, risen steadily from 23 percent in 2010. markets during uncertain economic up 6 percent in 12 months. The top THE COSTCO CHAIN IS A MEMBERS-ONLY RETAIL CLUB THAT OFFERS ‘executive’ tier of members accounts for The business began as Price Club in 1976 times with a unique and appealing ACCESS TO ITS BUILDINGS – IT DOESN’T CALL THEM STORES – FOR one-third of the membership but more and has traded under the Costco banner value proposition, and being content than two-thirds of sales. since 1983. While the business model to ‘wait and see’ at other times. DEFINED CUSTOMER SEGMENTS WHO PAY AN ANNUAL FEE. has been unchanged for decades, the Being first isn’t top priority but the Revenue generated from membership brand is seen as an innovator. It has been membership mission always is. WAREHOUSE-STYLE CLUBS OFFER BULK GROCERIES AS WELL AS fees supports Costco’s ability to offer a leader among mainstream retailers ELECTRONICS, FURNITURE, TOYS AND JEWELRY; THE RANGE TENDS great value for money, particularly in terms in expanding its range of organic and of price per unit. Rather than achieve healthy foods, a growing area of interest Demonstrating value through price, TO BE SMALL COMPARED TO OTHER BIG-BOX RETAILERS, WITH profit from margin, it demands low margin for Costco shoppers, and in developing ABOUT 3,700 ITEMS ON AVERAGE, AND THE SELECTION IS HIGHLY from suppliers to achieve some of the services in its clubs and online to drive exclusivity, and rotation has been a fastest-selling SKUs in US retail. This member value. In-club cafes are well big part of Costco’s promise, as has LOCALIZED. THIS GIVES COSTCO SHOPPING A “TREASURE HUNT” pressure on suppliers has led to popular known for their value meal deals, gas being agile when it comes to trying FEEL, FAMOUSLY OFFERING SHOPPERS THE CHANCE TO PUT A HUGE brands – including Coca-Cola and Apple - stations offer low-cost fuel, and the brand new things. If a new inclusion in the JAR OF MAYONNAISE AND A DIAMOND RING IN THE SAME TROLLEY. falling out of distribution from Costco from often works with local providers like solar assortment doesn’t sell, it’s quickly time to time, in some cases with signs on panel contractors to add to the local feel dropped. the steel suggesting that the brand could that the assortment in each club helps not offer the value the customer deserves. create. In the past year, Costco has been In this way, Costco has established a extending its ecommerce offering; in the reputation as the ‘Robin Hood of retail’ UK, it offers an online-only membership The club experience coupled with and a strong advocate for its members. option. In the US, Costco is working with strong member advocacy serve Google Express, Instacart and is selling Costco well and differentiate it Costco is expanding its presence globally through Jet.com and Boxed, giving digital within the increasingly competitive and the membership model is proving shoppers low prices and fast delivery. and disruptive retail landscape. successful; it is now present in the United

36 37 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

The brand is seen as highly innovative Although Lowe’s had a head start on BRAND VALUE: $13,001 million and very user friendly, particularly for Home Depot, launching its first stores non-expert consumers who are seeking in 1946 as timber merchants, nearly % CHANGE YOY: +21% reassurance and guidance as they 30 years before Home Depot, its sites INSIGHTS & 7 GLOBAL RETAIL SALES: $59,051 million undertake their first home-improvement tend to be a little further out of town GLOBAL RETAIL SALES GROWTH YOY: +5.1% IMPLICATIONS projects. Lowe’s has specialist staff who and it has fewer branches. Recent sales GLOBAL RETAIL STORES: 1,857 can visit a customer’s home and provide growth has been robust, though less Source: BrandZ™/Kantar Retail (including data from Bloomberg) tailored advice on the products best strong at Lowe’s than at rival Home Lowe’s is using digital media suited to their particular project, and Depot in Q2 2016, with sales at stores content to guide and reassure, TECH stores create scenes or vignettes that open at least a year up 2.0 percent in which is especially important for show ideas in action rather than just this period compared to a 4.7 percent young consumers who are new to presenting a range of products. rise at Home Depot. This is thought the world of home improvement. to be because cold weather in May DRIVE APPEALS Lowe’s has been investing in digital affected garden sales, an area in which and social-media tools that help Lowe’s is especially strong, Lowe’s has consumers see projects through from less presence in the west of the US, At a time when products are so idea to completion. Its Vine campaign where demand has been strongest, and readily available online, Lowe’s has #FixIn6 provides home-help advice in because Lowe’s is more of a direct-to- made its personal service a key TO FIRST-TIME six seconds, and the Made in a Minute consumer retailer, while Home Depot point of difference. Home visits by campaign launched in August 2016 uses has a greater emphasis on trade buyers, specialist staff create loyalty. 360-degree videos on Facebook to give who have been behind strong growth step-by-step instructions on popular in the sector recently. That said, the DIY-ERS projects. Viewers can click through to buy Lowe’s for Pros division targets building related products. professionals with special payment terms Lowe’s seems to understand that and bulk items; sales to the trade account people don’t shop there because Lowe’s Innovation Labs experiment for close to 30 per cent of the total. they want to; what they want is a LOWE’S IS THE SECOND- with ideas for the home-improvement remodelled kitchen or a garden LARGEST HOME IMPROVEMENT experience of the future, and ideas to Lowe’s is experimenting with smaller- where they can entertain. Online RETAILER IN THE WORLD, emerge so far include in-store robots format, urban stores to attract city- and offline, Lowe’s focuses on the and the Holoroom, a 3D virtual-reality dwelling and often younger consumers. goal and how to get there – and AFTER HOME DEPOT, AND HAS experience enabling customers to see Two Lowe’s City Center stores have the crucial finishing touches. A NETWORK OF WAREHOUSE- what their finished bathrooms and so far opened in New York City. The kitchens will look like. Holorooms are company has also been opening more STYLE STORES WITH A RANGE available in 20 stores and are being stores under the Orchard Supply SPANNING PATIO FURNITURE installed in more stores in 2016-17. The Hardware banner, a then-failing small- TO PLUMBING SUPPLIES. business is also growing its 3D printing store chain it took over in 2013. These capabilities, allowing customers to print neighborhood stores are smaller than items in plastic and metal to personalize Lowe’s, at about 36,000 square feet, ITS HOME MARKET, THE US, their projects. and carry a localized range of tools and ACCOUNTS FOR 97 PERCENT decorating supplies. The business is benefiting from growing OF SALES, THOUGH THE BRAND consumer confidence and rising house The bulk of sales come from Lowe’s US IS INCREASINGLY LOOKING TO prices in the US, which is encouraging stores, but the retailer has a growing more home-owners to invest in upgrading presence in Canada through its purchase INTERNATIONAL MARKETS FOR their homes. This is a trend seen across of the almost 500-store RONA hardware GROWTH, AND IS EXPANDING the home-improvement sector, which chain in early 2016, which gives it a IN CANADA AND MEXICO. tends to rise and fall with the housing presence in Quebec for the first time. market.

38 39 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

BRAND VALUE: $12,077 million % CHANGE YOY: +4% 8 GLOBAL RETAIL SALES: $99,514 million GLOBAL RETAIL SALES GROWTH YOY: +7.8% GLOBAL RETAIL STORES: 10,863 As Aldi has expanded into markets but true to Aldi strategy, these are largely Source: BrandZ™/Kantar Retail (including data from Bloomberg) unused to the discount model, it has automated to keep down operating had to invest in marketing to convince costs. In the past, Aldi had cash-only consumers that low prices don’t have to tills to keep costs down, but has moved INSIGHTS & mean quality is lacking. to modern payment systems in most IMPLICATIONS markets, even testing mobile payment The UK has been a key growth market in Switzerland through Apple Pay in July for both Aldi and its closest rival, Lidl. Aldi 2016. Having achieved saturation DISCOUNT launched in this market in 1990 and has in its home market, Germany, been posting high double-digit growth, Aldi’s attention is moving toward multi- and in many other European particularly in the past five years. It has channel Investment. While many large countries, Aldi is looking to the 500 stores and plans to extend the UK supermarkets are looking to downsize, US and Australia for growth. PIONEER LOOKS network to 1,000. Aldi is opening larger stores to offer a wider range and present a less utilitarian Stores have traditionally operated with feel to stores, with expanded fresh only two or three staff members each to food zones to draw in shoppers for a Aldi has shown willingness TO GLOBAL keep costs low, and there’s a no-frills feel full weekly shop. Aldi is opening in new to innovate and move away to stores, with products stacked on easy- locations with new store types; smaller, from its one-size-fits-all store to-move pallets that are quick to replenish urban formats are a key strategic area format, depending on the and replace when there are new items or of growth for Aldi. These stores are needs of local shoppers. GROWTH weekly specials. Stock tends to consist more sophisticated than regular Aldi of about 1,300 SKUs; this compares to a stores, with an emphasis on food-to-go, typical supermarket range of between differentiated pack sizes, new checkouts 30,000 and 60,000. In each category, and a stronger presence from brands. The company has focused on ALDI IS EUROPE’S ORIGINAL there are only one or two choices. This developing ‘hero categories’ means Aldi can stock a significant range Aldi launched its first online store in the that drive traffic. Aldi’s baby DISCOUNTER, AND ITS PIONEERING of categories but also keep store sizes UK in 2016, in a way that complements section is highly regarded in LOW-OVERHEADS, LOW-PRICES small. Private label accounts for about rather than replicates the physical the UK, for instance, and its MODEL HAS BEEN AN EXEMPLAR FOR 90 percent of all available products, shopping experience. Non-food specials fresh produce section has been though some stores, especially those in drive heavy traffic to stores on particular revamped to attract families for THE SECTOR AROUND THE WORLD. areas with a younger target audience, days. By selling its non-food offers a full weekly shop rather than are offering an increased proportion of online, Aldi is able to spread demand an occasional or top-up visit. THE BUSINESS GREW OUT OF A branded goods. throughout the week and prevent overcrowding in carparks and in store. SINGLE, FAMILY-RUN STORE IN The warehouse-style, highly functional An online liquor store in Australia, which ESSEN, GERMANY, WHICH OPENED feel that stores had a decade ago is helped the company work around strict gradually being changed, as Aldi realizes laws on the sale of alcohol in physical IN 1913, BUT THE ALDI BRAND WAS that to compete with more mainstream stores, was closed in early 2016 as the LAUNCHED IN 1962 AND HAS SINCE supermarket brands, it must offer not company said it wanted to focus instead BECOME A HOUSEHOLD NAME, NOT just low prices but also a more pleasant on its supermarkets there. In the US, shopping experience. New stores now Aldi operates more than 1,400 stores, JUST IN GERMANY BUT ACROSS have an in-store bakery, which shoppers and owns the Trader Joe’s supermarket EUROPE, THE US AND AUSTRALIA. have come to expect from supermarkets, chain.

40 41 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

BRAND VALUE: $12,074 million % CHANGE YOY: +17% 9 GLOBAL RETAIL SALES: $73,348 million GLOBAL RETAIL SALES GROWTH YOY: +6.3% GLOBAL RETAIL STORES: 9,730 Source: BrandZ™/Kantar Retail (including data from Bloomberg)

The business rebranded as CVS Health needs. The core pharmacy business in 2014, and announced that it would was also extended in late 2015 through COMMUNITY stop selling cigarettes and other tobacco the acquisition of more than 1,670 products in its stores. This was a first pharmacies and nearly 80 retail clinics INSIGHTS & for the sector in the US, and meant from the department store chain Target IMPLICATIONS forgoing more than $1 billion a year in Corporation. These outlets add to the ROLE AT HEART sales, but was “the right thing to do”, its CVS pharmacy count by 20 percent, and CEO said. Other programs to promote sit within or alongside Target stores so CVS has identified its core corporate social responsibility include benefit from their passing traffic. strengths and is focused on public health awareness campaigns on developing those, building its OF PHARMACY subjects including the effect of second- While rival Walgreens has been health products and services and hand smoke on children, and a reshaping extending its international footprint, extending its footprint of in-store of CVS’s food and drinks range in 2016 CVS is focusing heavily on its home clinics. It localizes its assortment with a focus on health. A 500-store pilot market, though it does have a small and services to match the needs of NETWORK program in 2015 added ‘better-for-you’ presence in Brazil. The drugstore sector local communities, and personalizes products to make healthy eating on the has been growing in the US as the offers through its loyalty scheme. go more convenient and affordable. The aging population drives up demand for program was being extended to more medicine and healthcare products and CVS IS A HEALTH AND PHARMACY CHAIN AND IS than 2,900 stores in 2016. CVS has plans services more broadly, and as a greater ONE OF THE TWO LARGEST DRUGSTORE NETWORKS to open 1,700 in-store clinics by 2017 as number of people enter insurance for the A focus on ‘doing the right thing’ it works to become a destination for all of first time under the Obamacare program. has become an important point of IN THE UNITED STATES. ITS MISSION IS TO MAKE consumers’ health needs. difference between CVS and its QUALITY HEALTHCARE “MORE AFFORDABLE, MORE CVS’s loyalty card scheme, ExtraCare, competitors. CSR is not a marketing CVS’s pharmacy services business has 70 million active users, including message but a driver of business ACCESSIBLE, AND MORE SUSTAINABLE”. accounts for two-thirds of total revenue; 17 million BeautyClub members, who decisions. its in-house Personal Benefit Manager benefit from additional rewards on WITH 9,500 RETAIL PHARMACIES ACROSS THE US, brand, CVS Caremark, serves employers, beauty-related purchases. The scheme insurance companies, unions and other provides members with personalized 76 PERCENT OF THE US POPULATION LIVES WITHIN health benefit plan providers, as well as offers and rewards, and can be accessed Convenience both in-store FIVE MILES OF A CVS PHARMACY; THERE ARE ALSO individuals. via the CVS app. Personalization and and online has been improving. 1,100 CVS WALK-IN CLINICS AROUND THE COUNTRY. the integration of online and offline Kerb-side collection of prescriptions CVS’s acquisition in 2015 of Omnicare, services are a core part of CVS’s growth and a link between the ExtraCare a provider of pharmacy services to the strategy. It has been rolling out services loyalty scheme and the mobile long-term care market, added 100 million to improve the shopping experience, app show progress in this area as prescriptions for the business, serving with kerb-side collection now available, the brand seeks to provide access two million patients, and is geared and since August 2016 a new end-to-end anytime, anywhere. towards catering for older consumers mobile payment service called CVS Pay, who have long-term, on-going healthcare which is part of the app.

42 43 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

BRAND VALUE: $11,509 million % CHANGE YOY: -19% 10 GLOBAL RETAIL SALES: $81,673 million GLOBAL RETAIL SALES GROWTH YOY: -1.3% GLOBAL RETAIL STORES: 0 AUCTION Source: BrandZ™/Kantar Retail (including data from Bloomberg)

In mid-2015, eBay spun off its highly focus on millennials. The two companies GIANT LOOKS successful payments platform, PayPal, can both succeed in parallel, he has said. into a separate, Nasdaq-listed company, As Amazon has grown its platform for and has since focused on improving the third-party sellers, eBay has been under INSIGHTS & shopping experience, particularly via pressure to adapt, and the company IMPLICATIONS mobile, for consumers. It positions itself as has entered partnerships with other TO BRING IN a destination for bargains, and is making it retail brands to offer convenience to easier for people to quickly find what they shoppers. In the UK, eBay has extended A focus on the user experience are looking for and to discover things they its Click and Collect partnership with online is making shopping and hadn’t specifically been seeking but that the catalogue-based department store discovery quicker and easier. MILLENNIALS match their browsing profile. In mid-2016, chain Argos, recently acquired by UK eBay reported having 164 million active grocery retailer Sainsbury’s , which users, up from 162 million three months enables shoppers to pick up or send earlier. eBay purchases at times that suit them. Strategic partnerships are EBAY MADE ITS NAME IN THE E-COMMERCE WORLD AT THE TIME OF It has also rolled out collection points in enabling eBay to provide THE 1990S DOTCOM BOOM, GROWING FROM A PEER-TO-PEER AUCTION In 2016, eBay reported two consecutive 200 Sainsbury’s supermarkets. Linked consumers with delivery options, SITE INTO A VAST GLOBAL B2C AND C2C SHOPPING PLATFORM. quarters of sales growth and a 6 percent with eBay’s Global Shipping Program, without having to invest in the lift in its share price, returning it to pre- this means consumers can use these logistics infrastructure itself. spin-off levels, and for the first time, stores to send a parcel to more than 100 THE COMPANY OWNS NONE OF ITS OWN INVENTORY AND DOES NOT eBay crossed the one billion live listings countries around the world. CONTROL SHIPPING; IT GENERATES REVENUE FROM FEES ON LISTINGS mark. Recent growth has been driven by the success of its event ticket reseller In Australia, eBay has in 2016 announced Experimentation with new AND SALES, AND FROM ADVERTISING ON THE PLATFORM. StubHub, which saw revenues rise 40 a partnership with the bricks-and-mortar technology such as virtual reality percent in Q2 2016; StubHub bought department store chain Myer to create keeps eBay in the public eye and IN RECENT YEARS, THE POPULARITY OF AUCTION SELLING, FOR WHICH Spanish rival TicketBis and the ticket seller what they are billing as the world’s first builds the brand’s reputation as EBAY BECAME FAMOUS, HAS BEEN DECLINING, BUT THE EFFICIENCY OF software business Ticket Utilis, which virtual reality department store. The two an innovator. helps sellers manage their inventory. companies have made 15,000 virtual THE MARKETPLACE AND ABILITY TO CONNECT BUYERS AND SELLERS Classifieds have also been strong, up reality viewing sets available, which ALL OVER THE WORLD IN A TRUSTED SETTING HAS MADE IT A 15 percent in Q2 2016, particularly in enable shoppers to check product range, automotive and property verticals in prices and availability in real time, and to DESTINATION FOR SHOPPERS SEEKING FIXED-PRICE GOODS AS WELL Germany and Canada. select items to examine and add to the AS ITEMS FOR AUCTION, AND OFTEN HARD-TO-FIND ITEMS FROM their basket by fixing their gaze on them. SPECIALIST SELLERS. President and CEO Devin Wenig eBay Sight Search makes selected items has stated his intention to be a clear appear to float towards the shopper to alternative to Amazon, with a particular be examined more closely.

44 45 BrandZ™ on the move

GOING Get the BrandZ™ Top 100 Most Valuable Global Brands, Chinese Top 100, Latin American Top 50, Indonesian Top 50 and many more insightful GLOBAL? reports on your smartphone or tablet. To download the apps for the BrandZ™ rankings go to www.BrandZ.com/ We wrote the book mobile (for iPhone and Android).

BrandZ™ country reports: Essential travel guides for global brand building BrandZ™ Top 50 Most Valuable Indian Brands 2016 This in-depth study analyzes the success of powerful and emerging Our BrandZ™ country reports contain Indian brands, explores the unparalleled market knowledge, insights, Indian consumer’s shopping habits, and offers insights for and thought leadership about the world’s building valuable brands. most exciting markets.

You’ll find, in one place, the wisdom of WPP brand building experts from all regions, plus the unique consumer insights derived from our proprietary BrandZ™ database.

If you’re planning to expand internationally, BrandZ™ country reports are as essential as a passport.

BrandZ™ Top 50 Most BrandZ™ Top 50 Spotlight on Myanmar Spotlight on Mongolia Valuable Indonesian Most Valuable Latin Brands 2016 American Brands 2015 The story of Myanmar is Mongolia’s GDP has one of huge potential, as a grown at rates as high as Now in its second year, this The report profiles the new era of openness signals 17 percent in recent years, study analyzes the success most valuable brands of strong growth opportunity. encouraging a growing of Indonesian brands, Argentina, Brazil, Chile, Now is the time for brands number of international examining the dynamics Colombia, Mexico and Peru to make an impression in brands to gravitate toward shaping this fast-emerging and explores the socio- this emergent economy. this fast-growth market market and offering insights economic context for and make a beeline for for building valuable brands. brand growth in the region. one of Asia’s hidden gems.

See page 75 for the BrandZ™ library of Chinese reports, videos and publications.

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BRAND VALUE: $10,496 million % CHANGE YOY: +37% 11 GLOBAL RETAIL SALES: $68,900 million GLOBAL RETAIL SALES GROWTH YOY: +76.4% GLOBAL RETAIL STORES: 0 Source: BrandZ™/Kantar Retail (including data from Bloomberg) CHINA E-TAILER PURSUES GLOBAL EXPANSION

JD.com is China’s second largest JD.com has global aspirations and in In June 2016, JD.com and Walmart e-commerce company, providing B2B and 2012 launched an English-language announced a strategic partnership direct-to-consumer retail services, selling site enabling global suppliers to reach relating to the Yihaodian grocery everything from books and electronics to Chinese consumers. A Russian version e-commerce business, which Walmart fashion and, more recently, grocery. With went live in 2015. The company has a has sold to JD.com in return for a stake in 30 million online visitors a day and 40 strategy of focusing on fast-growth or the business. The partnership will allow million products and services available, it emerging markets as it expands. JD.com to leverage Yihaodian’s brand has become one of the fastest-growing strength, especially in south-east China, retail brands not just in China and the In 2016, the business sought to tap into giving shoppers opportunity to access region but the world. For the past four the vast and largely unexplored rural high-quality groceries and imported years, gross merchandise value has Chinese market for e-commerce, which goods. In turn, Yihaodian will benefit from grown at an average of 96 percent per has been overlooked due to poor road JD.com’s traffic. year in local currency. Flexibile payment systems and the difficulty making home options, including cash on delivery, have deliveries. JD.com is trialling autonomous helped it overcome consumer reluctance drones for distribution in Suqian city, to pay online in advance and, by using its Jiangsu province. The drones are not own delivery network, including 45,000 delivering parcels direct to consumers’ people on tricycles, it has been able to homes but to a neighborhood distribution reduce delivery times to under three center where local teams distribute hours in some locations. parcels, though testing has begun on direct-to-consumer drone delivery. The business is also tapping into its wealth of consumer spending and browsing data to develop new products, such as loans.

49 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

BRAND VALUE: $10,364 million BRAND VALUE: $9,360 million % CHANGE YOY: +22% % CHANGE YOY: +25% 12 GLOBAL RETAIL SALES: $92,670 million 13 GLOBAL RETAIL SALES: $93,1089 million GLOBAL RETAIL SALES GROWTH YOY: +5.4% GLOBAL RETAIL SALES GROWTH YOY: +4.1% GLOBAL RETAIL STORES: 13,513 GLOBAL RETAIL STORES: 31,176 Source: BrandZ™/Kantar Retail (including data from Bloomberg) Source: BrandZ™/Kantar Retail (including data from Bloomberg) ACQUISITION CONVENIENCE ADDS TO US AND KING ROLLS WORLDWIDE OUT DELIVERY FOOTPRINT OPTIONS

Walgreens is a drugstore chain that Obamacare. Two-thirds of Walgreens In the US, the brand has been investing in The global 7-Eleven chain is the largest In 2015, the 7-Eleven format entered is primarily focused on the US market revenue comes from pharmacy sales, online and mobile health content as well convenience store network in the world, Vietnam for the first time, marking the first but which operates in more than 25 and Walgreens has been building as opportunities for consumers to buy spanning 18 countries and operating, new Asia-Pacific market in the network countries through the Walgreen Boots relationships with Pharmacy Benefit online. In mid-2016, it announced it would franchising and licensing more than since launching in Indonesia in 2009. alliance. It has a network of 13,100 stores Managers, the intermediaries between close the drugstore.com and beauty.com 60,000 stores. A new outlet is opened worldwide; 8,600 of them are in the US, people who require prescription drugs sites bought five years ago to focus on somewhere in the world every 3.5 hours. 7-Eleven is negotiating growing and the remainder are in the UK, other and the insurers who ultimately pay for Walgreens.com as its central online brand While the name originally referred to the demand both for indulgent treats and European markets, Latin America and them. in the US. It reports about two million 7am to 11pm operating hours of stores, healthier options with two private-label Asia. Walgreens is known for offering visits per day to its digital properties. many outlets are now open 24 hours. lines launched in 2015, Go!Yum and convenience both online and offline, and The company’s acquisition of Rite Aid Go!Smart. It is also rolling out a range in-store services often include clinics and drugstores, to be completed in Q3 2016, In the US, home to nearly 10,500 7-Eleven of home-delivery options, linking with beauty zones. will make Walgreens the largest drugstore stores, the brand is synonymous with the the DoorDash app and web site in major chain in the US, ahead of its biggest Slurpee frozen drink range and Big Gulp US cities, and with Postmates in other In the US, which accounts for 70 percent rival, CVS, though Rite Aid is expected large portions of soft drinks. areas. To mark the chain’s 89th birthday, of revenue, the drugstore sector is to continue trading under its own brand 7-Eleven in July 2016 made its first home benefiting from the aging population in name, at least in the short term. Rite Aid delivery by autonomous drone. Other new the US and an increase in the number tends to have a loyal customer base of ventures include a partnership with car- of people with health insurance under older consumers, and its Wellness Plus sharing network Zipcar, to place Zipcars loyalty program makes a strong addition outside selected 7-Eleven stores. to the Walgreens portfolio.

50 51 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

BRAND VALUE: $9,301 million BRAND VALUE: $8,923 million % CHANGE YOY: +11% % CHANGE YOY: -5% 14 GLOBAL RETAIL SALES: $73,785 million 15 GLOBAL RETAIL SALES: $91,682 million GLOBAL RETAIL SALES GROWTH YOY: -1.0% GLOBAL RETAIL SALES GROWTH YOY: -9.0% GLOBAL RETAIL STORES: 1,792 GLOBAL RETAIL STORES: 7,052 GEN Y Source: BrandZ™/Kantar Retail (including data from Bloomberg) UK Source: BrandZ™/Kantar Retail (including data from Bloomberg) FOCUS BEHIND SUPERMARKET IMPROVED LEADER STORE RETURNS TO EXPERIENCE CORE BUSINESS

Target has been a retailing fixture in shopping app and the brand’s own Tesco is the UK’s biggest supermarket by the rise of discounters meant Tesco In common with many other ‘big box’ the US for over 50 years, and invites its popular coupon app, Cartwheel. It is also chain, with 28 percent share of this highly was losing share, down from roughly 33 retailers, Tesco has focused on expanding customers to “Expect More, Pay Less”. reorganizing merchandise with a greater competitive market (Kantar Worldpanel percent just three years prior. its convenience and e-commerce Target generates a little under half of emphasis on supplies for babies and August 2016). Since former Unilever operations, which together now account sales from grocery, and the majority from children, style for consumers and their executive Dave Lewis took over as CEO Tesco pulled out of China in 2013 and for roughly 21 percent of sales. It has also general merchandise, primarily apparel homes, and wellness, with more organic in 2014, the business has refocused under Lewis, has sold its operations in the refurbished larger stores, making them and homeware. The company sold its and healthy food products. Smaller stores its priorities to arrest a dip in market US, Turkey and South Korea. In mid-2016 it easier to navigate, and is investing in in-store pharmacy network to CVS in in urban centers are being opened to share and falling profitability across the sold its Giraffe restaurants, Harris + Hoole improved customer service. late 2015; it no longer runs the pharmacy appeal to young, affluent city-dwellers. organization. coffee shops and Dobbies garden centres counters but benefits from the store to focus on its core business: grocery footfall they generate. In 2016, Target appointed its first Tesco had been expanding into new in the UK and Ireland. Like-for-like sales chief digital officer, and hired a former territories and verticals, selling not just in remaining stores have shown signs As Target focuses on winning over Nordstrom executive, known for groceries but also insurance, banking of improvement, with Tesco’s decline in Generation Y consumers, it is improving improving private-label sales, to the post and their own electronic tablet. But market share having slowed in 2016. its digital offering, which includes a of chief merchandising officer. strong pressure on prices brought about

52 53 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17 RETAILING TO AN AUDIENCE OF ONE: HOW MASS CUSTOMIZATION MAKES THE PERSONAL POSSIBLE - AND PROFITABLE

BRAND VALUE: $7,905 million % CHANGE YOY: NEW While e-tailing has provided 16 GLOBAL RETAIL SALES: $103,887 million consumers with unparalleled GLOBAL RETAIL SALES GROWTH YOY: +0.8% GLOBAL RETAIL STORES: 3,741 convenience, it has lacked Source: BrandZ™/Kantar Retail (including data from Bloomberg) immersive, personal experiences. CARING Until now. This report explains how personalization and customization can work for you, dispels some REPUTATION common myths, and demonstrates how the personal touch has been successfully deployed to sell products, maximize brand relationships and margins in diverse categories as chocolate and

APPEALS TO tuxedos, sports shoes, clothing and table linen. Download the Full Report in partnership with DISCERNING SHOPPERS WELCOME TO THE FUTURE...... or at least a taste of Things to come. The Internet of Things

Kroger supermarkets have expanded to store bars and restaurants, and has used is already beginning to shake up not just the world of retail, but cater to most of the United States during shopper-tracking technology to reduce the way we live. WPP’s interactive IoT thought leadership event, more than a century of growth, primarily average check-out waiting times to 30 in collaboration with Intel, showcased some of the latest ideas achieved through acquisitions. Its target seconds. Kroger has taken learnings from and explored the implications to the world of retail this huge audience is a slightly upscale mainstream its acquisitions and applied them to the technological shift. consumer, and its long-held philosophy network, most notably the ClickList click- of caring for the consumer, community and-collect service. This report captures the most salient points, curious facts and and environment sits well with shoppers thought-provoking comments from the seminar. There are links increasingly turning to organic and Kroger is one of the world’s largest throughout to videos of each session, which can all be viewed healthy foods and brands that promote grocery retailers, and in addition to at www.internetofthingsage.com. sustainability. Kroger-branded supermarkets, the Kroger company operates retail chains under Kroger has been an innovator in the more than 20 brand names, spanning US supermarket sector, investing department stores, convenience and A vision for the heavily in data analytics, using loyalty jewelry stores. The diversity of its future of shopping card, shopper and sales data to help it portfolio is widely seen as one of the and the smart shelf. tailor the selection of food and general secrets to its success. One of its most A FutureCasting merchandise in each store to local recent acquisitions was the Roundy’s Report by The Store shoppers. It has a strong focus on the supermarket chain, which has given the WPP and Intel. user experience, has been rolling out in- business a foothold in Chicago. Download the Full Report

Download the Full Snapshot 54

The Intel logo, and Intel are trademarks of Intel Corporation in the U.S. and/or other countries. in partnership with BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

BRAND VALUE: $7,736 million BRAND VALUE: $7,459 million % CHANGE YOY: -3% % CHANGE YOY: -37% 17 GLOBAL RETAIL SALES: $118,705 million 18 GLOBAL RETAIL SALES: $54,706 million GLOBAL RETAIL SALES GROWTH YOY: +3.2% GLOBAL RETAIL SALES GROWTH YOY: +7.2% GLOBAL RETAIL STORES: 13,401 GLOBAL RETAIL STORES: 1,875 NEW Source: BrandZ™/Kantar Retail (including data from Bloomberg) Source: BrandZ™/Kantar Retail (including data from Bloomberg) FORMATS AND RESTRUCTURING FEATURES FOR UNDER AUSSIE HYPERMARKET CHAIN’S NEW GIANT CEO

French-based Carrefour opened Europe’s experience; in-store sushi bars have been As it defends its strong position in physical Woolworths is an Australian retail brand focusing on refurbishment of existing first hypermarket, near Paris, in 1963, installed in some stores, along with a new retailing, in the past year, Carrefour has that began as a single discount grocer outlets, improving customer service and has since expanded its “affordable marketplace layout, with shopping zones also invested heavily in information and general store in Sydney in 1924, and and the in-store experience, investing premium” offering to more than 30 for different types of products. technology and logistics to improve online is now one of the biggest businesses in in own-label food, and has opened a countries in Europe, the Americas, Asia Under CEO George Plassat, in place shopping. New online shopping platforms Australia and New Zealand. There are Food Innovators Center in Sydney, where and the Americas. since 2012, Carrefour has sold some have been developed in each market, and Woolworths supermarkets and petrol customers can take part in new product of its non-performing hypermarkets, there has been significant spending in the stations, BigW discount department development and testing of own-brand Carrefour offers everyday low prices on acquired physical and online stores, back end of online retailing, particularly in stores, the Endeavour Drinks group products. staple grocery items but does not position and has expanded into convenience China, where Carrefour now handles its of liquor outlets, the EziBuy clothing itself as the cheapest player, rather as stores in urban centers. New formats own logistics. catalogue sales business and Woolworths The business is revamping BigW, which one that delivers a superior shopping include Gourmet in Italy and 5 Minutos Money financial services. The parent has suffered as a result of falling sales and experience. in Argentina. The recent acquisitions of company also operates hotels. heavy discounting. And in August 2016, Eroski hypermarkets in Spain and Billa Woolworths announced its exit strategy As hypermarkets – which account for supermarkets in Romania have extended Under new CEO Brad Banducci, from the Masters home improvement more than half of Carrefour’s global sales the small-store footprint. appointed in early 2016, the business has chain it has operated in a joint venture – fall out of favor among shoppers, the been restructuring to deal with a changing with the US chain Lowe’s. Masters will brand has responded by revamping its and increasingly competitive marketplace. close all stores by the end of 2016. biggest stores to improve the shopper It is slowing the rollout of new stores and

56 57 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

BRAND VALUE: $6,846 million BRAND VALUE: $5,419 million % CHANGE YOY: +14% % CHANGE YOY: -24% 19 GLOBAL RETAIL SALES: $87,950 million 20 GLOBAL RETAIL SALES: $27,079 million GLOBAL RETAIL SALES GROWTH YOY: +11.7% GLOBAL RETAIL SALES GROWTH YOY: -3.7% GLOBAL RETAIL STORES: 10,635 GLOBAL RETAIL STORES: 871 Source: BrandZ™/Kantar Retail (including data from Bloomberg) Source: BrandZ™/Kantar Retail (including data from Bloomberg) NO-FRILLS EXCLUSIVE SUPERMARKET BRANDS MAKE EYES ‘STORE OF FOR DESTINATION THE FUTURE’ SHOPPING

The discount supermarket chain Lidl of a rule breaker and innovator in the hungry for better value for money, and The mid-range department store chain a vibrant omni-channel brand experience launched in 1973 in Germany based on discounter channel, and it continues to plans to continuing growing from the Macy’s has been in business for more … (and) a more energized shopping the no-frills model pioneered by Aldi. generate excitement around weekly current 650-plus stores to 1,500. than 150 years, and its flagship store in experience in our remaining stores”. It has expanded across Europe into 27 specials and limited-time themes, which Lidl’s strategy is becoming harder to Herald Square, Midtown Manhattan, is markets, where its growth has been range from ‘XXL Week’ to food-oriented predict, as it takes bolder steps to world famous both for its size and for About 20 percent of sales comes from fuelled by an aggressive store roll- ‘Polish Week’. Lidl is unusual among strengthen its brand and reinforce its being the end point of the annual Macy’s private label goods, particularly in apparel, out, everyday low prices and a focus grocers for using social media not just as quality credentials. Lidl is refurbishing Thanksgiving Day Parade. The chain has and the brand has been investing in on private-label goods. Lidl has low ‘push’ media but also as a forum to give and extending traditional stores as well more than 700 outlets around the US and these as they provide shoppers with overheads and invests in marketing to customers a voice, encouraging them as rolling out its “Store of the future” in Puerto Rico and Guam, and plans to “exclusive to Macy’s” products and convince consumers that low prices don’t to join votes and discussions. It was the model, aimed at improving the shopper open a store in Dubai in 2018. reasons to make Macy’s a shopping have to mean a compromise on quality. first European retailer to reach 10 million experience and widening the assortment. destination. The business recently Facebook likes. Macy’s has been closing poorly acquired the Bluemercury beauty brand, Lidl is one of the biggest investors in performing stores and has announced an upmarket name that will help Macy’s advertising relative to its size among all There are very few European countries plans to shut a further 100 stores in the compete against rivals’ revamped beauty supermarkets. As well as promoting a without a Lidl presence; expansion into coming year, as it adjusts to consumers’ departments and give stores a more localized message – it uses the tagline Serbia is planned for 2017-18, and a launch increasingly digital shopping habits and premium feel. In 2015, it also launched #lidlsurprises in the UK - and locally into the US market is scheduled for 2018. focuses on the more profitable parts its own off-price banner called Macy’s sourced products, it seeks to turn cynics The UK has been one of its strongest of the business. Macy’s President Jeff Backstage, to help it compete in the highly into converts and ambassadors for the markets for the past five years; it launched Gennette says the company is “building competitive off-price sector. brand. The brand is seen as something in the UK in 1994 to a consumer market

58 59 Brand Building Tools

BRAND VALUE: $5,372 million % CHANGE YOY: -23% 21 GLOBAL RETAIL SALES: $15,343 million GLOBAL RETAIL SALES GROWTH YOY: +8.8% GLOBAL RETAIL STORES: 430 Source: BrandZ™/Kantar Retail (including data from Bloomberg)

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Whole Foods was a pioneer in the organic pressure in the post-recession period In May 2016, Whole Foods launched and health food market when it launched as more mainstream supermarkets have a smaller-format store, 365 By Whole in 1980, presenting discerning shoppers embraced organic and healthy lines Foods, which offers a smaller and more with an unmatched range of organic and offered them at a much lower price. affordable range than larger stores, and goods, specialist healthy ingredients and Whole Foods has slowed the pace of its combines digital technology in stores, high-end, ready-to-eat meals. The brand growth as a result; 127 stores opened to reduce staff costs, with a local grocer also has an environmental mission; it between 2011 and 2016, and 94 are due atmosphere. This format is designed to was an early mover on reducing plastic to launch by 2021. It has also redoubled appeal to millennials. packaging, uses green power in its stores, its efforts to provide a premium shopping SocialZ and insists suppliers meet strict standards experience that is tailored to local tastes. on quality and environmental measures. Some stores have live music and a café SocialZ is the new social media feel; others have a bar, offer yoga classes data visualisation product from As Whole Foods expanded, it rode the or guitar lessons, and in LA, there is a free BrandZ™ that enables you to wave of growing consumer interest in work space for aspiring entrepreneurs. organic and healthy living, and was able Whole Foods also offers two-hour home easily track, visualise and present to charge a significant premium, leading delivery on digital orders in some parts of a data-driven approach using the to the somewhat unflattering nickname the country through its partnership with real-time view of social landscape “Whole Pay Check”. It has come under Instacart. surrounding any brand.

61 Only available via your WPP Agency BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

BRAND VALUE: $5,305 million BRAND VALUE: $5,086 million % CHANGE YOY: -10% % CHANGE YOY: -11% 22 GLOBAL RETAIL SALES: $14,098 million 23 GLOBAL RETAIL SALES: $82,529 million GLOBAL RETAIL SALES GROWTH YOY: +6.2% GLOBAL RETAIL SALES GROWTH YOY: +2.9% GLOBAL RETAIL STORES: 316 GLOBAL RETAIL STORES: 3,939 Source: BrandZ™/Kantar Retail (including data from Bloomberg) Source: BrandZ™/Kantar Retail (including data from Bloomberg) PREMIUM LABELS STRATEGIC & FREE DELIVERY ALLIANCE DRIVE GROWTH AT PROVIDES GLOBAL DIGITAL INNOVATOR EFFICIENCY

Nordstrom is an upmarket department excellent customer service. More than 20 Auchan is an international network of In 2013, Auchan acquired 90 Central and store fashion retailer that is driven by new Nordstrom Rack stores have been discount hypermarkets that began in Eastern European stores from cash-and- sales of premium brands such as Burberry announced in 2016. France in 1961. France still accounts for carry giant Metro, and has since worked and Kate Spade. Recent additions to the over one-third of sales, but the balance is closely with Metro through a global range include Topshop and Madewell in Nordstrom has been a leader in its sector shifting, and China and Russia are each strategic purchasing alliance that gives apparel and Charlotte Tilbury cosmetics, in offering online shopping and is one of forecast to provide a quarter of sales each retailer economies of scale. The two which appeal to women in their 20s and the few US retailers to offer free home by 2020. In Western European markets companies overlap geographically but early 30s. delivery and returns. It was among the first including Spain, Italy and Portugal, do not compete directly as Metro’s target to provide a click-and-collect service, and Auchan is challenged by its heavy customers are trade buyers. Based in Seattle, the chain has more than continues to invest in innovation through presence in large-format stores, which 300 stores across the US and Canada; the growth of Trunk Club, the subscription are losing their appeal, and by having The business has established global about 100 of these are full-line stores, and apparel styling service it purchased last less representation in supermarkets centers of expertise and excellence 200 are Nordstrom Rack, the fast-growing year. Advertising tends to be low-key, and convenience stores than competing that can be accessed by managers in off-price or discount side of the business, mainly targeting existing customers and brands. Online operations, particularly in different countries and regions, and has which offers shoppers big reductions on relying on word of mouth. Nordstrom’s France and China, are being developed restructured to grant more freedom and premium goods and a “treasure hunt” loyalty program recently extended from rapidly. responsibility to regional divisions in a experience, without diluting the premium debit and credit card users to a ‘tender- drive to be more entrepreneurial. feel of full-line stores, which have built neutral’ system that has broader appeal. The brand describes itself as “audacious a reputation for crisp, clean lines and retailers”. It is known for having a wide assortment and fair prices aided by a wide, three-tier private label offer.

62 63 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

BRAND VALUE: $4,790 million BRAND VALUE: $4,575 million % CHANGE YOY: -10% % CHANGE YOY: -2% 24 GLOBAL RETAIL SALES: $16,539 million 25 GLOBAL RETAIL SALES: $67,474 million GLOBAL RETAIL SALES GROWTH YOY: +3.9% GLOBAL RETAIL SALES GROWTH YOY: -0.7% GLOBAL RETAIL STORES: 1,310 GLOBAL RETAIL STORES: 856 NEW CEO Source: BrandZ™/Kantar Retail (including data from Bloomberg) CHINA Source: BrandZ™/Kantar Retail (including data from Bloomberg) STREAMLINES EXPANSION BUSINESS, FOCUSES FOR SHOPPING ON EXPERIENCE SERVICES CLUB

The department store chain Marks & re-establish itself as an authority on Sam’s Club is a US-based chain of switching to more premium items in an Spencer is a British institution that has style, improve in-store availability and members-only retail warehouse clubs effort to attract higher-income families as expanded since its 1884 origins into a improve the customer experience through offering access to low-cost bulk grocery members. network of more than 900 UK stores. It investment in staffing. The rollout of and general merchandise – ranging from has branches and online stores across Simply Food stores, which only sell M&S fresh food to jewelry and flowers – in The chain is also investing in digital Europe, the Middle East and Asia, with grocery, will continue, and a review of return for an annual membership fee. services for club members and is a a range almost exclusively comprising international operations – which span Members also have access to a range pioneer in its category. It was the first club private-label goods aimed at middle to 58 markets - is in progress. Rowe has of other services including pharmacy, in the US to offer click-and-collect, later high-income consumers. scrapped his predecessor’s plans to optical, photographic and some financial adding features such as mobile check- open a flagship store in Amsterdam and services such as insurance. The brand is in on arrival, drive-through collection The brand has a reputation for quality has described poor results in European owned by Walmart and named after its and third-party collection. The Sam’s but has struggled in recent years with centers as unsustainable. founder, Sam Walton. Club ‘Club of the Future’ in Bentonville, declining clothing and homeware sales, Arkansas, is a club where new ideas although its upmarket grocery offering, In October 2015, M&S launched the Compared to its biggest rival, Costco, and innovations – such as an upmarket M&S Food, has been outperforming the Sparks loyalty scheme; members are Sam’s Club chain has more outlets and meat and seafood center, club café, and UK grocery market. rewarded for spending online or in store, tends to be less productive per location. alternative layouts and product placement writing reviews and for ‘shwopping’ Sam’s Club is currently reviewing its – are piloted before more widespread Under new CEO Steve Rowe, appointed – donating unwanted clothing when processes to address this, opening clubs introduction. in April 2016, Marks & Spencer has shopping. The scheme uses data mining in more affluent parts of the US, its main announced plans to cut 525 head office and shoppers’ stated preferences to market, and improving its fresh food Four of the top 10 biggest-selling Sam’s jobs to streamline the business. Clothing personalize rewards and discounts, and and organic ranges. Under new chief Club outlets are in China, where the and homeware prices will be lowered allows store managers to reach local merchandise officer John Furner it is company is expanding its footprint ahead and promotions reduced to provide members with tailored offers. also attempting to tighten its SKU count, of the anticipated arrival of Costco, which year-round value. The brand hopes to keeping only the most profitable lines and currently only has an online presence there.

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BRANDZ™ FOCUS ON INDONESIA... As Indonesia steps forward, opportunities grow for domestic brands to take to the regional and global stage.

BrandZ™ Top 50 Most Valuable Indonesian Brands 2016

Now in its second year, this study analyzes the success of Indonesian brands, examining the dynamics shaping this fast-emerging market and offering insights for building valuable brands.

The country has been transforming its economy, liberalizing markets and stimulating growth in ways that have brought about extraordinary changes to the lives of Indonesian people and the role of brands.

Watch the BrandZ™ Top 50 Most Valuable Indonesian Download the Full Report Brands 2016 Countdown Video

66 Focus on China BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

FOCUS ON CHINA

CHINA IS SIMULTANEOUSLY A HUGE DOMESTIC RETAIL MARKET, A LAND OF HOPE FOR GLOBAL RETAIL BRANDS FOCUS ON AND, INCREASINGLY, THE LAUNCH PAD FOR HOME-GROWN RETAIL BRANDS LOOKING TO GO GLOBAL. WITH MORE THAN 40 YEARS’ EXPERIENCE CHINA – IN CHINA, WPP HAS THE MOST DEVELOPED UNDERSTANDING OF THE FORCES SHAPING CHINA’S RETAIL LANDSCAPE, THE ASPIRATIONS About half of all e-commerce in China happens on mobile devices, compared OF ITS BRANDS AND THE SPENDING PRIORITIES THE WORLD’S with just over a fifth in the US and OF CHINESE CONSUMERS. THESE INSIGHTS FROM around a third in the UK. The implication for brands is clear: consumers are on WPP EXPERTS IN CHINA SHINE A SPOTLIGHT ON smartphones at least two hours a day, SOME OF THE KEY SHIFTS TAKING PLACE NOW. according to GroupM, and mobile is the E-COMMERCE place to engage them. Internet users in China totaled 668 million in June 2015, and 549 million of those users, almost Consumers keep Consumers seek not only price, but also 90 percent, accessed the Internet on spending, but purchase quality, and are willing to pay a premium, if a mobile device. In other words, the more wisely justified, according to Kantar Worldpanel. HOTSPOT number of Internet users in China is more In the big cities especially, spending than twice the population of the US and has shifted from necessities to products Retailing is highly competitive in China; almost equal to the population of Europe, and services related to transportation, retail brands not only have to compete and most of those Internet users are communication, culture, education, and with each other, but also adapt to walking around with smartphones. These entertainment. Other factors, including changing shopper attitudes and behavior. numbers alone would appeal to any brand government initiatives, have also In the past year, consumers have marketer, but there is more. The total impacted on development of the retail continued to spend, but more wisely. number of Internet users still represents category. Internet growth, a government The annual growth rate of retail sales has less than half of China’s population of over priority, and the availability of affordable declined from 13.7 percent in 2013 to 10.3 1.3 billion people. And penetration is lower smartphones, has facilitated the rapid percent through the first 10 months of in rural China. A big brand opportunity is expansion of e-commerce throughout 2015, according to Kantar Retail. about to become bigger. China, even to rural areas.

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China is e-commerce’s greatest success building strategy and creating their own story to date. In the five years to the end of branded flagship store on Tmall, the world’s 2015, the amount spent online has more largest B2C e-commerce marketplace, than quadrupled to Junlebao, is able to cut its marketing costs nearly half a trillion significantly and pass the savings on to E-COMMERCE dollars, driving it past consumers. And in the value-conscious A POWERFUL the US (US$300 billion) and immensely discoverable online BRAND-BUILDING as the world’s largest shopping environment, selling a quality e-commerce market. product at a lower price enables you to PLATFORM The e-commerce amplify brand awareness quickly through environment that recommendations and positive user has emerged in China is significantly reviews – both of which have been key different to the model in Western markets elements in Junlebao’s marketing strategy. and more than just a sales channel; it’s This approach has significantly contributed a potent ecosystem for brand building, to Junlebao becoming a top three instant CRM, innovation, test marketing, and milk formula brand on Alibaba’s Tmall more – the foundation for entire go-to- site within less than a year of its launch. market strategies. E-commerce platforms E-commerce’s hugely disruptive influence are already the largest digital advertising on the brand environment in China is far channel in China. The rise of local brands from a passing phase, and as marketing CHRIS BONSI such as Junlebao demonstrates just how budgets come under greater pressure, Chief Client and Insights Officer TNS Asia Pacific disruptive this distinct online shopping it seems that e-commerce platforms will [email protected] ecosystem can be. The crucial difference emerge as an ever-more important brand- is that by following a digital-only brand- building opportunity.

The major e-commerce brands have E-commerce giant Alibaba has purchased Tencent’s ubiquitous messaging site. expanded their rural distribution almost a 20 percent stake in Suning, Meanwhile, the product categories significantly during the past several the consumer electronics retailer that available with e-commerce are expanding years. Alibaba, for example, is present operates about 1,600 stores. The to include even big-ticket purchases, like DESPITE TAX in 27 provinces with 170 county service synergistic hook-up strengthens Alibaba’s cars. During China’s Singles Day shopping CHANGE, SPENDING centers and 8,000 village service centers. presence in the physical world, and event, on November 11, 2015, consumers ON LUXURY Because of the government establishment boosts its electronics offering, while lifting bought over 6,500 cars on Alibaba’s of cross-border e-commerce zones for Suning’s online profile, and improving Tmall.com, and then picked up their HAPPENS OVERSEAS reduced tariffs on foreign merchandise, logistics and delivery times for both purchases at local car dealerships. Chinese consumers enjoy lower online brands. The relaxation of the import tax on luxury is prices and faster delivery for imported At least one consideration keeps Chinese ALEXANDER RUNNE intended to drive more domestic consumption. It goods. The first cross-border e-commerce Tencent, the giant Internet portal, and consumers shopping in physical stores Chief Strategy Officer also has the beneficial side effect of assisting in zone was established in March 2015, in Number 1 in the BrandZ™ Top 100 Most however: a concern for food freshness. Ogilvy & Mather Group, Shanghai the anti-corruption drive by keeping funds within Hangzhou. The government plans to set Valuable Chinese Brands 2016, is a Yonghui Superstores is known for [email protected] our borders. My sense, however, is that there up zones in Shanghai, Guangzhou and stakeholder in JD.com, the e-commerce its strength in fresh food. Freshness has not yet been a huge shift to purchase within 10 other cities. The zones are intended to site known for its consumer electronics becomes a competitive advantage China compared with purchasing abroad, which drive consumption, a government goal. strength. This social e-commerce because it drives traffic to the Yonghui’s seems to be how the top end of luxury offerings Brands have also worked collaboratively arrangement enables consumers to large format physical stores at a time are still bought. to improve online and offline integration. seamlessly purchase products from when consumers increasingly are JD.com while texting on WeChat, shopping online or at smaller convenience locations.

72 73 THE BRANDZ™ CHINA INSIGHTS REPORTS Unmasking the Individual Chinese Investor This exclusive new report provides the first detailed In-depth brand-building examination of Chinese investors, what they intelligence about today’s China think about risk, reward and the brands they buy and sell. This will help brand The opportunity to build brands in China is owners worldwide understand market greater than ever. But so are the challenges. dynamics and build sustainable value.

The fastest growth is happening deep in the country, in less well-known cities and The Power and Potential towns. Consumers are more sophisticated of the Chinese Dream and expect brands to deliver high-quality “The Power and Potential of the Chinese Dream” is rich with knowledge products and services that show real and insight, and forms part of a growing understanding of local market needs. library of WPP reports about China. It explores the meaning and significance WPP has been in China for over 40 years. of the “Chinese Dream” for Chinese consumers as well as its potential We know the Chinese market in all its impact on brands. diversity and complexity. This experience has gone into our series of BrandZ™ China reports. They will help you avoid The Chinese Golden Weeks mistakes and benefit from the examples of in Fast Growth Cities successful brand builders. Using research and case studies, the report examines the shopping attitudes and habits of China’s rising middle class and explores opportunities for brands in many categories.

The Chinese New Year in Next Growth Cities The report explores how Chinese families celebrate this ancient festival and describes how the holiday unlocks year-round opportunities for brands and retailers, especially in China’s lower-tier cities.

BrandZ™ Top 100 Most Valuable 8 Retail Trends in China With the continued rebalancing of Chinese Brands 2016 the Chinese economy, 2016 - The The report profiles Chinese brands, outlines Year of the Monkey - could be major trends driving brand growth and characterized as another year of includes commentary on the growing influence change for China. The retail sector of Chinese brands at home and abroad. is at the intersection of much of this transformation, and with the rapid Watch the BrandZ™ Top 100 Most Valuable growth of e-commerce, Chinese Chinese Brands 2016 countdown video retail is changing and adapting fast. Watch our 2014 documentary to get a comprehensive view of Alibaba’s rise to domestic and global success Watch the Singles’ Day documentary To download any of these reports, please visit to learn more about the behind-the- www.brandz.com/ChinaInsights. To download iPhone scenes, factors behind massive growth or Android apps, please visit www.brandz.com/Mobile. of this sales festival and shopper habits

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While many are impressed by the gigantic transaction numbers (which keep growing every year), few make serious efforts to understand the brand drivers behind the figures. We are now entering the next phase of e-commerce CREATING – digital shopping has become a daily practice for Chinese consumers, and mobile connectivity makes such shopping possible in any place, EXPERIENCE at any time. With this, the e-commerce marketing paradigm has shifted BEYOND to brands and platforms that can offer a total brand experience rather E-COMMERCE than a narrow focus on sales and after-sales services. There are two key strategic initiatives being taken by leading brands:

1. Integrated experience 2. Continuous across all touch-points engagement along and channels: the entire consumer journey: Innovative brands are overcoming the online and offline barriers to create a The old concept of the top-down seamless and immersive experience. marketing funnel is not working any For example, Sephora Beauty more as consumers are shopping MIKE ZHU Workshop has 12 individual stations everywhere, all the time. The rapid Head of eCommerce and Analytics equipped with USB ports, iPads, development of e-commerce shortens OgilvyOne Shanghai and WiFi, so customers can look at the physical distance between [email protected] Sephora’s existing Skin IQ, Fragrance brand and consumer. However, the IQ, and Color IQ technologies and emotional distance between brand watch beauty tutorials to enjoy an and consumer is also contracting as indulgent, digitized and personalized people are now consuming the entire shopping experience. Similarly, brand experience over a much shorter the InterContinental hotel group is interval. Winning brands are focusing leveraging VR and 3D imaging to bring on designing an experience along the the on-property, in-room experience consumer journey versus creating a alive for hotel guests when they plan a brand experience impulse (awareness- booking. to-preference). For that reason, we see brands (P&G, L’Oreal et al) heavily investing in building a brand-owned, digital eco-system (rather than building on third-party platforms). OgilvyOne believes that upgrading creative and content excellence in line with a “continuous, omni-channel” commerce strategy will help brands to win the future of digital commerce.

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Thought Leadership BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

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Bryan Gildenberg Many of the great retail brands are going Chief Knowledge Officer Kantar Retail to be involved in a “war for recency” [email protected]

There probably isn’t an industry in the But, there are several unifying factors to Profitably world whose top brands are structurally these brands: more different to one another than the Five of the top 10 retail brands in the world retail sector. A quick look at the BrandZ™ • Mastery of complex and distributed – eBay, Alibaba, Amazon, Costco and CVS list shows retailers with: operations to deliver their brand – have complex models in which trading PROFITABLY promise, and the need for thousands margin on consumer goods is a relatively • Zero stores (eBay, Alibaba and JD.com (or in Walmart’s case, millions) of small part of their profit equation. have none, and Amazon has one) people to align with relentless to over 56,000 outlets (7-Eleven). consistency. Whether through membership services, Stores range in size from the smallest other services, advertising or marketing DELIVERING 7-Eleven to the one million square foot • A relatively small margin of error access fees, or being a content platform, Macy’s store in New York’s Herald economically; few retailers consistently trading margin will be a smaller part of Square. achieve an operating profit even many retailers’ economics going forward. approaching 10 percent of sales. This has enormous implications for brands • Anywhere from 800 items available, selling through retailers, who will need as in some Aldi stores, to a virtually • A brand delivered personally rather to understand that profit model more RELEVANCE limitless assortment in online than abstractly. Every consumer’s holistically, as well as for retailers that rely marketplaces. impression of a retail brand is steeped on trading margin for success. A model in intensive immersion in that retailer’s like Aldi’s or IKEA’s, in which the retailer • An assortment almost entirely physical and/or digital ecosystem. sells predominantly proprietary products, THE KEYS TO RETAIL BRAND comprising proprietary brands, as in may be essential for retailers that want to Aldi and IKEA, to a mix of brands and So what unifies the most successful solely survive on trading margin. GROWTH IN 2016 – AND BEYOND own-label goods at Walmart, Carrefour retail brands in the world? The three and Tesco. unifying factors above can be distilled The second key to 'profitably' is that into one phrase: “Profitably Delivering the focus of profitability, particularly for • Category expertise from fresh Relevance”. store-based retail, shifts from margin food, power tools and healthcare to towards cash flow and asset productivity. bedroom sets and fashion. The major difference between these two metrics involves inventory owned by the retailer. The fundamental question becomes: “What products deserve to be sold where?” In order to remain cash-flow competitive, retailers will need to make hard decisions about which products warrant multiple points of distribution, and which are sold only online.

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Delivering Automation will replace some of work now For instance, Walmart’s acquisition done manually, such as check-out and of Jet.com’s basket-pricing algorithm Between now and 2020, many of the stock management, and retail teams will could foreshadow a new era of pricing, great retail brands are going to be need fewer but more highly skilled people based on a set price for a collection involved in a “war for recency” – a battle to ensure the effective delivery of a brand of goods dynamically calculated and to deliver ever-faster on their brand promise. personalized. promise to wherever consumers want to receive their purchases. Amazon Prime Relevance • Sign me up – subscription and auto- Now will continue to raise the bar, and replenishment will play a bigger role in consumer expectations; it already offers Relevance for great retail brands should the shopper relationship. free two-hour delivery on a variety of have five attributes, irrespective of format: products in the most densely populated • Show me great things – help their urban areas. • Shop for me – use data to curate the shoppers be a better version of assortment and provide intelligent themselves than they could be without Delivery is not just about speed, however. marketing, giving shoppers the closest the retailer as a partner. It is also about the ability to relentlessly thing possible to “their store”. execute on a brand promise. In the • Don’t screw up – relentless discipline e-commerce sphere, retailers are going • Save for me – with item-level price on executional basics to prevent to find ways to systematize the basics transparency, great retail brands will outages – we expect most of the of product and item management, and need to be creative about delivering great profitable retail brands to be develop their skills in online item and “savings” to shoppers – proprietary executionally excellent. In retail, there category presentation. Store-driven retail products, membership fees and is no relevance without delivery; will require in-store teams with new skills. aggressive promotions have all served everything else is simply a broken this purpose well in years past. promise to a shopper.

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Emma-Jane Steele Brands should consider retailer platforms in a holistic way; Shop+ Global Director Mindshare they are influencer channels as well as sales channels. [email protected]

Successful retailers always put the billion, Amazon is clearly a king among relevant mobile experiences that blur customer first, and whether they’re retailers, but now it is also one of the physical and digital. Shop+ is working acquiring new customers or retaining loyal web’s ad juggernauts – the seventh- with brand marketers and their larger customers, digital has become vital in that largest seller of digital ads worldwide, retail partners to exploit their existing process. according to eMarketer. It’s already physical footprint and app-installed base. generating more ad revenue than According to Business Intelligence, by the WIN-WIN- Global e-commerce sales are expected Twitter, Pandora and LinkedIn, selling at end of 2016, 85 percent of US retailers will to reach $2.3 trillion by 2020, and 70 least $1 billion in ad inventory last year. be equipped with beacon technology. percent of consumers today rely on But, it’s Amazon’s ability to swiftly take digital channels when making a purchase you from ad exposure to purchase with Personalization is, of course, a key trend decision. Retailers are now beginning its one-click-to-buy model that is its in the shopper and e-commerce space, WIN IN to shift their digital focus beyond simply unique selling point. Unilever recently therefore the ability to leverage retailer transacting a sale online to supporting worked with Amazon to bring New York data to tailor digital advertising across those consumers who are online Fashion Week to life online via video, and retailer platforms and reach consumers primarily to decide, rather than to buy enabled viewers to get the tips behind at the moments that most influence their immediately. A side effect of providing the hair looks and instantly purchase purchase decisions is very powerful, for these consumers with the information and the necessary ingredients, including both brand and sales marketers and the THE NEW inspiration they seek is that retailers have TRESemme, the show’s official hair care retailers themselves. become large-scale media owners. sponsor. The shift in consumer decision-making, Amazon’s global audience reach is 181 Retailers including Target and Walmart the growth in retailer channels, as well million unique users, and 434 million are now linking in-store sales to digital as the overall growth in e-commerce RETAIL ERA buyers have accessed Alibaba’s media placements too, allowing brands means that marketers need to adjust e-commerce properties in the past 12 to get a better read on the ROI of their their spending. Brands should consider months, a jump of 15 per cent year-on- digital media. A report published by retailer platforms in a holistic way; they year. Kantar Worldpanel forecasts FMCG online are influencer channels as well as sales IT’S RARE THAT YOU COME ACROSS A BUSINESS sales to hit $130 billion by the end of channels. Retailers are now seeking ways to 2025, making up 15 percent of grocery OPPORTUNITY THAT WORKS WELL FOR EVERYONE monetize their growing audiences in the sales in China and 10 percent in the UK It’s a win-win-win situation at present. INVOLVED. BUT THAT’S EXACTLY WHAT WE’RE same way online media publishers do: and France. The ability to turn shopper Retailers that have capitalized on the shift through digital advertising. A few years engagement data into insights to enhance in consumer behavior to online are seeing SEEING RIGHT NOW AS RETAIL AND MEDIA COLLIDE. ago, this was a cautious experiment, but overall brand communication planning results. Brands that are removed from the retailers have advanced their capabilities is a huge benefit to brands that rely on point of sale have new ways to connect in this space, and now both omni-channel retailers to sell their goods. with and influence target audiences, and pure-play e-commerce retailers and consumers have a more relevant have become huge engagement and In other cases, retailers are tapping experience when in ‘shopping mode’. influencer platforms for brands, playing an into geo-location and mobile initiatives Shop+ is a Mindshare division dedicated to retail and e-commerce. increasingly important role in the end-to- like beacons to drive the omni-channel Make sure you are prepared for when end consumer journey. experience. Despite being around for a your largest commercial customers www.mindshareworld.com Amazon is a prime example of a retailer few years now, beacon technology is only suddenly become massive media Mindshare is a global media agency network. The network consists of more than 7,000 employees, platforms. in 116 offices across 86 countries spread throughout North America, Latin America, Europe, Middle optimizing its audience base in exchange now being widely embraced by retailers East, Africa and Asia Pacific. Each office is dedicated to forging a competitive marketing advantage for media dollars. With sales of over $107 and brands seeking ways to deliver more for businesses and their brands based on the values of speed, teamwork and provocation.

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THOUGHT LEADERSHIP

Hugh Fletcher This is a game-changing Digital Business Consultant Salmon loyalty opportunity for brands. [email protected]

For years, brands have successfully used It gives both consumers and companies We’re Magnum people at heart. For Mum a range of incentives, rewards schemes amazing opportunities to cement loyal and Dad, it’s always a Magnum Classic, and great service to keep customers loyal. relationships – to ‘lock in’. Consumers and Magnum Minis for the kids. But with Here’s a newsflash: the goalposts are forgo temptation from competing brands none at home, we headed for the corner about to shift. in return for convenience, and brands shop. benefit from a more predictable revenue OF CRM, until now, has been based on stream. For those brands that get ‘locked Magnums are made by Unilever, which encouraging human beings to make the out’, however, as consumers sign up with has a 22 percent share of the global ice- ‘right’ decisions. But what happens when their competitors, opportunities to woo cream market, Forbes reports. But when a computer or, more precisely, a computer the customer back are systematically (and we got to the store, we were tempted using a customer’s data, is making the alarmingly) limited. by all the non-Magnum options. My son MACHINES purchase decisions? chose a Smarties Pop-Up (Nestlé). I chose Here’s a real-world example of how this a Mars Ice Cream (Mars). My daughter The future of e-commerce is one in which might work. Last summer, us Brits finally remained true to Unilever with a Mini- machines will re-order goods on behalf got what we’d been waiting for: some Milk, while my wife chose to defer her of their masters, using real-time data sunshine. ice-cream indulgence for after the kids’ and what they ‘know’ of their masters’ bedtime and picked a tub of Häagen- AND MEN preferences. This is ‘programmatic Like most Brits, my family and I reached Dazs. commerce’, made possible at the for two things as the mercury rose: intersection of the Internet of Things, suncream and ice-cream. The only For Unilever, in this scenario they lost out. connected devices, and a demographic problem was, after weeks of rain, neither For us, it showed how disorganization and THE FUTURE OF BRAND LOYALTY WHEN comfortable with sharing personal data. my wife nor I had checked the forecast, temptation sabotaged our loyalty. So, how MACHINES MAKE THE DECISIONS and our freezer was bare. can both sides win?

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Loyalty 2.0 • My family would have been ‘locked in’ Consumers are already thinking along to a relationship with Magnums. these lines when they think about home Programmatic commerce could have appliances; 58 percent said that the next safeguarded our loyalty. Here’s how. Let’s • Until we had good reason to change, time they replace an appliance such rewind to the rainy week in early August other brands would be ‘locked out’. as a fridge, they were likely to choose before the sun came out. one with smart technology, while 54 What if our freezer had ‘known’ that hot Now, some may argue that ice-creams percent said that they’d be comfortable weather was on the way – and, crucially, make a bad example; the margin’s too using programmatic commerce both for that we were out of Magnums? What if, small, people won’t interact directly household supplies and food and drink. driven by my love of Magnums, I had with an ice-cream brand and so on. given an online portal consent to top up But everyone’s sceptical of change, But organizations must tread carefully. my supply in exchange for a discount particularly when it requires some large Concerns still exist about data security; and occasional free samples? What if organizational transformations. in fact, 69 percent of UK consumers the weather forecast had triggered an are uncomfortable with the amount of email asking for permission to deliver to Ice-cream is, in fact, a perfect example. personal data already being used. The a (Unilever-supplied) cool box outside my Any product bought regularly, and whose good news is that other than approving home? buying patterns can be predicted, is automated replenishment, brands should a prime candidate for programmatic not need additional data, just a new Here’s the answer: commerce: ice-cream, coffee, underwear analysis of the data they have. or moisturizer. Think about how a machine • Our freezer would have contained predicting your consumption, reordering Organizations must also ensure that the Magnums, and we would have enjoyed for you and replenishing the product commercial gain from programmatic them. could help ensure you never had to be comes from increased loyalty and sales, without. because while consumers see its benefits, • We would have appreciated the 71 percent say they’re not prepared to pay insights (Magnums, that is) that our This is a game-changing loyalty extra for it. freezer and Unilever, working in opportunity for brands. tandem, had given us. So, if programmatic commerce is But do consumers really want this? imminent, then a new era of machine- • The opportunity to be tempted by Yes, they do. Salmon and Censuswide led loyalty is on the horizon. It promises other brands would not have arisen. research involving 2,000 consumers in big rewards for organizations locked July 2016 found 13 percent of consumers into mutually beneficial relationships • Unilever would have gained revenue wanted programmatic commerce now, with consumers – but huge barriers and and protected its market share. and 44 percent felt they’d be ready within risk to those that are locked out. Which two years. organization are you? You decide.

To view the Salmon and Censuswide research key findings go to: https://www.salmon.com/en/programmatic-commerce-report/

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Jason Yu General Manager The days of double-digit growth are not gone; Kantar Worldpanel China [email protected] one only needs to know where to look.

Sales of Fast Moving Consumer Goods convenience stores, grew 3.3 percent Convenience stores are innovating are no longer quite so fast as observers in 2015, and those in key cities to create a differentiated shopping in China have come to expect. But there and provincial capitals added only experience, and typically offer ‘last mile’ OPPORTUNITIES are pockets of strong growth in a market 1.4 percent in value, while smaller home delivery via e-commerce. The that has been dampened by sluggish cities posted 4.4 percent growth. 2016 franchise agreement between economic expansion, and these signal Hypermarkets in the biggest cities Lawson convenience stores, from Japan, areas of potential in a country that has grew just 1.5 percent while national and Zhongbai supermarkets, based in FOR GROWTH IN become increasingly important not just hypermarket value sales grew 4.1 central Wuhan, paves the way for even to national retailers but global brands. percent, as new stores opened in more rapid expansion of convenience in lower-tier cities. Smaller formats fared the inland provinces. The value of FMCG sales rose by much better, with convenience stores A DECELERATING 3.5 percent in China 2015 – not bad enjoying healthy growth of 13.1 percent As growth in the modern trade in the by world standards, given that the nationally. biggest cities has flagged, retailers are global average was 1.6 percent – but seeking growth opportunities in the disappointing for China, which has While bricks-and-mortar part of Chinese lower-tier cities, where there will be ECONOMY seen growth rates average 11 per cent retail showed lacklustre performance, intense competition for share of wallet. between 2007 and 2015. the opposite was true for the country’s New store openings are still the fastest booming e-commerce landscape. way to grow, and RT-mart’s 12 percent The bulk of the growth the market Online FMCG or grocery sales rose by growth in 2015 was largely a result of is seeing has come mainly from 37 percent in 2015, as e-commerce expansion, with 31 new stores, 26 of premiumization, as consumers upgrade giants expanded their penetration them in lower-tier cities. their product choices and spend more consistently across all city tiers. Today, money in the process. The sectors penetration of e-commerce even in With absolute growth in lower-tier cities hardest hit by the shifting economy – China’s more remote tier-five cities is also experiencing a slowdown, it is GDP is now expanding at its slowest well ahead of the levels in Spain or critical for retailers to be more shopper- pace in 25 years – are the large Germany. centric, and develop their ‘right to win’ modern-trade chains that have been through optimizing merchandise and in- rolling out across the country in the past The view ahead store execution based on local needs. decade, but which are now faced with a consumer preference, as in much of the Growth is likely to continue to world, away from big-box retail in favor accelerate for convenience formats. of convenience. Competition in convenience is intense in the south of the country, but there Overall, the modern trade, including remains plenty of room to strike double- hypermarkets, supermarkets, and digit growth in the north and west.

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Size matters in China, so more mergers and alliances are expected. As competition intensifies and the total market continues to decelerate, retailers have to build scale to optimize their cost base and strengthen their negotiating power. In 2015, Yonghui’s acquisition of a stake in Lianhua supermarket allowed it to expand into the affluent East China region, while Hongqi’s takeover of Huhui supermarket enabling the group to reach share of 1.5 percent of the West market. Further regional market consolidation is expected in 2016 as China’s retail landscape is still fragmented, with the top 10 retail groups only accounting for less than one-third of modern- trade sales.

International retail brands have so far struggled to tip the scales in China, having battled to keep up with the rapidly changing trading environment. Their share of the FMCG market has dropped 1.1 percentage points to 13.4 percent. Slow growth in their strongholds, which tend to be the biggest cities and provincial capitals, has added to the difficulty, along with strong competition from local players in lower-tier cities as well as the e-commerce giants.

Real omni-channel grocery shopping is yet to emerge in China, and this is a beacon of potential growth. E-commerce continues to surge in China’s FMCG market, with likes of JD.com and Tmall invested heavily in festive promotions and shopper conversion, and as bricks-and-mortar retailers launch their own e-commerce platforms to win their shoppers back. However, most brands in this space are yet to create a differentiated shopping experience that spans both the online and offline worlds.

Growth may be slow now by Chinese standards, but it is not evenly spread. The days of double-digit growth are not gone; one only needs to know where to look.

94 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

THOUGHT LEADERSHIP

Jon BIrd Brands have more platforms and Managing Director, Labstore Part of VML in North America and Y&R worldwide more channels than ever before [email protected]

“Challenging” is an oft-used but Globalized Polarized euphemistic term that some retail executives use to describe today’s Manufacturer brands have been The middle of the market is disappearing. turbulent times. When they say the word expanding their distribution footprint for Retail has polarized into extreme value at “challenging”, what they really mean is decades, Coca-Cola being the classic one end of the market and ultra-specialty OMG & “OMG”. (In fact, this three-letter acronym case – ensuring that their brand is always at the other. Retail brands that are in the covers up for more colorful language – within “an arm’s reach of desire”. Many middle of the road, as many department but let’s not go there in this publication.) retail brands, however, have traditionally stores are, stand a good chance of being been content to confine themselves to run over. Once-calm seas are indeed now choppy their own territories. No longer. In order OBE: PANIC and unpredictable. The retail landscape to grow, retailers have been forced to roll Personalized as a whole has become Globalized, out across the globe both physically and Digitized, Polarized and Personalized: digitally. Brands without a global strategy Data is driving personalized – at the very least enacted digitally – are communications. At the same time, facing a troubled future. products and services are increasingly AND A PATH being customized. Retail brands that still Digitized operate with a “one-to-many” approach will lose; one-to-one wins. Channels to market have been digitizing, and that has extended to products and While these changes may be daunting services. There is a race to turn the for retail brands, customers love what’s FORWARD tangible into bits and bytes – look at happening. They get access to new Uber and Airbnb. Digital is also, of course, brands in new ways, with sharper offers increasingly driven by mobile. Retail that feel more relevant. But consumers brands without a clear and compelling and shoppers are also far more digital strategy that revolves around demanding of retailers. Once-passive FOR RETAIL mobile have little chance of surviving. customers are now in control and are calling the shots. And the more technology-savvy they are, the more BRANDS they are wreaking havoc. TODAY

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BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

THOUGHT LEADERSHIP

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Mobile technology is one of the major Retailers also face a broader and need to be present whenever, wherever driving forces with which retail brands more aggressive competitive set. In and however their customers want to need to contend. WPP’s BrandAsset® many markets – most notably the US – connect. Valuator Shopper research, run recently Amazon dominates this group. Amazon in the US and rolling out across the world, is fundamentally changing the way that And that’s where the “OBE” acronym shows that there are now six distinct people shop in the United States. Kantar comes in. It stands for “One Brand “Shopper States”: Store Reassurers, Retail data now asserts that half of US Experience”. To be successful as a brand Bargain Hunters, Brand Desirers, households are Amazon Prime Members in today’s world, it’s not enough to “be Knowledge Seekers, Practical Players – prepared to pay US$99 a year for a there”, you must be there in a consistent and Mobile Warriors. All are digitally bundle of services, but primarily to gain and unified way. Brands must offer a enabled and one is digitally obsessed – access to free two-day shipping. seamless, relevant customer experience, the Mobile Warrior, who routinely uses across all touchpoints and channels, smartphones to compare prices, get It’s sobering to reflect that Amazon was delivered through a fully integrated information, receive coupons and make responsible for 60 percent of total US ecosystem. purchases. The Mobile Warriors represent e-commerce growth from 2014 to 2015. nearly 10 percent of US shoppers and are The reactive position is to respond to statistically significant enough to warrant But for all that, there is tremendous the new retail reality with an attitude of a segment on their own. opportunity for retailers building brands “OMG”. The proactive position is to take today. Brands have more platforms charge with a strategy centered on OBE. Shopper behavior has radically evolved and more channels than ever before, with The world’s best retail brands are doing and so have the retail destinations and new ones seemingly emerging every day. exactly that. Yes, it’s “challenging”, but it’s formats that shoppers prefer. As Marc Where once retailers had a store and a what customers expect, and increasingly, Andreessen famously said, “software website, now they have myriad ways it’s what they demand. eats retail”. For retail brands with large for shoppers to interact: traditional, legacy bricks-and-mortar portfolios, it can e-commerce, m-commerce, social be difficult to make sense of the same commerce and even “conversational network of physical stores. commerce” via “bots” and chat. Brands

Shopperstates™ SIX DIMENSIONS OF THE NEW AMERICAN SHOPPER

To find out more about the Shopperstates™, please email [email protected]

98 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

RETAIL TRENDS ROUNDTABLE

SHIFTING MEET THE EXPERTS: SANDS AS

TG NA DR

SHOPPERS’ Tim Greenhalgh Nick Ashley David Roth Chairman and Chief Creative Officer Chief Client Officer CEO FITCH Mindshare The Store WPP, EMEA and Asia [email protected] [email protected] [email protected]

HABITS Deliveries are getting We used to think it was fine to expect of an experience now is off faster all the time, and TG stand in the street in the rain the charts, and it goes beyond omni- the range of goods on and put our hand out hoping channel. offer gets ever more vast; a yellow cab might go past and it might stop. We now get frustrated when we The other thing that’s how do you think that’s order an Uber and see he’s gone down DR happened is we used to have CHANGE changing consumers’ the wrong road. The expectation is our expectations framed by expectations of retail remarkable. In response to that, a lot of the category we shopped in and we brands? the conversations we’re having with our were quite happy … I don’t think that’s clients are about ‘what is 21st century true any more. We expect the best HOW ARE DATA, DELIVERY CHALLENGES AND A DRIFT AWAY service?’ Even though I may have a service we’ve ever experienced in any flourishing e-commerce part of my E-commerce is growing so fast, sector, across all the sectors. I think that FROM OLD CONSUMPTION PATTERNS ALTERING THE RETAIL business and a live chat room and make NA and delivery expectations are puts a real strain on traditional retail recommendations based on what other LANDSCAPE? OUR ROUND TABLE HAS THE ANSWERS. going through the roof. Pre- economics and structures because people bought and what you’re buying, Christmas, Amazon were running a they’re having to compete with a very and all of that kind of thing, what is the one-hour delivery campaign in London; different service-level model. actual face-to-face service like? I think Argos were promising four-hour slots. It there are many brands that are getting WPP experts gathered in London for a session convened by BrandZ™ does feel like that consumer expectation left behind as newer players come into about the future of retail and retail brands. The following comments has become so strong that the pressure the market with a very distinct service that’s putting on retailers now to deliver are taken from that discussion, involving Tim Greenhalgh, chairman proposition. Warby Parker opticians are against is fairly significant. and chief creative officer, FITCH, Nick Ashley, chief client officer, a good example of that. What people Mindshare, and David Roth, CEO The Store WPP, EMEA and Asia. >> 100 101 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

RETAIL TRENDS ROUNDTABLE

>> So maybe different branches of a chain will perform different roles, with a flagship as a place Data obviously holds You can either be very don’t tend to see that much of that. It The idea that a physical store can be What does all of this to showcase, and maybe TG the key to a lot of the optimistic about this or tends to be ‘I know this about you, I think constantly improved doesn’t mean mean for the role of outside that people will possibilities for retail incredibly pessimistic. You that you’re this sort of person so I’m you’re going to refit it every time, but it retail brands and stores shop for price or for could argue that retailers are the reason going to put a message in front of you could be that the store staff are given brands in the future. But in the community? experience? why people are installing ad blockers that may or may not appeal, again and more to do; they could give you more there’s a lot of cynicism left, right and center, because they’re again and again’. We find a lot of retailers of a theatrical showcase to sell you the among consumers and quite happy to retarget you 38 times on who have a marketing department and products in terms of the service and the I do feel that we as consumers As consumers we want both DR concern about how their the basis of what you’ve just looked at an e-commerce department, and they’re information that they give. You can put are falling out of love with our TG the ease of technology and data is handled. What until you finally crack. Retail and travel I’d separate. The marketing director does in a new display, move it around, but retailers. You did used to feel the emotion of the human should brands be doing say are the two categories that are not not have responsibility for e-commerce, the idea is that it becomes more of a that they were on your side or doing connection. things for you, but now, if Tesco went in this area? thinking about their customers as much which is, to my mind, suicide, because stage set for a performance that people as they could be in certain instances. you’ve got an e-commerce person who’s then help to enact for you as a brand bankrupt tomorrow, I don’t think anyone That shouldn’t been an But then, you could be much more driven by clicks, by immediate short-term message is quite interesting. Nike Town would be too emotionally upset about DR insurmountable problem. optimistic and say certain retailers are ROI, and you’ve got a marketing director is a bit like that – the whole store is it, or Sainsbury’s or Marks & Spencer, in We recently did a study looking installing personalized pricing models with no control over what effect that’s constantly changing. the same way they would have been 10 Maybe you’ll start seeing more DR at which categories people based on what might work for you or having on the brand. But some retailers The idea is that the store manager years ago. NA like-minded partnerships would be happy to give their where you are on the journey. It really are starting to change that. becomes a store experience manager. between a local coffee shop data to, and retail is in the third level of is in the balance … some people are They’re less about the bricks and mortar It feels like the middle’s been and a local food store. TG categories. The National Health Service getting it desperately wrong, with over- and more about the tone that you create. squeezed. There’s a reason why So, if a retail brand is no is at the top and retail is down at the tail. reliance on data, and they’re annoying Walmart has been hurt and why Or the local coffee shop, the Within that, we then looked at the top people by making it clear they have that longer just about putting That’s back to the old-fashioned Walmart changed their logo to have the TG local hardware store and the of the tree and not surprisingly, Amazon data. Others are being smarter and are goods on shelves for DR retailers because that’s what sun in it rather than a big, brutal identity. local dry cleaners might get and John Lewis are at the top there, and aggregating it, thinking about people people to buy, what is the they were – the Macy’s of There’s a desire for things to be organic, together and produce a department you can guess who’s at the bottom. The in clusters and segments rather than role of physical stores in this world, the Selfridges and Marks real, genuine. The great example of this store or a federation of independents. contempt that some retailers have had is Prufrock, a coffee shop in Shoreditch, individuals when they communicate in people’s lives now? & Spencer. We’ve turned retailing into for their customers for all these years is that way. Tech is a massive issue. People this homogenized world where I’m an London, whose owner has a dis-loyalty Or maybe high streets become coming back to bite them in ways that don’t want to feel that data is being used operator or a marketeer or whatever, card. Basically, he wants you to shop DR curated environments. The nobody could have anticipated. All those to punch them over the head until they The idea of building one-off and in the good old days of retailing, the at all the other excellent independent street that always makes people that for the last 10 to 15 years finally collapse. TG monuments with a fantastic guy who ran the store was a showman, coffee shops and if you do he’ll give you me smile every time I go down it is have played fast and loose with their chandelier that lasts for five a curator. free coffee. People are slightly turning Marylebone High Street in London and consumer proposition are at the bottom When it’s data out from the years, and then you do your refit, is against chains. it’s not by luck, it’s by design. It’s the of that level of data trust. NA retailer to the customer, that starting to go away. The idea of retail most amazing selection of stores – there can be really useful – things like being in a constant state of beta is People will still make a are a couple of the usual suspects but stock levels at a store when people are interesting to us; consumers expect your NA pilgrimage to somewhere most of them aren’t, and you feel that looking to pick up or reserve – but you apps to get updated every two weeks. special, to a Westfield for there’s a benefit in wandering down that instance, where brands want to street and seeing what’s there. Maybe showcase the best of what they have in for retail to thrive again in the high street a premium environment. They become there needs to be a curator … not just cathedrals of brands. whoever wants to buy the lease.

102 103 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

BRANDZ™ FOCUS ON INDIA... FOR THE FIRST TIME IN INDIA A RETAILER MAKES THE TOP 50...

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BrandZ™ Top 50 Most Valuable Indian Brands 2016 BrandZ™ on Indian entrepreneurism and innovation, the move factors which produced the strongest Gross Get the BrandZ™ Top 100 Domestic Product (GDP) growth of any major Most Valuable Global Brands, industrialized economy, also drove a rise Chinese Top 100, Latin amongst local Indian brands. American Top 50, Indonesian Top 50 and many more insightful reports on your This in-depth study analyzes the success of smartphone or tablet. powerful and emerging Indian brands, explores the Indian consumer’s shopping habits, and To download the apps for the BrandZ™ rankings go to www. offers insights for building valuable brands. BrandZ.com/mobile (for iPhone and Android).

104 WPP Shopper Marketing and E-commerce Capability BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

WPP SHOPPER MARKETING EXPERTISE

Sir Martin Sorrell CEO “Marketers find it harder and harder to succeed using WPP the tools of the past…it is critical to figure out how to sell more effectively along the path to purchase.”

SHOPPER HORIZONTALITY: MARKETING THE KEY TO SUCCESS. CAN GENERATE There is no question that shopper visibility (Barrows), digital shopper marketing is one of the fastest-growing (Lunchbox and Rockfish), retail media YOUR BEST sectors in marketing communications (Shopper2Buyer), and it’s not hard to see why. multicultural and Hispanic (Bravo), and our general shopper agencies (such as Marketers find it harder and harder to Geometry, Labstore and GreyShopper) SALES RETURN. succeed using the tools of the past. – no other parent company comes close to our breadth of resources. Given the changes created by consumer By leveraging our key strategic pillar of control in an omni-channel world, horizontality, we’ve found a way to bring combined with the growing power and these resources to bear on a client’s footprint of the retailer, it is critical to business in a customized, efficient and figure out how to sell more effectively powerful way. Unilever, Kimberly-Clark, along the path to purchase. General Mills and Heineken all use the BUT ONLY IF team shopper approach and it shows. At WPP, we have invested in some of the world’s best shopper companies, So please let this section serve as spanning retailer knowledge and an introduction to the WPP Shopper YOUR RESOURCES insights (Kantar Retail), instore Model; I only wish that I could walk each ARE PROPERLY of you through it personally. ALIGNED.

108 109 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

WPP SHOPPER MARKETING EXPERTISE WPP SHOPPER MARKETING DISCIPLINES

Done well, shopper marketing ...Team WPP Shopper turbo unlocks your biggest assets... charges your success.

The practice of shopper marketing has BETTER TALENT PROVEN EFFECTIVENESS become so complex and important for The bigger the ask, the higher caliber Best-in-class experts drive superior clients that WPP understands that no of resources attracted to it. Our global, programming, and the success of these single agency could meet all of a client’s regional and local reach grants access programs should be provable given SHOPPER INSIGHTS RETAIL CUSTOMER CATEGORY/AISLE ROI & ANALYTICS needs. Rather, we believe clients to top experts in every discipline of shopper marketing’s proximity to sales. Our research and analysis INSIGHTS LEADERSHIP Our proprietary analytics require a customized consortium of shopper marketing. No one else can capabilities can help you It’s always easier to sell what Deeper retailer relationships models can help you measure best-in-class resources from multiple build a team this good. SMARTER USE OF find new ways to reach, people want to buy. We can translate to more traffic touchpoints and tactics. So agencies. EXISTING & FUTURE understand and influence can help you understand and more sales. Our experts you can create stronger plans TIGHTER INTEGRATION ASSETS the shoppers you care about the reasons behind every can help position you as a and manage budgets more WPP has over 30 agencies that most. purchase. leader throughout the store. efficiently. A single Team Leader aligns WPP’s By breaking down silos, we are able specialize in shopper and retail agencies and experts around your to make resources available across marketing and activation. specific plans. Everyone works together specialties and disciplines, from retail with a common brief, process, and channel insights to in-store visibility, Shopper marketing is important. Done timeline and operating system. We’ve while also eliminating redundancies. well, it unlocks your two biggest assets created a structure that encourages – brand value and trade spend. Done interdependency and allows expertise PATH TO PURCHASE DIGITAL SHOPPER PACKAGING RETAIL STORE DESIGN THE POWER OF ONE PLANNING MARKETING How your product is delivered Creating the right experience well, shopper marketing investment can to flourish. be your most productive investment in One agenda, one bill, one evaluation, Purchase decisions aren’t Shoppers are everywhere, can be as important as the in the store can elevate even always made in the store (or from smartphones to social terms of sales return. one contract and one person that product itself. Package design well-known brands. Our TRUE EFFICIENCY manages the relationship: WPP’s on the Web site). Our goal is to media. Our experts can help helps your products stand out experts can help you develop The WPP Shopper Model enables the help you reach shoppers with you be there too, with helpful in the aisle—and find their way an in-store identity that serves This consortium is based on your structure promotes collaboration and best thinking and work while eliminating the right messages from start tools, useful content and into shoppers’ carts. as a marketing tool. business and your particular business rewards shared success. Everyone a client’s need to manage every to cart. valuable offers. objectives. You tell us what you’re trying is 100% focused on your goals, and relationship separately. The process to accomplish, and we craft a dream everyone sees the entirety of the task also allows for de-duplication, since team, centrally managed, to help you rather than only a portion. resources can be shared across the meet your goals. This business growth network. will come from six key areas: IN-STORE EXPERIENTIAL / SAMPLING CRM MERCHANDISING & MIX COMMUNICATIONS We’re experts in everything Getting shoppers to try your Every purchase has a story. To find out more and how WPP Shopper Marketing can help you contact Take shoppers out of auto- from pop up stores to mobile product is only half the battle. Smart product bundling and pilot mode while they are in street teams. Events let Our customer relationship displays can create new usage The Americas and Australasia EMEA & Asia the aisle. We specialize in shoppers experience your marketing programs can occasions and overcome old Gwen Morrison Carl Hartman Igor Tolkachev creating the right message brand in a memorable (and help you win the second half- barriers to purchase. – and placing it in the right [email protected] Carl/[email protected] [email protected] loyalty-building) way. making the next sale (and the location. next after that). www.shoppermarketingstore.com

110 111 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

WPP SHOPPER MARKETING AGENCIES

AKQA ALWAYS BARROWS BRAND UNION BRAVO DYNAMIC ACTION

AKQA believe in the imaginative Always is the largest Field Marketing Barrows aim to make shopping better for Brand Union is a leading global brand Bravo is WPP’s largest and most Better decisions. Faster action. application of art and science to create Services Agency in China, providing Total retailers, brands and shoppers alike. agency with deep expertise in brand successful Hispanic and multicultural DynamicAction is the most advanced iconic experiences, services and products Field Marketing Solutions from “Sell In” strategy, design, interaction, brand agency. As part of the WPP Shopper analytics solution specifically built for that improve people’s lives and place to “Sell Out”, from “Activation Strategic Barrows have been operating in the management and employee engagement. Model offering, Bravo offers marketing retail merchandising teams. their clients at the forefront of the ever- Planning” to “On-The-Ground Execution”. global retail design realm for over 25 With 500 people in 25 offices, Brand to shopper expertise that focuses on changing connected world. Their ideas With a network of 90+ fully-owned years, continually growing and adapting Union serves every major market with understanding today’s Hispanic shoppers, Connecting and analyzing millions of embrace the most appropriate platform, offices throughout China, Always has the to meet the demands of each of the clients including Vodafone, Bank of and collaborates with our clients’ retailer data points from every part of a retail whether harnessing the power of social capabilities to activate in 600+ Tier 1 to regions the company operates in. America, GSK, Jaguar Land Rover, partners to craft successful shopper organization, DynamicAction uses more media, mobile, interactive experiences or Tier 6 cities. Service Offerings include CBRE, Pernod Ricard, IHG, LeGroup, marketing solutions. than 600 proprietary algorithms that award-winning content creation. AKQA's Promoter & Field Marketer Management, Everything Barrows do is centered Shazam and Tencent. From the most encapsulate hundreds of collective years extensive retail experience is fused with In-Store Activation / Promotion, Retail on a single overarching mission; significant of launches to the smallest of of retail knowledge to pinpoint margin- a deep understanding of how technology Audit / Mystery Shopper, Event / Road creating solutions that drive shopper online interactions, Brand Union defines, eating disconnects in the business, and data can deliver positive change, Show, POSM Management and Premium conversion. Barrows' range of services creates, and curates the total brand prescribe the precise actions to take and to satisfy audience needs and surpass / Gifting. encompass everything from insights and experience, ensuring it’s both brilliantly accurately rank those actions by financial business goals. This unique approach strategy, design and conceptualization, designed and beautifully connected. impact. Merchandising and eCommerce has earned them numerous international Always manages 800+ projects on an right through to engineering and teams run more efficient organizations, accolades for creative and strategic annual basis across 500+ cities, executing execution. True to Barrows' heritage in sell more at full price, mitigate excellence, including the Queen’s Award more than 3.5 million activations on behalf manufacturing, their ideas and designs markdowns, capitalize on demand and for Enterprise Innovation. of a portfolio of Blue-Chip Clients. Client are firmly rooted in technical know-how. increase profit. partners include Unilever,Nestle,Colgate, Barrows design with real-world results in Johnson & Johnson, Ferrero, Nokia, Intel, mind, and always strive to be remarkable. Microsoft, Shell, VISA, Pfizer and many more.

www.akqa.com www.alwaysmkt.com www.barrowsglobal.com www.brandunion.com www.bebravo.com www.dynamicaction.com

Anna-Louise Gladwell Barry Leung Lucien d’Avice Toby Southgate Eric Hoyt John Squire Director of International Business Development Managing Director CEO Worldwide CEO President & CEO CEO [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]

112 113 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

WPP SHOPPER MARKETING AGENCIES

EVO FEEDBACK ASAP FITCH FUSEPUMP GEOMETRY GLOBAL GREY SHOPPER

Evo is a specialist Shopper Marketing Feedback ASAP's products and services FITCH transforms consumer experience FusePump is a strategic partner for Geometry Global, the world’s largest Grey Shopper is Grey's shopper agency, building programs that inspire the provide Unique Customer Excellence and accelerates business success. They brands, helping them understand and and most international brand activation marketing and brand activation agency. behaviour of the brands target audience Solutions. The team turns Feedback deliver seamless solutions by combining apply technology to succeed in digital agency, drives conversion, action Experts in persuading people to buy, to drive traffic and conversion at the into Action, Action into Insights, Insights the physical, human and digital elements commerce. The company's web-scraping and purchase through award-winning they talk directly to the shopper, rather point of purchase. Evo inspires Shopping into Customer Excellence so you can of a brand to create unique experience technology allows them to gather programs that change behavior and than the consumer (they know they're not Behaviour Insightfully, Measurably, turn Customer Excellence into Sales, signatures. information directly from any website (and inspire people to buy well. With teams always the same person). Grey Shopper Creatively, Pragmatically. It is the evo Loyalty and ROI. Feedback ASAP has other data sources) then optimise this in 56 markets, Geometry Global has specialise in creating ideas that get teams enviable experience that enables been built on nearly 20 years global FITCH is a leading global retail and brand for use in digital marketing applications. expertise in shopper, digital, experiential, clients' brands on the till receipt. Studies them to create the work they do. Evo are experience across 74 countries, 200 consultancy with an integrated offer of FusePump publish and promote clients’ relationship, promotional and trade show that most purchase decisions are a team of hybrids with deep experience clients, 200 million individual measures strategy, design and implementation, product information (via product data marketing. Geometry Global is a WPP made at the point of sale. An idea should on every side of the desk. The team has of performance, working globally with which enables them to deliver across all feeds) into multiple online marketing company. work hardest where it will have the more than 130 years of collective shopper McDonald’s, Yum, Shell and large touchpoints. They do this for clients that channels, and also use it to create biggest influence on sales. That's why marketing experience, earned in Australia organisations such as AT & T, UK Post, include adidas, B&Q, Brown-Forman, product-led dynamic advertising and Grey Shopper treat the retail environment and in the worlds most developed Carphone Warehouse and Radioshack. Dell, H&M, Philips, Sberbank. FITCH is a campaign content for agency partners. as an essential creative platform to bring markets. Evo are a globally connected member of the WPP Group of companies ideas to life. Grey Shopper drives people shopper marketing agency, powered by a (NYSE). along the path to purchase, all the way suite of tools that keep them connected to from brand awareness to the till. the industry in Australia and abroad.

www.evoagency.com.au www.feedbackasap.com www.fitch.com www.fusepump.com www.geometry.com www.grey.com

Jeff Froud Phil Prosser Gavin Clark Robert Durkin Steve Harding Joe Lampertius Managing Director CEO Global Development Director CEO Global CEO Global CEO, Shopper Marketing [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]

Sarah Green CEO EMEA [email protected]

114 115 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

WPP SHOPPER MARKETING AGENCIES

GROUP XP H-ART HIGHCO IDEA WORKS KANTAR RETAIL KANTAR WORLDPANEL

Group XP is a unique consulting model H-ART works on brands marketing and Since its creation, HighCo has placed Idea Works are the experts in all things Kantar Retail are the retail and shopper Kantar Worldpanel is the global expert in formed through the partnership between communication strategies and builds innovation at the heart of its values, retail and shopper - in all forms and specialists. They are a leading retail and shoppers’ behavior. Through continuous Brand Union, FITCH, SET & SET Live. The amazing digital experiences. H-ART’s goal offering its clients – brands and retailers media. shopper insight, consulting and analytics monitoring, advanced analytics and company believes that great customer is to discover how brands can leverage – Intelligent Marketing Solutions to and technology business, part of Kantar tailored solutions, Kantar Worldpanel experience is the key driver of business ONLINE channels such as the web, mobile influence shopper behaviour with the They embrace today’s globalised, Group, the data investment management inspires successful decisions by brand growth today. Together, they are are devices, in-store technologies and other right deal, in the right place, at the right digitised, polarised and personalised division of WPP. They work with leading owners, retailers, market analysts and over 1000 strategic and creative thinkers emerging media to engage people and time and on the right channel. consumer environment. They have global brand manufacturers and retailers to help government organizations globally. With located across 40 studios worldwide. to connect those channels to OFFLINE perspective with local understanding them sell more effectively and profitably. over 60 years’ experience, a team of By connecting diverse perspectives touchpoints such as retail, events, etc. Listed in compartment C of Euronext and credibility. They create impactful Kantar Retail track and forecast over 1000 3,500, and services covering 60 countries and skills in our network, GroupXP bring Paris, HighCo has more than 700 campaigns and memorable shopper retailers globally and have purchase data directly or through partners, Kantar a holistic view of experience to create employees and since 2010 has been experiences. They do it all wherever on over 200 million shoppers. Amongst Worldpanel turns purchase behavior transformative interactions between included in the Gaia Index, a selection of brands can engage with consumers and their market-leading reports are the into competitive advantage in markets brands and people. 70 responsible Small and Mid Caps. transactions can be influenced or made. annual PoweRanking® survey and the as diverse as FMCG, impulse products, Digital Power Study. Kantar Retail work fashion, baby, telecommunications and with over 400 clients and has 26 offices in entertainment, among many others. 15 markets around the globe.

www.group-xp.com www.h-art.com www.highco.com www.ideaworks.com.au www.kantarretail.com www.kantarworldpanel.com

Ksenia Starikova Massimiliano Ventimiglia Olivier Michel Danny Lattouf Ray Gaul Josep Montserrat Head of Growth & Innovation CEO Managing Director Managing Director VP Research & Analytics, Market Insights Global CEO [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]

116 117 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

WPP SHOPPER MARKETING AGENCIES

KINETIC KKLD KUVERA LABSTORE LAMBIE-NAIRN LANDOR

Kinetic offers a full service, KKLD* is a creative agency for innovative Kuvera is an expert partner in every Just as the world of communications has Lambie-Nairn has been creating Dynamic A global leader in brand consulting and implementational planning and buying communication in digital, integrated aspect of China e-commerce that offers a become more digital, so the world of Brands for over 40 years—brands built design, Landor helps clients create agile service for OOH proximity media, communications and e-commerce. wide range of services for brands entering marketing has shifted emphasis from the for a multi-screen, digital world with the brands that thrive in today’s dynamic, engaging shoppers while out of the or operating in China market, including consumer to the shopper. Enter Labstore ability to coherently evolve in real time disruptive marketplace. Landor’s home. A full understanding of the role and e-commerce consulting, cross-border – a new global retail & shopper marketing and reshape categories. Beginning branding services include strategy and effects of reaching shoppers whilst out of e-commerce operation, warehousing agency that is an integral part of Y&R with their pioneering work in broadcast positioning, identity and design, brand the home as part of their daily lives and and logistics, retail distribution, customer worldwide, and VML in the US. This is identity; their unique approach to brand architecture, prototyping, innovation, when in shopping mode. service management, online store a business built for the way that people building today extends to industry leading naming and verbal identity, research and management, digital marketing service shop today - from Google search through brand management known as Brand analytics, environments and experiences, Excellent experience in optimising and data analysis. to the shelf (whether that’s physical or Optimisation™. As part of WPP they serve engagement and activation, and budgets and understanding how digital). We bring together a rich mix of clients across the globe and manage nine interactive and media design. Landor has additional budgets can increase sales. cultures and skills across the planet. But offices in Europe, the Middle East and 27 offices in 21 countries, working with a we share three things in common: an Latin America. broad spectrum of world-famous brands. absolute passion for retail, an obsessive Clients include Barclays, Bayer, BBC, focus on the shopper, and a desire to BMW, BP, FedEx, GE, Kraft Heinz, Pernod Create Shopper Chemistry™. Ricard, Procter & Gamble, Sony, and Taj Group.

www.kineticww.com www.kkld.net www.kuvera.cn www.labstoreshopper.com www.lambie-nairn.com www.landor.com

Stuart Taylor Alexander Diehl Peter Bomer Jon Bird Jim Prior Trevor Wade CEO UK CEO President Managing Director, Global CEO Global Marketing Director [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]

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WPP SHOPPER MARKETING AGENCIES

LUNCHBOX MINDSHARE SHOP+ MIRUM OGILVYONE POSSIBLE ROCKFISH

Lunchbox is a digital shopper Shop+ helps brand navigate how to use Mirum is a global digital agency that OgilvyOne Worldwide is The Customer POSSIBLE's philosophy is “Does It Rockfish is a full-service digital innovation engagement agency that solves problems adaptive media techniques to accelerate creates experiences that people Agency. It makes brands more valuable Work?”. They ask themselves this critical partner that drives business for some of and builds brands through custom their digital efforts in advancing online want and businesses need. Named a to customers and customers more question on every client project, and the world’s largest brands. By combining content and utility. They create engaging and offline sales. Mindshare is a global Visionary in the 2016 Gartner Magic valuable to brands by combining data they wrote the book on it. With more than shopper marketing insights with their branded experiences to transform media agency network with billings Quadrant, Mirum helps guide brands and creativity to unlock Total Customer 1,500 employees in 19 offices around digital ecosystem expertise, Rockfish consumers into shoppers and shoppers in excess of US$34.5 billion (source: in business transformation, experience Value. Employing the unique DAVE the globe, they are as adept at design, creates a new brand of digital shopper into buyers. Their solutions are centered RECMA). The network consists of more development, and commerce and methodology, OgilvyOne develops customer experience and technology marketing through Omnichannel around insights-led planning and strategy, than 7,000 employees, in 116 offices activation. The agency operates in 22 successful, digitally- and data-driven as they are at leveraging data to drive Optimization. Their deep expertise in social media, digital/mobile experiences, across 86 countries spread throughout countries, with more than 46 offices and Customer Engagement solutions for insights, optimize performance and drive search science, content strategy, retail promotions, custom content, and North America, Latin America, Europe, 2,400 professionals. Mirum is part of the clients. The process is divided into six ROI. POSSIBLE helps major brands drive insights, user experience and retail analytics. Middle East, Africa and Asia Pacific. J. Walter Thompson Company and WPP phases to gauge customer ambition, efficient sales growth and build brand technology helps deliver what clients Each office is dedicated to forging Network. identify customer personas, create equity on the most important digital need most: premium omnichannel competitive marketing advantage for a customer journey map, develop retail channels including Amazon, Tmall, placement that makes products fly off businesses and their brands based on engagement ideas, cultivate an Walmart, and others, as well as client- shelves. Rockfish is known as an expert the values of speed, teamwork and engagement strategy, and ultimately map owned and operated properties. With in all things e-commerce. In fact, in provocation. Mindshare is part of GroupM, an experience. particular focus on Amazon and Tmall, 2014, Amazon Media tapped them for which oversees the media investment their commerce capabilities include the Trusted Creative Partner program, management sector for WPP, the world’s e-commerce strategy, performance enabling us to push the boundaries of leading communications services group. marketing (search and display), content e-commerce for Amazon channels. development and optimization, customer experience design and optimization, CRM, and analytics. They are among a very short list of agencies that enjoy three partnerships with Amazon: Trusted Creative Partner, AAP (Amazon Advertising Platform) Enterprise Partner, and AWS Global Consulting Partner. www.kineticww.com www.mindshareworld.com www.mirumagency.com www.ogilvyone.com www.possible.com www.rockfishdigital.com

Kevin Weisberg Emma-Jane Steele Dan Khabie Brian Fetherstonhaugh Laurent Burman Kenny Tomlin CMO Director Global CEO Global Chairman & CEO Global VP of Business Development CEO [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]

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WPP SHOPPER MARKETING AGENCIES

SALMON SET SMOLLAN SCHOLZ & FRIENDS TRADEMARKS SCHOLZ & FRIENDS NEUMARKT SHOPPER2BUYER (S2B) (A PART OF TENTH AVENUE) Salmon is a global commerce service SET is a brand experience agency Smollan is an international retail solutions Scholz & Friends Trademarks is the Scholz & Friends NeuMarkt is the provider that defines and delivers market- founded in Portland, Oregon in 2009. company. Focused on perfecting retail specialist within the Scholz & Friends Group’s specialist for retail strategy Shopper2Buyer (S2B) is an award winning changing commerce strategies and SET's home of craft coffee and wilderness and shopper experiences, they are the universe for the holistic development and marketing. Based on its precise agency solely dedicated to planning and solutions for the world’s leading brands. seekers expanded to offices in Los pivot point where the retailer, brand and management of retail brands. Scholz understanding of the market, brand, buying media to reach shoppers in the Salmon have a reputation for using their Angeles, New York and London to work owner and shopper intercept. Smollan & Friends Trademarks offers professional product and, especially, people, it offers right environment. technical know-how to make things with the best world class brands. They deliver growth for retailers and brand product and brand consulting and strategic brand development and design happen. But they are creative too, which create experiences across all active owners across five continents through accompanies interested firms throughout combined with packaging design and S2B leverages rich shopping data to means they don’t always give clients touch points with a brand -­ physical and leading solutions in field sales and retail the process, from brand building and ATL communication for all relevant drive proprietary insights and inform the exactly what they ask for. Instead, they digital -­ in retail, non-­retail environments, execution, activation, and information shaping, development of name and logo media. Firmly committed to the power marketing plan that encompasses all call on Salmon's commerce expertise through technology, in events and across and technology. With extensive industry and range management to packaging of superior presentation, the agency relevant media points along the shopper to put forward new and challenging the globe. In close collaboration with experience, an exceptional human design, product development and POS provides companies with tactical, journey from “pre-trip” (out of store) to ideas. Salmon then help brands decide their clients, SET look to make every platform and sophisticated systems, management. In addition, the agency strategic and psychological competitive trip (in-store) and post-trip (advocacy and what to do, before they go on to deliver. active interaction with a brand one that Smollan has provided consistent can leverage the expertise of the entire advantages. Tailored campaign kits repeat), to ultimately closing the sale. With Salmon, clients grow their online is meaningful, rewarding and one that excellence in operational execution for Scholz & Friends network as needed. charge brands and products with revenue and profit. We are trusted to translates into action. While SET see three generations. functional and emotional added value. Using proprietary technology, S2B run commerce solutions that generate social amplification as a key success The agency’s systematic approach for delivers plans for national, market and more than £3 billion in sales each year. factor in the experiences and events they clients with a high share of standardised retailer-specific requests based on Our clients include Akzo Nobel, Argos, create, what redefines their relationship to promotional materials allows products to thorough consideration of in-store media Audi UK, Halfords, Kiddicare, Morrisons, experiences is seeing the results of their be presented in a high-quality way while placement and opportunities within each Premier Farnell, Sainsbury’s and work in a client’s bottom line because also enabling time and cost savings. individual location. Selfridges. they and their clients believe the true assessment of an experience is the direct S2B has won multiple awards for shopper effect it has on sales. marketing services, most recently two gold Shopper Marketing Effies 2016.

www.salmon.com www.setcreative.com www.smollan.co.za www.s-f.com www.s-f.com/kompetenzmarke/ www.tenthavenue.com neumarkt/ Neil Stewart Kurt Kujovich David Smollan Sven Jarck Rupert Day CEO Chief Operations Officer CEO Partner und COO Scholz & Friends Group Sven Jarck Global CEO, Tenth Avenue [email protected] [email protected] [email protected] Managing Director Scholz & Friends NeuMarkt Managing Director Scholz & Friends NeuMarkt [email protected] [email protected] [email protected]

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WPP SHOPPER MARKETING AGENCIES Leaders in

WUNDERMAN Wunderman is Creatively Driven. Data the hot seat Inspired. A leading global digital agency, Wunderman combines creativity and WPP is the world’s largest communications services data into work that inspires consumers group with billings of US$73 billion and revenues of to action and delivers results for brands. US$19 billion. Through its operating companies, the Behind the brands that Wunderman has won multiple creative Group provides a comprehensive range of advertising awards including a Cannes Lion Grand shape lives and build value Prix and in 2015, industry analysts named and marketing services including advertising & Wunderman a leader in marketing media investment management; data investment database operations as well as a strong management; public relations & public affairs; Interviews with chief marketing officers performer in customer engagement branding & identity; healthcare communications; from some of the world’s most strategy. Headquartered in New York, direct, digital, promotion & relationship marketing and valuable global brands reveal the the agency brings together 7,000 ingredients of brand strength, creatives, data scientists, strategists and specialist communications. The company employs value and longevity. technologists in 175 offces in 60 markets. over 200,000 people (including associates and investments) in over 3,000 offices across 113 countries. For more information, visit www.wpp.com.

WPP was named Holding Company of the Year at the 2016 Cannes Lions International Festival of Creativity for the sixth year running. WPP was also named, for the fifth consecutive year, the World's Most Effective Holding Company in the 2016 Effie Effectiveness Index, which recognizes the effectiveness of marketing communications. In 2016 WPP was recognised by Warc 100 as the World’s Top Holding www.wunderman.com Company (second year running). Mark Read Global CEO For more information, visit www.wpp.com [email protected]

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124 125 BrandZ™ Brand Valuation Methodology BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

BRANDZ™ BRAND VALUATION METHODOLOGY

Introduction The Valuation Process

The brands that appear in this differentiates the BrandZ™ methodology Meaningful Step 1: Calculating It’s similar to the calculation used by that way to consumers), and being Salient report are the most valuable in from competitors that rely only on a panel In any category, these brands appeal financial analysts to determine the market (coming to mind quickly and easily as of “experts,” or purely on financial and Financial Value value of stocks (Example: 6X earnings the answer when people are making the world. They were selected more, generate greater “love” and meet market desktop research. the individual’s expectations and needs. or 12X earnings). Information supplied category purchases). for inclusion in the BrandZ™ Top Part A by Bloomberg data helps us calculate We start with the corporation. In some 25 Most Valuable Global Retail Before reviewing the details of this Different a Brand Multiple. We take the Branded We identify the purchase volume and any cases, a corporation owns only one Brands 2016/2017 based on the methodology, consider these three These brands are unique in a positive way Earnings and multiply that number by the extra price premium delivered by these brand. All Corporate Earnings come from unique and objective BrandZ™ fundamental questions: why is brand and “set the trends,” staying ahead of the Brand Multiple to arrive at what we call brand associations. We call this unique that brand. In other cases, a corporation brand valuation methodology that important; why is brand valuation curve for the benefit of the consumer. Financial Value. role played by brand, Brand Contribution. important; and what makes BrandZ™ the owns many brands. And we need to combines extensive and on-going apportion the earnings of the corporation definitive brand valuation tool? Salient Step 2: Calculating Here’s what makes BrandZ™ so unique consumer insights with rigorous across a portfolio of brands. and important. BrandZ™ is the only They come spontaneously to mind as the Brand Contribution brand valuation methodology that financial analysis. Importance of brand brand of choice for key needs. To make sure we attribute the correct obtains this customer viewpoint by portion of Corporate Earnings to each So now we have got from the total value The BrandZ™ valuation methodology Brands embody a core promise of values conducting worldwide on-going, in- can be uniquely distinguished from its Importance of brand, we analyze financial information of the corporation to the part that is the depth quantitative consumer research, and benefits consistently delivered. from annual reports and other sources, branded value of the business. But this competitors by the way that it is based on Brands provide clarity and guidance for brand valuation online and face-to-face, building up a the viewpoints of consumer, who is the such as Kantar Retail. This analysis yields branded business value is still not quite global picture of brands on a category- choices made by companies, consumers, a metric we call the Attribution Rate. the core that we are after. To arrive at ultimate contributor to a brand’s financial Brand valuation is a metric that quantifies by-category and market-by-market investors and others stakeholders. Brands Brand Value, we need to peel away a few success. We conduct worldwide, on-going, the worth of these powerful but intangible basis. Our research now covers over provide the signposts we need to navigate We multiply Corporate Earnings by the more layers, such as the in-market and in-depth quantitative consumer research, corporate assets. It enables brand three million consumers and more than the consumer and B2B landscapes. Attribution Rate to arrive at Branded logistical factors that influence the value and build up a global picture of brands on owners, the investment community and 100,000 different brands in over 50 Earnings, the amount of Corporate of the branded business, for example: a category-by-category and market-by- others to evaluate and compare brands markets. At the heart of a brand’s value is its ability Earnings attributed to a particular brand. price, availability and distribution. market basis. and make faster and better-informed to appeal to relevant customers and If the Attribution Rate of a brand is 50 potential customers. BrandZ™ uniquely decisions. Step 3: Calculating Globally, our research covers three million percent, for example, then half the What we are after is the value of the measures this appeal and validates it Corporate Earnings are identified as intangible asset of the brand itself that consumers and more than 100,000 Brand valuation also enables marketing Brand Value against actual sales performance. Brands coming from that brand. exists in the minds of consumers. That different brands in over 50 markets. This professionals to quantity their that succeed in creating the greatest means we have to assess the ability Now we take the Financial Value and intensive, in-market consumer research achievements in driving business growth attraction power are those that are: of brand associations in consumers’ multiply it by Brand Contribution, with brands, and to celebrate these Part B minds to deliver sales by predisposing which is expressed as a percentage achievements in the boardroom. What happened in the past – or even what’s happening today – is less consumers to choose the brand or pay of Financial Value. The result is Brand important than prospects for future more for it. Value. Brand Value is the dollar amount Distinction of BrandZ™ earnings. Predicting future earnings a brand contributes to the overall value requires adding another component to We focus on the three aspects of brands of a corporation. Isolating and measuring BrandZ™ is the only brand valuation tool our BrandZ™ formula. This component that we know make people buy more and this intangible asset reveals an that peels away all of the financial and assesses future earnings prospects as pay more for brands: being Meaningful additional source of shareholder value other components of brand value and a multiple of current earnings. We call (a combination of emotional and rational that otherwise would not exist. gets to the core – how much brand alone this component the Brand Multiple. affinity), being Different (or at least feeling contributes to corporate value. This core, what we call Brand Contribution, differentiates BrandZ™.

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BRANDZ™ BRAND VALUATION METHODOLOGY

Why BrandZ™ is the definitive brand valuation methodology

All brand valuation methodologies How does the What’s the are similar – up to a point. competition determine BrandZ™ benefit? the consumer view? All methodologies use financial The BrandZ™ methodology produces important benefits for two broad research and sophisticated Interbrand derives the consumer point of view from panels of experts who audiences. mathematical formulas to calculate contribute their opinions. The Brand current and future earnings that Finance methodology employees a • Members of the financial community, can be attributed directly to a brand complicated accounting method called including analysts, shareholders, Royalty Relief Valuation. investors and C-suite, depend on rather than to the corporation. This BrandZ™ for the most reliable and exercise produces an important but accurate brand value information Why is the BrandZ™ incomplete picture. available. methodology superior? • Brand owners turn to BrandZ™ to more What’s missing? The picture of the BrandZ™ goes much further and is more deeply understand the causal links brand at this point lacks input from relevant. Once we have the important, between brand strength, sales and the people whose opinions are most but incomplete, financial picture of the profits, and to translate those insights brand, we communicate with consumers, into strategies for building brand important – the consumers. This is people who are actually paying for equity and fuelling business growth. where the BrandZ™ methodology brands every day, constantly. Our on- and the methodologies of our going, in-depth quantitative research competitors part company. includes three million consumers and more than 100,000 brands in over 50 markets worldwide.

130 BrandZ™ Top 25 Most Valuable Global Retail Brands 2016/17

BRANDZ™ GLOBAL RETAIL BRANDS TOP 25 TEAM

These individuals created the report, providing valuations, research, analysis and insight, editorial, photography and production.

Thank you to these individuals at Kantar Retail for contributing their Amandine Bavent Jo Bowman Elspeth Cheung knowledge and insight to the report: Amandine Bavent is a BrandZ™ A journalist for 20 years, Jo Bowman Elspeth Cheung is the Global Valuation Manager for Kantar worked for newspapers in Australia BrandZ™ Valuation Director for Millward Brown. She manages the before moving to Hong Kong to Kantar Millward Brown. She is brand valuation projects for BrandZ™. specialize in business writing with a responsible for valuation, analysis, Her role involves conducting financial focus on Asian branding and marketing. client management for the BrandZ™ analysis, researching brands and She has since worked in Italy and the rankings and other ad-hoc brand Sara Altukhaim Simon Johnstone Himanshu Pal calculating valuations. UK, as a writer and editorial consultant. valuation projects. Timothy Campbell Laura Kennedy Tudor Popa

Bryan Gildenberg Amy Koo Nicole Santosuosso

Reid Greenberg David Marcotte Diana Sheehan

Tiffany Hogan Brian Owens Elley Symmes Karolina Fiedler Ray Gaul Cecilie Østergren Karolina is Global Data Manager at Ray is VP of Research & Analytics and Cecilie Østergren is a professional Kantar Retail. Karolina is responsible is a founding member global retail photographer based in Denmark, who for managing retail data and insight forecasting team at Kantar Retail. His has worked closely with WPP agencies for BrandZ™ Top 25 Global Retail team produces continuous analysis since 2009. Cecilie specializes in Brands report. of more than 1,200 retailers as well as documentary, consumer insight and original research for numerous client portraits. She has travelled extensively projects. in China, Brazil and other locations to photograph images for the BrandZ™ reports. www.ostergren.dk www.kantarretail.com

David Roth Igor Tolkachev Doreen Wang David Roth is the CEO of the Store Igor Tolkachev is a part of The Doreen Wang is the Global Head of WPP for Europe, the Middle East, Store WPP EMEA and Asia team BrandZ™ at Kantar Millward Brown, Africa and Asia, and leads the BrandZ™ and manages BrandZ™ worldwide and a seasoned executive with 16 years worldwide project. Prior to joining project, business development and experience in providing outstanding WPP David was main Board Director of partnerships. Igor managed the market research and strategic consulting the international retailer, B&Q. development of BrandZ™ Top 25 for senior executives in Fortune 500 With thanks and appreciation to: Global Retail Brands report. companies in both the US and China. Anthony Marris and Jay Makwana.

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Writing Jo Bowman Photography Cecilie Østergren and David Roth

www.brandz.com

Methodology and Valuation by Insights and Data by