#BESTRETAILBRANDS BI L ppAR Co NTENTS To see interactive content Introduction 002 throughout the book please The magic of retail theater 008 follow the instructions below. What digital means to retail 014 Sector overviews 022 DOWNLOAD Apparel 024 Department store 030 Drugstore 036 Electronics 040 LOOK FOR THE Grocery 044 BLIPPAR LOGO 048 ON EACH PAGE Home improvement Mass merchant 052 Regional overviews 056 FILL SCREEN North America 058 WITH THE 080 DOUBLE PAGE Europe Asia-Pacific 102 Latin America 116 BLIPP... 128 THE IMAGES Methodology WILL JUMP About brand strength 132 TO LIFE Appendix 134 Best Retail Brands 2014 DOWNLOAD LOOK FOR THE BLIPPAR LOGO ON EACH PAGE FILL SCREEN By Jez Frampton, GloBal ChieF exeCutive oFFiCWITHer, THE inter Brand DOUBLE PAGE BLIPP... THE IMAGES There is no doubt that WILLthe JUMP TO LIFE retail landscape has changed Introduct dramatically in recent years. Demographics are shifting, I on behaviors are changing, and consumer spending priorities reflect an atmosphere of economic uncertainty around the globe. As a result of these trends, in-store traffic is slowing for brick and mortar retailers and cumulative sales are shrinking by the billions. Best Retail Brands 2014 But, above all, one macro trend prevails From mobile shopping and augmented In the end, it is the brand, not the If anything has become and shows no sign of letting up: digital. reality apps to virtual storefronts footprint, that will endure. And that clear, it is that wherever Today, anyone with a product and and fitting rooms, retail brands are brand’s growth or decline, especially a website can build their own sales reimagining the customer journey in retail, ultimately depends on the a retail brand operates, channel—and, as we’ve learned, new through a digital lens. They are also loyalty and satisfaction of customers. standing still is not entrants can shake things up fast. taking the art of display and presentation Yet, how this is achieved varies from an option. In today’s Meanwhile, established online giants like to new heights and creating meaningful region to region. Amazon are capturing a growing share of social experiences in physical retail rapidly evolving global the retail pie. And as pure online players environments—giving customers more With the entire world now serving as marketplace, brands increasingly look to enter into—and reasons than ever to get out the door our real-time research lab, what lessons disrupt—new categories, such as grocery, and into the store. can Western brands learn from Eastern must be more agile, the penetration of e-commerce will brands—and vice versa? What can flexible, and responsive continue to impact traditional retail. Knowing that many retailers are dominant big box retailers learn from still searching for the most effective brands that have learned to thrive in than ever before. Is this the end? Well, it depends how omnichannel strategy, the 2014 Best dense urban centers at a smaller scale? you look at it. At Interbrand, we do Retail Brands report highlights what Which consumer behaviors reflect Consistency still matters, but it’s not not say “The world has the power to successful retailers are doing to meet universal human tendencies, and enough. Living brands adapt and change brands”—we say, “Brands swiftly evolving consumer expectations— which are a variable product of culture? that means testing, experimenting, have the power to change the world.” online and off. We also share key findings (To help you answer some of these stretching, and understanding the Introduct And we stand by that proclamation. on digital trends, insights on enhancing questions, please refer to the following cultures and communities you’re In this Darwinian struggle playing out the in-store experience, snapshots of pages, which will provide you with operating within. The structural shift in the malls, shopping centers, and seven major retail sectors, and overviews an at-a-glance cross-cultural guide from physical to digital retail has not internet retail hubs of the world, a great of retail activity in four global regions: to building retail value.) been painless—and reinvention is a turning is afoot which brings with it Asia-Pacific, Europe, Latin America, must. But we know that extraordinary a historical opportunity. and North America. retail brands will not only survive the I on transition—they will become more Digital, which currently While digital has brought more extraordinary because of it. commonality to brand management and #BESTRETAILBRANDS threatens all that retail the issues, challenges, and opportunities once was, also promises brands face across these regions, our report reveals that what works in one to make it what it was region does not necessarily work in destined to become: a all. In many markets, expansion is the du jour living theater, a crucible strategy but, as The Home Depot found in its forays into China, more of human creativity, and stores do not always equal success. Jez Frampton the field where brands and Others are expanding their reach and Global Chief Executive Officer broadening their appeal through mergers Interbrand consumers meet to foster and acquisitions. But, in a finite world, prosperity and co-create expansion has its limits. In a diverse, fast-moving world, consolidation and a new reality. “colossalization” has its disadvantages. 4 Best Retail Brands 2014 Lessons for all Latin AmERICA ThE regIoNS at A gLANCE • Digital must be used strategically to bridge a compelling in-store experience with Emerging trends a multi-dimensional digital strategy • With a growing middle class and an increase (omnichannel selling, seamless access in consumer spending, most retailers are NoRTh AmERICA Lessons for all and transactions, etc). seeing strong financial results. • While e-commerce sales continue to Emerging trends grow 10 percent each year, questions • Retailers must use data to gain a true • Supermarket and apparel brands are • Amazon continues its relentless growth to about the role of brick and mortar seem understanding of shopper insights and particularly strong in the region. become “the everything store.” Analysts to be largely resolved. create a frictionless shopper journey, predict Amazon will soon carry more than putting their brands at the cornerstone • To meet rising consumer expectations, 85 percent of the products sold at leading • The store is now a brand experience that of that journey to achieve engagement, brands are improving service in both retailers—including groceries with Amazon drives revenues across all channels. responsiveness, authenticity, and relevance. traditional and digital channels. Fresh—at better prices, with more delivery methods and payment options. • Nearly all North American retail brands • Major retailers such as Renner, Casas Bahia, on our list this year offer competitive ASIA-PacifIC Lojas Americanas, and Extra, are using • A fully functional mobile presence is a given pricing, convenient purchasing and lending (credit cards and financing) to for every brand; the new omnichannel payment options, a pleasant shopping Emerging trends increase revenue as well as customer loyalty. reality has led to a rise in “connected stores experience, offerings that are meaningful • Home to approximately half the world’s for connected customers.” and relevant, and demonstrate that they population and witnessing rapid • Many brands are taking advantage of understand the complex and challenging urbanization and income growth, with the region’s increased internet and • Health clinics inside retail chain stores have relationships between analog and digital, China set to overtake the U.S. as the world’s broadband penetration. doubled over the last six years led by CVS, retail and the shopper. biggest retail market by 2016. which, in a move to strengthen its image Challenges and Risks as a healthcare retailer, will remove tobacco • Online retailing is giving traditional retailers • Economic uncertainty and a degree from its stores this year. EuRopE the opportunity to expand more rapidly; of political and social turmoil. multichannel retailing is finally starting • Increased cross-border activity (e.g., Target Emerging trends to take hold; innovation is everywhere. • Devaluation of local currencies, which can #BESTRETAILBRANDS arrived in Canada this past year; Saks Fifth • E-commerce accounts for an estimated 5 have a negative impact on brand value. Avenue will go north in 2015). percent of retail sales in European retail; • China has the world’s largest online traditional retailers such as Zara, John population and Asia's most vibrant • Bureaucratization continues to pose Challenges and Risks Lewis, Carrefour, and Fnac are catching up e-commerce sector. obstacles. • Electronics retailers are facing increased with digital pure players. pressure due to showrooming. Challenges and Risks Lessons for all • The drive-through hypermarket format has • Adapting to diverse cultural preferences and • Adapting retail formats to accommodate • The general merchandise department become one of the secret weapons for food languages as well as navigating a variety the shift in consumer preferences for store is facing challenges; Sears and retailers to protect their business and build of regulatory hurdles. e-commerce is proving to be the key JCPenney are in decline. on the strength of their brand; Walmart to success for many retailers. is replicating this format in the U.S. with • Increased competitive threat from more • North American brands with an Walmart To Go. agile online retailers. • Brands must become more responsive to overabundance of stores may not be able stay relevant and add differentiating value, to withstand declining top-line revenue Challenges and Risks Lessons for all especially when it comes to integrating the growth for long. • Brands must be willing to invest to take • Online and offline offerings need to work online and physical retail experience. advantage of the omnichannel revolution in harmony. • Online retail is rapidly taking share in and work harder to ensure that convergence • The winning retail brands are those many retail categories.