• January 13, 2009
  • By Jessica Tsai, Assistant Editor, CRM magazine

The Most Valuable Retail Brands of 2009

NEW YORK — As part of the 98th annual National Retail Federation (NRF) conference being held here this week, brand consultancy Interbrand Design Forum (IDF) today released its first-ever report on the nation's top retail brands. Though Lynn Gonsior, IDF's executive vice president and chief marketing officer, says the firm -- formerly known as Design Forum -- has a long history trying to help companies understand the value of building a brand, this is the first time a specific emphasis has been put on retail. The objective, she says, is to have "retailers understand that their brands [are] valuable assets and they really need to focus on creating and managing those in order to grow their business."

Lee Carpenter, IDF's chief executive officer, will be presenting the results Wednesday morning at a dedicated session of the NRF conference. The report, entitled "The Most Valuable U.S. Retail Brands 2009," scores companies based on three criteria:

  • financial forecasting: projected profits taking into account the risk associated with the projection;
  • role of the brand: the economic value of the brand based on brand earnings as a percentage of Economic Value Added; and
  • brand strength: the degree of economic risk the company faces given factors such as market leadership, stability, and geographic coverage.

The companies topping the list are hardly a surprise. The top 10 (and their respective brand values, in millions of dollars) include:

  1. Wal-Mart ..............$129,809
  2. Best Buy...................21,981
  3. The Home Depot........20,809
  4. Target.......................17,111
  5. CVS Pharmacy............12,566
  6. Dell...........................11,695
  7. Walgreens..................11,145
  8. Lowe's.......................10,710
  9. Sam's Club...................9,478
  10. Coach..........................9,052

Gonsior acknowledges that many retailers on IDF's full list of 50 could be seen as predictable, but notes at least one major shocker: the absence of retail giant Macy's, a result that simply came down to poor financials, as opposed to lacking in brand strength. Department stores, the report notes, have been undergoing extensive consolidation, and have had a longstanding problem unifying various brands under a single roof. Even so, big-name department stores -- Macy's, Neiman Marcus, Saks Fifth Avenue, and even Kohl's -- do have relatively strong brand identities, despite not making the cut. "I don't think that it means anything they're doing is necessarily bad," Gosnior says. "It really has to do with their financial forecasting [more] than anything else."

Companies that performed well in the report were ones that truly differentiated themselves, Gonsior says. Despite occupying a relatively small niche, videogame retailer Game Stop, for example, landed at number 18 -- a reflection of its status among consumers as a brand that hires a knowledgeable staff. Another "surprise" on the list was Tractor Supply Co., which ranked 46th. "It's kind of this quirky little brand that's made a connection with their consumers," Gonsior says. The company's tagline is, "You can buy everything we carry someplace else, but you can't find someplace else that sells everything we carry," making it a highly relevant supplier to its very specific target audience.

"Anyone who's on this list," Gonsior says, "has spent more time creating their brands." Within the parameters of this list, she adds, success is contingent on how retailers manage their brands -- and customers' expectations. "As we look at the down economy, as everyone has started pricing and discounting [wars] -- which are very tactical reactions to the marketplace -- consumers start to come to expect [lower prices]. The question is, what happens in the long term?" she asks.

"I don't think it's fair to say consumers don't have money," Gonsior says, echoing the message conveyed by Wal-Mart President and CEO Lee Scott, Jr., in the conference's opening keynote on Monday. "I think it's fair to say that they're going to be making different choices with the money they have…. I don't think a ‘value price' needs to mean that everything is 90 percent off the original price -- which, right now, is the direction everything's headed." Brands, she says, can price-compete only up to a point. When prices have been slashed to the bone (and beyond), consumers are ultimately going to go to the brand they trust. "Going forward," Gonsior says, "the brand with the strongest proposition and most engaging experience will be the one [that] wins."

IDF is a proponent of taking an analytical look at how retailers make decisions, Gonsior says -- how they can mitigate risk, and how they can measure their return on brand investment. It's not easy, but there may be no better time than a recession in which to start honing your value proposition. "[Brand owners] need to understand and look at what strengths their brand has," Gonsior says. While you may discover that your brand isn't quite what you thought it was, find the instances of maximum brand value among your most-valuable customers. "A big part of it is understanding how everything that I do influences the customer behavior. I'm either driving her to choose my brand or not," Gonsior says. She also describes the importance of one of IDF's core beliefs, emphasized by IDF CEO Lee Carpenter, as "the constant innovation that a retailer needs to be bringing to the retail environment, whether it's a new product or being connected to those consumers and bringing them the right choices."

Because the retail process itself is so complex, brand value has often been pushed to the side as companies opt to focus instead on operations and the supply chain. Now, however, many retailers' operations have begun to reach a level of static maturity, Gonsior says, and technology continues to evolve. The emerging goal, Gonsior says, is to help retailers "understand that everything they do, every day, influences people's perceptions of their brand, which...influences their choice about what brands they're going to stick with during the hard times, which brands they may choose to trade up or down for, the brands they feel are really connecting to them." To do so, each retailer must not only manage its brand, but first, understand the value that brand has to offer.

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

CRM Covers
for qualified subscribers
Subscribe Now Current Issue Past Issues

Related Articles

Luxury Brands Embrace Social Media

NRF Annual '10: Consumers are looking for value that goes beyond just a price cut.

Retail Experts Optimistic in 2010

NRF Annual ‘10: With the worst of the economic recession behind them, retailers must seek new growth opportunities through jobs, innovation, and international expansion.

Retail Buys Into New Social Media Tools

More retail merchants are on Facebook and Twitter than they are employing customer reviews and viral videos, according to a survey by The E-tailing Group.

The Social Media Monitoring Cheat Sheet

An Aberdeen Group study suggests it's not too late to begin tapping into social media to manage your brand reputation online. Not yet, anyway.

Selling Out

Have retailers, desperate for survival, abandoned their commitment to the customer experience?

4 Rules to Recession-Proofing Your Brand

Search Engine Strategies NYC '09: In the current economic climate, even top-shelf brands need to be wary. "Marketing must move from passion to compassion," according to a presenter.

On the Scene -- National Retail Federation ’09: Retailers Face Reality

In today's economy, mere survival can become the primary goal.

NetSuite Retails a New Offering

The popular on-demand ERP and CRM provider announces a version for the retail industry, and has its first profitable quarter.

Retail's Uncertain Horizon

NRF Annual '09: Petsmart and Urban Outfitters weigh in on what retailers must do with the horror of 2008 behind them and projections of a difficult 2009 ahead.

Wal-Mart CEO Reveals the Company of the Future

NRF Annual '09: No pressure or anything, but retailers are the key to building "a stronger America."

Long Live the Brand

When a company believes in its brand, customers will believe in it, too.

Is Your Brand's Image Stuck on Hold?

Improving what your most outspoken worker says to your customers.

Reinforce Your Brand in the Contact Center

The venue to reinforce the brand day in and day out is the contact center.

Live the Brand

Managing B2B2C relationships effectively.

Reach Out And Touch Somebody's Brand

The consumer packaged goods industry turns to CRM to attract and retain customers.