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Posts Tagged ‘Walmart’

Walmart flexes muscle by moving into the neighborhood

In brand-building, Shopper Marketing on March 8, 2012 at 10:46 pm

by Robert Liljenwall

In the supermarket business, there is no bigger, badder brand than Walmart.  By a long way, Walmart is the world’s largest retailer in terms of total revenues ($446 billion), employees (2.1 million worldwide), and $206 billion market cap in the supermarket segment.  Not satisfied with its global power, Walmart is heading to a neighborhood near you with its new, smaller Neighborhood Market format, which will be about a third of the size of its regular Super Center stores – from 33,000 to 45,000 sq. ft., which is about the size of Best Buy.

English: A Wal-Mart Neighborhood Market in Win...

Image via Wikipedia

Why is this brand event significant? The down-sizing of Walmart’s traditional do-it-all format to fit into local neighborhoods spells trouble for the well-established supermarkets brands in Southern California where the company has targeted approximately 13 stores in the near future.  These stores will compete head-to-head with Ralph’s, Vons and Albertson (California’s ‘big three’) which are unionized – and Walmart isn’t.  And the company has picked a very smart strategy of avoiding ugly public fights with opposition of unions and local communities.

 

Most of us have always had the brand perception of Walmart as the ultimate downtown-killer, forcing thousands of local merchants throughout its dominant South and Midwest markets out of business, leaving many downtowns to antique stores and a few insurance companies.  That is the fear that many cities have, especially in Southern California which already has 28 Walmart stores in Los Angeles County.  According to their new strategy, this move into smaller markets will probably work because they have learned that the Walmart brand doesn’t always mean cities are hanging out their ‘Welcome To Our Town’ signs anymore.  Every city wants more business, more employment opportunities, but not at the expense of closing their downtowns.

If you haven’t been into the newer, refurbished Walmart Super Centers – you ought to visit, shop.  These stores are extremely well designed – still have wide aisles and great in-store fixturing and signage.  The signage is particularly helpful and dramatic, especially in the meat section.  I was impressed.  One thing you can count on: Walmart will not make the same mistakes that Tesco did with Fresh & Easy, a concept that has not caught on, especially in the Trader Joe’s sector.

Walmart appears to have a handle on its brand values – good and bad – and is making adjustments to expand and enhance their revenues, even at the expense of its competitors.  — RJL

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Apple Tops BrandZ’s ‘Most Valued Brands’ Study

In Apple on May 22, 2011 at 8:28 am
Image representing iPad as depicted in CrunchBase

Image via CrunchBase

by Robert Liljenwall

Apple has now climbed to the top of the World’s Most Valuable Brands, according to the latest study published by mega-agency WWP in their 6th Annual BrandZ list earlier this month.  WPP companies, which include some of the most eminent agencies in the business, provide national, multinational and global clients with a broad range of marketing and advertising services.  Their annual BrandZ study, conducted by Millward Brown, measures the brand equity of thousands of global “consumer facing” and business-to-business brands, based on interviews of over 2 million consumers globally.

When you scan the Top 100, you’re not really surprised by the rankings.  The “usual suspects” remain strong and relevant in 2010.  For example, behind Apple comes Google, IBM, McDonald’s, Microsoft, Coca Cola, AT&T, Marlboro, China Mobile (a newcomer to the Top 10), and General Electric.

It’s important to immediately point out that brands are in good shape: While the overall recovery has been tepid, the report states, the value of the world’s best brands grew at a considerably faster rate than what we saw in 2009. Compared with an overall improvement of 13% in the world’s equity markets during 2010, the best brands grew their value 30% faster, registering a 17% increase since last year.

Inside BrandZ

The BrandZ report is a brand goldmine – full of segmented rankings and data on a variety of how the Top 100 brands are connected within their categories – while pulling out insights on trends, emerging markets, and how ‘we’ – collectively – are coping with the merging of brands and technology.

For example, many of us would never suspect that Amazon.com would become a more valuable brand than the world’s largest retailer – Walmart – but this year, WPP has put the world’s largest “online” retailer ahead. Who would have thought just a few years ago that Apple would be the world’s #1 most valued brand?

It should be noted that Interbrand’s Top 100 Global Brands competes for attention with the BrandZ ranking although its criteria and methodology is different.  One of the key unique elements of this methodology is the ‘Trust-R’ assessment, which looks at the relationship between trust and recommendation.   WPP finds that there’s a high correlation between high Trust-R and bonding, which drives sales.  The other unique element is the ‘Value-D’ assessment, which seeks to measure the gap between the consumer’s desire for a brand and the consumer’s perception of the brand’s price.

The Top 100 Brand List focuses on “actual monetary (quantifiable) contribution to the brand’s success.” For example, the BrandZ ranking notes that the Coca Cola brand value is based solely on the “value of Coca Cola” – and not all of the other company’s 3,500 brands owned/managed/distributed, such as Fanta and Minute Maid. Apple’s brands, on the other hand, are based on its broad monolithic brand structure where all of its products are considered part/parcel of the Apple brand.

Our Observations

As BrandTech News reviews the comprehensive rankings in the Top 100 Most Valued Brands, it is clear that technology brands continue to dominate – 12 out of the top 20 brands are technology companies.

Facebook, just seven years old, made it to the Top 100 (35th) in a meteoric rise and with 500+ million registered users already – of whom 50% visit daily – is quickly morphing into the alternative Internet where it has become the premier connection for brands, consumers, and everything promotional. Only 30% – 150 million – of the users are in the United States.

But what is propelling Apple has been the phenomenal success of the iPhone and the iPad. Before the launch of iPad2, there were 15 million iPads around the globe because Apple made it available on Verizon and distributed through a bank of hungry retailers. Apple expects to sell 30 million iPad2 this year – giving it a dominating 80% market share in the tablet market. And just how in the world will the other 100 tablet makers share the remaining 20%?

What does this success breed? Apps – and lots of them. Today there are 350,000 apps created just for Apple and another 250,000 for the Android. What does this do for the merging of brands and technology? Consumer obsession, frenzy – on steroids.

Another key point in the brand study was that we are seeing an upward trend in all surveyed sectors in the study: All 13 product sectors measured in the BrandZ Top 100 ranking appreciated in overall brand value – which didn’t happen in 2009, when only four of the sectors grew. To some extent, this bodes well for 2011 and beyond if we truly believe the recession was officially over in 2009. Since these WPP surveys cover events of the previous year (2010), the ongoing Middle East unrest and higher oil prices are of course not reflected in these rankings. The leading sectors in brand value growth was insurance (137% increase), fast food (22%), luxury (19%), technology (18%), and apparel (10%). These were followed by financial institutions, beer, cars, soft drinks, personal care, retail, oil & gas, and telecom providers.

The top retail brands were Amazon, which rose 37% in brand value last year alone. Walmart, Tesco, Carrefour, Target, eBay, Home Depot, ALDI, Auchan, IKEA, Lowes, Marks & Spencer, Best Buy, Costco, Lidi, Kohl’s Asda, Sam’s Club, Sainsbury’s and Safeway. The growing use of mobile devices, pre-shopping on the Internet, and discriminating shoppers who are more deliberative before the purchase decision – have made shopper marketing much more challenging. Lower prices weren’t always enough – shoppers wanted a better shopping experience, and private labels grew but not at the rate they had during tougher economic times.

Walmart tinkers and retreats
According to BrandZ, Walmart executed a course correction to reassert price leadership after alienating some of its US customer base by reaching for affluent consumers with edited merchandise displays and less cluttered, more efficiently run stores. The previous effort, Project Impact, was intended to hold on to higher-income shoppers.  Walmart decided in 2008 to reduce POP displays from 700 to 300 per store, and to eliminate 15% of the items carried in store. This perceived, less-cluttered look was to give Walmart the chance to expand and clean up their aisles – not necessarily appealing to the ‘value-happy’ customers.   Instead, at stores open for a year or more, sales fell 1.5% in its second quarter, ending July 31, 2009. Third-quarter sales dropped 0.5%, followed by a 2% retreat in the fourth quarter.  In March of 2010, Walmart reversed course to correct this trend.

On a significant note, Walmart is in the throes of negotiating to buy Massmart Holdings in South Africa, and if that occurs, many predict that Walmart will have a positive impact on improving local economies wherever they go on this continent. Is Walmart a game changer? We think so.

Meanwhile, Dollar Stores won shoppers by tinkering with range and promoting low prices (they are the fastest growing retailer segment in the US today). Target countered the high-price perception of its trendy approach to discount retailing, expanding food selection to drive shopping trips and increase basket size.  The largest global brands continued their expansion into China and other fast-growing markets such as India and Brazil. Each of these countries has brands that are now solidly placed in the Top 100 Brands.

This 52-page report (which you can download at www.wpp.com ) can be overwhelming in the amount of data it has collected. In conclusion, however, we congratulate WPP on another great report – and while it’s a ‘good-news’ report for brands, retailers, and technology providers (compared to the previous two years – we continue to be optimistic about our retailing future – where it occurs.         RJL

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