Webloyalty Retail Research - Winning Brands & How To Strengthen Yours

Section 3
The future of retail
Winning brands
The supply picture

Winning brands
Introduction
• 

With growth in retail expenditure having slowed considerably and the internet continuing to
take spend from physical stores, it is more important than ever for retail brands to identify and
execute a clear compelling offer for their bricks and mortar outlets.

THINGS TO CONSIDER

• 

With these trends in mind it is no surprise that John Lewis is the brand that people would most
like to see open in their most used shopping location. Indeed, the five most popular choices
(John Lewis, Primark, Debenhams, H&M, Waitrose) serve to illustrate how retailers operating
at quite different price points remain in demand, instead judged by common shared strengths
in their propositions - such as value credentials, popular products ranges and stores which
provide a special experience.

• 

15

These views towards issues of quality and value are playing a key role in determining where
consumers shop. Retailers with a clear focus on prices which seemingly belie the quality of the
item, allowing consumers to purchase more for their money – such as Primark, Uniqlo and H&M
– remain in demand, as do more aspirational, luxury players. It is those that sit in the middle,
such as M&S, which are struggling for relevance.

The future of retail: the supply picture
Prepared for Webloyalty by Conlumino

August 2013

Be brave. In today’s fragmented consumer society, retailers cannot be all things to all
men. To be successful, specific, discrete groups of consumers need to be targeted,
through carefully selected and edited product lines, which deliver a clear, consistent
message to the consumer – Apple provides the extreme example of this.
Create a point of difference. If you can’t identify why consumers should visit your
stores, then they probably won’t. Whether you are offering a great experience,
superior service or, like Primark, value that simply can’t be found online, you need to
pull shoppers in.

• 

Understand your customers and their requirements. A good brand should be customer
centric and built around consumer needs and should know what it stands for.

• 

Focus. Good brands have a relatively narrow focus, and this focus helps increase brand
equity and consumer understanding; don’t try to be all things to all men.

• 

Be consistent. Good brands are consistent across all aspects of the retail proposition
from product to marketing to store environment. Make sure everything pulls together
and that your branding message is not compromised or diluted. A good brand evolves
over time and in response to changing conditions, but the core essence of the brand
should not change often, if at all.

• 

There are a number of characteristics widely shared by the most successful physical formats,
such as the usage of particularly exciting or interesting store environments, or locations which
are particularly convenient. Similarly, those stores and brands which are consistently
struggling also generally have a similar failings, such as the lack of a clear offer or reason to
visit.

• 

• 

• 

Communicate actively. A solid brand has something to shout about and in today’s
pressured retail environment, getting heard is critical.

Section 3
Winning brands
The supply picture

Formats
Winners and losers
Losers

Winners

Variety stores

High speciality

Convenience

Experiential

16


Neither-nors

August 2013

Under reachers

Section 3
Winning brands
The supply picture

Formats
Winners and losers
With growth in spending sluggish and online taking share, stores need to
establish a real point of difference to succeed
• 

With growth in spending slowing down and transferring online, stores can no longer depend on passing
footfall to generate enough business to keep them profitable. Instead they need to establish clear points of
difference, which compel shoppers to visit them.

• 

The most successful formats are those which offer something unique and valuable , whether that is the
convenience of being able to purchase food within a five minute walk from your house, the specialist
experience of a visit to Hotel Chocolat, or the ‘theatre’ created by a visit to Hollister.

• 

Perhaps one of most successful brands at creating winning retail formats has been Apple. Its stores act as a
showcase for its products and are geared towards exciting and inspiring consumers, rather than directly
selling to them. Ranges are also carefully edited to a bare minimum of high quality products, creating
consistency in the eyes of the consumer.

• 

Stores which have been unable to differentiate or excite shoppers have found the going much tougher. For
example, Ethel Austin, which is neither the cheapest nor offering particularly inspiring product, has met with
repeated failures. Many variety stores, merely focusing on offering a wide range of products over
experience or value, have found their offers superseded by online and competitors with clearer propositions.

17


August 2013

Section 3
Winning brands
The supply picture

Brands
Popular brands in demand: overall
John Lewis is the retail brand consumers would most like to see
• 

When asked about which retailers they would like to see open at their most used non-food shopping
location, consumers top five choices were John Lewis (21.4%), Primark (18.3%), Debenhams (13.8%),
H&M (9.8%) and Waitrose (9.7%).

• 

This spread shows how polarised retail has become, with the most desired brands possessing little overlap
in terms of price points, but similar qualities in terms of value for money, popular products ranges and stores
which provide a special experience. Consumers will engage with a wide range of offers, as long as they offer
something above and beyond, whether that is quality and service (John Lewis, Debenhams, Waitrose) or
value and fashionability (Primark, H&M).

• 

When looking at demands by region, views are very similar. Although the specific retailers do vary
somewhat, they are generally fashion-led operators with a focus on trends, demonstrating the importance
of a strong clothing offer in driving footfall to a location.

21.4%

18

18.3%


August 2013

13.8%

9.8%

9.7%

And the next five:
House of Fraser: 8.3%
Zara: 6.4%
Apple: 6.1%
Harvey Nichols: 5.9%
Abercrombie & Fitch: 5.2%

Section 3
Winning brands
The supply picture

Brands
Popular brands in demand: by region
Anglia
John Lewis (20.4)
Primark (17.4)
Debenhams (13.8)
House of Fraser (10.8)
Waitrose (9)
Cath Kidston (7.8)
H&M (7.2)
Next (7.2)
Zara (6.6)
Harvey Nichols (6)

East Midlands
Primark (20.4)
John Lewis (18.2)
H&M (17.5)
Debenhams (13.9)
Waitrose (10.2)
Zara (8.8)
Next (7.3)
Mango (6.6)
Abercrombie & Fitch (5.8)
Harvey Nichols (5.8)

Scotland

South East

London
John Lewis (19.4)
Debenhams (18)
H&M (16.5)
Primark (15.5)
Waitrose (12.1)
Zara (11.2)
Next (10.7)
Mango (7.3)
Uniqlo (7.3)

South West

Northern Ireland
Debenhams (29.4)
John Lewis (23.5)
H&M (23.5)
Zara (23.5)
Waitrose (17.6)
Primark (17.6)
Top Shop (11.8)
Next (11.8)
White Company (11.8)

Wales

North East
Primark (21)
John Lewis (17.3)
Forever 21 (7.4)
Debenhams (7.4)
Waitrose (6.2)
H&M (6.2)
Diesel (6.2)
French Connection (6.2)
Next (6.2)

West Midlands

North West
Primark (23.7)
John Lewis (21.9)
Debenhams (12.3)
Next (10.5)
Waitrose (8.2)
H&M (7.8)
Monsoon (7.8)
Apple store (7.3)

Yorkshire

John Lewis (17.8)
Primark (15.9)
Debenhams (12.7)
Next (8.9)
Waitrose (7.6)

John Lewis (29.4)
Primark (15.4)
Debenhams (11.8)
Waitrose (11)
H&M (7.4)

John Lewis (21.2)
Primark (20)
Waitrose (18.8)
Debenhams (12.9)
Next (10.6)
H&M (8.2)

John Lewis (23.8)
Primark (17.7)
Debenhams (17.1)
H&M (9.8)
Waitrose (7.9)

John Lewis (21.6)
Primark (16.2)
H&M (10.8)
Debenhams (8.8)
Victoria’s Secret (7.4)


H&M (7)

Apple store (5.9)

Apple store (8.2)

Diesel (7.3)

Cath Kidston (7.4)

Abercrombie & Fitch (7)
H&M (7)

Monsoon (5.8)
Zara (5.8)

Apple store (7.3)

Apple store (7.4)


Burberry (5.1)
Abercrombie & Fitch
(4.4)

Monsoon (7.1)

Victoria’s Secret (6.4)

19

John Lewis (22.2)
Primark (18.3)
Debenhams (15.2)
Waitrose (10.9)
Next (7.8)

Top Shop (5.9)


Ted Baker (6.1)


August 2013

Section 3
Winning brands
The supply picture

Key attributes
Quality and value
Consumer attitudes to quality and value continue to evolve
• 

The evolving behaviour of consumers, where they are simultaneously looking to trade down without
sacrificing quality, whilst also ‘treating’ themselves to occasional premium purchases, has benefitted some
retailers much more than others.

• 

It is no surprise to see Waitrose is by far the most desired food & grocery retailer among consumers. This is
not just a reflection of its comparative under-representation across the UK, but also its superior stores and
service and a wide price architecture that ranges from the price-led quality of the ‘Essentials’ range, all the
way up to ultra premium products. These characteristics have enabled it to capitalise on many of the trends
fostered by the recession, including the greater consideration given to purchases, the trend for dining at
home rather than eating out and the greater value perceived in a strong retailer own brand.

• 

This attitude has also spread to non-food. Retailers with a clear focus on value, which allows consumers to
purchase more for their money – such as Primark, Uniqlo and H&M – remain in demand, as do more
aspirational, luxury players. It is those that sit in the middle, such as M&S, which are struggling for
relevance.

I am thinking much more about
the food I’m buying

69.3%

Buying more expensive foods to
substitute eating out

54.3%

Switching to retailer own brands
to save money

44.9%

Buying cheaper brands and
foodstuffs
Cutting back on the amount
of food I buy to save money

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August 2013

31.1%
17.1%

Section 3
Winning brands
The supply picture

Case study
John Lewis
John Lewis’ success is built upon exciting and satisfying the consumer,
through good quality, a good experience and good value
• 

Despite the stagnant retail environment, John Lewis is a retailer which has continued to grow from strength
to strength, with the employee owned business growing by 16.1% between January 2008 and January 2012,
despite the impact of the recession.

• 

The company’s success has been built upon foundations of excellent customer service and a reputation for
trustworthiness and quality. However, while positioned at the premium end of the market, John Lewis
maintains its price competitiveness through its Never Knowingly Undersold commitment of matching
competitors’ prices.

• 

This dual strategy has created a powerful appeal to shoppers, supported by clever marketing and large, well
designed stores which create a sense of affection and excitement around the brand, particularly over the
crucial Christmas period.

• 

This popularity means John Lewis stores, and its huge flagship outlets in particular, are able to drive
significantly high footfall. This has made them a much in demand anchor tenant for any number of retail
schemes and sees them frequently offered incentives ranging from long rent free periods to subsidies
towards store fit-outs.

21


August 2013

Webloyalty Retail Research - Winning Brands & How To Strengthen Yours

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