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Tesco brand strong, but UK retailers behind global rivals

The value growth of the UK’s top retail brands is falling behind the leading global retail brands, according to the 2019 BrandZ Top 75 Most Valuable UK Brands ranking announced today by WPP and Kantar.

While the UK retailers in the Top 75 grew their combined value by 4% over the last year, their performance is significantly lower than that of the retail brands in the BrandZ Global Top 100, which grew by 25%.

It also represents a slowdown compared with the UK retailers’ 2018 value growth of 11%.  

The retail sector dominates the UK Top 75 again this year, with 14 retail brands making the ranking: Tesco, Next, Asda, Sainsbury’s, Marks & Spencer, Morrisons, Ocado, Boots, Co-op, Very, Waitrose, John Lewis, WHSmith and littlewoods.com. Online-only players Ocado and Very grew the most – by 35% and 21% respectively.

Without them, the combined value of the UK’s top retail brands would have increased by just 2%.

Of the retailers in the Global Top 100, Amazon was the biggest hitter, increasing its value 52% to US$315.5 billion. 

Highlights: The 2019 BrandZ Top 75 Most Valuable UK Brands shows:

  • Tesco is the most valuable UK retail brand (no.7) worth $9.2 billion, followed by Next (no.22), Asda (no.23), Sainsbury’s (no.24) and Marks & Spencer (no.27).
  • Ocado (no.34) grew its value fourth fastest of all the brands in the UK Top 75, rising 35% to $2.0bn.
  • The total value of the brands in the UK Top 75 (in all sectors) fell by 3% over the last year.
  • Outside retail, the other brands in 2019’s top 5 fastest risers are Deliveroo, (+54%; no.50; $1.4bn), Costa Coffee (+48%; no.47; $1.5bn), BrewDog (+40%; no.57; $1.2bn) and Innocent (+35%; no.51; $1.3bn).
  • Among three newcomers to the Top 75 this year, WHSmith enters at no.68. Aston Martin (no.69) and Halifax (no.70) are the other two.

The BrandZ Top 10 most valuable UK retail brands 2019

Rank 2019BrandBrand value 2019 (US$bn)Brand value changeRank 2018
7Tesco$9.2+1%7
22Next$2.8+4%25
23Asda$2.8+8%28
24Sainsbury’s$2.8+4%26
27Marks & Spencer$2.5-18%22
33Morrisons$2.1+6%36
34Ocado$2.0+35%49
40Boots$1.7-7%39
45Co-Op$1.5+2%48
52Very$1.3+21%58

Note: BrandZ is the only brand valuation ranking that combines validated financial data with consumers’ opinions to calculate the value a brand contributes to the business that owns it.

UK retailers are facing a raft of pressures, many driven by the changing needs of consumers who have high expectations when it comes to convenience, range, speed of delivery and competitive pricing. As a consequence, a record number (net 2,481) of well-known names disappeared from the UK’s top 500 high streets in 2018, including Maplin, Toys R Us and Poundworld.

Other retailers, in particular fashion brands, are moving from high street sites to new shopping areas such as train stations, airports and malls that attract high footfall and charge lower rents and rates.  

Some of the UK’s retail brands live off their fame, but are no longer distinctive or relevant to today’s consumer, according to Henry Heywood, Head of Brand at Kantar:

“The mantra here is that you cannot live off fame alone. Salience has kept brands buoyant, but without meaningful difference this is not sustainable; salience will drain away, along with value. To avoid losing more ground, retailers must reinvigorate themselves – invest in long-term brand building, by communicating to a less engaged, less loyal and more demanding consumer about why they are still relevant.”

BrandZ’s analysis also reveals the success of Irish brand Primark – not in the UK ranking –which has flourished on the high street, driven by its ability to create meaningful difference.  Built around value-for-money fashion, the brand has developed a strong emotional connection with young shoppers online via celebrity influencers and other paid partnerships.

This year’s BrandZ UK Top 75 highlights that online players Ocado and Very are the main drivers of growth. Recognised by shoppers as innovative, dynamic and responsive, they have built strong emotional connections with consumers through their customer service, range and pricing – and, ultimately, are good at telling their story. 

Heywood added: “While the death of the physical store is exaggerated, traditional retailers are having to reinvent themselves for a new generation of shoppers, connecting digital platforms and online experiences with the physical offline experience. But now with the advent of online to offline, such as the launch of the Amazon Clicks & Mortar initiative in Manchester, there will be additional pressure on an already beleaguered high street.”

Image by StockSnap from Pixabay

GUEST BLOG: Cross-brand collaborations – ‘X’ marks the spot

By Red Hot Penny

Cross-brand collaborations seem to be everywhere right now. But why the sudden explosion in collaborations? And why do brands do it?

We’ve delved into some of the likely reasons behind cross-brand collaborations and collected some handy examples of those collaborations in action.

Open up new markets

One reason for collaboration is to open new, complementary markets and get your brand in front of potential customers.

We’re seeing this a lot in the fashion world. High-fashion brands are constantly collaborating with high-street brands. Think Moschino X H&M, Fenty X Puma, or Junya Watanabe X The North Face.  It helps to tap into different customer groups and introduce higher end brands to the high-street shopper through capsule collections.

IKEA are current kings of the new market collaborations. They regularly collaborate with other brands and individuals all of which open up the IKEA brand to new customers and markets.

Show you “get” your customer

Sometimes a collaboration isn’t necessarily about accessing new customers but showing your existing customers that you get them and understand what they want. It increases brand value and makes your fans even more dedicated.

LEGO are particularly good at this with Star Wars, Batman, Simpsons and Harry Potter brand collaborations all reinforcing their respective brands even further within their target markets.

Sports brands are also getting in on the action. Nike X Cristiano Ronaldo, Puma X Rihanna, and Adidas x Pharrell Williams are all examples of brands spotting trends amongst existing customer bases and using collaborations to reinforce their brand with their customers.

Get noticed

The marketplace in all sectors is so crowded now that brands have to do something out of the ordinary to be heard and raise awareness. And a collaboration is one way to do just that.

Some of the most hyped collaborations of recent times include Supreme X Louis Vuitton (what’s a blog about collaborations without at least one mention of Supreme?), Nike X Apple, and Uber X Spotify.

Smaller brands can use collaborations to get ahead and piggy-back on the reputation of their better-known collaborator too. Palace Skateboards, well known in their niche but not globally renowned, have had great success with their Adidas collaborations.

Through the collaboration the smaller brands get access to a much bigger audience and the larger brand gets positioned as a champion of the next wave. Win – Win.

Promote a cause

Brands can also team up for selfless reasons. The CALM X F&F #MarkYourMan campaign, WWF X Whiskas and GLAAD X Asos collaborations all help shine a light on different charity causes such as preventing suicide, protecting tigers and promoting LGBTQ rights.

A collaboration can be a fantastic way for a charity to expand its reach and awareness with the relevant people, while also generating more funding. For the supporting brand, it can create good feeling as they demonstrate their commitment to charitable causes.

Reinvigorate a brand

Sometimes a brand collaboration can be a great way to shake the dust off an established brand and create a bit of positive buzz to show that it’s still relevant.

Heinz soup cans had been largely untouched for 108 years until a design collaboration with Cath Kidston was launched in April this year.

Crayola, beloved crayon brand and supplier of one of the best smells from your childhood have been getting in on the action, launching a make-up range with Clinique that sent beauty bloggers crazy. Their second make-up range released with Asos is primed and ready for festival season.

Both ranges will have reintroduced the brand to many former Crayola fans, and tapped into nostalgia to drive the brand forward.

Tap into the latest trends

Collaborations aren’t necessarily long-term deals and that’s never more evident than when brands team up with pop culture flavours-of-the-month for short term collaborations.

The marketers at Topshop might love Stranger Things, the guys at Drop Dead probably binge watch Game of Thrones and the team at Covergirl are obviously massive Star Wars fans, but the mass appeal of the shows and the buzz around new releases is more likely the reason for the collaboration than any shared ideals or agendas.

Collaborations between brands don’t look like they’re going to stop any time soon, and with the ever-growing pressure on the high-street it may soon be a case of “collaborate or die” for those retailers who haven’t done so yet.

So, whether it’s to open up new markets, reinvigorate a brand or shine a light on a cause close to a brand’s heart which brands do you think will be the next to collaborate?

An unedited and extended version of this blog can be found at https://www.redhotpenny.com/insight/cross-brand-collaborations/

Bazaarvoice partners with The Insiders for ‘impactful’ product reviews…

Bazaarvoice has announced its partnership with the global shopper advocacy network, The Insiders to create ‘impactful’ product reviews for retailers, brands and consumers as part of its Content Acquisition Partner Program (CAPP).

Working together as partners, product reviews written by The Insiders as part of client campaigns are aligned into the Bazaarvoice Network that syndicates the reviews to thousands of retail and brand websites around the world; allowing marketers to generate and display product reviews faster on retail websites immediately after a product launches.

With access to more than 10 million consumer advocates (people dedicated to protecting and promoting consumer welfare and rights), Insiders SmartReviews® claims to tap into an engaged community consisting of ‘word of mouth’ ambassadors to generate authentic online reviews.

Bjorn Cassier, CEO and founder of The Insiders said: “With 95 per cent of shoppers consulting peer reviews during their purchasing journey, according to Forrester Research, shopper to shopper storytelling and recommendations are currency to enable better product decisions faster and influence their purchase.

“We’re excited to partner with Bazaarvoice, leveraging the authentic feedback and stories of our global shopper word of mouth network even further.”

Reaching more than 25 countries, members of the CAPP are able to regulate content from shoppers’ experience and recommendations during their purchase journey on a regional and global basis.

Aaron Bollinger, vice president of Partnerships at Bazaarvoice added: “Quality consumer-generated content fuels the Bazaarvoice Network. We are excited to collaborate with The Insiders to offer clients an expanded toolkit for collecting more content to power their CGC programs, which has already proven to drive great results for our clients.”