The Best Retail BrandBy Tom Dougherty
The Best Retail Brand Of All
Who has the best retail brand? Of all the retail stores and superstores in the US, who has the best brand of all? Which brand commands dominance over the competition and strikes fear into the heart of the market space?
Just to stir up the pot a bit and make a point, let’s include in our evaluation all of the discount mega stores, big box retailers, home furnishing stores and even home improvement super stores.
So, we will consider as candidates for the best retail brand: Target, Walmart, Sears, Kmart, Home Depot. We’ll also consider Lowe’s, Staples, Office Depot, Best Buy and a host of others in our hodge-podge mix.
But we will choose our retail brand winner by looking at the power of their brand to attract customers, create preference, and maintain margins. (Read a detailed study on the retail market here.)
What Makes a Retail Brand Great?
In its permissions, it needs to find a means to excite the target audience that it is positioned against the competition and causes shoppers to covet the brand. Because shopping at the brand not only offers a satisfying retail experience. (For example, great value, great selection, convenient location, and friendly employees). It needs to also fulfill their life needs.
In other words, the brand needs to reflect the experience of being fully alive and vital as the customer chooses to define it.
The Favorites Fall Behind Right Out Of The Gate
The favorites are eliminated right away and the space looks remarkably different right away.
We know they lose by simply looking at their physical plant. Fundamentally, they know their brand’s ability to attract customers depends on location and proximity. The value of their brands to steal market share has a geographic limit. And, that limit is getting smaller and shorter all the time.
Take Target, for example.
For many of us, we can drive 10 miles in any direction and arrive at our choice of Target stores.
This close proximity means that Target has determined that unless it builds a retail superstore within 10 minutes of a major population, it will lose customers to any one of many other competitors. Target believes that, if it is not close at hand, we will shop at a Walmart, Kmart, Radio Shack, or even a corner pharmacy.
The same scenario applies to Walmart. You can turn in two directions and find two of their super centers and a Sam’s Club to boot.
We used to be able to do the same for Kmart. (Not anymore.)
Little Brand Preference of One Over the Other
For the mom & pop retailer, the arrival of one of these behemoths spells real trouble.
But it does not necessarily spell trouble to a competitive super store unless the competitor builds a new store in the same immediate proximity. That is not a description of a brand. It is simply a dissertation on deep pockets.
I would not buy stock in Target or Walmart because their success clearly hinges on location and new construction — exactly what a great brand is designed to protect you against.
Office Supply Super Stores
Staples and Office Depot have become synonymous with the category moniker of office supply store. Neither recognizes the intrinsic value of the shopper and has infused that misunderstanding into their brand.
”Easy” is a cute advertising tag line but it identifies the category benefit and not the customer.
Customers assign the value of easy to both Office Depot and Staples. And neither one has paid off the benefit in any real way. Brand is about the customer, not the store.
The Retail Brand WINNER
The winner, the REAL winner is… IKEA.
IKEA has a brand so powerful that it is a destination and not just a home furnishings store. The brand promises its customers that they have good taste, appreciate great design, and don’t mind saving a few bucks to boot.
It says you are slightly counter culture and enjoy the shopping experience because you want to be entertained and engaged — and not just sold.
Shoppers make IKEA a trip
I doubt if IKEA has any locations closer than an hour and a half drive from each other. Yet, its ever-expanding customer base makes pilgrimages to journey there.
IKEA was once the place where yuppies shopped because they wanted top design but could not always afford it. It has morphed into a feast for your senses that engages even those that can afford much more.
It is an experience, and that experience enriches our own sense of ourselves. As a brand that can claim the crown, IKEA stands alone.