Most valuable U.S. Retail Brands – Importance of Brand for Driving Sales in a Downturn Economy.

Interbrand Design Forum released the Most Valuable U.S. Retail Brands, the first-ever ranking of the top 50 American retail brands. Walmart claimed top honors as the most valuable retail brand in 2008, followed by popular retailers Best Buy (No. 2), The Home Depot (No. 3), Target (No.4) and CVS (No. 5).

Following the deflated earnings of the 2008 holiday shopping season, it is apparent that shoppers have changed their behavior in response to a downturn economy. With brand accounting for 25 percent of the decision to shop at a particular store, the top retailers understand the emphasis that is now needed on brand. As a result, the trend toward large, pervasive and impersonal retail spaces is reversing in favor of stores with more emotion, creativity and community.

“In a recession, brand is more important than ever, as retailers with a well-positioned brand have the opportunity to thrive and seize a bigger piece of the pie in terms of customers,” said Lee Carpenter, chief executive officer of Interbrand Design Forum. “Retailers are now realizing that brand transcends its traditional marketing role and should be adopted as an idea that runs through every part of the company. During a period of increased competition and lowered sales, brands that have successful propositions, such as Walmart, and offer an engaging shopping experience, like Best Buy, will come out on top.”

Walmart was recognized as the top American retail brand in 2008 after being plagued by years of negative perceptions about the company. As America’s largest retailer, Walmart evolved into a brand and differentiated itself from other discount retailers by understanding its consumer base and carving out a niche for value-driven shoppers. With a brand value of $129 billion, Walmart is the most valuable retail brand in the world.

Several non-traditional retailers, such as those with an online-only presence, were included in the ranking, including Dell Company (No. 6), eBay (No. 11), Amazon.com (No. 14) and Netflix (No. 32). Out of the top 50 companies included in the Most Valuable U.S. Retail Brands, only six do not have online channels. Amazon, which attracts over 50 million visitors a month, offers customized service for its simple transactions from start-to-finish, specialized for every person who visits the site.

Specialization enables retailers to make strong emotional connections with consumers by offering a more meaningful shopping experience, which in-turn, helps to create future earnings by building relationships with customers. Brands that excel at specialization include AutoZone (No. 25), Dick’s Sporting Goods (No. 38), American Girl (No. 41) and Barnes and Noble (No. 44).

“Even in a downturn economy, consumers will always need a reason to purchase goods,” said Carpenter. “Offering a shopping experience that delivers on the brand proposition can be the ultimate factor that drives shoppers into your store and can serve as the catalyst of a potential long-term relationship with a loyal consumer.”

In terms of department stores, financial woes kept iconic brands such as Macy’s, Saks Fifth Avenue and Sears off the list, while Nordstrom (No. 13), Kohl’s (No. 22) and JCPenny (No. 24) all ranked high. JCPenny’s success can be attributed to five billion-dollar private brands catering to the middle-American shopper, who seek both variety and value.

Grocery stores, including Kroger, Safeway and Supervalu, were all but absent from the ranking of the top retailers, as the grocery sector scored low in terms of customer loyalty and brand strength. Supermarkets depend heavily on promotions and pushing product out of the stores, rather than focusing on the experience of the customer or product differentiation. However, Whole Foods Market made it into the top 50 list (No. 47), and is perceived to provide the highest quality food offering in the industry. By placing a cap on the number of stores in operation to less than 300 and supporting entrepreneurial manufacturers, Whole Foods delivers on its promise of an unmatched variety of organic and natural foods.

“Successful brands bend and curve with the changing economy and continue to engage and deliver a unique experience to the consumer. The retailers included in our ranking are constantly evolving and optimizing their brand strategies based on the current environment, and this renewed focus on brand is what will carry these companies through the volatile times ahead,” added Carpenter.

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