UK RETAIL REPORT JULY 2015

Transcription

1 UK RETAIL REPORT JULY 2015

2 CONTENTS INTRO: ABOUT MEANINGFUL BRANDS MEANINGFULNESS DRIVES GROWTH THE BATTLEGROUND TO BE A MEANINGFUL RETAILER THE TOP PERFORMERS IN RETAIL

3 IT IS A RESPONSIBILITY TO SEPARATE THE MEANINGFUL AND THE UPLIFTING FROM THE TRIVIAL. IT IS THE ONLY TOOL THAT ENABLES US TO GO FROM WHO WE ARE TODAY TO WHO WE WANT TO BE TOMORROW. SHEENA IYENGAR, PROFESSOR OF BUSINESS, COLUMBIA UNIVERSITY BUSINESS SCHOOL

4 Brands need to reach out and speak directly to their customers. Business leaders must become architects of community, consistently demonstrating the values that their customer community expects in exchange for their loyalty and purchases. VALUES, TO FORM MEANINGFUL RELATIONSHIPS WITH THEM

5 1 INTRODUCTION: ABOUT MEANINGFUL BRANDS

6 MEANINGFUL GROWTH RELIES ON OUR ABILITY TO BUILD MEANINGFUL RELATIONSHIPS WHY SHOULD I CARE? WHY SHOULD I ENGAGE? WHY SHOULD I BE LOYAL? WHY SHOULD I SHARE? WHY SHOULD I TRUST?

7 MEANINGFUL BRANDS OFFERS DATA INSIGHTS TO POWER 21ST CENTURY RELATIONSHIPS framework to connect human wellbeing with brands at a business level. It measures the quality of benefits brands business outcomes.

8 IT IS THE LARGEST GLOBAL SURVEY OF ITS KIND, NOW IN ITS SEVENTH YEAR WORLDWIDE STUDY +300,000 citizens 34 markets 12 industries +1,000 brands Ongoing + 7 years UK MAIN WAVE UK TECH & TELCO 19,426 citizens 168 brands 12 industries 1,500 citizens 11 brands

9 PRICE, PRODUCT AND SERVICE EXCELLENCE IS NO LONGER ENOUGH

10 BRANDS DISAPPEARED % % Source: Meaningful Brands UK-All respondents and All brands

11 GREAT EXPECTATIONS PEOPLE BELIEVE ONLY 3% OF BRANDS IMPROVE OUR QUALITY OF LIFE 85% AGREE AND UN-MET NEEDS 25% AGREE COMPANIES AND BRANDS SHOULD PLAY A ROLE IN IMPROVING QUALITY OF LIFE AND WELLBEING COMPANIES AND BRANDS WORK HARD AT IMPROVING QUALITY OF LIFE AND WELLBEING 36% ARE UNSURE 38% DISAGREE Source: Meaningful Brands UK-All respondents and All brands

12 ONLY 5 BRANDS IN THE UK SURVEY ARE WIDELY THE RISE AND RISE OF THE PLATFORM BRAND 50% Source: Meaningful Brands UK-All respondents and All brands. Five brands are perceived to improve quality of life by more than 50% of the total UK sample

13 2 MEANINGFULNESS DRIVES GROWTH

14 THE MOST MEANINGFUL BRANDS CONTRIBUTE TO OUR LIVES AT ALL LEVELS Personal Wellbeing Factors PURPOSE Product & Service Factors Collective Wellbeing Factors

15 BY STRENGTHENING RELATIONSHIPS ON A HOLISTIC RANGE OF FACTORS, RETAIL BRANDS CAN BE DISRUPTIVELY MEANINGFUL 26% COLLECTIVE WELLBEING BRAND PURPOSE 46% 47% PRODUCT & SERVICE 27% 26% PERSONAL COLLECTIVE WELLBEING EXCELLENT PRODUCT/SERVICE DELIVERY IS LESS THAN HALF OF Most businesses place great effort on communicating the benefits of their products & services, but less effort demonstrating how these products or priorities and the needs of society as a whole. Source: Meaningful Brands UK-All respondents and All brands

16 MEANINGFUL BRANDS MEASURES THE FULL SPECTRUM OF BRAND STRENGTHS & THE ROLE BRANDS CAN PLAY TO POSITIVELY IMPACT OUR LIVES Product & Service Going beyond the transaction Personal wellbeing Exploring how brands tangibly improve Collective wellbeing And the role they play in society

17 MEANINGFUL BRANDS HELPS TO UNLOCK THE RANGE OF MOTIVATIONS THAT DRIVE STRONGER RELATIONSHIPS 46% PRODUCT & SERVICE DELIVERY 27% PERSONAL WELLBEING 26% COLLECTIVE WELLBEING 150 GOOD QUALITY PRODUCTS & SERVICES 129 I LIKE TO BE SEEN USING BRAND 146 DELIVERS WHAT IT PROMISES 140 USEFUL PRODUCTS/SERVICES 120 HELPS ME FEEL HAPPY 118 MAKES MY LIFE EASIER 139 SAFE PRODUCTS AND SERVICES 110 HELPS ME FEEL MORE SATISFIED WITH MY LIFE 138 RESPONSIBLE PRODUCTS & SERVICES 108 GIVES ME PEACE OF MIND AND CONFIDENCE Source: Meaningful Brands UK-All respondents-retail Sector IMPORTANCE WEIGHTS INDEXED

18 BRANDS THAT ARE MEANINGFUL OFFER A A TRUE VALUE EXCHANGE 85% 75% 65% 55% 45% 35% MED SoW HIGH SoW LOYALTY AND A DISPROPORTIONATE 25% 15% 5% LOW SoW Share of wallet is % spent with a brand v total annual expenditure within its category. In the UK every 10 points a retailer climbs up the Meaningful Brands Index equates to an 8 point increase in share of wallet. This is reflective of intended expenditure. Source: Meaningful Brands UK-All respondents-retail Sector

19 AND THE MOST MEANINGFUL BRANDS OUTPERFORM THE STOCK MARKETS BY 133% MB INDEX* 11,78% Stock SXW** ,76% x 6, % yyyy 5-1-yyyy 5-1-yyyy 5-1-yyyy 5-1-yyyy 5-1-yyyy 5-1-yyyy 5-1-yyyy 5-1-yyyy MB INDEX SXW1-STX *MB INDEX: Considers the top 25 most meaningful global brands 2015 that operate in the stock market. Period: Jan 2007-March 2015 **The STOXX Global 1800 Index provides a broad yet liquid representation of the world's most developed markets with a fixed number of 1,800 components (600 European, 600 American and 600 Asia/Pacific region stocks)

20 3 HOW IS THE BATTLEGROUND AS RETAILERS ADAPT TO TO STRUCTURAL BE A MEANINGFUL CHANGES HOW RETAILER DOES MEANINGFULNESS SHAPING UP? MATTER?

21 ATTACHMENT % people who would care if the brand disappeared RETAIL CONTINUES TO BE THE MOST MEANINGFUL SECTOR IN THE UK Entertainment Retail Transport Technology Energy Media Beverages Insurance Financial Food Automotive Tourism Consumer Healthcare MEANINGFUL BRAND INDEX 2014 Source: Meaningful Brands UK-All respondents and All brands

22 ATTACHMENT % people who would care if the brand disappeared ONLINE RETAILERS ENJOY THE HIGHEST LEVELS OF ATTACHMENT, WHILST SUPERMARKETS RANK HIGHEST ON THE MEANINGFUL BRANDS INDEX E-tail Supermarkets Transport Dept Stores Technology Consumer DIY Entertainment Media Food Automotive Finance Tourism Healthcare Beverages Energy MEANINGFUL BRAND INDEX 2014 Source: Meaningful Brands UK-All respondents and All brands Attachment is measured by the question: How much would you care if xxx brand disappeared?

23 ATTACHMENT % people who would care if the brand disappeared MOST OF THE RETAIL BRANDS ON UK THE SURVEY ARE IN THE TOP HALF OF THE MEANINGFUL BRANDS INDEX MEANINGFUL BRAND INDEX 2014 Automotive Beverages Consumer Energy Entertainment Finance Food Healthcare Media Retail Technology Transport Tourism Meaningful Brands UK Index-All respondents and All brands

24 IN FACT 7 OF THE 10 MOST MEANINGFUL BRANDS IN THE UK ARE RETAILERS UK MAIN WAVE S UK TECH & TELCO Source: Meaningful Brands UK-All respondents and All brands

25 IN THE FACE OF STRUCTURAL CHANGES IN THE SECTOR, THE MOST MEANINGFUL RETAIL BRANDS ARE SHAPING A NEW BATTLEGROUND A delivery model that genuinely enhances Quality of Life is driving unprecedented Attachment or un-substitutability. The contribution to Collective Wellbeing makes its heritage relevant and builds Trust and Loyalty. The most well-rounded of the brands, where its contribution to Personal and Collective Wellbeing enhances the overall customer experience. Redefining grocery retail by disruptively contributing to Personal Wellbeing beyond price advantage.

26 THE BUSINESS CASE FOR BEING A MEANINGFUL BRAND IN RETAIL IS CLEAR REPUTATION: People Trust the most Meaningful Retail Brands nearly 3 times more than the least meaningful brands in the sector. PURCHASE INTENT People are 6x more inclined to buy from Retailers that are Meaningful and enhance their quality of life. RECOMMENDATION: People are more than twice as likely to recommend others buy from Retail brands that are meaningful to them. LOYALTY: People are 50% more likely to remain loyal to Retailers that are top performers on the Meaningful Brands Index.

27 THE MOST MEANINGFUL BRANDS HAVE THE STRONGEST RELATIONSHIPS WITH CUSTOMERS Improving meaningfulness scores by 10% results in competitive advantage on all indicators of brand strength. +2,5% FAMILIARITY +6,6% +4,9% PURCHASE OVERALL IMPRESSION +3,2% REPURCHASE +4,8% ADVOCACY +10,4% PREMIUM PRICE

28 QUALITY OF LIFE RETAIL PERFORMANCE BECAUSE OF THE BRAND HIGH MARKETPLACE Those Retail brands that stand out on the Meaningful Brand Index perform ahead of the pack in contributing to Quality of Life. WORKPLACE GOV. & ETHICS ENVIRONMENT COMMUNITY ECONOMY After product and service, the most important factors for Retailers to be Meaningful and perceived to be enhancing quality of life lies in contribution to personal wellbeing, where the category overall underperforms. Un-met needs include making life easier, happier, healthier. LOW SOCIAL PERSONAL PRODUCT COLLECTIVE INTELECTUAL PHYSICAL RETAIL IMPORTANCE ORGANISATIONAL FINANCIAL EMOTIONAL NATURAL IMPORTANT AND UNDERPERFORMING HIGH Source: Havas Media Group Meaningful Brands 2015 Quality of Life

29 TOP PERFORMING MEANINGFUL BRANDS ARE THOSE THAT KEY AREA WHERE RETAILERS HAVE AN OPPORTUNITY TO IMPROVE THEIR STANDING 60% 50% 40% 30% 20% 10% 0% TOP 10 PERFORMING BRANDS Source: Meaningful Brands UK Retail All Brands Quality of Life contribution

30 TRUST RETAIL PERFORMANCE GROUNDED IN HOW BRANDS DO BUSINESS HIGH MARKETPLACE Many retail brands score well, but trust is an outcome of enough on its own) and is driven by the relationship between Product factors and Collective Wellbeing. FINANCIAL INTELECTUAL PHYSICAL ECONOMY WORKPLACE GOV. & ETHICS ENVIRONMENT COMMUNITY ORGANISATIONAL EMOTIONAL NATURAL LOW SOCIAL IMPORTANT AND UNDERPERFORMING RETAIL IMPORTANCE HIGH PERSONAL PRODUCT COLLECTIVE Source: Havas Media Group Meaningful Brands 2015 Trust

31 PEOPLE ARE NEARLY 3 TIMES MORE LIKELY TO TRUST RETAIL BRANDS THAT ARE MEANINGFUL 60% 50% 40% 30% 20% 10% 0% Source: Meaningful Brands UK Retail All Brands Trust

32 RETAIL PERFORMANCE PURCHASE INTENTION & LOYALTY Whilst the most Meaningful Retail Brands out-perform competitors, the category as a whole can improve purchase intention and loyalty metrics by recognising the underserved need to directly benefit Personal Wellbeing factors. HIGH ECONOMY WORKPLACE GOV. & ETHICS ENVIRONMENT COMMUNITY NATURAL INTELECTUAL PHYSICAL ORGANISATIONAL EMOTIONAL FINANCIAL MARKETPLACE LOW SOCIAL IMPORTANT AND UNDERPERFORMING RETAIL IMPORTANCE HIGH PERSONAL PRODUCT COLLECTIVE Source: Havas Media Group Meaningful Brands 2015 Purchase intention and loyalty

33 PEOPLE ARE 6X MORE LIKELY TO BUY FROM RETAIL BRANDS THAT TOP THE MEANINGFUL BRANDS INDEX THAN THE BOTTOM PERFORMERS 60% 50% 40% 30% 20% 10% 0% Source: Meaningful Brands UK Retail All Brands Trust

34 RETAIL PERFORMANCE PRICE PREMIUM REQUIRES EXCEPTIONAL DELIVERY ON HIGH MARKETPLACE ECONOMY WORKPLACE GOV. & ETHICS ENVIRONMENT Willingness to pay 10% more is driven entirely by non-product factors FINANCIAL COMMUNITY ORGANISATIONAL NATURAL INTELECTUAL PHYSICAL EMOTIONAL LOW SOCIAL IMPORTANT AND UNDERPERFORMING RETAIL IMPORTANCE HIGH PERSONAL PRODUCT COLLECTIVE Source: Havas Media Group Meaningful Brands 2015 Price

35 SO WHAT DOES THIS ALL ADD UP TO? PRODUCT & SERVICE FACTORS ARE IMPORTANT BUT WELL MET Range, price, availability, service factors matter, but our needs are largely met. products and services, beyond price and savings, is critical to build momentum for growth. Retailers Trust over the long run, but dynamics.

36 4 WHY DO TOP PERFORMERS SUCCEED IN RETAIL?

37 JOHN LEWIS STEAMS AHEAD BY OFFERING CLEAR, COMPELLING BENEFITS TO SOCIETY THAT INDIVIDUAL CUSTOMERS CAN RELATE TO 48% MARKETPLACE OUTPUTS 20% PERSONAL WELLBEING 32% COLLECTIVE WELLBEING 168 IS A LEADER IN ITS CATEGORY 157 LISTENS TO CUSTOMERS 157 DELIVERS WHAT IT PROMISES 154 MAKES INTERACTIONS EASY/EFFECTIVE 154 RESPECT 126 I LIKE TO BE SEEN USING THIS BRAND 116 HELPS ME FEEL HAPPY 115 GIVES ME PEACE OF MIND/CONFIDENCE 110 MAKES MY LIFE EASIER 107 HELPS ME FEEL MORE SATISFIED WITH MY LIFE 137 TREATS EMPLOYEES FAIRLY 129 TRANSPARENT/HONEST ACTIVITIES AND COMMUNICATIONS 128 GOOD PLACE TO WORK 126 ETHICAL 122 ENSURES FAIR CONDITIONS FOR SUPPLIE REMPLOYEES Source: Meaningful Brands UK-All respondents and All brands IMPORTANCE WEIGHTS INDEXED

38 JOHN LEWIS EXCEEDS OTHER MB INDEX LEADERS ON COLLECTIVE WELLBEING ATTRIBUTES Treats own Employees Fairly Is a Good Place to Work Ensures Fair Working Conditions for suppliers / Employees Is Taking a Lead on Environmental / Social Issues Is Open and Embraces Diversity Treats own employees fairly5.5 Is taking a lead on environmental / social issues 5.0 Is open and embraces diversity 4.5 Is a good place to work Ensures fair working conditions for suppliers / employees Supports charities and good causes Supports Charities and Good Causes Uses Local Suppliers Where Possible Is Ethical Is transparent and honest on its activities and communications Is Transparent and Honest on its Activities and Communications Is ethical Is truly committed to helping solve environmental issues Is Truly Committed to Helping Solve Environmental Issues Uses local suppliers where possible Fosters my Local Community Development (Neighborhood/City/Country Fosters my local community development (neighbourhood / city / country) Is Truly Committed to Helping Solve Social Issues Is truly committed to helping solve social issues Its Business Activities Benefit the Economy of the UK Today Reduces packaging as much as possible Reduces Packaging as Much as Possible Its business activities benefit the economy of the UK today Creates Jobs Promotes Recycling Promotes recycling Creates jobs Uses Energy Efficiently Uses energy efficiently Uses water and natural resources responsibly Invests for tomorrow's economy Uses raw materials from sustainable sources Uses Raw Materials from Sustainable Sources Uses Water and Natural Resources Responsibly

39 AMAZON AND MARKS & SPENCER STAND OUT ON PERSONAL WELLBEING BENEFITS It Inspires me to Make the World a Better Place It Encourages me to Reduce, Reuse, Recycle It helps me stay healthy It inspires me to make the world a better place 5.5 It helps me be at my best (e.g. from the inside and out) It encourages me to reduce, reuse, recycle Enables me to be more environmentally friendly through its products and activities Enables me to be Environmentally Friendly Through its Products and Activities I Like to be Seen Using this brands It Gives me Peace of Mind and Confidence I like to be seen using this brand It gives me peace of mind and confidence It Helps me to Improve my self -esteem It helps to improve my self-esteem It Helps me Stay Healthy It helps me improve my physical fitness It helps me save money It helps me manage my cash-flows It helps me grow my wealth It makes my life easier It Helps me be at my Best (e.g. from the Inside and Out) It Helps me Improve my Physical Fitness It Helps me Save Money It Helps me Manage my Cash-Flows It Helps me Grow my Wealth It Helps my Life Easier It Encourages me to Adopt Better Habits It helps me feel more satisfied with my life It Helps me Feel More Satisfied with my Life It encourages me to adopt better habits It Helps me Save Time and Better Organise my Daily Tasks It Helps me Feel Happy It helps me feel happy It helps me save time and better organise my daily tasks It Encourages me to Learn New Things It helps me become closer to people and / or meet new people It Helps me Become Closer to People and/or Meet new People It helps me to connect and share experiences with others It makes me feel part of a group (e.g. with shared interests, values) It helps me to Connect and Share Experiences with Others It encourages me to learn new things It empowers me to develop my skills It inspires me with new ideas and possibilities It Inspires me with New Ideas and Possibilities It Empowers me to Develop my Skills It Makes me Feel Part of a Group (e.g. with Shared Interests, Values

40 SERVICE FACTORS BENEFIT JOHN LEWIS & M&S. EXCEPTIONAL RANGE AND AVAILABILITY BENEFITS AMAZON Offers Good Quality Products / Services Offers good quality products / services 6.0 It makes interactions with the company easy and effective Offers safe products / services 5.5 It Makes Interactions with the Company Easy and Effective Offers Safe Products / Services It Treats me with Respect It treats me with respect Offers responsible products / services Offers Responsible Products / Services 4.0 Listens to me / to Customers Listens to me / to customers 3.5 Offers a wide range of products / services Offers a Wide Range of Products 3.0 Is a Leader in its Category Offer Useful Products / Services Is a leader in its category Offers useful products / services It Delivers What it Promises / Says Creates Innovative Products / Services It delivers what it promises / says Products / Services are Clearly Labeled with Relevant Information Products / services are clearly labeled with relevant information Creates innovative products / services Products and services are priced fairly for the quality Products and Services are Priced Fairly for the Quality

41 THERE IS NO SINGLE MODEL Winners demonstrate a clear brand purpose and consistently deliver across the customer experience

42 A QUICK OVERVIEW OF MEANINGFUL BRANDS TERMINOLOGY

43 THE KEY MEASURES EXPLAINED MEANINGFUL BRAND INDEX ATTACHMENT A unique metric that measures both brand strength and how consumers perceive your brand is performing on three key areas marketplace factors, personal wellbeing and society Would you care if this brand disappeared? QUALITY OF LIFE IMPRESSION TRUST ADVOCACY PREMIUM PRICE Does this brand contribute to your quality of life? How positive is your impression of this brand? To what extent is this a brand you trust? How likely are you to recommend this brand? How likely would you be to pay 10% more for this brand?

44 THANK YOU FOR MORE INFORMATION ON THIS REPORT PLEASE CONTACT: JON KERSHAW SHARON JOHNSON