There wasn’t an Evolutionary War for a reason. In the pre-dawn of U.S. history, the new settlers wanted more than to just evolve the British rule, it had to be overthrown. A new start, a clean slate. Imagine the pressure that those founding fathers must have felt when deciding that enough was enough, let’s try something new. Today, many brands find themselves in the same place. The status quo isn’t working. It’s time to differentiate. But I wonder if the ideas of “revolution” and “evolution” aren’t being confused.

It’s easy to tell yourself that your brand needs something revolutionary, something that breaks paradigms and reveals new ways of talking to your customers. But all too often, companies follow the evolutionary path—a new coat of paint, a few new fixtures and a new sign on the storefront. A quick win here, a quick win there.

Starting your own revolution isn’t easy and that first step can be scary. One of the most important things to do once you’ve determined to change is deciding how far you can and are willing to go. Look at every facet of your brand, from the most obvious things to the very subtle.  Deep unbiased introspection will uncover opportunity for a new attitude, a new set of guiding principles, a new market space.

In retail, change is life. So overthrow the old paradigms.  Delve into your brand and find that crazy idea, the one that’s worth fighting for.

To be most effective, a sustainability initiative must be approached holistically. Sustainability and brand thinking are alike in that they radiate outward from the heart of the business. Just as brand is part of everyone’s job, sustainability can be too. Both brand and sustainability strategies are ideally intertwined, well thought out and well executed from vision to prototype. Typically, companies with this kind of forethought get high marks for differentiation and credibility, such as Whole Foods Market and Starbucks. There’s a direct benefit to the value of the brand.

Whether a company has a long history of social responsibility or a newly awakened desire to conserve resources, there are trusted ways to make decisions based on return on investment. If a large fleet of stores is in need of image refreshing, that’s an opportunity to look at controlling energy costs and sustainable building strategies. Even stores primarily in tenant spaces can look at a healthier environment and LEED certification.

In terms of the cost savings to be realized from energy and operational upgrades, if a company needs to go outside for sustainable design expertise, it’s best to align with a team that’s experienced in retail architecture and engineering. A considered, holistic approach allows a company to have their sustainability expert step in at any point in the store development process to find the most relevant and immediate opportunities.

Retailers looking for great examples of wirelessly connecting with their shoppers have three great brands to look to: American Eagle Outfitters, Netflix and Amazon.com. The continue to differentiate their shopping experiences with intimacy, responsiveness and relevance.

Even with millions of items for sale, Amazon connects intimately with customers, from its one-click ordering to its ability to become more relevant with each visit. The result is a “barrier to exit” that other brands envy.

American Eagle excels at aggressively integrating multi-channel marketing tactics into both its traditional and digital campaigns. It connects at all the right touchpoints, which goes a long way towards achieving brand loyalty. This year, AE included a mobile filed in its loyalty program, and used mobile as a point of entry into sweepstakes as well as an alerts program. Calls to action were posted on social networking sites, such as Facebook and Twitter in the form of banner ads, status updates and tweets.

Netflix invites feedback and gives customers what they want. The movie provider uses crowdsourcing to find ways to improve its service and offerings, and recently generated a lot of buzz with a million-dollar prize awarded to the customer who could improve its movie recommendations by ten percent—a classic way to allow customers to interact positively and co-create with the brand.

In the future, both online and brick-and-mortar retailers will need to focus on customer mobility to connect intimately and immediately with customers. The giving is no longer one-way. These brands clearly demonstrate the digital connections also provide valuable information that allows services and products to be personalized with the crucial insights that help companies stay relevant.

While we can all agree that price matters more to the consumer than ever, it’s not the be-all, end-all of shopping. At some point, the hunt for best price has to stop. And why it stops is up to the retail brand.

Shoppers attach to brand, not price. Brand—the distinct way you do business—needs to provide a reason to activate the purchase, a reason beyond price. It can be trust, convenience, fun, effortlessness, time savings, fashion or many other factors a brand makes itself known for.

Many retailers have learned the hard way that price-based competition is simply not sustainable. To survive, they need a balanced value proposition unique to the brand that makes the shopper confident she has found the right choice among similar offerings of the product or solution she seeks.

This year, retailers have made headway in the battle against “sameness” by negotiating exclusive famous name brands, making sure their private labels stand for something besides “cheaper” and by infusing the shopping experience with emotional appeal. One brand that renewed its value-plus-reason image is Old Navy. After veering off into fast fashion inspired by the designer runway, it has returned to bright basic family apparel surrounded and supported by its kitschy sense of humor. Shoppers are returning to the store and business is on the upswing.

Differentiation is crucial to brand strength. A lack of it kills value of both the brand to its owners and its worth in the shopper’s perception. Without a differentiated proposition, a company has less power to defend margins and create demand.

Copying the latest “hot” retailer is an easy way to stay current, to level the playing field. But imitation doesn’t keep you at the top of the shopper’s mind. When a retail brand displays a unique, creative energy—the J. Crew Liquor Store comes to mind—I get a dose of inspiration like an electric charge. I’m not just browsing now, I’m fully engaged because a particular creative spirit permeates every touchpoint for an unmistakable experience. That’s when the brand stops chasing and starts engaging. Maybe it’s my emotions, my ego, or my sense of fun which is always looking to come out and play.

A great retail concept represents something more than just fulfilling a need. Yeah, I need a shirt but why did I run all the way down to Tribeca to have this particular shopping experience? It’s the kind of thing that inspires affinity—experiential attachment. I think that’s great.

I know maintaining a brand’s creative mindset is challenging. That’s why you have to see the fun side of creativity, the side that plays with your senses and the environment around you. You can twist and stretch ideas to bend old paradigms into something new. No part of the retail experience is too small to consider, since those that appear insignificant are often found to have surprising impact.

All too often, however, I find that retail brands let their most engaging idea run its course. They rest on their triumph or allow others to copy them. Mistake. Ongoing creativity makes you different and keeps you that way.

Businesses in search of competitive advantage are much more comfortable asking design consultants for “innovation” when they should be asking for “creativity,” the birthplace of new ideas. But creativity, with its faint air of mystery and associations with renegade, non-corporate types, doesn’t seem at home in the world of commerce, where goals are achieved through “procedure” and “knowledge.”

Interbrand Design Forum has seen an increase in the number of retail brands deciding to bring creativity to the table, but a negative tendency to have their procurement officers treat it like a commodity—buying it by the pound. That’s a mistake. Few agencies know how to bring about the environment, the chemistry and the provocation that net the great, disruptive ideas that are actionable in terms of the brand experience. The kind that can move your business to a new place.

If you’re searching for creative consultants, look for those who know how to imaginatively frame questions, consider multiple perspectives and celebrate instinct and intuition. Find a team with a simple framework that allows for the unexpected, that can help your company get outside your normal tendencies so you can conceive of something really new that creates retail demand. Refuse to let anyone solve the problem at hand in a habitual way. Not all creative is equal. Truly creative people are contrary in a purposeful way.

Have you ever seen a client celebrate as if they’d just won Wimbledon? I got to experience that last night at the Association for Retail Environments awards dinner. The Burger King Whopper Bar took first place in the fast food restaurant category. We were thrilled to see a client who embraces innovation be rewarded for their ongoing commitment to improving the brand experience and delighted to celebrate the moment with an enthusiastic client.

For Release March 11, 2010

Interbrand Design Forum Contact:
Beth Ling, Director of PR
Direct: 937-312-8803
Mobile: 937-823-3480

Interbrand Design Forum Ranks the Most Valuable U.S. Retail Brands; Walmart Remains the Top Retailer, Target Leaps to Second Report shows that the strong brands got stronger, while the bottom 25 fell.

DAYTON, OHIO – Retail brand consultants Interbrand Design Forum, today released the Most Valuable U.S. Retail Brands report, the second ranking of the top 50 retail brands. Walmart claimed top honors as the most valuable retail brand, followed by Target (No. 2), Best Buy (No. 3), The Home Depot (No. 4) and Walgreens (No. 5).

The most striking shift in this year’s ranking is that despite the weakened economy, the Top 25 companies grew their brands’ value over last year. They not only survived, they prospered. However, the next 25 as a group lost value.

Broadly speaking, falling companies slashed prices, lost focus and chose not to renew their brand through investment or innovation. Rising companies had their brand proposition fully in place to take advantage of the downturn, invested in brand and convinced the customer of their relevance and worth.

This is Walmart’s second year as the top U.S. retail brand, however the big news is how much the brand value has increased. The economic downturn made it relevant to an even greater number of shoppers and its store remodel program “Project Impact”—less inventory, wider aisles, lack of in-aisle displays—paid off in high same-store sales. Walmart grew their brand value by 19%, or $25 billion, to $154 billion. It continues to be the most valuable retail brand in the world.

Target is another company that built brand value this year. With a 49% increase, Target leapfrogged Best Buy and The Home Depot to take the #2 spot on the list. As a brand-led company, Target focused on improving its operations to boost performance in the face of reduced growth without compromising brand. The company streamlined its assets, according to what matters most to the Target customer.
Five brands are new to the list in 2010:
Dollar General (No.18) – new to the list after going public in 2009
Buckle (No. 45)
Family Dollar (No.46)
Advance Auto Parts (No. 47)
Macy’s (No. 50)

A highlight among those new to the list is Macy’s, whose debut is attributable to its three-year focus on becoming a “master brand.” By holding steady to its strategic direction, it has succeeded in capitalizing on brand to improve its financials, and the results are showing up in organic sales growth in its 850 stores. Macy’s now has the clarity and power of a national brand.

The five brands that fell out of the top 50 are:
Hollister (last year No. 40)
Barnes & Noble (last year No. 44)
Men’s Wearhouse (last year No. 45)
Gymboree (last year No. 48)
Anthropologie (last year No. 50)

In turbulent times, brands that lack a solid brand strategy are likely to lose value along with the ability to drive demand. While many companies engage in tactical brand efforts, there are relatively few that filter their business strategy through their brand strategy to guide decisions. The tough market demands differentiation, innovation and value-add like never before, so brands need to be clear and compelling to stand out from price-based competition.

Interbrand Design Forum’s Most Valuable U.S. Retail Brands report will be available online at www.interbranddesignforum.com on March 11, 2010. The results will be unveiled at the GlobalShop Conference in Las Vegas on that same day.

-End-

Note to the editor:
Most Valuable U.S. Retail Brands 2010
1. Walmart
2. Target
3. Best Buy
4. The Home Depot
5. Walgreens
6. CVS
7. Sam’s Club
8. Dell
9. Coach
10. Amazon.com
11. eBay
12. Lowe’s
13. Nordstrom
14. Staples
15. Costco Wholesale
16. Avon
17. GameStop
18. Dollar General
19. Kohl’s
20. AutoZone
21. Tiffany & Co.
22. Victoria’s Secret
23. Gap
24. Polo Ralph Lauren
25. Bed Bath & Beyond
26. Netflix
27. Old Navy
28. Sherwin-Williams
29. Banana Republic
30. RadioShack
31. PetSmart
32. J. Crew
33. Marshalls
34. T.J. Maxx
35. Aéropostale
36. American Eagle Outfitters
37. Urban Outfitters
38. Whole Foods Market
39. JCPenney
40. Rent-A-Center
41. Dick’s Sporting Goods
42. Bath & Body Works
43. Big Lots
44. Tractor Supply Co.
45. Buckle
46. Family Dollar
47. Advance Auto Parts
48. American Girl
49. Abercrombie & Fitch
50. Macy’s

Most Valuable U.S. Retail Brands 2010 Methodology and Results
To qualify for inclusion in the Interbrand Design Forum Most Valuable U.S. Retail Brands, each company must be a market-facing brand, operate significant distribution channels in the United States, with publicly available financial data and positive Economic Value Added. Interbrand examines brands through the lens of financial strength, importance in driving consumer selection and the likelihood of ongoing branded revenue. This methodology evaluates brand value in the same way any other corporate asset is valued—on the basis of how much it is likely to earn for the company in the future.

About Interbrand Design Forum
Since 1978, we have been creating retail brand experiences for companies around the globe. Interbrand Design Forum’s talent for game-changing innovation led us to create a business model that integrates analytics-based strategy—the first and only company with such a comprehensive offering.

This unique ability to address retail’s growing complexity led many of the world’s top companies to our doorstep and propelled Interbrand Design Forum to the forefront of the industry.

We have been part of Interbrand since 2002, and two years ago we added Interbrand to our Design Forum name to reflect our place in the world’s largest branding consultancy.

Today, we have 1,200 associates in almost 40 offices around the globe and a practice that brings together a diverse team of insightful right- and left-brain thinkers. This deep talent pool makes our business both rigorously analytic and highly creative.

As a result, we have changed the dialogue, defined the meaning of brand management, and continue to lead the debate around brand as a valuable business asset. By making brand central to our clients’ strategic business goals, we help them create, manage and grow the value of their brands.

It looks like consumer frugality is settling in for a long stay. For most shoppers, the new thriftiness is a cautious choice in the face of an insecure future. There is money to spend, but there is a new social consciousness around the idea of value. Value has less to do with price and more to do with intangible benefits, such as time-saving, problem-solving, convenience, consistency, creativity and confidence building.

In such an atmosphere, retailers would do well to redefine and reintroduce themselves. The key is a new and deeper understanding of brand and customer.

When it comes to retail brands, it is always difficult for businesses to get away from logo-centric thinking and question the company components that may or may not resonate with consumers. But devoting time to introspection now, while the economy is in limbo, could help find the crucial differentiation, credibility and greater relevance needed to win. Once found, these elements can be introduced into the brand experience, usually without the need for big capital-intensive physical transformations.

For example, although the extreme value category is seeing gains now, once the recovery takes hold, how will stores retain the trial customers driven through their doors by the recession? Dollar General knew that to go forward it needed to stand for something other than a cluttered, random, “cheapest” experience. By subjecting itself to a peeling back process, Dollar General revealed its original roots as an “honest and casual” brand. And after listening to its customers, the retailer discovered it needed to add a new dimension: fresh.

The subsequently refreshed brand is introducing itself through its almost 8,500 stores, supported by a conservative budget. The store plan is more shoppable and the brand benefits are clear; the regular customers are reassured that their favorite store didn’t change too radically and the new customers are encouraged by the experience. Even for the extreme value category, it’s a far better strategy to add value than pound the price drum.

It has always been difficult to create appropriate goods and services without shopper insight. Lack of it often leads to broadened assortments beyond a retail brand’s legitimacy. While stuck in the current economic limbo, companies can use the time to learn more about the new customer. It’s a given that today’s consumers escape traditional demographic conventions. Attitudes and values are a better predictor of shopper behavior than age and income. Decoding them requires a more sophisticated, retail analytics-driven approach to shopper research. These tools allow retailers to map the decision processes of each of their segments and identify both the connections and the gaps. Those with the highest to engage the shopper can be redesigned to be more effective.

This is where the idea of brand “touchpoints” comes into play. In the past, customers were “touched” by companies through the store, an associate or the telephone. It was easy to imbue those moments with a cohesive and consistent brand style. In a Web 2.0 world, the touchpoints seem almost infinite, from web pages to tweets. In the analog world they include new store concepts such as those planned, oddly enough, by Microsoft, which feels that people need something tangible in a digital world. And store formats designed to enter denser locations, such as Safeway’s urban lifestyle grocery in Washington D.C. From eBay to Hermes, pop up stores continue to be favored as way to surprise and interrupt consumer expectations. All offer the chance to put a new twist on brand so that people approach it in a different context, and see how it fits in their new framework.

Armed with endless touchpoint possibilities, how does a company choose? Three words retailers will be hearing more in the future are “prioritize,” “optimize” and “orchestrate.” Prioritize in regards to touchpoints, optimize in terms of ROI and orchestrate the elements of the brand experience—from flagships to digital sales receipts.

Hallmark, the specialty card and gift retailer, offers its products through its own stores as well as as supermarkets, drugstores and mass merchants. Its tradition of innovation has taken it into many digital territories, from television to in-store kiosks, online offerings and greeting card software. With so many touchpoints, each with its own potential for return, the challenge is to determine which of the many actions the company could take to please its customers, according to what priority.

Again, breaking down the big picture requires a repeatable analytics driven approach to brand impression management in order to guide thinking about the design of every touchpoint, so that all are aligned and orchestrated according to a brand that’s been refreshed and redefined according to shopper needs.

The new frugality is not solely about price. Quality, price and reason will share top consideration in the customer’s mind. For them, transactions will revolve more and more around ideas, information and relationships. As retail brands adapt to this new customer culture, they will redefine their ideas, values and positioning to stay in the game. In an age of frugality, thrift—the wise use of resources—is a cherished cultural value. It can also become a winning retail strategy.

Design Forum has changed its name… sort of.

When we became part of Interbrand in 2002, we kept the name of the company that I founded in 1978. Since then, we’ve evolved from a pure design entity into a multi-disciplined consultancy with a deep pool of talent, including a lot of brand expertise.

“Design Forum” contains valuable branding in its own right. Our name has touched hundreds of success stories and a lot of people who’ve become our friends during thirty years in business.

Anyone who’s been through a company name change is aware of all the ramifications, from switching the sign on the front door to an updated logo on the coffee cups. And the risk, of course, that customers will assume there’s been a change in leader-ship—in our case there has not.

The time has come to take on the new Interbrand Design Forum identity in order to focus more precisely on what our business does—global retail store design that incorporates business brand strategy, shopper analytics, retail architecture, retail-sensitive implementation—and to stress our ability to draw on resources from around the world: 1,249 creative minds in 36 offices and 22 countries.

This month, Interbrand publishes the annual Best Global Brands in conjunction with
BusinessWeek. It’s one of the top three published business rankings in the world. If you think your business is a potential leader, here’s where you can find out what it takes. And of these 100 brands, you’ll see who the top riser and faller were this year. (Spoiler alert: Google and Merrill Lynch.)

Brand value is a simple idea. If retail brands play a role in choice, and shoppers must choose between competing products, then brands must contribute to earnings and profit. It then follows that brands must be quantifiable and valuable to its owner.

By using brand valuation as a diagnostic tool, we understand the precise economic benefit that brand has on every aspect of business. Insights into which brand attributes are relevant at each step in the customer journey tell us exactly what must be changed to make the brand perform better. You can then invest in the touchpoints that generate the most demand.

The topic of brand management has been generating more interest every year in the face of proof that strong brands, consistently managed, are more resilient in shifting economic climates. A study of Best Global Brands versus the S&P 500 conducted by Harvard and USC showed they outperform the market.

Yet, business pundits say we’re living in a post-branded world and that traditional branding is outdated. Perhaps that shouldn’t surprise me. Although the concept of brand value has been evolving since the ‘80s, it’s still misunderstood.

Brand is not an advertising gimmick. It’s a set of attributes and a promise: the attributes consumers have ascribed to store or product, and a promise made by the company to deliver those attributes through the way it does business. Ideally, the brand idea shapes the company and directs the behavior of everyone in it. That’s why we believe brands have the power to change the world.

There are some interesting new names on the list this year. BlackBerry makes its way onto the global brand stage. We’ll see if it can outperform the iPhone. Luxury brand Ferrari zooms onto list. The debut of H&M is a great example of a retailer understanding consumer demands, as is the entrance of Marriott.

Our longtime client Honda still ranks high; also new to Best Global Brands is our client FedEx, whose promise we’re bringing to life in the FedEx Office stores (formerly Kinkos). Like all the leaders, they have managed to strike a clear note of differentiation that we have translated into retail environments.

Although we can understand nervousness in a results-oriented world, we’re hoping the current slowdown will push retailers to change. The world is becoming one global economy. Competing in it demands a connected and holistic approach to brand management, not siloed 20th century corporate habits. In order to stand out from the crowd and engage our associates and customers, our businesses must become branding communities, resilient and flexible. Because—particularly in retail—there are always new and unknown challenges ahead. Thoughtfully,
D. Lee Carpenter