Superbrands 2004 - Brand Autopsy

Superbrands
BRAND
Wal-Mart Keeps Smiling,
And Rivals Are Not Happy
By Sandra O’Loughlin and Barry Janoff
Wal-Mart’s smiley face once again this year has a lot to
grin about as Brandweek’s super retailer retains its command
of the top position, with no others even coming
close. But don’t count them out—the other retail Superbrands
have been busy improving their merchandise assortments, shedding
extraneous businesses and beefing up marketing
messages in their quest for market share.
Still, the Bentonville, Ark., titan is so big that
last month union leaders and community activists
met in Washington, D.C., to air concerns over the
retailer’s impact on wages and the economy. A bigger
concern, however, may be the rising cost of
gasoline, which is steadily taking a larger bite out
of consumers’ wallets. For now, thanks to tax
rebates and home refinancings, the mood is mostly
optimistic as consumers shop for
colorful new apparel, and update their homes
with new kitchens and other improvements.
Wal-Mart sales last year grew from a whopping
$244.5 billion in 2002 to an even more
mammoth $256.3 billion. Second-place contender
The Home Depot also posted an impressive
sales gain, to $64.8 billion from $58.2 billion
to retain its No. 2 position. Lowe’s also
showed growth, by $3.4 billion, to move up a
spot, ahead of Kmart, which held steady at
$30.7 billion. Meanwhile, thanks to its breezy
new apparel assortment and targeted advertising
messages, Gap climbed ahead of Federated
to achieve the ninth spot, up from 10th last year. Yet don’t
count Federated out. Despite a slight decrease, the company is
striking back with a new marketing model that attaches the powerful
Macy’s name alongside its other holdings.
Still, when it comes to sheer volume, Wal-Mart is king. The
mega-retailer just keeps giving consumers exactly what they want:
* includes Old Navy, Banana Republic; ** includes Bloomingdale’s, Bon Marche Sources: Hoover’s Online (sales); TNS/CMR (media); Harris Interactive/EquiTrend: QxFxPI=E (see key, page S18)
S62 JUNE 21, 2004
COMPANY NAME,
LOCATION
RETAIL
quality merchandise—if somewhat limited selection—at low prices.
Its message resonates in “real people” ads, via Bernstein-Rein,
Kansas City, Mo. In March, Wal-Mart began offering music downloads
from its Web site for 88 cents a tune. Consumers can now
cash paychecks at designated registers in 44 states, a tactic the retail
giant will use to eventually morph into the banking business.
Small wonder that other brands want to join Wal-Mart’s ride.
Dunkin’ Donuts plans to open 10 shops in Wal-Mart stores; and
following 2003’s decree to banish so-called “laddie magazines”
FHM, Stuff and Maxim, Time Inc. has developed All You, a women’s
lifestyle magazine for exclusive distribution in Wal-Mart stores.
Kmart, which emerged from bankruptcy protection last May,
is counting on a redesigned apparel collection to give it a one-up
over Wal-Mart’s cost-conscious consumers and Target’s trendy ones.
In April, it established a New York design team to upgrade quality
and style. A campaign via new agency Grey, New York, plays
up the “K” and exclusive brands with the theme, “Kmart. Right
Here. Right Now.”
Paul Guyardo, former evp-television and
marketing for Home Shopping Network,
joined Kmart in March as svp/CMO, with a
track record of redefining national brands and
attracting new customers, exactly what the
retailer needs as it builds its way back. His first
deal pairs Kmart with the WB Television Network
where Kmart’s apparel brands, Martha
Stewart Everyday, Joe Boxer, Thalia Sodi,
Route 66 and Sesame Street, will appear on top
WB shows such as 7th Heaven.
Keep smiling: Wal-Mart’s icon offers
people low prices, good experiences.
J.C. Penney, in the fourth year of a fiveyear
turnaround plan, in April shed its Eckerd
drug store chains and is now focused on its core department
store business. During February’s Academy Awards telecast, the
retailer updated the “It’s all inside” tag with the campaign theme:
“Have you seen what’s inside at J.C. Penney?” The effort, via
DDB Chicago, touts its improved apparel and lingerie offerings,
jewelry and household goods. Also in the works: a strategy
LEAD AGENCY,
LOCATION
1. Wal-Mart Wal-Mart, Bentonville, AR Bernstein-Rein, KC, MO $256.3 $428.6 6.94 96% 8.52 70.8
2. The Home Depot The Home Depot, Atlanta Richards, Dallas 64.8 522.7 7.08 90% 8.42 68.9
3. Target Target, Minneapolis Peterson, Minneapolis 48.1 573.8 6.96 93% 8.29 68.0
4. Sears Sears, Hoffman Estates, IL O&M, Chicago; Y&R, Chicago 41.1 634.7 6.66 97% 7.54 62.1
5. J.C. Penney J.C. Penney, Dallas DDB, Chicago 32.3 436.4 6.68 95% 7.58 62.0
6. Lowe’s Lowe’s, North Wilkesboro, NC McCann-Erickson, NY 30.8 299.2 7.02 82% 8.10 65.5
7. Kmart Kmart, Troy, MI Grey, NY 30.7 175.4 6.18 96% 7.20 57.7
8. Best Buy Best Buy, Eden Prairie, MN Best Buy Advtg., Eden Prairie, MN 24.5 302.1 6.95 89% 8.19 66.1
9. Gap* Gap, San Francisco Laird, NY; Deutsch/LA; others 15.8 356.1 6.46 76% 6.45 52.8
10. Macy’s** Federated, Cincinnati Lowe, NY; others 15.2 604.8 6.70 64% 6.86 55.9
TOTAL
SALES
(billions)
MEDIA
EXPENDITURES
(millions)
QUALITY
FAMILIARITY
PURCHASE
INTENT
EQUITY
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