Mobile helps Macy’s increase brand value more than 300pc
Macy’s increased its brand value by 383 percent in the past year in part by how quickly it has responded to shoppers’ new digital behavior and become a leader in omnnichannel retailing, according to a new report from Interbrand.
The brand consultancy’s 2014 Best Retail Brands Report ranks the top 50 North American and European retail brands by brand value. The results suggests that leading retailers are leveraging online technology such as mobile to harness data and better understand customer needs faster than ever before, which is giving them a competitive advantage.
“When we assess a brand’s strength, one component of the total brand valuation, three of the ten factors we look at are: A brand’s responsiveness to market changes; its relevance and fit with consumer needs, and its presence in the marketplace,” said Dirk Defenbaugh, managing director of Interbrand Design Forum, Dayton, OH. “When you consider these three factors in particular, it is evident that brands need to keep up with the quickly changing consumer behaviors.”
“Building a digital and mobile experience is no longer an ‘extra’ — it’s a must,” he said. “Consumers want to integrate their physical and digital worlds into a seamless experience that will allow them to get the benefits of value and convenience wherever they are.
“Retailers must master mobile to make purchasing easier, step up service, emphasize storytelling and personalization, and integrate the physical and virtual to create better customer experiences.”
The annual report was produced in collaboration with Interbrand Design Forum, the retail experience group within Interbrand.
According to Interbrand, the best retail brands understand the complex and challenging relationships between analog and digital. They have been quick to address changing shopping behaviors and drive purchases by integrating physical and virtual, making purchasing easier, enhancing service and using storytelling.
Macy’s is in 16th place on the list but saw its brand value grow 383 percent, making it the fastest growing name on the list.
Macy’s strategy stands out for how the retailer leverages mobile to interact with customers.
“Is Macy’s doing things absolutely right for their brand value? Yes,” said Sheryl Kingstone, Toronto-based research director at Yankee Group. “Are they really embracing mobile? You know they are.
“They are leveraging not just a mobile app, but they are leveraging mobile as their strategy for customer interaction,” she said. “They really have that mobile-first interaction and that is really where Macy’s separates itself.”
Macy’s has quickly embraced mobile in a number of ways to better meet customers’ needs, from its partnership with mobile shopping app shopkick and the use of in-store beacons to leveraging augmented reality and image recognition.
Additionally, the retailer has a strong presence in mobile advertising and a robust mobile application and Web presence.
“Mobile has rapidly emerged as the most important digital touch point for brand equity,” said Jason Goldberg, Chicago-based vice president of the commerce practice at Razorfish. “Well over 50 percent of all consumer time spent with retail digital touch points are spent on mobile devices.
“Macy’s has consistently been an early adopter of in-store mobile experiences with QR codes, indoor location services, and BLE beacons, all of which add to Macy’s brand equity but not necessarily to ecommerce,” he said.
One of the key differentiators for retail brands that are deriving significant brand value from mobile is in how they are leveraging mobile in-store more so than how it is enabling ecommerce.
“Firms like Macy’s and Walmart understand that mobile isn’t just about commerce and immediate conversions,” Mr. Goldberg said. “Many shoppers use digital mobile experiences on their path to a purchase that will be consummated in a physical store.
“Many consumers have multiple mobile interactions that engender band equity and lifetime customer value, without having a purchases attached,” he said. “So the best retailers understand that ecommerce conversion isn’t the most important metric for mobile success.
No quick fixes
Other brands that saw significant increases in brand value this year include Whole Foods, Amazon and Cabela’s.
At the same time, several brands dropped off the list: Guess, Big Lots, Rent-A-Center, Radio Shack and Anthropologie.
While stronger mobile strategies could give these brands a boost, it needs to be leveraged in tandem with a strong product, pricing and merchandising strategy.
“If they still don’t get the product and merchandising mix, the basics down, mobile is not going to help,” Ms. Kingstone said. “Radioshack has bigger problems, it has pricing, merchandising and brand problems.
“Anthropologie has more of a product, merchandising and pricing strategy, but their core audience, if they started understanding feedback on the social side, they could probably do better, but they haven’t so they could even fall further,” she said.
“Guess is another strong brand that could embrace mobile, mobile could help them better understand their consumer, get closer to their consumer, yet they are still not embracing it.”
Other brands with a strong mobile strategy also fare well in terms of brand value.
Walmart saw its brand value drop 4 percent but still remains in the top spot on Interbrand’s list.
Target remains in second position with an eight percent increase in brand value while The Home Depot held its position at number three.
Amazon saw a 27 percent increase in brand value and held onto its fourth place position.
Rounding out the top five is CVS/pharmacy, whose brand value increased 12 percent.
“While digital threatens the retail business as we’ve known it, it is also powering a surge of innovation as retailers reimagine the shopping journey through a digital lens,” Interbrand’s Mr. Defenbaugh said.
Chantal Tode is associate editor on Mobile Commerce Daily, New York