Making the Value Judgment
A Retail Publication by:
7575 Paragon Road, Dayton, Ohio 45459Phone: 937.439.4400 Fax: 937.439.4340Email: email@example.comBranch Ofces: Chicago, London,Los Angeles, New York, Paris,San FranciscoD. Lee Carpenter, Chairman & CEOJill Davis, EditorJorge Sanclemente, Design/ProductionFor more inormation or to be placedon our mailing list, visit out website,www.designorum.comand complete the contact orm.Reprints o articles or excerpts without the express written permissiono Design Forum is prohibited.Ideations is printed bimonthly.Subscriptions: $125 annually in the U.S.;$150 elsewhere.© 2006
Every August when the “Top Global Brands”issue of
arrives, I look for thenames of retailers. Out of the one hundredcompanies listed, not counting the automotivecompanies, there’s about ten—McDonald’s,Gap, Ikea, Amazon.com, Starbucks and a fewmore quick service restaurants. I look forwardto the day when more retailers give those other companies a run for their money.The list will always be dominated by companieswith clarity about what they offer. These arethe companies that manage their brands withskill, despite the market’s ups and downs.They command higher margins and stock prices, and that’s whatit’s all about here at C-level.Brand articulation is less concrete for retailers, who need to think aboutwho they are as a brand, as opposed to being just a box full of stuff.
It wasn’t all that long ago that famous names who entered the ckle
and merciless retail arena came away bloody. Liz Claiborne closed
its stores. Tommy Hilger got out of retail and is trying to get its
brand back under control. The demise of the Sears and Kmart brandsand their once-powerful private labels prove that even old-timers cancave under competitive pressure. And Disney sold its stores.It’s only in the last few years that retailers have started to get seriousabout their intangible assets—the keys to shareholder value. Todayeverybody gets it. What you stand for is equally as important aswhat you sell. Sometimes it’s more important. Brand in somecompanies accounts for the bulk of overall value. For Apple,according to
2001 report, brand value equaled aremarkable 80 percent of market capitalization. Apple’s retail storeswere designed to evoke the elite creative attitude of their brand,especially in Steve Job’s big glass iCube on Fifth Avenue.Companies who make the list also have the advantage when itcomes to reinventing themselves, the way our client, AT&T, has
begun to do as they move into retail. Their stores will be unied
and consistent around the globe, across all products, services andmarkets. Their customers will not be confused, nor will their employees, because the entire organization is steeped in brand.There have been times when Design Forum’s ability to help has beenlessened because clients chose to rush headlong into execution. Theyskipped brand strategy in favor of operational issues: pricing,merchandising, marketing, real estate and supply chain. But that’snot your brand. You need to know what you stand for in the heartsand minds of your chosen customer.Understanding your brand helps you make the choices that keep you
fresh and relevant. Tommy Hilger is experimenting with anupscale concept with its H Hilger stores. Liz Claiborne failed in
their recent bid for J. Jill stores. I see little hope for Sears and Kmartas long as they starve the brand and continue to work from the oldfear-based competition paradigm. In the case of Disney Vault 28,Disney’s latest, very high-end attempt at retail, they’re trying tomake their classic animated characters appear contemporary. Thatdoesn’t seem brand-right to me. Putting a pimp Mickey Mouse onan $80 t-shirt isn’t my idea of a fresh mix. In fact, I’m not altogether sure Disney has the depth and breadth to support a retail store. ButI’m all for taking a calculated risk.Great brands do have a human and cultural perspective. Sure, youcan follow trends, but just following trends doesn’t make you a brand. You need to clarify your brand, research the behavior of your selected targets, apply those insights to every touch point, and bringthe brand to life—from the emotional level to the most practical
level of inuencing the purchase. That’s what puts you on the list.
To anyone who used to think branding was a parlor game,Interbrand’s annual brand value calculation for
shows otherwise. The ability of a great brand to deliver proven
value to the consumer ows straight to the bottom line.
Thoughtfully,D. Lee Carpenter
Chairman & CEO