With back-to-school spending heating up, Tenet Partners, a leading brand innovation and marketing firm, today revealed its ranking of the Top 20 Most Powerful “Back-to-School” Retail Brands. Barnes & Noble claims the top position, with Target and Walmart rounding out the Top 3 companies.
The Top 20 Most Powerful “Back-to-School” Retail Brands are ranked by a unique, quantitative measure called BrandPower as measured through Tenet’s CoreBrand® Index. The CoreBrand Index, a landmark study conducted continuously since 1990, is based upon an annual U.S. survey of approximately ten thousand consumer opinion elites and business-decision makers. Tapping the CoreBrand Index, the BrandPower score is a weighted composite of two key metrics that contribute to a brand’s ability to drive long-term growth: Familiarity and Favorability. Familiarity measures awareness of the brand. Favorability is the perception of the brand (among those who are well aware of it), and is based upon three attributes that tie directly to future business performance: Overall Reputation, Perception of Management, and Investment Potential.
Key Findings
*Barnes & Noble leads as the #1 Most Powerful “Back-to-School” Retail Brand. * With a BrandPower score of 66.6, both Barnes & Noble’s Familiarity (degree of awareness) and Favorability scores (positive perception) remained constant year-over-year. Examining the three dimensions that contribute to Favorability – the company’s Perception of Management score experienced the highest gain year-over-year, a strong indicator that investors and business-decision makers are confident in leadership’s ability to drive company success and future growth. Demonstrating its ability to remain agile in a changing retail environment, the company recently spun-off its college bookstore unit from its retail and Nook businesses. As Barnes and Noble Education, the new company is poised to expand the number of bookstore locations across college campuses. It also has plans to further its digital presence through its e-textbook app, Yuzu, as well as through new products.
*Big-box retailers dominate the Top 20 ranking with a total of eight brands hailing from the category. * This year’s big box retail brands include: Target (#2), Walmart (#3), Bed Bath & Beyond (#4), Kohl’s (#7), IKEA (#8), Best Buy (#9), Sam’s Club (#14) and Big Lots (#15). Walmart, IKEA, Best Buy, and Big Lots demonstrated particularly strong improvements, gaining year-over-year on both dimensions of BrandPower (Familiarity and Favorability).
Despite the threat of online shopping taking over physical stores, the BrandPower of big-box retailers has been on the rise. Average Familiarity and Favorability has steadily increased year-over-year since 2011.
A collective focus on digital and omnichannel innovation have allowed these traditional big box stores to reimagine their customers’ path to purchase. By offering new conveniences and incentives to shop both in-store and online, they have been able to remain competitive, while also alluring a key demographic: Millennials. Walmart (#3) has acquired more than a dozen technology companies in the past year, many of which have contributed to major improvements and changes to its e-commerce properties. According to the company’s 2015 annual report, e-commerce sales rose faster than the market globally last year at approximately 22 percent. In addition, the company also launched an online price-matching service last year. To gear up for back-to-school, the company took online prices to all-time low, and is offering free shipping to student dormitories on all orders over $35.*E-commerce giant Amazon (#5) demonstrates the strongest brand momentum *, improving on both Familiarity and Favorability year-over-year. Across the Top 20, the company earned the highest Favorability score (71.3, just edging out Barnes & Noble’s 71.2). Across the three dimensions of Favorability, Amazon witnessed notable gains across each attribute: Overall Reputation, Perception of Management and Investment Potential. While online retailing currently accounts for only 7% of U.S. retail sales, Amazon continues to hold an enviable position in the retail sector. Last quarter, the company made a $92 million profit and for the first time in its 30-year history, garnered a market value that exceeded Walmart. As further evidence of its rapid growth, analysts at the Cowen securities firm recently predicted that Amazon would overtake Macy’s as the No.1 U.S. apparel retailer within two years. The company was also a ‘top-riser’ on Tenet’s 2015 Top 100 Most Powerful Brands report released in May. The company jumped 20 spots to enter at #65 among the 100 most powerful brands in the U.S.
Office supply stores, including Staples (#11), Office Depot (#16), and OfficeMax grapple with increased competition from other big-box stores and e-retailer giants. Entering the Top 20 at #11 with a BrandPower of 52.1, Staples is the uncontested category leader. However, over the last few years, Staples has struggled to maintain its competitive advantage. In March 2014, the company announced it would close 225 underperforming stores in North America by 2015. More recently, it announced plans to acquire Office Depot for $6.3 billion, a move which analysts estimate would likely result in additional store closings; noting that about half of Staples stores are within five miles of an Office Depot store, bringing into question the quantity and location of many their outposts.
Apparel brands, including Old Navy (#6), Abercrombie & Fitch (#18), Aéropostale (#19) and Urban Outfitters (#20) struggle to remain relevant; representing some of the lowest ranked companies. While once some of the most popular clothing brands among teen shoppers, these companies have seen sales unravel in recent years. In terms of their respective BrandPower scores, Abercrombie & Fitch and Aéropostale experienced the sharpest declines across each dimension of Favorability. Contributing to its decline in Overall Reputation, Abercrombie & Fitch made headlines for a number of reasons over the past few years. From being accused of purposefully excluding plus-sized customers, to (now ex-CEO) Mike Jeffries’ public statements that he wants only “thin and beautiful” people to shop in his stores, to facing a discrimination lawsuit where it was accused of turning down a Muslim job applicant because she wore a hijab, these series of events have left the brand’s future in jeopardy, with investors and customers questioning the company’s integrity and relevancy in today’s marketplace.
Specialty brand, LensCrafters, enters the Top 20 at #10. With a BrandPower of 52.9, the international eyewear retailer experienced significant gains on Familiarity over the past few years as well as on Overall Reputation and Perception of Management. A division of Luxottica Group, the company reported an increase in store sales in 2014, up 1.8%. A key ingredient of the company’s success has been its continued focus on the in-store experience. In 2012, the company launched ‘myLook’ mirror, a custom-built digital mirror installation. Bringing together facial recognition technology and multiple digital cameras, it allows customers to see digital photos of themselves when trying on different frames. Using a touch screen, the customer can select among different looks and upload and share the photos via email, Facebook, and Twitter. In time for back-to-school season, the company is also educating customers of the importance of annual eye exams. With comprehensive vision care information on its website and through its partnership with OneSight, the company provides free eye exams and prescription glasses to people in need, illustrating its corporate commitment and responsiveness to customers’ needs as well as its role as a good corporate citizen.
Commenting on the Top 20 Most Powerful “Back-to-School” Retail Brands, Steve Makadok, Partner of Tenet’s CoreBrand Analytics practice, said: “While big box retailers demonstrate the biggest gains on BrandPower, the key to their staying power will be continued innovations in digital and the omnichannel brand experience. Brands falling out of favor with consumers and investors are struggling to keep pace with the change in retail. These brands would benefit from a renewed focus in three key areas: customer experience, product and brand innovation, as well as improvements across channels, including digital and mobile.”
The Top 20 Most Powerful “Back-to-School” Retail Brands
Indicates a significantly higher Familiarity/Favorability vs. 2014
Indicates a significantly lower Familiarity/Favorability vs. 2014
Indicates an insignificant change of only +/- .5 or less year-over-year
| Company | BrandPower Rank | BrandPower Score | Retail Category | 2015 Familiarity | 2015 Favorability |
|---|---|---|---|---|---|
| Barnes & Noble | 1 | 66.6 | Specialty | 0 | 0 |
| Target | 2 | 64.5 | Big Box | +1 | -1 |
| Walmart | 3 | 62.5 | Big Box | +1 | +1 |
| Bed Bath & Beyond | 4 | 62.4 | Big Box | 0 | 0 |
| Amazon.com | 5 | 59.0 | E-Commerce | +1 | +1 |
| Old Navy | 6 | 58.7 | Apparel | 0 | 0 |
| Kohl’s | 7 | 58.6 | Big Box | +1 | -1 |
| IKEA | 8 | 56.0 | Big Box | +1 | +1 |
| Best Buy | 9 | 54.7 | Big Box | +1 | +1 |
| LensCrafters | 10 | 52.9 | Specialty | +1 | 0 |
| Staples | 11 | 52.1 | Office Supply | +1 | +1 |
| Family Dollar Stores | 12 | 52.0 | Discounter | +1 | +1 |
| Macy’s | 13 | 51.6 | Apparel | +1 | +1 |
| Sam’s Club | 14 | 50.2 | Warehouse Club | +1 | -1 |
| Big Lots | 15 | 46.7 | Big Box | +1 | +1 |
| Office Depot | 16 | 44.3 | Office Supply | 0 | -1 |
| OfficeMax | 17 | 42.8 | Office Supply | 0 | -1 |
| Abercrombie Fitch | 18 | 34.7 | Apparel | +1 | -1 |
| Aéropostale | 19 | 25.1 | Apparel | -1 | -1 |
| Urban Outfitters | 20 | 24.0 | Apparel | +1 | -1 |
Methodology
A company’s BrandPower score is determined by a survey of approximately ten thousand influential people on two key brand metrics: Familiarity and Favorability. This carefully screened audience, representing opinion elites/business-decision makers at the top 20 percent of American corporations are polled on the following:
Familiarity – Respondents are considered to be familiar with a brand if they state that they know more than just the company name. Familiarity scores can range from 0 to 100.
Favorability - Respondents familiar with a corporation are then asked about three dimensions that together, form a Favorability score, also on a scale of 0 to 100.
- Overall Reputation – Do you have a favorable impression of the corporate brand?
- Perception of Management – What is your perception of the company’s management? How would you assess the way senior leadership leads the enterprise and engages stakeholders? Does leadership have future-forward outlook on the market in which it operates, as well as on the competition?
- Investment Potential – Would you invest in this company?
BrandPower is calculated as a function of Familiarity and Favorability, enabling easy comparison among competitors, against industry averages and against world-class brands.
About this ranking
The starting point for determining the Top 20 Most Powerful ‘Back-to-School’ Retail Brands is the CoreBrand® Index (CBI) – a quantitative database based on a continuous benchmark tracking survey of nearly 1,000 companies across 50 industries. The study has been in the field continuously since 1990.
About Tenet Partners
Formed from the merger of Brandlogic and CoreBrand, Tenet Partners is a brand innovation and marketing consultancy that helps companies create brand value and unearth business opportunities by putting customers at the center of their business strategies.
For more information, please contact:
Russ Napolitano
Chief Operating Officer
Tenet Partners
+ 1 212 329-3035
rnapolitano@tenetpartners.com