Woolworths most valuable Aus brand, pockets of hope for decimated retail

by Marketing ON 12 June 2012

More than half of Australia’s top 30 brands registered declines in their value over the past year, with Harvey Norman and David Jones among the worst hit, a study has found.

There were clear winners and losers over the past year, Brand Finance found in its annual study into the value of Australian brands. Retail and finance brands bore the brunt of the tough conditions, with many in these sectors experiencing a 10-20% decline in the value of their brands, but it wasn’t all bad news for these sectors with standout brands performing well.

In the retail sector, Bunnings, Coles and Target showed that growth is achievable despite difficult trading conditions, notching 20.3%, 14.5% and 10.0% increases in brand value respectively.

Coles, valued at $4.7 billion, succeeded in closing the gap on rival Woolworths, gaining $597 million in value and moving up the ladder to reach third position. Woolworths, valued at $7.1 billion, maintained the top spot despite losing $504 million of value, prompting managing director of Brand Finance Australia, Tim Heberden, to point out three areas where retailers could step up their game. “Due to increased international competition and changing consumer behaviour, Aussie retailers are learning the importance of customer service, brand differentiation, and omni-channel strategies,” Heberden says.

Australian finance brands also recorded mixed results over the past year, but on the whole outperformed their global peers with six of our banks featuring in the top 100 of Brand Finance’s global list of the top banks. MLC declined the most out of the top 30 brands, shedding 25.8% of its brand value. Macquarie Bank and St George also experienced significant declines, but at the other end of the scale BankWest and ANZ increased in value by 16.5% and 9.8% each. The Commonwealth Bank (CBA) seized the title of Australia’s most valuable banking brand from NAB, increasing its value by $185 million.

Another brand value study, Millward Brown’s BrandZ, recently ranked CBA as the most valuable Australian brand on the global stage at $13.1 billion, compared to the $4.1 billion valuation given in this study. However, Millward Brown does not release Australian results or include all Australian brands in its global list, making no other comparisons possible.

Brand Finance calculated the overall value of the top 30 Australian brands at $51 billion, well below the value it attributes to the largest global brand, Apple, at US$71 billion. The researcher calculates a brand’s value by looking at a company’s market share, profitability, reputation and emotional connection with consumers.

Telstra held on to second place in 2012, gaining $294 million to reach a value of $5.1 billion, placing the telco on par with the once great Nokia brand in an international context.

The Qantas brand continued to free fall dropping below the billion dollar threshold, although this year’s drop of $108 million represents a reduced rate of decline.

Woolies mocks Coles with Everyday Rewards ad

by Marketing ON 15 May 2012

Woolworths has hit back in its loyalty war against Coles, with an ad mocking the recent high profile relaunch of Flybuys.

In a TVC that highlights the size of the Flybuys campaign, an animated green ‘peaman’ says, “This is the simplest way we could make this ad. Because extra special savings from Woolworths Everyday Rewards is the simplest way to save on the things you love.”

The ad also takes aim at elements of Flybuys by saying Everday Rewards is simpler than “waiting at the mailbox” and “simpler than counting to five”, in reference to Flybuys’ letterbox drop and My5 initiative.

Created by Droga5, the campaign comes less than four weeks after Coles relaunched Flybuys.

Supermarkets take private label to alcohol market but face uphill battle

by Marketing ON 18 April 2012

As supermarket private label products win favour with consumers, Coles and Woolworths are looking to expand own-label offerings into the alcohol market in a move labelled risky by an industry expert.

Coles and Woolworths owned brands, which include beers Platinum Blonde, Sol and Maxx Blonde, wines Malborough Sounds and Nature’s Harvest and a range of ready-to-drink (RTD) mixes, spirits and liqueurs, do not incorporate the retailers’ ‘masterbrands’ and have so far been slow to take off.

Awareness and purchase of retailer-owned brands is low, reveals executive director at research firm TNS, Jonathan Sinton, with no brand owning greater than 5% awareness in the market and the most extensively purchased product, Woolworths’ Platinum Blonde, sitting in the purchasing repertoire of only 11% of alcohol consumers.

Sinton believes retailers will struggle to build brand equity in the same way they have in supermarkets without the use of the masterbrand, which has been ruled out as incompatible with alcohol branding.

“Alcohol is about status and about being seen drinking it,” Sinton says. “Some would argue the appeal of Grey Goose vodka and Johnny Walker Blue is about taste, but it’s actually about status.”

Not using the masterbrand may help distance products from perceptions of being inferior or replicas, but it means the brand has to perform on its own to generate equity and sales.

This is where the challenge currently lies for the big retailers, with none of their brands commanding awareness among more than 5% of consumers. In a market where promotional pricing is common and premium products are performing well at not much greater cost than standard products, gaining market share is proving a difficult task.

“Brands that have been around for a long time will be hard to beat,” Sinton says, also warning against the practice of retailers replacing well-known brands with their own, which happens to some extent in the supermarket. “If you go to a bottle shop and they don’t have youy favourite beer, you’re going to go elsewhere.”

TNS’ private label research did find, however, that respondents were likely to agree they would buy private label alcohol for a party, but only if it’s less expensive than branded competitors. Vodka brands emerged as the most likely to be substituted for private label products, with 61% of alcohol consumers agreeable to making the switch. Wine followed at 59%, beer and RTDs at 51% and Whiskey at 50%, while Gin was the least interchangeable, with only 41% claiming they would substitute a manufacturer brand for a retailer’s brand.

Sinton adds, however, that when faced with the reality of the point of sale, consumers are more likely to consider brands they know if they’re at a comparable price point, than brands they don’t know.

Woolworths would not comment on the details of their private label products, but said in a statement to Marketing, “As our private label liquor brands are sold throughout our various banners (Dan Murphy’s, BWS, WoolWorths Liquor, ALH and Cellarmasters) it is appropriate that we use trademarks that will resonate with customers across all channels.”

Woolworths most valuable retail brand in Asia Pacific

by Marketing ON 22 February 2012

Woolworths has topped a list of most valuable retail brands in Asia Pacific released by Interbrand yesterday, while competitor Coles was nowhere to be seen.

The ‘Best Retail Brands Report’, which combines a variety of measures including brand strength and financial performance, valued the Woolworths brand at US$4.2 billion, almost double that of second-placed brand Uniqlo.

Harvey Norman, Myer and David Jones rounded out the top five with brand values of US$873 million, US$599 million and US$562 million respectively. Over the past year, the value of Woolworths’ and Myer’s brands increased, while Harvey Norman’s and David Jones’ decreased.

Coles, which is a consolidated entity, was not included in the study because it doesn’t release enough financial information to qualify for Interbrand’s criteria.

CEO of Interbrand Australia and New Zealand, Damian Borchok, says, Australian brands performed well on the study in relation to Asian brands which are only just beginning to use brand as a strategy in their respective retail markets.

“The general value of Asia’s brands are lower because it’s such a fragmented market and building retail brands in Asia is a relatively new thing,” Borchok says.

“For Australian retailers facing the toughest marketplace in decades, the study provides some clear signposts towards what will drive success in the future.

“The fusion of physical environments and technology will be key and winning retailers will place greater emphasis on customer insight and customer service. The role of the store will go beyond being a receptacle for merchandise and carrying out transactions; smart retailers are already working out that their stores can deliver memorable and engaging experiences that result in substantial commercial success.”

The top retail brand in Asia Pacific for 2012 are:

In overseas lists, department store Walmart maintained its number one position in the US, with a brand value just over US$139 billion (down 2% from last year), supermarket Tesco took top honours in the UK, valued at US$11 billion (up 9% on last year), hypermarket Carrefour topped the list in France, grocery giant Aldi in Germany and fast-fashion retailer Zara in Spain. All number-one ranked brands held onto their top spots from 2011’s ‘Best Retail Brand Report’.

Amazon maintained its position at number nine in the US, and was the largest riser on any of the lists, with a 32% increase to bring its brand value up to US$12.8 billion.

eBay moved into the top 10 for the first time in the US, while other big movers included hardware chain Leroy Merlin (France; up 22%), supermarkets Mercadona (Spain; up 22%) and Lidl (Germany; up 20%), machinery manufacturer Tractor Supply (U.S.; up 18%), and cosmetics retailer Sephora (France; up 18%).

In Asia Pacific, there were three new entrants in 2012’s list – Japanese department store Muji, valued at US$355 million, Chinese women’s footwear retailer Belle, valued at US$310 million, and Japanese home furnishings supplier Nitori, valued at US$275 million.

The report was launched with a word of advice for retailers – every channel matters in the new landscape. It names the need to be agile, a focus on the path to purchase, every brand is a story, leveraging design to build brand value and the promise of omni-channel retail as the most prominent global retail trends gaining relevancy.

Target, Home Depot, CVS and Best Buy completed the list of the top five brands in the US.

And in the UK, Marks & Spencer, Boots, Asda and Next rounded out the top five.

Woolworths launches virtual stores to promote mobile grocery shopping

by Marketing ON 20 February 2012

To promote an update to its popular smartphone app, Woolworths has opened virtual supermarkets in two of Australia’s busiest train stations.

Sydney Town Hall station and Flinders Street station in Melbourne will be home to the virtual stores for the next week in what Woolworths describes as a trial for mobile shopping, as well as a very buzz-worthy promotion for the iPhone and Android app’s new abilities.

Prior to last week, the app allowed shoppers to make a shopping list and plan a trip around their local Woolworths store, but the update adds the ordering and delivery functions previously only available through the supermarket’s website. Adding ordering to the app was a direct response to user feedback, says Has Fakira, Woolworths innovation program manager. Users can now build a shopping list, order and have their purchases delivered, next day at the earliest.

While the ‘stores’ are not quite disruptive innovators of sales channel norms, they are a novel twist on stock standard billboard advertising, and Woolworths is already planning expansions. Fakira tells Marketing that the next stop is bus shelters in the country’s five major cities.

Marketing strolled around the aisle of the Flinders Street store earlier this afternoon, noting the barcodes (not QR codes), a mix of brands (not just private labels) and a distinct lack of people trying it out (although it is only the first day). Also present were green-shirted Woolies staffers who we are assured were plucked fresh from nearby stores, not the corporate marketing department.

And in a refreshing twist, the promotion promises less than the product actually delivers. The virtual stores are limited to 120 products in two locations across Australia, whereas the app has access to Woolworths’ full range with ordering possible from anywhere WiFi or cellular data is available.

Fakira explains to Marketing that the virtual stores are more about drawing consumers’ attention to the fact they can do their grocery shopping from a smartphone than a serious new business innovation, as education will be a barrier to first use to many people.

Private label brands gatecrash Product of the Year awards

by Marketing ON 6 February 2012

A vacuum pack food saver, vegetable smoothies, sweet potato fries and private label deli style chips feature in the Product of the Year 2012 awards for best consumer product.

The study of 7,000 Australian shoppers identified the innovations at the top of shopping lists as products which save time, simplify life, are perceived to be of good value or bring a little luxury into people’s lives.

Product of the Year director, Sarah Connelly, says most of the 28 winners reflected the time pressure people are under and the desire to find new products to make lives simpler and better.

“Consumers are looking for good value, with supermarket home brands scoring two awards this year, but there’s still room for little luxuries even though purses are being squeezed,” Connelly says.

“A number of category winners are not the cheapest options, but clearly shoppers think they are worth paying that little bit extra for.”

Little luxuries without the big price tags feature in the awards with Imperial Leather Foamburst Shower Gel, OLAY Regenerist Wrinkle Revolution, Surf with Essential Oils and Tim Tam Dark Chocolate biscuits with Mint and Rum and Raisin winning their respective categories.

In the food space, McCAIN’s Sweet Potato Superfries won for frozen savoury foods category and Be Natural Cereals triumphed in the Packed Food section.

Premium juice product, V8 Smoothies, emerged victorious in the new beverages group and Tim Tam Dark Chocolate Mint and Dark Chocolate Rum and Raisin took top honours in their categories.

Private label products entered the awards this year amid consumer backlash over their increasing domination of supermarket shelves. Coles took out the fresh food category with its Coles Grill range of seasoned barbecue meat cuts and Woolworths topped the snack vote count with its Woolworths Select Deli Style Chips.

A stand-out among the entrants was Listerine Zero which scored best in class in both Australia and the US as the first alcohol-free mouth freshener, indicating the intense taste of traditional offerings is a deterrent to their uptake.

The research also found eight in 10 (83%) household shoppers have bought goods and services over the internet in the past 12 months, with CDs, DVDs and books being the most popular purchases, followed by tickets to movies, shows and concerts and clothes.

Twenty-eight categories were covered in the 2012 awards including adult health, dental care, deodorant, female skin care, male grooming and personal hygiene.

The full list of winners for 2012’s awards were:

Personal media easing consumer pain in retail

by Chris Watt ON 20 January 2012

Have you ever wandered into a supermarket that wasn’t your local and tried to find what you consider to be a simple, staple item; the butter, Vegemite or a packet of pasta? Was it easy? Or was it an entirely frustrating experience that had you scurrying up and down every aisle in search of the item that in your local supermarket sits in aisle three, next to the Tim Tams? I have, and as much as I enjoyed pretending that I was a contestant on Supermarket Sweep, the experience was overall a painful one. Assuming that I am not alone, I’m pleased to let you know that thanks to the personal media devices (smartphones, tablets) that over 50% of us now carry around, there is better way to shop.

The benefits that personal media devices bring to both retailers and shoppers alike stem from the ability of these devices to ease points of pain in the shopping experience. These points of pain can occur at any time in the consumer journey, be that before the purchase, during the purchase or after the purchase. Understanding where personal media devices can be used to address these points of pain will ultimately lead to a positive impact across the key retail drivers: loyalty, frequency and basket size.

A great example of this is the Woolworth’s iPhone and Android application launched last year and downloaded by over 1.4 million Australians. Understanding that finding products in a foreign supermarket is a major point of pain for many consumers (myself included!), Woolworths implemented a solution that enables users to build a shopping list and have that list mapped out by aisle according to the store they intend to shop at. Further to this, users can search for over 50,000 products to add to their shopping list, add them in manually or use the barcode scanner in the application to scan them in. By making the shopping experience simpler and more convenient, Woolworths is hoping that consumers will not only be more loyal to the brand but also increase the frequency at which they shop and the value of their spend. At a time when many market commentators appear to have limited positivity about the strength of the Australian retail sector, the success of initiatives such as this clearly demonstrates that consumers have an appetite to engage and transact on their personal media device.

This is just one example of how personal media devices can be used in the retail context. Before I shop I can use my device to research, read reviews and call the store for more information if I need it. A recent study from Google and IPSOS Research found that 49% of Australian consumers had used their device to research a product or service before they purchased. I can use my smartphone or tablet to find a store, get directions and use it to assist me while shopping. In fact, states iModerate Research Technologies, over 70% of iPhone owners use their smartphone to help them when they are in the store. I can also browse a product range, save favourites and share items I intend to purchase with friends. I can have targeted offers sent to me, use the device to redeem vouchers, rate and give feedback on my overall experience. Most importantly I can purchase in any number of different ways.

Some retailers are using personal media devices to challenge the status quo. Big W’s iPhone application enables consumers to scan barcodes and compare prices of products at competing stores. If the item is stocked at Big W, the price will be displayed against that of the competition. “We are so confident that you won’t find any stocked item for less anywhere else that we want our customers to check for themselves,” stated Big W director Julie Coates.

With over 62% of smartphone users having purchased physical goods from their personal media device in the last six months according to a recent Adobe Survey, it is staggering to learn that over 80% of Australian retailers do not have an optimised experience for this audience. Consumers are spending more time on their devices than ever before, a trend that is going to accelerate further in 2012. This then presents a fantastic opportunity for those retailers who can successfully tap into this exploding market. By empowering consumers to research, find, share and purchase on device, retailers can build new audience, make existing ones more loyal and very positively impact the bottom line. If your business is not engaging with consumers on their device in 2012, a huge opportunity is being missed.

Google fast risers: iPad, Woolworths top search list

by Marketing ON 9 December 2010

Today Google released its first ever brand zeitgeist, reporting the top brand-related searches over the last year.

iPad ad came up trumps as the fastest rising advertising campaign search term, proving it was again the year of Apple dominance. On the surface of it, you would assume KFC would be happy with coming in at second place, but the popular search for kfc ad returned a widely criticized cricket season commercial, which shows a white man sedating West Indian fans with fried chicken.

Woolworths proved their move in to online shopping was well timed, coming in at number one for fastest rising retailer.

The fastest rising Google Maps search results were a tad bizarre; parents couldnt decide whether they wanted to nurse their kids back to health, with Eastbrooke Family Clinic taking the top spot, or lock them up, with juvinile centre (spelt incorrectly) coming in second. Furniture retailer Nick Scali and pizza joint Little Caesers also made it in the top ten.

“Australians are online and they’re looking for your brand and your business, Google Australia’s sales industry lead Will Easton said. You need to be online to respond to their interest and convert these consumers into customers. The savviest Australian marketers are incorporating online advertising – whether it’s search, display, video, or even mobile – into their plans from the start and making sure that their online ads are engaging Australians in real dialogue.”

Fastest rising Google searches for advertising campaigns
1. ipad ad
2. kfc ad
3. libra invisible ad
4. mazda ad
5. old spice ad
6. brut ad
7. kia ad
8. aami ad
9. qantas ad
10. perfect italiano ad

Fastest rising Google searches for retailers

1. woolworths online shopping
2. urban outfitters
3. shopbop
4. saks fifth avenue
5. dfo south wharf
6. nordstrom
7. rubi shoes
8. graysonline
9. zara
10. walmart

Fastest rising searches on Google Maps

1. eastbrooke family clinic
2. juvinile center
3. little caesars
4. the bicycle entrepreneur
5. the electric discounter
6. mt everest
7. tour eiffel
8. hawthorn town hall
9. nick scali
10. sbs federation square

Fastest rising Google searches for Australian brands

1. abc3
2. jetstar.com.au
3. bendigo bank
4. nrl
5. realestate.com.au
6. whereis.com.au
7. masterchef
8. graysonline
9. anz.com.au
10. afl

Google reveals the internet eitgeist (German for he spirit of the times) through an exploration of the billions of search queries they receive each year.

Welcome to the revolution: Petrol pump ads

by Marketing ON 6 December 2010

In the average day, an Australian will be exposed to 300 advertising messages. Or is it 500? Or is it 1000? Whatever the number is, it will be higher now, with Woolworths Petrol announcing it will sell ad space on its petrol pumps. No, not on the bowsers, where we’ve seen TV ad screens popping up already, but on the actual pumps as well.

In a 2 page-long press release accompanied by two more email’s worth of super high-resolution photos of the pump ads in action, Woolworth’s ad partner Seemedia Group meticulously deconstructs the specifics of its new execution.

“Seemedia Group has signed a deal with Woolworths Petrol that will give Australian brand owners an innovative new out of home media platform that offers unprecedented consumer engagement,” reads the release.

“The deal sees Seemedia enter into an arrangement with Woolworths to provide advertising space on petrol pump nozzles at 400 Woolworths forecourts nationwide through a petrol pump advertising device called FillBoardTM.”

“FillBoard™ is a patented and integrated petrol pump handle unit capable of holding and displaying a high quality printed graphic that faces directly at the consumer while filling their vehicle.”

For those a little confused, ‘FillBoard™’ is indeed just a piece of paper glued on to the nozzle of a petrol pump.

“FillBoard has already attracted considerable interest from some of Australia’s leading brand owners,” continues the release. “Nestle, PepsiCo, GIO, NRMA, Visa and others have already conducted campaigns with some outstanding results. In two separate campaigns for Kit Kat, in-store sales increased a spectacular 84% and 19%.”

Or maybe it’s working because of the “six intense ‘hands-on’ contacts” consumers have with the fuel pump when filling their vehicle, which the release says occurs…

1) While selecting the fuel grade

2) As the nozzle is lifted from the pump

3) While the nozzle is inserted into the tank

4) At least once while fuelling the vehicle

5) As the nozzle is removed from the tank, and

6) As the nozzle is placed back in the bowser

“Petrol pump advertising delivers an unavoidable one on one interaction with each consumer for up to four minutes,” Seemedia Group’s managing director Chaz Heitner says.

“Couple this engagement with a mass market reach capability and you have a compelling value proposition to take to Australian advertisers.”

Australias corporate social media judged sub-par

by Marketing ON 3 November 2010

Less than half of the top Australian and Asian companies listed on the Wall Street Journal’s Asia 200 Index have a corporate social media presence, according to a new study by global public relations and communications firm Burson-Marsteller.

The study examined the social media presence of some of Australia’s most well known brands – including Woolworths, Qantas, Westpac and Westfield – alongside the top companies in eleven other countries across the Asia-Pacific region.

Australia compared favourably with the Asia-Pacific region as a whole in terms of the use of social media where companies do have a presence. The study found that, of those Australian companies that do have a presence, more than fifteen per cent of their social media profiles are inactive, compared to over fifty-five percent for Asia-Pacific. Only thirty percent of those Australian companies have integrated their social media profiles into their corporate websites, but this was compared to just eighteen percent in the region as a whole.

By contrast, Burson-Marsteller’s Fortune Global 100 Social Media Check-Up study, conducted in February this year, showed that seventy-nine percent of major global companies used branded social media sites as part of their corporate communications mix – demonstrating that the top companies in the Asia-Pacific region are lagging behind the rest of the world.

The study found that corporate use of social media in Australia, and across Asia-Pacific, tends to focus on the ‘viral’ potential of pushing information out rather than engaging with people.

“True engagement involving two-way dialogue remains limited for Australian companies and those across the Asia-Pacific region,” said Stephanie Aye, Director of the Technology practice, Burson-Marsteller Australia. “Instead, companies are using social media to portray a ‘softer’ corporate image in a way that is less likely to invoke interaction or negative commentary.”

Jamie Silver, managing director of Clear Light Digital, says companies need to do their homework before they dive into social media.

Social media will work for many different types of businesses, but it has to have a sound strategy behind it if its going to succeed, he tells Marketing magazine. Just throwing up a Facebook page and publishing press releases is not going to work. Companies need to go into social media with a clear understanding of issues like: why they are doing it, the level of engagement they are comfortable with, how they are going to manage it and how it integrates with their broader marketing activity.

There are several ways companies can use social media. Many of our clients start with social media monitoring, which allows them to track and analyze social media conversations. This allows them to listen in to their consumers, understand the sentiment of those discussions and channel the information into their business and marketing strategies. For others, advertising across social networks has been the right path. Social networks provide great opportunities for targeting advertising based on user information, and much of the activity can be purchased on a cost per click basis, so its relatively low risk.

Big W pays $400,000 for childrens clothing breach

by Marketing ON 31 March 2010

Large letter retailer Big W has made a deal with the Australian Competition and Consumer Commission (ACCC) after it was found it had breached aspects of the ‘children’s nightwear code’.

Big W will make a contribution of $200,000 to the Sydney Children’s Hospital in Randwick and $200,000 to a major research program into the mandatory safety standard, following a major recall of children’s nightwear by its parent company Woolworths Limited and supplier Vinetex & Co.

According to the ACCC, the company was investigated for children’s nightwear that had incorrect warning tags labelled as ‘low fire danger’, when flammability testing showed they should have been labelled ‘high fire danger’.

After being advised of the breach, Woolworths acted promptly and undertook a voluntary recall across dozens of styles across its nightwear range, including 19 styles from the Pink Sugar and Bed Bugs Girls Single Nighties range and eight styles from the Selected Sleepwear Nite Club Boys Nightwear range.

“Although there has been a significant reduction in hospitalisation rates due to burns from nightwear since the late 1970s, when the standard was introduced, burns from nightwear can and still do occur. There is considerable research which shows that clear labelling helps minimise the risk of these injuries, which is why the ACCC regularly monitors compliance,” ACCC deputy chair Peter Kell said.

“Suppliers and retailers alike should be particularly vigilant when selling products that are subject to mandatory safety standards. Care needs to be taken in checking the details contained in test reports to ensure products meet all requirements. Keeping consumers safe should be the top priority.”