The Brand Intimacy Agency RETAIL REPORT U.S. MX In partnership with UAE RETAIL FINDINGS Marketing is more complicated than ever. From big data and digital integration to shrinking timelines and diminishing budgets. Despite this volatility, there are untapped opportunities. Brand Intimacy is at the heart of this thinking. Building on our research spanning five years, this year’s results examine 52,000 brand evaluations on more than 400 brands across 9 industries and 3 countries. It is one of the largest studies of brands based on emotion. $22 TRILLION+ GLOBAL RETAIL SALES IN 20141 This report focuses on the retail industry in the U.S., Mexico, and UAE. In it, you’ll find rankings and head to head comparisons that showcase how Brand Intimacy works. To learn more about our findings, explore our interactive Ranking Tool that let’s you examine data by demographics and countries. 2 BRAND INTIMACY | 2015 RETAIL Retail is an interesting industry to review based on our geographies. It is ranked number 2 in both the U.S. and UAE, and in last place in Mexico, suggesting quite a varied performance. Fulfillment is the leading archetype in the U.S. and UAE, and indulgence is the leading archetype in Mexico. AVERAGE RETAIL BRAND INTIMACY QUOTIENT SCORES BY COUNTRY GLOBAL AVERAGE ACROSS ALL INDUSTRIES IS 33 U.S. MEXICO UAE 20 30 40 50 60 TOP RETAIL BRANDS BY COUNTRY RANK U.S. MEXICO UAE #1 #2 #3 BRAND INTIMACY | 2015 RETAIL 3 U.S. RETAIL U.S. 4.5% AVERAGE ANNUAL INCREASE OF U.S. RETAIL SALES BETWEEN 1993–20152 $2.6 TRILLION RETAIL’S CONTRIBUTION TO THE U.S. GDP3 42 MILLION JOBS THE NUMBER OF JOBS THAT RETAIL DIRECTLY AND INDIRECTLY SUPPORTS IN THE U.S.4 With an average Brand Intimacy Quotient of 40, retail is seven points above the average across all categories. Fulfillment is the archetype most associated with this industry. Amazon, Whole Food, and Starbucks all hover around 10–11 percent fusing. Amazon and Pizza Hut also have the highest percentage of bonding consumers (12 percent) in the category. Also notable is that The Home Depot and McDonald’s ranked 17th and 18th respectively. TOP 10 RETAIL BRANDS 2015 RANK BRANDS QUOTIENT #1 64 #2 60 #3 51 #4 49 #5 48 #6 47* #7 47* #8 45 #9 40 #10 39 *Scores that appear tied are the result of rounding four decimal point Quotient scores to their nearest whole number. 4 BRAND INTIMACY | 2015 RETAIL HEAD TO HEAD BRANDS OVERALL RANK #18 #60 INDUSTRY RANK #4 #14 49 34 9.9% 6.3% QUOTIENT PAY 20% MORE 1 6 ARCHETYPES 2 5 3 4 STAGES Target outperforms Walmart by 13 points in the fulfillment archetype, which centers on performance. BRAND INTIMACY | 2015 RETAIL 40 1. FULFILLMENT 1 27 28 2. IDENTITY 21 42 3. ENHANCEMENT 40 43 4. RITUAL 38 25 5. NOSTALGIA 20 25 6. INDULGENCE 13 8% 1. FUSING 5% 9% 2. BONDING 5% 18% 3. SHARING 18% 6 2 5 3 4 Comparing Target to Walmart, the higher-ranked Target, with its Quotient of 49, has stronger associations across all archetypes. Perhaps most notable is the difference between the two brands related to fulfillment, with Target at 40 and Walmart at 27. The stages comparison shows Target has higher levels of bonding and fusing, the highest stages of intimacy. Importantly, 35 percent of Target users are in some form of intimacy, whereas 28 percent of Walmart’s are. Almost 10 percent of Target respondents say they are willing to pay 20 percent more for its products, whereas 6.3 percent of Walmart’s note the same. This may not be surprising because a core promise of the Walmart brand is affordable prices. Although clearly both brands have room to improve, Target presents as a more significant intimate brand, from its Quotient score to its percentage of users willing to pay more for the brand. Target’s higher level of key characteristics associated with Brand Intimacy and its composition of intimate users all suggest a brand with more emotional strength. 5 RETAIL MEXICO $395 BILLION MEXICO’S TOTAL RETAIL NET SALES IN 20135 $9.04 BILLION MEXICAN RETAIL E-COMMERCE SALES PROJECTIONS FOR 20176 2.4% PERCENTAGE MEXICAN RETAIL NET SALES GREW IN ANNUAL TERMS FROM 2013 TO 20147 Retail has an average Brand Intimacy Quotient of 18, which is the lowest score among the categories. Indulgence is the most popular archetype associated with this industry. Within our top intimate ranked retail brands, department stores and quick-service restaurants seem to perform the best. Liverpool ranked highest, with 40 percent of its customers surveyed in an intimate stage, including 11 percent fusing, three percent bonding, and 26 percent sharing. Pizza Hut, the highest-ranking retail food brand, has 30 percent of its customers in intimate stages, with two percent fusing, six percent bonding, and 22 percent sharing. OXXO and Pemex ranked 11th and 12th. Walmart ranked highest for men 18–34 years old, whereas men ages 45–64 ranked Pemex the highest. TOP 10 RETAIL BRANDS 2015 RANK BRANDS QUOTIENT #1 39 #2 31 #3 26 #4 22 #5 21 #6 17 #7 16 #8 11 #9 10* #10 10* *Scores that appear tied are the result of rounding four decimal point Quotient scores to their nearest whole number. 6 BRAND INTIMACY | 2015 RETAIL HEAD TO HEAD BRANDS OVERALL RANK #84 #110 INDUSTRY RANK #4 #8 22 11 7.8% 4.9% QUOTIENT PAY 20% MORE 1 6 ARCHETYPES 2 5 3 4 STAGES Perhaps most notable is the difference between the two brands related to fulfillment, PizzaHut at 37 and McDonald’s at 21. BRAND INTIMACY | 2015 RETAIL 37 1. FULFILLMENT 21 20 2. IDENTITY 15 23 3. ENHANCEMENT 17 29 4. RITUAL 22 38 5. NOSTALGIA 44 56 6. INDULGENCE 49 2% 1. FUSING 1% 6% 2. BONDING 3% 22% 3. SHARING 10% 1 6 2 5 3 4 Comparing Pizza Hut to McDonald’s, Pizza Hut is higher performing, with stronger associations across most archetypes. Most notable is the difference between the two brands related to fulfillment, with Pizza Hut at 37 and McDonald’s at 21. McDonald’s is more known for nostalgia, which is not surprising, given the brand’s history. Pizza Hut has higher levels of bonding and fusing, the highest stages of intimacy. Thirty percent of Pizza Hut users are in some form of intimacy, whereas 14 percent of McDonald’s are. Almost 8 percent of Pizza Hut respondents say they are willing to pay 20 percent more for its products, whereas 4.9 percent of McDonald’s note the same. While clearly both brands have room to improve, Pizza Hut presents a more significant intimate brand, based on its Quotient score and more than double the number of intimate customers than McDonald’s, as well as its percentage of users willing to pay more for the brand. Pizza Hut’s higher level of key characteristics associated with Brand Intimacy and its composition of intimate users all suggest a brand with more emotional significance. 7 UAE RETAIL UAE 32.9% ESTIMATED UAE RETAIL SECTOR GROWTH IN 20158 2ND THE UAE’S POSITION AS MOST IMPORTANT RETAIL DESTINATION GLOBALLY IN 20149 29.2% THE WHOLESALE AND RETAIL TRADE SECTOR ‘S SHARE OF DUBAI’S GDP IN 201310 Retail has a Brand Intimacy Quotient average of 39, six points above the average across all categories. Within our top intimate ranked retail brands, fulfillment is the archetype most associated with this industry, with indulgence a close second. Starbucks ranked highest, although 55 percent of its intimate customers surveyed are in sharing, the earliest stage of intimacy. IKEA emerged in 2nd place, whereas the hypermarkets Carrefour and LuLu ranked 3rd and 4th. Several restaurants, including Pizza Hut, McDonald’s, KFC, and Subway also placed into the Top 10, with McDonald’s notable for having 12 percent bonding, the third highest percentage in the category. Men 18–34 years old rank KFC as their most intimate retail brand. TOP 9 RETAIL BRANDS 2015 RANK BRANDS QUOTIENT #1 55 #2 51 #3 46 #4 39 #5 38 #6 37 #7 34 #8 31 #9 23 *Scores that appear tied are the result of rounding four decimal point Quotient scores to their nearest whole number. 8 BRAND INTIMACY | 2015 RETAIL HEAD TO HEAD BRANDS OVERALL RANK #34 #62 INDUSTRY RANK #7 #9 34 23 32.8% 13.3% QUOTIENT PAY 20% MORE 1 6 ARCHETYPES 2 5 3 4 STAGES McDonald's has double the bonding users of Subway and more sharing customers. BRAND INTIMACY | 2015 RETAIL 33 1. FULFILLMENT 30 23 2. IDENTITY 23 24 3. ENHANCEMENT 23 27 4. RITUAL 17 37 5. NOSTALGIA 23 43 6. INDULGENCE 32 1% 1. FUSING 3% 12% 2. BONDING 6% 34% 3. SHARING 20% 1 6 2 5 3 4 Comparing McDonald’s to Subway, McDonald’s is the more intimate brand, with a higher ranking. Across archetypes, most interesting is McDonald’s 10-point lead in ritual, defined as being a vitally important part of someone’s daily life, a desired goal for both of these brands. McDonald’s is also considered more nostalgic and indulgent. We know 47 percent of McDonald’s customers surveyed have an intimate relationship with the brand, whereas 29 percent of Subway’s customers do, suggesting McDonald’s is doing more to create and deliver intimacy. The stages comparison shows that neither brand has fusing customers, the highest form of intimacy. McDonald’s has double the bonding users of Subway and more sharing customers. You can see that 32.8 percent of McDonald’s respondents say they are willing to pay 20 percent more for its products, more than double the 13.3 percent of Subway users who say the same. 9 ADDITIONAL MATERIALS COLLAGE GRAPHIC BRAND INTIMACY Lorem ipsum dolor sit amet, consectetur adipiscing elit. Ut fermentum faucibus tincidunt. Aliquam dolor erat, ullamcorper id libero in. PLAY VIDEO Explore more Brand Intimacy insights and findings with our interactive Brand Ranking Tool, industry snapshots, and country reports. EXPLORE E-BOOK METHODOLOGY During the spring of 2015, Praxis Research Partners conducted an online quantitative survey among 6,000 consumers in the United States (3,000), Mexico (2,000), and the United Arab Emirates (1,000). Participants were respondents who were screened for age (i.e. 18 to 64 years of age) and annual household income ($35,000 or more) in the U.S. and socioeconomic levels in Mexico and the UAE (A, A COMPREHENSIVE EXAMINATION OF established to ensure that the sample mirrored census B, and C socioeconomic levels). Quotas were HOW TO CREATE, SUSTAIN AND MEASURE ULTIMATE BRAND RELATIONSHIPS data for age, gender, income/socioeconomic level, and region. We crafted the survey instrument using insights from extensive qualitative research conducted on the topic of Brand Intimacy. The survey was E-BOOK designed primarily to understand the extent to which consumers have relationships with brands and the strength of those relationships, from fairly detached to highly intimate. It is important to note that this study provides more than a mere ranking of brand performance and was specifically designed to provide prescriptive guidance to marketers. We modeled data from a total of 52,000 brand evaluations to quantify the mechanisms that drive intimacy. Through factor analysis, structural equation modeling, and other sophisticated analytic techniques, the research allows marketers to better understand which levers need to be pulled to build intimacy between brands and consumers. To read a more detailed description of our approach, visit our methodology page. SOURCES 10 To review the sources cited in this report, please visit our sources page. BRAND INTIMACY | 2015 RETAIL ABOUT US MBLM is the Brand Intimacy Agency, dedicated to creating stronger bonds between people, brands, and technology. We integrate strategy, design, creativity, and technology skills to shape brands for the needs of today and the vision of tomorrow. Our partners have built B2C, B2B, and B2G brands of all sizes and scales across continents and categories. With offices in seven countries, our multidisciplinary teams form an experienced and dynamic multicultural network that helps clients deliver stronger marketing outcomes and returns over the long term. To learn more about how we can help you create and sustain ultimate brand relationships visit mblm.com Praxis Research Partners was established in 2002 by three senior market research professionals. Our guiding principle is to measure and create growth opportunities for our clients through revenuedriven targeting and researching on branding, positioning, and optimization strategies. Collectively, Praxis represents more than 60 years of strategic research experience, with an analytic heritage stemming from years spent in leadership positions at Yankelovich Partners and the Marketing Corporation of America. To learn more visit praxis-research.com BRAND INTIMACY | 2015 RETAIL 11 @mblm | mblm.com
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