The Fastest Growing and Declining Retail Brands in 2020
The COVID-19 outbreak has led to the savage disruption of retail the world over.
Almost overnight, foot traffic in physical stores disappeared, and supply chains were left scrambled. Now at a major fork in the road, many retailers are forced to make tough decisions that were completely unforeseen.
While some global retail giants are laying down their weapons and filing for bankruptcy, others are innovating to save themselves, serving their customers in new and unexpected ways.
Today’s graphic uses data from Kantar’s Brand Z™ report to illustrate the retailers that are growing through adversity, and those that may struggle to survive.
Editor’s note: The report compares brand value of the top 75 retailers globally between 2020 and 2019, using mid-April as a cut-off date for incorporating latest financial information. Some early effects of the pandemic are incorporated in these calculations, but the pandemic’s impact on retail going forward is uncertain.
Retailers Rising to the Top
The calculation of brand value refers to the total amount that a brand contributes to the overall business value of the parent company.
In this case, it is measured by taking the financial value of a brand (latest data as of mid-April), and multiplying it by the brand’s contribution, or the ability of the brand to deliver value to the company by predisposing consumers to choose the brand over others or pay more for it, based purely on perceptions.
Based on these metrics, activewear brand lululemon is the world’s fastest growing retail brand for the second year running. Famous for its culture of accountability and global community events, the brand has struck the perfect balance between a seamless online and offline experience.
Explore the 10 fastest growing retail brands of 2020 below:
|Brand||Brand Value 2020||Brand Value % Change|
2020 Vs. 2019
|Costco||$28.7B||35%||Retail||🇺🇸 United States|
|Amazon||$415.9B||32%||Retail||🇺🇸 United States|
|Target||$10.6B||32%||Retail||🇺🇸 United States|
|Walmart||$45.8B||24%||Retail||🇺🇸 United States|
|Sam’s Club||$6.8B||19%||Retail||🇺🇸 United States|
Interestingly, Walmart holds three spots in the ranking as it also owns Flipkart and Sam’s Club. Moreover, the American retail giant purchased a stake in Chinese e-commerce platform JD.com, which has grown from 5% to 12%.
The two brands entered the strategic partnership together with the goal of dominating the Chinese market and surpassing Alibaba.
The Recipe for Retail Success
While every retailer has a unique growth strategy, according to the authors of the report, there are three factors that are undeniably crucial for success.
- Value: Offering value for money through fair pricing for all products or services.
- Uniqueness: Having a clear purpose and standing for something that consumers find meaningful.
- Premium: Being perceived as being worth more than the price consumers pay.
Further, research also suggests that successful brands dominate their respective category when it comes to brand awareness and consistently provide experiences that enrich their customers’ lives, as demonstrated by lululemon.
As retailers continue to shift their focus towards digital transformation, consumers are still finding great value in having the best of both worlds when it comes to combining e-commerce and brick-and-mortar, otherwise known as “brick and click”.
Retailers Struggling to Stay Relevant
Unfortunately, there are several brands that haven’t yet mastered this winning combination, and the ruthless pandemic economy has only emphasized their struggles.
Here are the 10 fastest declining retail brands of 2020:
|Brand||Brand Value 2020||Brand Value % Change|
2020 Vs. 2019
|Under Armour||$2.6B||-34%||Apparel||🇺🇸 United States|
|Walgreens||$6.8B||-26%||Retail||🇺🇸 United States|
|Tim Hortons||$5.4B||-20%||Fast Food||🇨🇦 Canada|
|Subway||$13.8B||-20%||Fast Food||🇺🇸 United States|
|Burberry||$3.8B||-18%||Luxury||🇬🇧 United Kingdom|
|M&S||$2.5B||-18%||Retail||🇬🇧 United Kingdom|
|Dunkin'||$2.4B||-15%||Fast Food||🇺🇸 United States|
|The North Face||$2.4B||-14%||Apparel||🇺🇸 United States|
Under Armour’s distribution relies heavily on third party retailers and department stores, so the brand has understandably been negatively impacted by the mass store closures.
While the brand focuses on expanding its personalized and connected fitness product offerings, it faces huge pressure from powerful competitors such as Nike and Adidas who already dominate this space.
A Rising Tide Lifts All Shipments
2020 has instigated a retail renaissance of epic proportions through accelerated digitization and changing consumer values. Ultimately, some brands will be better positioned than others to benefit from these changes.
As retailers begin reopening for business, they are presented with an opportunity to recalibrate the current retail landscape by setting new standards for the industry.
A Very COVID Christmas: The Pandemic’s Impact on Festive Spending
This graphic explores how festive spending in 2020 has changed as a result of the ongoing COVID-19 pandemic and evolving consumer behavior.
The Pandemic’s Impact on Festive Spending
View the high-resolution of the infographic by clicking here.
From mass job losses to not seeing family and friends for months on end, the COVID-19 pandemic has pushed people to their limits in 2020.
As an incredibly difficult year draws to a close, people are starting to accept that this festive season will be anything but typical. But while a portion of consumers have reined in their spending due to financial uncertainty, others are spreading Christmas cheer by indulging in gifts for their loved ones.
The graphic above from Raconteur explores how consumers’ festive spending in the U.S. and UK has changed as a result of the ongoing pandemic.
Will the shift trigger permanent changes in the retail industry?
Festive Budget Breakdown
According creative agency Kinetic, half of all UK adults surveyed believe this Christmas is more important than ever before, with that figure rising to three quarters for 18-34 year olds.
However, given consumers’ concerns over the future of the economy, they are expected to reduce spending during the festive season. In the U.S. for example, spending will decline by 7% to $1,387 per household.
When it comes to how consumers plan to spend their hard-earned cash, some interesting insights emerge. As many have saved significantly on socializing and travel—which is down 34% year-on-year—they plan to put this money towards items for themselves instead of gifts and gift cards for others. These items include clothes, at-home entertainment, and home furnishings.
It therefore comes as little surprise that the global online home decor market is estimated to grow at a compound annual growth rate (CAGR) of almost 13% between 2020-2024 with revenue of over $80 billion.
Dampening the Christmas Spirit?
Unsurprisingly, over half of all U.S. consumers are anxious about shopping in-store this holiday season. The vast majority have health and safety concerns, with 71% being the most worried about dealing with others who aren’t taking the virus seriously. This is closely followed by being around, or too close to others in stores.
Therefore, when it comes to physical shopping, people feel more comfortable in local stores or at outdoor markets and much less so in shopping malls.
Safety in Online Shopping
Considering this change in mindset, almost 60% of UK consumers said that they will be shopping online more this Christmas.
Here’s a closer look at how they plan to shop differently during the 2020 holiday season:
|Shopping In-store||Shopping Online|
But while ecommerce sales are expected to spike over Christmas, delivery speeds and shipping delays are also major concerns for consumers. As a result, many of them started their shopping much earlier this year to avoid disappointment. In fact, over half of all UK shoppers had started their Christmas shopping before November had even arrived.
Bidding Adieu to 2020
The end to a painful year for many can’t come soon enough. But boarded-up storefronts, and “for sale” signs serve as a harsh reminder of the fragility of the retail sector and its reliance on consumer sentiment.
Even as we march forward guided by the hope of an effective vaccine, the future of retail remains uncertain. For consumers, their confidence will build once more, but how they choose to spend their money following the festive season will be more important for businesses and the economy than ever before.
5 Big Picture Trends Being Accelerated by the Pandemic
In some cases, COVID-19 has sped up societal and economic trends that were already in motion. Here we examine five examples.
As every email introduction has reminded us in 2020, we’re living in “unprecedented times”.
No doubt, even after a viable vaccine is released to the general public and things begin to return to some semblance of normalcy, there will be long lasting effects on society and the economy. It’s been said that COVID-19 has hit fast forward on a number of trends, from e-commerce to workplace culture.
Today, we’ll highlight five of these accelerating trends.
#1: Screen Life Takes Hold
Smartphones have drastically altered many parts our lives – including how we spend time. In the decade from 2008 to 2018, screen time on mobile devices increased 12x.
Fast forward to today, and screen time is up across the board, with some of the most dramatic increases seen among kids and teenagers. 44% of people under the age of 18 now report four hours or more of screen time per day – up from 21% prior to the pandemic.
Gaming is another digital segment that has benefited from the pandemic. Video game revenue spiked in the springtime, and sales have remained strong going further into 2020. Companies are hoping that casual gamers won over during lockdown will continue playing once the pandemic has come to an end.
Acceleration signal: International bandwidth and internet traffic was already increasing steadily, but COVID-19 stay-at-home activity has blown away previous numbers.
Even as more workplaces and schools begin to operate normally again, it’s doubtful that screen time will drop back down to pre-COVID levels.
#2: The Big Consumer Shake-Up
The consumer economy has been innovating on two fronts: making physical buying as “frictionless” as possible, and making e-commerce as nimble as possible. COVID-19 broke old habits and sped up that evolution.
Innovations in real world shopping appear to be moving in the direction of cashierless checkouts, but in order for that model to work, people first need to embrace contactless payment methods such as mobile wallets and cards with tap payment.
So far, the pandemic has been an accelerant in moving people away from cash and pin-and-swipe credit cards in lagging markets. Once people get used to the convenience of contactless payments, it’s likely they’ll continue using those methods.
Of course, no conversation about e-commerce is complete without talking about Amazon. The company has seen consistent growth in subscription revenue in recent years, and the company’s actions have a wide-reaching effect on the rest of the industry.
Much like the gaming industry, e-commerce companies like Amazon are hoping that people who dabbled with online ordering during the pandemic months, will convert into lifelong customers.
Acceleration signal: E-commerce penetration projections have shifted upward.
In hindsight, 2020 could be an inflection point where e-commerce gained a much bigger slice of the overall retail pie.
#3: Peak Globalization
Globalization went on a tear starting from the mid-1980s until it hit a plateau during the financial crisis. Since that point, global trade as a percentage of GDP has flat-lined in the face of trade wars, and now COVID-19.
Trade was obviously impacted by the pandemic, and it’s too early to say what the long-term effects will be. One thing that is clear is that the information component of globalization is becoming an even more important piece of the world’s economic puzzle.
Even before COVID-19 took hold, the global services trade was growing 60% faster than the goods trade, and was valued at approximately $13.4 trillion in 2019.
Acceleration signal: The dip in merchandise trade looks eerily similar to the one that took place in 2008.
#4: The Wealth Chasm
On the high end of the wealth spectrum, billionaires are worth more than ever.
Meanwhile, in the broader economy, inequality has grown over the last few decades. Those in the top 50% wealth bracket have seen increasing gains, while the bottom 50% have seen stagnation.
This issue is sure to be compounded by economic turmoil brought on by COVID-19. Younger generations face the dual challenges of being more likely to be negatively impacted by the pandemic, while also being the least likely to have savings to cover an interruption in income.
In fact, nearly half of people in the 18–24 year old age group have nothing saved at all.
The longer the economy is affected by COVID-19 measures, the more of a wedge will be driven between people who have continued working and those who are employed in impacted industries (e.g. tourism, events).
Acceleration signal: Growth in the net worth of billionaires has been largely unaffected by COVID-19.
#5: The Flexible Workplace
As of 2019, over half of companies that didn’t have a flexible or remote workplace policy cited “longstanding company policy” as the reason. In other words, that is just the way things have always worked.
Of course, the pandemic has forced many companies to rethink these policies.
This grand experiment in remote work and distributed teams will have an impact on office life as we know it, potentially reshaping the entire “office economy”. The impact is already being felt, with global commercial property investment volume falling by 48% in Q3 2020.
Acceleration signal: Thousands of people are moving out of pricey urban areas, presumably because they are able to work remotely from a cheaper location.
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