Brands: Latest Shifts (Retail)

Some Brands are winning over consumers, but are they providing real value?

 Everyone agrees that Brand equity is something precious to hold on to and can sometimes help you ride out the rough times, but in times of crisis it is also true that our fickle consumers will become treacherous and turn their backs on their favourite product, in search of a cheaper or fresher looking.alternative.

In a recent Bigger Picture Market survey, some of the shifts in New Zealand's Brand Leaders and Losers have come as somewhat of a surprise in a country that relentlessly adores home brands and shuns outsiders, and does so in a consistent manner - year in, and year out.

Take, for example, The Warehouse - "Where everyone gets a bargain". Back in 2005, when I last visited these shores, The Warehouse was best known for selling "cheap and cheerful" goods (to be polite). Walk into any of their glistening red warehouses today and you'll be met with...yes, you guessed it: "cheap and cheerful" goods again. Surely a successful model that has stood the test of time? 

Well...yes and no. This latest survey actually ranks the country's largest listed retailer well behind many of its competitors when it comes to delivering value. Market Research firm Big Picture surveyed 300 New Zealand consumers last week, asking them to rate 44 well-known brands in terms of their value.

 

Supermarket operator Pak'nSave came out on top, closely followed by online auction site Trade Me and DIY chains Bunnings and Mitre 10. The Warehouse came in at No 33.

 Big Picture claim that while 67 per cent of respondents thought The Warehouse was good value, its low ranking resulted from 32 per cent saying it was cheap but not good value. However, another 32 per cent said the retailer was offering better value than it had in the past.

And this is perhaps the most important point when we analyse real Brand value and Brand equity - depending on the overall measure and perspective, the conclusions can often be misleading or misrepresentative to say the least. 

Shoppers' perceptions of The Warehouse were generally upbeat and positive, but was it offering real value to the consumer? No. And in hard times, people want and expect their purchases to do more for less, rather than just buy more for less. 

One of the Brand winners this year - and not a physical shop in sight !

As a result, shoppers were helping to drive the success of the rival Briscoe Group, which operates Briscoes, Rebel Sport and Living & Giving stores. This group has posted a record full-year profit last week. Briscoes itself was ranked 11 in the survey, behind Pams and Countdown.

But The Warehouse wasn't the only listed business given a low ranking for value, Restaurant Brands' KFC ranking 40th behind competitors McDonald's (39), Burger King (31), Domino's Pizza (30) and Subway (10) come as somewhat of a surprise. Yes, they are very popular. Yes, they are "top of mind" and the "go-to" choice of most consumers, but even with modest or steady prices, perceptions fail when it comes to rational sense.

Jon Bird of brand strategy company Idea Works, said the market disruption caused by the global financial crisis had led to heavy discounting by stores, but retailers also needed to enhance shoppers' in-store experience.

Value was more than just a good price - it was a combination of benefits, said Bird, who revealed the survey's findings at the Westfield Retail Brain Food for Breakfast seminar in Auckland yesterday.

Announcing The Warehouse's full-year result in September, chairman Graham Evans spoke candidly of how the retailer had "lost its way". Under-investment had made the Red Sheds "tired and unattractive" and the company hadn't met customers' demands.

The retailer is carrying out a $430 million capital investment programme to return The Warehouse to its former glory through improving the external and internal appearance of its stores, property development and new sites.

Asked if the spending programme would change consumers' perceptions of The Warehouse, Byrne said: "I imagine it will change the perception, whether it's enough is the question.'

BRANDS RATING (Value for money rating)

Source: Bigger Picture Consumer Online Survey

HIGHEST to LOWEST

• Pak'nSave 95%
• Trade Me 93%
• Bunnings 92%
• Mitre 10 91%
• Maggi 87%
• Signature Range 86%
• Skype 85%
• Pam's 85%
• Countdown 85%
• Subway 85%
• Briscoes 84%
• Nescafe 83%
• Farmers 82%
• Toyota 82%
• Home Brand 81%
• JB Hi-Fi 81%
• Continental 80%
• Dick Smith 80%
• Air NZ 80%
• Noel Leeming 79%
• Westfield shopping centres 78%
• New World 77%
• Postie 76%
• Glassons 76%
• Mazda 76%
• KMart 75%
• PlaceMakers 75%
• Bakers Delight 75%
• Whitcoulls 73%
• Domino's Pizza 72%
• Burger King 71%
• Harvey Norman 68%
• The Warehouse 67%
• EziBuy 67%
• StrawberryNet 65%
• Jay Jays 64%
• Nosh 64%
• Apple 64%
• McDonald's 63%
• KFC 60%
• Adidas 59%
• Nike 56%
• Jetstar 50%
• The $2 Shop 43%