Big Australian retail brands are feeling the hot breath of foreign rivals down their necks and overseas operators have started to put a dent in local brand values. Harvey Norman, Myer and David Jones all declined in brand value in the last 12 months according to Interbrand's fourth annual Best Retail Brands Report.
With Amazon gearing up its Australian operation, life for local retailers will only get tougher.
According to the report, David Jones, Australia's oldest department store, is feeling the pace against its younger more agile global rivals. It took the hardest hit, declining by 17% year-on-year to a brand value of US$426 million.
The report states: “Increasing competition from overseas retailers, both online and offline, and a waning reputation for customer service is rendering David Jones' 'house of brands' proposition less relevant.”
David Jones recently hired Whybin TBWA and Maud to help redevelop its in-store proposition but the brand, as well as rival Myer, needs to be swift and bold, suggested the report - which also sniffed at the idea of a potential merger between the two.
Damian Borchok, CEO of Interbrand in Australia, said: “Myer and David Jones both showed declines in their ability to create value through their brands. Despite stated plans to reform and transform, too little change is making its mark with the customer.
“Some argue that the market cannot sustain two premium department stores in the face of online competitors and international players. But the unanswered question remains – why would the merger of two traditional retailers finally deliver a breakthrough business model that gives customers a better shopping experience?”
Woolworths and Coles, however, were among the APAC region's top retail brands, with Woolies topping the list as the most valuable retail brand in the region, with a brand value of US$4.948 billion, up 8% on last year. Coles is valued above US$4 billion for the first time, at US$4.016 billion, up 11% year-on-year.
The report calculates brands' values by looking at market, brand, competitor and financial data and using Interbrand's own 'Brand Strength' framework.
Globally, Walmart is the most valuable retail brand, with a value of US$131.877 billion, and in Europe the winning brand is H&M (which opened a new store almost every day in 2013), with a value of US$18.168 billion.
Australia's top 10:
Woolworths (US$4.948bn, +8%)
Coles (US$4.061bn, +11%)
Bunnings Warehouse (US$1.169bn, +6%)
Harvey Norman (US$620m, -3%)
Myer ($584m, -7%)
Big W ($579m, +3%)
Kmart ($555m, +8%)
Target ($511m, -5%)
David Jones ($426m, -17%)
JB Hi-fi ($378m, +13%)
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.
Have something to say? Send us your comments using the form below or contact the writer at email@example.com
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at firstname.lastname@example.org