The term “influencer” conjures up mental images of Cristiano Ronaldo, Taylor Swift, or Kim Kardashian, and their hundreds of millions of followers on social media.
But brands can be just as, if not more, influential than people, and at this week’s World Retail Congress in Barcelona, the spotlight shifted to the best retail brands and the impact they have on the lives of billions of consumers and shoppers, as well as our society and culture.
A new report by WPP’s BAV* in association with World Retail Congress 2023, (with retail analysis from VMLY&R Commerce**) researches and documents “The World’s Most Influential Retail Brands”.
As David Roth, Chairman of WPP’s BAV told me, making the list is about more than bragging rights.
“It pays to be influential. The top 5% most influential brands are literally the chosen ones,” Roth said. “They are selected regularly 2.4 times more often than rival brands, win double the level of advocacy, and have 1.5 times the pricing power.”
That shows up in stock market performance too, with a broader portfolio of Most Influential Brands overall (retail and non-retail) outperforming the NASDAQ by 48%.
So…the envelope please…which retail brands won out? The winners are many you may expect - Amazon, Apple, Ikea, Nike, Disney, Lego, The Home Depot and Adidas - and a couple you may not - Mercado Libre (Latin America) and Xiaomi (China).
Some other less obvious stars come to light when you analyze by region – e.g., Brooklinen in North America, Finn.no in Europe, Rappi in Latin America and Don Don Donki in Asia. What’s more interesting, however, is which characteristics drive their success.
From more than 15 billion data points, WPP’s BAV gleaned nine “elements of influence” – “clusters of attributes that reflect different ways in which brands can be influential”. They are (in no particular order):
Innovation – brands being “perceived as smart, creative, leading the field” (e.g., Apple)
Trust – brands that “people feel they can count on” (e.g., Costco)
Performance – brands “associated with excellence and specialist expertise” (e.g., Nike)
Status – brands that “say something” about a consumer (e.g., Lululemon)
Purpose – brands that “consumers perceive as being driven by a mission” (e.g., Patagonia)
Authenticity – brands that “feel to consumers like the real deal” (e.g., Lego)
Convenience – brands that “simply make life easier” (e.g., Walmart)
Fun – brands that “bring a smile to peoples’ faces” (e.g., Japan’s Don Don Donki)
Contemporary – highly relevant brands on the “cutting edge of culture”, that live “in the now” (e.g., Singapore’s Lazada)
Not all these characteristics are created equal. Amongst the top 10 retail brand leaders, their superpowers of influence tend to fall under six of the nine elements – Contemporary (comes up three times), Innovation (2x), Authenticity (2x), Performance (1), Purpose (1) and Trust (1).
The study also reveals a multiplier effect – “depth of influence” comes from a combination of “complementary strengths”. German discount supermarket Lidl has more influence, for example, because it combines Purpose with Convenience.
My take after reading the report is that to wield the greatest influence as a retail brand, you need to clearly win on being Contemporary and Innovative, compete on Performance, with Authenticity and Trust playing important supporting roles. The first three qualities are critical for consumer engagement, the last two are vital for shopper conversion. (I do think there is one element that should feature more strongly – Fun! But perhaps this is not as powerful a driver for pure influence.)
That matches where commerce is headed generally. To capture a distracted shopper today, you have to offer way more than a functionally efficient retail solution – which may have been sufficient in the past, at least in online commerce. You must be emotionally arresting to build a brand, turn browsers into buyers and deliver a commercial outcome. That’s Creative Commerce.
Influencing is “doing”, not just “talking”. So, where the idea of influence really comes to life is in the cases cited by the report, for example:
Alipay successfully launching in a Chinese consumer market where credit cards were not ubiquitous and millions of people never had a bank account
The founder of Patagonia donating 98% of the company to a non-profit established to fight climate change
Amazon pioneering frictionless commerce with its Echo devices, Amazon Go and biometric payment with Amazon One
Lego leading in amazing physical retail spaces that deftly include digital experiences, such as their Dubai store where LEGO figures mimic the facial expressions of customers on large screens
IKEA proving that a near 80-year-old retailer can be seen as “Contemporary”, by being one of the first brands to introduce an Augmented Reality app, six years ago
Influence is not “one and done”. As the report observes, “celebrate your influence, but know the clock is ticking”. The clock well and truly ran out for Bed Bath & Beyond, for instance, which once was an influential retail brand. And others may be on borrowed time – Best Buy, for example, faces significant challenges to its Trust dimension from Amazon’s review system, and whether it can retain inherent qualities of “Contemporary” and “Performance” is not assured.
How does a retail brand become more influential? According to Roth, the key is to identify your intrinsic areas of influence, ideally two or three, and work to amplify those. But it takes time and is not entirely systematic. “What ultimately makes the difference is the way someone feels about a brand,” Roth said. “If there is no emotional connection, then price is everything.”
As the report concludes, “with household budgets under pressure and every decision under scrutiny, influential brands are more likely to feel like ‘the right choice for me’.” Whether it’s via social media or retail brands, we are in the “Age of Influence”.
- Jon Bird is Executive Director Global at VMLY&R Commerce
Originally published in Forbes