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eCommerce pushing social media ad spend higher in Q3

960 640 Stuart O'Brien

Social media ad spend rose sharply in Q3 to pre-pandemic levels, led by increased investment in e-commerce ads despite the ongoing impact of COVID-19.

That’s according to a new Social Media Trends report rom Social Breakers This signals a healthy trust among marketers in the effectiveness of digital channels.

Compared to Q2, worldwide social media ad spend increased by 56.4% in Q3, making average spend nearly double its level at the lowest point of the pandemic in late March.

The largest increase took place in North America, where ad spend increased by 61.7%. In the UK, brands spent more in Q3 2020 than they did in Q3 2019 (see below), with a 43% uplift on ad spend in the last week of September year-on-year.

Looking across all brands, ad spend was 27.6% higher in Q3 compared to the same period last year, after dropping below 2019 levels in March and April. In Q3, the average industry ad spend increased by 38.9% in Q3, with large jumps from FMCG Food (up 61.3%), Auto (up 59.4%), Finance (up 35.3%) and Ecommerce (up 27.5%).

CPC reaches its highest point since 2019

The worldwide cost-per-click increased by 42.4% in Q3, compared to where it was at the end of June. At $0.168, global CPC is now at its highest point since the end of 2019. Among the regions that saw significant CPC increases were Latin America (up 44.8%), Western Europe (up 30.8%) and North America (up 19.5%). For all brand accounts, CPC increased by 32.1% to $0.140, which is the highest it has been since December 2019. In the UK, CPC in September reached the same levels as Q3 2019 (see below), with the final week in September actually beating 2019, at 0.339 (versus 0.322), a 5% uplift.

Instagram continues to dominate

Instagram continued to outperform Facebook in Q3. Globally, the audience size of Instagram’s 50 biggest brand profiles was 34.7% larger than that of Facebook, but in the UK, the figures are almost equal. However, Instagram continues to generate significantly stronger engagement than Facebook, garnering 22x more interactions. Despite this, 61.9% of all brand posts in Q3 were published on Facebook. Worldwide, Facebook ad reach increased on average by 12.3%.

Daily News and NGOs see major spikes in interactions 

As one might expect during the pandemic and elections, the Daily News and NGO industries saw a steep rise in engagement in Q3. Daily News interactions rose 103.3% on Instagram and 57.8% on Facebook, while NGOs interactions rose 112.9% on Facebook and 31.2% on Instagram. Interestingly, Travel industry interactions increased by 60.9% on Facebook, yet decreased by 31.2% on Instagram.

In the UK, ecommerce brands continue to take the biggest share of interactions on Facebook, with 44.3%, and even bigger than in Q2 2020 with 36.8%. On Instagram, fashion brands continue to dominate, with Oh Polly taking the winning spot with 18,400,000 interactions, followed by Pretty Little Thing with 11,800,000 and Missguided coming in third with 11,400,000 interactions.

Facebook Live and longer videos are top performers

In the UK, when comparing the usage of video content across platforms, video is used the most on Twitter. When looking into Facebook, Facebook Live was by far the most engaging format for that channel in Q3. It delivered double the interactions of the video format. On Instagram, carousel posts that can include both images and video were the most engaging format in Q3. Organic interactions across all formats on Instagram showed an increase in Q3. However, on Facebook only Facebook Live showed increased interactions, while other formats remained flat compared to Q2.

When it comes to the overall top-performing formats in terms of both reach and interactions on Facebook, the winners were long and very long videos. The reach was best for very long videos (over 5 minutes) which achieved a 70.4% higher reach than the second best video length (long). However, the performance of very long videos has been declining over the last seven months. In Q3, long videos (over 65.194 seconds but shorter than 5 minutes) had the top performance index at 23.2%.

The Socialbakers’ Social Media Trends Report Q3 2020 is now available for download at no cost.

The Hidden $20.3 Billion: The cost of disconnected payments

960 640 Guest Contributor

By Checkout.com

How can your payments perform better? And what can you do to stop leaving money on the table? Checkout.com decided to find out.

In partnership with Oxford Economics, Checkout.com analyzed data from 5,000 consumers and 1,500 merchants to piece together this complex puzzle.

Black Boxes and Paradoxes: The True Cost of Disconnected Payments

Checkout.com’s exclusive report shines a light on the biggest untapped payments opportunities for companies today. It reveals what customers are willing to pay for more secure transactions and how fast-growing brands like Deliveroo and TransferWise, approach payments.

Report insights:

  • False declines cost merchants $20.3 billion last year, with $12.7 billion given away to competitors and $7.6 billion -written off
  • 60% of merchants don’t think that their payments data that they receive is robust enough to inform their business strategy nor their innovation
  • Super high growth (41%+ year on year) companies are more likely to have an authorization rate of 96-100% than other businesses

Who are Checkout.com?

Checkout.com’s flexible payments solutions help global enterprises — like Samsung and adidas — adapt, innovate and thrive with more value from every transaction flowing through your business. They’re on a mission to empower merchants by building the connected finance they deserve.

Download the report now to discover the hidden value of payments.

UK consumers set to stick to online stores post-lockdown

960 640 Stuart O'Brien

Lockdown has led to the UK becoming a nation of online shoppers – with millions planning to continue their digital spending spree despite restrictions being lifted.

A study of 2,000 adults found 61 per cent shopped online more than usual during lockdown, with a staggering nine in 10 planning to shop as much online, if not more from now on.

Groceries, and home and garden products were at the forefront of items purchased online, with 41 per cent of adults making at least one of these purchases during lockdown.

And three fifths of the adults polled now plan to buy groceries online in the future, with sales figures of meal kits purchased over the internet soaring by 114 per cent when people were urged to stay indoors.

Stefano Rossi, packaging CEO at packaging firm DS Smith, which commissioned the research, said: “There has been a seismic shift in the way consumers are shopping.

“What’s clear is that as lockdown eases further, these trends aren’t likely to fall away.

“Consumers have found new confidence and convenience in the way they shop, buying a whole range of items online – everything from the family food shop, to toiletries and home and garden products.

“If companies are not already transforming their business to meet this new age of e-commerce, they risk being left behind.”

The study also found shoppers are buying in new ways and from new suppliers, with nearly a third signing up to a new shopping website that they hadn’t used before lockdown.

DS Smith also saw packaging demand double for food, flowers, and hygiene products sold online since the start of the pandemic.

Reasons for buying online differed both by age and gender, with men and younger people prioritising convenience – while women and older generations focused on safety.

But some of the in-store habits remain despite the switch to online shopping, with a third saying they still ‘window shop’ by browsing websites and keeping a wish list of the items they want to buy.

And more than one in three enjoy bargain hunting even when shopping online.

However, sustainability has become an increasing concern with almost a quarter more likely to buy online if items are delivered with less or more environmentally-friendly packaging.

Another 21 per cent of those polled, via OnePoll, are more likely to shop online if their products arrive in more recyclable packaging.

Those aged between 25 and 34 were most conscious about sustainability, while women held this as a higher priority than men.

It’s takes Brits 43 minutes to commit to an online purchase

960 640 Stuart O'Brien

The average Brit will spend just under 43 minutes ‘shopping around’ online before committing to a purchase, with almost four in 10 also reading online reviews before finally hitting ‘buy’.

Insurance and white goods are the top items shoppers are most likely to look for a good deal on, along with energy providers and clothes.

But Brits are more likely to shop around for a new mobile phone contract than a new car.

The study of 2,000 people, commissioned by mobile network provider O2, also found half of those polled are having to be more careful with their spending than ever before, as a result of the current pandemic.

But a lucky four in 10 feel they have had MORE disposable income during lockdown.

A fifth have spent more time than usual shopping around for the best bargains over the last few months because they have had more time on their hands while being stuck indoors.

However, 80 per cent say they have always looked for a good deal no matter what their circumstances or income have been.

It also emerged that 48 per cent hate feeling they’ve been ripped off, but this doesn’t simply mean parting with the lowest amount of cash possible.

Less than a quarter (24 per cent) feel the cheapest offer is always the best value.

A further six in 10 believe ‘good value’ is simply a matter of getting more product for your money than offered elsewhere.

And one in four count additional benefits beyond the initial purchase, such as exclusive offers and discounted access to third party services, as good value.

The research, conducted via OnePoll, also found 70 per cent of the population have bought something – only to feel annoyed seeing it for sale later on.

Of the O2 customers surveyed, 71 per cent use Priority to take advantage of pre-sale tickets and exclusive deals.

And nearly a third (32 per cent) of shoppers say an ability to adjust the service to meet their personal needs or the flexibility to manage their payments is key for them to commit to a purchase.

With O2’s customisable plans, customers can choose how much they want to pay upfront and the length of their device plan (anywhere between three and 36 months), as well as having the option to flex their data allowance up or down every month to suit their needs.

Top 10 list of what Brits look to get a good deal on:

1. Insurance (58 per cent)
2. White goods (52 per cent)
3. Energy providers (gas, electric etc.) (51 per cent)
4. Clothes (49 per cent)
5. Mobile phone contract (47 per cent)
6. Furniture (45 per cent)
7. A new car (43 per cent)
8. Days out such as a trip to the zoo or theme park (31 per cent)
9. Meals out (27 per cent)
10. Tickets such as to gigs and sporting events (21 per cent)

Lockdown cements UK eCommerce buying habits

960 640 Stuart O'Brien

Just 16 per cent UK consumers intend to return to their old shopping habits post-lockdown, signifying the lasting change that COVID-19 will have on the retail industry and the cementing of eCommerce habits.

The COVID, Commerce and the Consumer research conducted by Wunderman Thomson – which surveyed 2,000 UK consumers on their shopping experience during the COVID-19 pandemic – found that the need for safety during lockdown has resulted in a huge shift in shoppers’ habits and traits with a particular trend towards online channels.

Online purchasing accounted for 62% of all shopping during lockdown, compared to 43% before the pandemic. Although online shopping is predicted to account for over half (51%) of all spend moving forward, it will remain higher than it was before the pandemic. Fear of contracting the virus will also play its part in driving online spend with 48% of shoppers scared about shopping in-store.

Shopping habits may have had to change during lockdown, but familiar factors have emerged: 61% of shoppers identified free delivery as a key purchase driver, with availability (57%) and price (53%) coming in as close second and third choices. Yet, when asked what consumers would like to see change most in their online shopping experience, free returns (28%) topped the list.

Amazon’s share in the eCommerce market swelled with over a third (35%) of all online shopping conducted through the marketplace during the lockdown period, reinforcing the company as a big retail winner in the wake of the pandemic. One-in-five (20%) said their net intention to purchase with Amazon post-COVID-19 will increase, despite 21% of people expressing worry about Amazon’s ever-increasing dominance.

Not the sole retail winner, Tesco led the battle of the supermarkets and saw a significant 23% improvement in net perception; while the net intention to purchase post-COVID-19 rose by 9%. Competitors Sainsbury’s and Morrisons both saw a 12% net rise in positive perception respectively.

Other winners include corner shops with a quarter (27%) net increase in positive public perception as they played a pivotal role in providing essential goods. In comparison, the Government’s net change in perception decreased by 30% while the NHS is up during the COVID-19 outbreak by a significant 62%.

Hugh Fletcher, Global Head of Consultancy and Innovation at Wunderman Thompson Commerce, said: “COVID-19 was always going to have a big impact on retail, particularly on high-street brands; in many cases, retailers have had to shift entire operations online. With many consumers looking for assurances on safety and reliability, it’s perhaps unsurprising to see the likes of Amazon and the ‘big four’ supermarkets resonate highly with their ability to provide services to consumers in the way they want. They also all adapted quickly by emphasising stock availability, competitive pricing and customer safety. But corner shops played a vital role too. As consumers look to keep their purse strings relatively tight and as a more digital-first retail future materialises, the brands and retailers that are able to pivot their business models to accommodate this rise in online spend will ultimately get a greater share of shoppers’ wallet.”

On consumers’ desire for digital, one in five (21%) would like more of their products to be digital and instantly downloadable, a noticeable influence of lockdown measures as shoppers have been forced to purchase various goods without leaving home.

The impact of COVID-19 may also be a tipping point for ethical concerns with nearly three-quarters (73%) wishing that retailers and brands would offer better environmental practices. Over half (55%) of consumers say that a company’s ethics and morals play an important part in their purchase decisions, another element that retailers need to contend with as the ‘new normal’ becomes a reality.

Download The COVID, Commerce and the Consumer report

Coronavirus requires increased speed and agility in the retail supply chain

960 640 Stuart O'Brien

A major study from the University of Warwick has provided insights into how retailers have responded to COVID-19 crisis, highlighting a need for human intervention with existing processes unable to keep up with changes in the markets.

The research, conducted by the university in partnership with Blue Yonder, concludes that, going forward, future systems will need to be more robust and responsive, to increase speed and agility in the supply chain.

The pandemic means both online and physical retailers have experienced a combination of unprecedented demand for some particular products, whilst no demand for others. Many stores have been forced to close, or adapt their operations to accommodate social distancing. Where possible, there has been a shift to online shopping, but this is not always possible and presents its own operational challenges.

The study gathered insights from 105 different retailers from Europe, Asia and the Americas who offered a glimpse into their survival and navigation of the COVID-19 crisis. The study found that:

  • The majority (61%) of retailers used inventory to buffer against the disruption of COVID-19. Supply chain processes and systems were effective, but more than half (58%) of retailers said a high degree of manual intervention was required to respond to the fluctuation in demand and supply.
  • Workforce issues were dominant issues for retailers with 59% of warehouse and 48% store operatives being affected by quarantine or illness. This often resulted in the closure of online operations and the need to recruit temporary staff.
  • Retailers were polarised in their treatment of supplier payments, with 37% delaying payments and 30% making early payments.

The survey was administered on-line by Qualtrics in late April 2020. It was targeted at senior executives in retail supply chains, in Europe, Asia and the Americas. 105 responses were received with relatively equal distribution across the regions.

Jan Godsell, Professor of Operations and Supply Chain Strategy at WMG, University of Warwick, said: “Using inventory to buffer against the disruption of COVID-19 was the most common strategy deployed by retailers. This provides the greatest certainty of supply but comes at a cost. In contrast, only just over a quarter (29%) of retailers relied on suppliers with more agile manufacturing and distribution networks, which is a potentially more resource efficient and resilient response.

“With 75 to 80% of products seeing a demand fluctuation, retailers were slightly better at responding to decreases rather than increases in demand. Whilst retailers found that their supply chain processes and systems to be effective in responding to the demand fluctuations, many were still dependent on the human touch.

“From warehouse and store operatives being affected by quarantine or illness to an over-dependence on human intervention within supply chain planning, COVID-19 has highlighted the human vulnerabilities across retail supply chains.”

Wayne Snyder, Vice President Retail Strategy, EMEA at Blue Yonder, added: “Early indications in Asia show that customers have been most supportive of those retailers they deemed to have responded best to the crisis and we’d expect that pattern to follow across Europe and the US. A critical learning for retailers is the need to invest in creating supply chains with greater flexibility, visibility and automation. Here technologies such as artificial intelligence and machine learning will play a key role in helping retailers navigate future disruption, whilst still meeting customers’ expectations.”

 

How online shopping has developed during the coronavirus pandemic

960 640 Stuart O'Brien

Once you think online shopping couldn’t get any more convenient during the Coronavirus pandemic, many major retailers have provided us with yet more ways to shop more efficiently — after all, 70 per cent of UK sales are placed on smartphones.

These additions could be understood partly as a way to combat the need to return goods once they’ve been received, and a few brands have resorted to using some savvy technology to combat the cost of reimbursing customers, as well as improving their shopping experience.   

By looking at recent research, it seems free shipping is more important to a customer than fast delivery. Because free delivery is a common option for many online retailers, this results in increased sales — and increased returns. Returns, of course, lessen any doubts you might have about potential clothes you’re interested in, ordering more to choose from in different colours and sizes.

However, for retailers, it can cost double the amount for something to be returned than it does for delivery. And if returns are balancing orders, there’s going to be a problem for retailers. 

This piece looks at different ways retailers are mitigating returns rates by helping you find the perfect garments. This is certainly important for retailers during the current Coronavirus pandemic. Social distancing is currently making returns harder for customers and retailers alike, therefore, it is important retailers can cater to customers during these unprecedented times.  

From being able to virtually try your shoes on at Nike, to using a picture on ASOS to determine where that dress you saw online is from, it has become even simpler to get the product we really want. 

Fit

Five months into 2020 and already one retailer in particular has innovated online shopping. Anyone who’s not a smaller size will empathise with the frustration that online shopping can bring. Whether you’re searching for suits or women’s dresses, almost all clothes are modelled on a textbook body type — toned and trim.   

This is perfect, of course, if you have this body shape. However, for those who are considerably taller or a larger size, it’s impossible to envision what it would look like on yourself. Material may bunch or gape in areas you don’t want, for instance. 

ASOS’ ‘See My Fit’ is a new feature which uses augmented reality to digitally map what a piece of clothing would look like on a variety of different body shapes, ranging from four to 18. Pioneering customers’ online experience, this addition is the first of its kind in Europe.  

ASOS has also been instrumental in integrating a feature called style match, where customers can essentially image search for clothing they’ve seen, for example, in real life or on social media, scraping ASOS’ stock for similar clothing they have available. This not only helps customers find products but allows them to find cheaper alternatives.  

DIY Makeup Testing

Renowned makeup retailer, Sephora have fused augmented reality in the beauty industry with Sephora Virtual Artist, which scans your face and lets you digitally apply numerous styles with different lipstick colours, eyeshadows, false eyelashes, and foundation colours to check what looks good on you. With it being difficult to gauge what colours can suit men and women’s skin tone, it’s particularly useful in reducing returns.   

Virtual Fitting Room 

An expected popular trend in ecommerce in the coming years is the ability to virtually try products on with artificial intelligence (AI). Nike is eradicating customer’s confusion around what size they should order certain types of shoes in — you might be a size nine at one retailer or a 9.5 at another, resulting in purchasing several sizes for the perfect fit. 

Well the need to do this is being removed. By standing in front of a wall and pointing your phone camera at your feet, the Nike app will scan your feet and use AI to determine what size and shape your feet are and the correct size in a specific shoe. The feature takes less than a minute of your time and has precision within two millimetres. 

Customised Shirts 

Charles Tyrwhitt Shirts is a men’s clothing brand that offer a range of choice of shirts and tuxedos on their online website to make sure they’re perfect for you. With the ability to modify website filters, you can select your style, fit, collar size and style, sleeve length, colour, pattern, weave, and fabric weight — you can purchase the shirt that meets your exact requirements. You can also customise your shirts by selecting the cuff type, adding pockets and monograms. 

The diverse selection makes it less likely you’ll return it when you’ve crafted it to meet your exact specifications. Many of us return clothes that come in one style or shape, perhaps the neck is too tight or the sleeves too short — so when you’re offered a variety of filters to craft the perfect shirt, you’re highly likely to keep it. 

Over in the States, the value of returns is forecasted to increase from $350 billion in 2017 to $550 billion in 2020. Hopefully more and more online retailers will introduce innovative features to make purchases so much easier. 

Sources 

https://www.theverge.com/2018/3/9/17092834/asos-style-match-visual-search 

https://elkfox.com/blogs/articles/how-to-reduce-your-return-rate 

https://www.theverge.com/2017/3/16/14946086/sephora-virtual-assistant-ios-app-update-ar-makeup 

https://www.ctshirts.com/uk/mens-shirts/ 

Coronavirus: Millennials now prefer their online purchases to be digital

960 640 Stuart O'Brien

Brands and retailers must not forego the near half (44%) of millennial consumers who now prefer their online purchases to be digital and instantly downloadable, rather than physical.

That’s according to Wunderman Thompson Commerce’s Future Shopper report, which surveyed over 14,000 people in seven countries and found that close to a third (28%) of consumers’ annual spend is on digital services, such as streaming music and films, rising to 34% amongst millennials (those aged between 25 and 34).

This figure is likely to increase further still as more consumers look for new ways to keep themselves busy indoors.

The study also revealed that 65% of consumers expect to use digital shopping channels more in future, rising to 72% for those aged between 16 and 24. With no sign of lockdown measures being lifted anytime soon, these numbers are only likely to increase, says the report.

When it comes to service, Amazon continues to set the benchmark, with three-quarters (75%) of consumers wishing more brands and retailers offered the same level of service. More than half of UK consumers (57%) now subscribe to Amazon’s flagship loyalty programme, Prime, up from 49% the previous year.

Amazon still leads when it comes to inspiration and search too; with the majority of consumers (52%) looking to Amazon the most for inspiration and 63% starting their search there. Overall, consumers purchase from the company an average of seven times a month. This is more than other marketplaces (five times), retailer sites (four times), social platforms (three times) or the website of the brand they want (three times) each month.

While online shopping – and shopping on Amazon in particular – is a popular choice across most industry sectors (including Health and Pharmaceutical, Entertainment and Toys), 30% of those purchasing luxury products and 40% of those buying groceries would never buy these products online. But with lockdown measures still firmly in place for most countries, consumer resolve is likely to be tested and loyalty to physical stores waning.

For now, however, Amazon doesn’t win out on everything and supermarket loyalty programmes are incredibly popular; three quarters (74%) belong to a grocery loyalty scheme, making them more popular than Amazon Prime membership (55%). Globally, membership of supermarket loyalty schemes is higher amongst women (78%) than men (68%).

What’s more, two thirds (67%) of shoppers would still rather visit a supermarket website or physical stores to buy groceries than go to Amazon, with just 10% saying they would order their groceries from the retail giant. Despite supermarkets struggling to cope with the surge in demand caused by COVID-19, it’s clear they remain the outlet of choice for consumers, regardless of the lockdown measures.

The report says new technologies are changing expectations and consumers are crying out for more innovation in their shopping experience, with innovation and technology now key considerations for almost half of consumers (47%) when choosing where to shop, and over half (52%) wishing brands would be more innovative in how they use digital technology to improve their overall experience. Social commerce is also a key ingredient in the retail mix, with 42% of consumers actively recommending products to their friends through direct messaging or tagging on social media.

Neil Stewart, CEO, Wunderman Thompson Commerce, said: “With many countries still in lockdown as a result of the pandemic, brands and retailers are having to find new revenue streams online to ensure they’re not being left behind. This means having a balanced strategy in place that incorporates direct-to-consumer, B2B and B2B2C business models, plus marketplaces and retailer.com to maximise exposure. Whilst the lockdown measures have benefited Amazon, the need for other brands to evolve quickly in response will likely foreshadow how they respond to changing demand in future. After all, consumers are increasingly looking to buy digital products in place of physical ones and will be looking to a new generation of brand and retailer to fulfil that demand.”

In China, consumers are even more excited by eCommerce and seemingly more prepared for this retail landscape under COVID-19, as 93% of Chinese consumers expect to increase their use of digital shopping channels in the future. What’s more, 85% are excited about the idea of the future heralding cashless payments (vs. 44% internationally), 84% use social media to tag friends for products and over half (54%) use or have used devices to automatically re-order products (compared to only 24% for the international average).

Click here to download The Future Shopper report.

Value of most valuable global retail brands hits $1.5 trillion

960 640 Stuart O'Brien

The third annual BrandZ Top 75 Most Valuable Global Retail Brands Ranking from WPP and Kantar shows the value of the world’s top 75 retail brands has grown 12% to $1.5 trillion in the past year.

The report provides an indication of the brands that are most likely to prevail in a post-coronavirus market and uses valuations data incorporating stock price performance from April 2020 to reflect the impact of COVID-19. It also drives home the retail sector’s pivotal role in the global economy as brands respond to shifts in consumer behaviour while facing business-critical changes to supply and demand and a restricted ability to trade.

BrandZ combines analysis of retailers’ financial performance with the opinions of millions of consumers surveyed in more than 51 markets around the world. Historical BrandZ data confirms that brands with the strongest brand equity recovered nine times faster following the financial crisis of 2008.

“The coronavirus crisis underscores the essential role that retail plays in both our daily lives and the overall global economy; we are seeing some heroic examples of retail companies stepping up to meet consumer need and keep the world turning. While this is a fast-moving and ongoing story, the report allows us to show the businesses that, having invested in becoming a strong brand, are potentially better able to withstand the current shock. Twenty-two years of BrandZ data analysis consistently confirms that strong brands help their businesses to survive turbulent times,” said David Roth, CEO of The Store WPP EMEA and Asia and Chairman of BrandZ.

The 2020 BrandZ retail report highlights the actions agile and innovative retail brands are taking to make a difference to the lives of people confined to their homes and forced to change their habits; experience and data shows brands that maintain their visibility in a relevant and sensitive way throughout a crisis are best-placed for a faster recovery.

The top retailers in the 2020 ranking illustrate the scale and breadth of activity making brands meaningfully different and salient to consumers in the coronavirus age: Amazon (No. 1, $415.9 billion) is managing demand and reducing its speed of delivery to prioritise key products; Alibaba (No. 2, $152.5 billion) subsidiary Ali Cloud used its AI expertise to help medics in China significantly shorten the coronavirus diagnosis time; Louis Vuitton (No.5, $51.8 billion) parent company LVMH took only 72 hours to convert its production lines to make hand sanitizer; and Chinese ecommerce brand JD (No. 13, $25.5 billion) delivered medical supplies and food using its extensive distribution network.

Athletic apparel company Lululemon (No. 25, $9.7 billion) grew 40% to become the ranking’s highest riser; current activity includes offering online training programmes, a purposeful marketing tactic to keep it front-of-mind that has also been adopted by Adidas (No. 18, $14.8 billion).

Otherwise the fastest riser category is dominated by pure retail as grocery outlets see a boom in demand as people stock up. Unsurprisingly, the digital-native brands scored highly – Amazon, JD and Alibaba were up 32%, 24% and 16% respectively – but physical retail veterans also showed their ability to adapt to an online-only environment. Costco (No. 11 $28.7 billion) grew 35%, Target (No. 23, $10.6 billion) was up 27%, Walmart (No. 8, $45.8 billion) increased 24% and Sam’s Club (No. 36, $6.8 billion) rose 19%.

Smart retailers are also resisting the temptation to cut back on advertising investment, learning lessons from China where brands that ‘went dark’ are struggling to reconnect during the early stages of recovery as consumers opt for those that actively demonstrated support. Marketing is being adapted as people are confined to staying indoors, with tone of voice being as important as the media mix.

Graham Staplehurst, Global Strategy Director for BrandZ at Kantar, said: “Brand value isn’t just determined by financial performance, but also by reputation in the eyes of consumers. How retailers behave now in terms of helping people through the crisis, as well as the way in which they treat their staff and whether they comply with government and health advice, will be important to their survival. Those that have actively demonstrated their relevance and usefulness and continue to do so as consumers’ lives start to get back to normal, will be best-placed to strengthen customer relationships both in the recovery phase and the long-term.”

 

The BrandZ Top 10 Most Valuable Retail Brands 2020

Rank 2020 Brand Brand value 2020 ($bn) Category Rank 2019
1 Amazon 415.9 Retail 1
2 Alibaba 152.5 Retail 2
3 McDonald’s 129.3 Fast Food 3
4 The Home Depot 57.6 Retail 4
5 Louis Vuitton 51.8 Luxury 6
6 Nike 50.0 Apparel 5
7 Starbucks 47.8 Fast Food 7
8 Walmart 45.8 Retail 9
9 Chanel 36.1 Luxury 8
10 Hermès 33.0 Luxury 10

 

Highlights in this year’s BrandZ Retail ranking include:

  • The strongest got stronger: The Top 10 brands in the ranking outpaced the rest of the sector, posting an average rise in brand value of 16.4%. Amazon’sgrowth sees it account for 27% of the Top 75’s total brand value while robust performances by other Top 10 brands such as Alibaba show that strong brands can do more than get by; they can redefine what is possible.
  • Sector leaders continued to dominate: McDonald’s(No. 3, $129.3 billion) is by far the most valuable Fast Food brand in the world, although others enjoyed rapid growth, thanks largely to delivery and other service innovations such as AI-powered suggestions at drive-throughs and delivery partnerships behind incremental orders. Louis Vuitton is the most valuable Luxury brand, with a new global flagship store in Seoul and creative partnerships with major artists while Nike (No. 6, $50.0 billion) leads the Apparel category with e-commerce, product customization and collaborations driving strong sales.
  • Five new entrants: Three Japanese brands make their debut in this year’s ranking; online fashion store Zozotown(No. 52, $4.5 billion), retail network Aeon (No. 64, $2.9 billion), and convenience story company Family Mart (No. 75, $2.4 billion). China’s ecommerce platform Pinduoduo (No. 26, $9.4 billion) is the highest new entry, following the success of its online group-buying model; Bunnings hardware chain from Australia (No. 69, $2.7 billion) is the fourth new entry.

Coronavirus: Consumers ‘ignoring online fraud risks’

960 640 Stuart O'Brien

Consumers in the US and UK aren’t taking the necessary precautions to protect their online identity, instead prioritising convenience and speed of access to online goods and services over personal security.

That’s according to research conducted by YouGov in April 2020 on behalf of Callsign that surveyed more than 4,000 consumers in the US and UK, showing evidence of overconfidence among consumers in relation to their perceived strength and level of protection their credentials provide, with 77% believing their banking credentials to be the most secure, followed by online shopping (74%) and work network logins (71%).

Callsign says this overconfidence may also explain why many consumers failed to update their login details with more than half (52%) of online shoppers admitting they have no plans to update their login details, with this figure rising to 55% with online banking customers and 54% for employees that are working from home, remotely accessing their work’s networks and systems.

Key Survey Findings:

  • Risking It All for Toilet Paper – When in isolation and under pressure to buy scarce, staple items e.g. toilet paper, nearly one in four (26%) consumers in the U.S. admitted to overlooking online security concerns – using third-party online merchants – while one in five (13%) UK consumers admitting taking similar risks.
  • Remote Workers More Mindful of Business Credentials Over Own – U.S. and UK consumers (21%) were also found to be more likely to update work network login details over their own online banking (19%) and shopping (19%) credentials. While the disparity was marginal, this could be explained by employers’ willingness to provide staff with information and tools to update their login details, with almost half (45%) of respondents saying they had received this information when the pandemic hit – a figure that is higher (60%) for full-time workers.
  • Frictionless Digital Reality Still in Question – The research also highlights that nearly two thirds (61%) of respondents are struggling with business networks and systems access, while 60% of online shoppers confirmed a similar experience in the past month. This results in many hours of lost time for employees; it also leads to customers needing to call customer service representatives to resolve their issue – a group who are already contending with a limited crew due to social distancing. However, it appears that bank-grade security and authentication should set the precedent, with over half (52%) of people not having had an issue logging in over the last month.
  • Unemployed Struggling Most With Access – People out of work are finding it even harder than their peers to access services online in the last month, with 65% finding it challenging to log in and pay for their online shopping and 54% struggling with logging into their online banking – a concern when vulnerable groups such as this are the people who need these services most.  
  • Pandemic Weighs on Patience Increasing Churn – With consumer anxiety at an all-time high, there is little patience for a poor online user experience. In the last month alone, 20% of consumers switched to other brands due to a bad online shopping experience (e.g. failed payments, complicated log-in, etc.). While numbers were not as high for banking, churn was still considered significant, with 14% of U.S. consumers already agreeing they would make the switch. Although this was only 4% in the UK.
  • Vigilance Varies Among Markets – Americans were found to be more vigilant than their British counterparts, with one in four Americans updating their banking logins compared to just 13% in the UK. This is further compounded by the fact that two out of three (66%) UK banking customers have no plans to update their banking credentials, compared to 44% in the US.
  • Consumers Indifferent Despite Risk When asked ‘Has the COVID-19 pandemic and increased fraud influenced you to use alternative banking or shopping apps or websites with more secure measures?’, over three quarters (78%) of U.S. consumers stated ‘no or they didn’t know’ with 85% of UK consumers sharing a similar indifference about security.

Amir Nooriala, Chief Commercial Officer at Callsign, said: “With fraud escalating at a staggering rate, businesses cannot afford to sit back and watch. Consumers have enough to worry about regarding the pandemic; their security shouldn’t be one of them. As more and more people shift their lives online, businesses need to take responsibility while encouraging customers and employees to prioritize personal security – without adding in extra cumbersome identity checks. Companies must use technology that allow consumers to log in without having to deal with pesky one-time-passwords via text messages or long forgotten security questions which could result in them switching provider. With businesses on the brink they cannot afford to lose customers that way. Instead, they need to make identification and authentication as safe and easy as possible.”