The Retail Category is Valuable and Highly Talkable
by John Moore, TalkTrack® Conversationalist, February 14, 2011Tags: Brands, Keller Fay Group, offline, online, research, Shopping & Retail, Social media, TalkTrack®, WOM, word of mouth
Retail brands make the American economy hum. The retail industry contributes about $4.0 trillion dollars to the US economy and is responsible for nearly 12% of all US employment [source].
According to an Interbrand 2010 study, Walmart, for the second consecutive year, is the most valuable American retail brand as measured by its financial strength and brand equity. Target moved up from being the fourth most valuable retail brand in 2009 to being the second most valuable brand in 2010. Best Buy (#3), Home Depot (#4), and Walgreen’s (#5) round out Interbrand’s top five most valuable American brands.
The Keller Fay Group compiles a similar list of retail and apparel brands. However, Keller Fay’s list is not based on being financially valuable but rather, being highly talkable. Walmart tops Keller Fay’s list of the most talked about retail brands. Target is #2. Nike is #3. Home Depot is #4. Macy’s is #5.
(Keller Fay’s list of most talked about retail brands is based upon their TalkTrack® ongoing study of measuring and monitoring over 350,000 conversations Americans have about brands in both online and offline environments.)
Nearly 40% of Americans, according to Keller Fay data, will mention a retail brand name in everyday offline (person-to-person) and online (social media) conversations with others. Just as differences exist between how women and men shop, differences exist between which retail brands women talk about versus those men talk about.
Yes, fashion brands rank higher in the women’s list while more athletic and utility brands rank higher in the men’s list of the most talked about retail brands. Notice Kohl’s – it’s #3 with women and #11 with men. Given the recessionary retail environment, Kohl’s, a department store focused on delivering low prices and high value, is a brand that’s benefiting from both strong sales and strong conversational mention.
Discount retailers are definitely more top of mind for Americans because of the economy and of their improving merchandising mix. According to Keller Fay data, discount retailers garner a nearly 30% share of retail brand name mentions Americans have in both offline and online conversations. Specialty retailers (13% share), department stores (12%), and athletic brands (10%) trail way behind in the percentage of conversational mentions Americans have with others.
For retail marketers, the lesson from these word of mouth statistics is if your brand isn’t in the conversation then it’s less likely to be under buying consideration. The most talked about retail brands all have a clear identity, which makes them all the more conversational. Walmart is about low prices. Target is about cheap chic. Nike is about better athletic performance. And Home Depot is about home improvement.
The first step in capitalizing on word of mouth to drive sales is to become talkable. Once a brand is talkable, it’s easier to become referable. And referable brands become more valuable brands because they have salience with consumers to drive sales from consumers.
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