Happy New Year for Sainsburys and Waitrose
RETAILERS have had a bumper Christmas according to the British Retail Consortium, but here is my review of 2009 as far as supermarkets are concerned.
Graph 1 shows the share of total attention that each of the six received on BrandIndex. Over the course of 2009, Aldi and Asda dropped, Tesco and Morrison’s stayed steady, and Waitrose and Sainsbury’s gained.
When we turn to some of the components of the seven BrandIndex scores: on “value”, Asda and Morrison’s fought it out all year for top spot, with Waitrose improving significantly from a low base: at the start of the year, only 46 per cent of those who ventured an opinion reckoned Waitrose to provide value, today it stands at 59 per cent.
On “quality”, meanwhile, Waitrose and Sainsbury’s have shared top spot the whole time.
On “net recommend scores”, Sainsbury’s remained in the lead all year, increasing the gap over second-place Tesco, with Morrison’s and especially Waitrose making gains.
Graph 2 shows the proportional scores (that is, the percentage of the “attention” that was positive), summarising the position.
Bear in mind this is proportional, and should be read in conjunction with Graph 1.
Aldi is relatively in the dumps, having attracted quite a bit of media attention when we were heading into recession, but its satisfaction ratings remain up there with its competitors.
•Now an apology: last week the figures I gave for customer satisfaction were wrong, for reasons I blush to admit: sheer carelessness with the excel sheet when cutting and pasting the columns.
No excuse. They should have been as follows: (percentage of those satisfied among all those identifying themselves as recent customers): Sainsbury’s 90 per cent, Waitrose 87 per cent, Morrison’s, 87 per cent, Asda, 83 per cent, Aldi 80 per cent, Tesco 79 per cent.
This isn’t just a brand; this is an M & S brand
This article first appeared in Stephan’s City AM column.
In the highly-competitive world of supermarkets, there are two basic types of brand: those which are “cheap and cheerful”, which focus on low cost while maintaining reasonable quality; and those which cost more but make a feature of the higher quality products.
These show up very clearly in the respective average BrandIndex scores from the start of November.
Those in the first group, most notably Asda and Tesco, receive very high scores for “value”, but very low scores for “corporate reputation”. On the other end of the scale we see brands like Waitrose and Sainsbury, whose “reputation” scores outweigh consumers’ opinion of their value.
However, one supermarket is leagues ahead of the others by these measures, and proves that “good value” is not the same thing as “cheapness”.
M&S A WINNING BRAND
Marks and Spencer has long been a BrandIndex star performer, but this graph makes clear how its brand dominance breaks into its constituent parts.
Not only do people have a higher regard for Marks and Spencer’s reputation than any other supermarket by a considerable margin, it is considered in the same bracket as Tesco and Asda in terms of value.
If this reputation sustains (and there is no reason to expect it should not), M & S should be able to look forward to an excellent trading period over Christmas.
Things do not look quite so positive for Waitrose. People have a high regard for it as a company – perhaps as a result of its employee-owned structure as part of the John Lewis group – but its reputation for good value is poor at +5.5.
WAITROSE VALUE NOT NOTED
This is a cause for concern as we enter the Christmas period still in the midst of a recession, and indicates that Waitrose’s “essential” range has failed to convince consumers that Waitrose can deliver “good value”.
The Optimism of Youth? Young people more optimistic about job prospects
This article first appeared in Stephan’s City AM column.
Salary predictions
Looking to the year ahead, there are some indications that the credit crunch has impacted older workers more than younger workers. YouGov polled 1,135 UK adults who work full or part time on behalf of consultancy firm Croner, and the responses to the question ‘Are you expecting a salary increase in 2010?’ indicated a strong inverse correlation between age and the hope of increased salary. 57% of 18 to 24 year olds expected a salary increase next year, while only 33% of over-55s were so hopeful.
For all we have heard about the ‘betrayed generation’, the young are certainly much more optimistic about their career prospects than their parents: 32% of 18 to 24 year olds feel more positive about their career prospects in 2010 than they did in 2009, while only 13% of over-55s agree. It is difficult to ascertain whether this difference is down to an inherent optimism within young people (or pessimism in the old); or whether the realities of their economic prospects are fundamentally different.
Nintendo
Nintendo can look forward to strong trading in the run up to Christmas, if their average November BrandIndex scores are anything to go by. The Wii and the DS comfortably outscore Sony’s PS3 and PSP models, as well as Microsoft’s XBox 360. BrandIndex scores are calculated across seven measures of a brand’s strength, and provide a powerful insight into exactly how consumers relate to a brand. A pan-European YouGov poll released this week has also found that Mario is the most popular videogame character ever.
Nintendo’s strength lies in its appeal beyond the traditional young, male videogame demographic, and the success of products such as Wii Fit, as consumers become more fitness-conscious. Many traditionally gender-specific brands have attempted to move beyond their core demographic, but this run the risk of alienating their keenest supporters. The BrandIndex scores suggest Nintendo has been successful in this gamble.
BrandIndex SnapShot: Nintendo Set for a Strong Christmas Period
Nintendo can look forward to strong trading in the run up to Christmas, if their average November BrandIndex scores are anything to go by. The Wii and the DS comfortably outscore Sony’s PS3 and PSP models, as well as Microsoft’s XBox 360.
BrandIndex scores are calculated across seven measures of a brand’s strength, and provide a powerful insight into exactly how consumers relate to a brand.
Nintendo’s strength lies in its appeal beyond the traditional young, male videogame demographic, and the success of products such as Wii Fit, as consumers become more fitness-conscious.
Cold Weather Makes Some Brands Hotter
This article first appeared in Stephan’s City AM column.
We all like to ‘make up our own minds’ about brands, and recommend to our friends those with which we have had positive dealings. However, rather than being wholly our own self-determined opinions, these recommendations tie in with the seasons much more readily than we might think. Some ‘seasonal brands’ like The North Face and Pimms No.1 are obvious in their application to specific periods of the year or weather conditions. However, many brands have a less obvious seasonal connection.
The connotations that brands carry can be down to the emotions they evoke, or some deeper association we hold with them. BrandIndex tracks brands for 52 weeks of the year, so we see these changes happening day-by-day.
On the graph we have chosen six products across two sectors with which possess ‘wintery’ associations: ales and pro-biotic health drinks. Imagine a nice pint of ale in a warm pub or sitting room, as winter sets in. BrandIndex ‘recommend’ scores for IPA, John Smith’s and Tetley indicate a consistent upward trend, when we compare the averages from August and September combined, to those from October and November. More people recommend ales as the weather gets colder and Christmas approaches.
‘Recommend scores’ are a reliable measure of perceived brand quality, but brands exist within a real-life context – not just in marketing theory books. Cold and wet weather influences how we feel, and how we relate to health brands. As we see colleagues, friends and family members come down with the lurgy, we start to think more positively about Actimel, Activia, and Danone. Average recommend scores increase for all three from the temperate August and September period, to the colds, coughs and splutters of October and November. Brands interact with real-life; they do not sit above or beyond it.
Android versus iPhone: Brand Fight Goes Global
The Independent are reporting that Motorola are launching their new handset the Droid in the UK on December 7th. The model runs on Google’s Android Operating System, and has won over a number of iPhone fans in the US.
YouGov’s BrandIndex has been the primary tool for tracking the impact that the Droid’s release – especially US Carrier Verizon’s combative iDont ads. We have been delighted that BrandIndex’s scientific brand-measuring data is finally getting the publicity we believe it deserves. AppleInsider, Cell Phone News 2.0, eWeek, and numerous other tech news sites (as far afield as China) have been quick to understand the implication of the BrandIndex figures.
Supermarkets and Food Staples have a Family Feel
This article first appeared in Stephan’s City AM column
BrandIndex asks general questions about brands, but sometimes it’s useful to look at more specific qualities. YouGov recently conducted research on the associations between brands and family values. The recent Family Brands report, conducted for advertising agency Isobel, suggests that association with family values is a very useful differential by which we can measure different types of brands. Some brand are seen as sexy but distant, others as domestic and closer-to-home.
Two groups emerged particularly well from this research: supermarkets and staple food brands. Marks & Spencer finished top, with 30% of respondents citing it as a brand which they believed ‘promoted and supported family values’. Other supermarkets fared well, taking up with five of Isobel’s top-ten spots, when measured across a matrix comprising respondents’ associations of the brands with family values, listening, caring, and social responsibility. Tesco just missed out on the top ten, placed thirteenth.
Staple food brands can take encouragement that their brand-positioning is registering with consumers: one in four respondents saw Kellogg’s as a promoter of family values, and Warburtons, Hovis, and Cadbury performed strongly. Regular BrandIndex ‘stars’, Apple, Google, and Nokia, fared poorly when respondents considered their family values, as the graph makes clear.
However, there was also a warning to brands across all sectors: they need to be perceived to be listening more to their customers. Marks and Spencer was recognised as the ’best-listening’ brand, with one in five respondents citing it. Boots came in at (a distant) second place with 14%. Dominos Pizza, Ryanair, and BMI were thought to be among the worst listeners, as a meagre 1% of respondents recognised them as ‘good listeners’. For all Microsoft’s Windows 7 advertising campaign on the London Underground – which stresses that user input is the defining feature of the Operating System – only 6% of respondents identified Microsoft as a listening brand.
Personal Interaction and Regular Brand Contact Breed Trust in Banks
This article first appeared in City AM.
Last week saw the launch of NatWest’s personal banking iPhone app, in line with the banking sector’s efforts to cut costs and improve user experience by moving their operations online.
Recent YouGov research undertaken on behalf of Deloitte points to the risks in an online strategy: customers place high value on face-to-face interactions in their bank’s branches. The issue of trust – perhaps unsurprisingly given the popular perception of bankers – is paramount.
Personal interaction seems fundamental to trusting your bank. Fifty-three per cent of respondents said they would only place their savings in a bank with branches they could visit, and 65 per cent would only take out a mortgage after speaking with someone face-to-face.
This has already translated into changes in the market: 21 per cent of respondents say they have switched bank in the last two years due to their dissatisfaction with the way they have been treated.
This represents an opportunity for banks looking to increase their market share: 66 per cent of respondents have their current account where they believe they receive the best level of service, compared with 30 per cent who place their current accounts where they earn the highest interest.
We get interesting validation of those conclusions from the BrandIndex data shown in the chart. The first bar shows the proportion of satisfied customers, the second shows the proportion which would recommend the brand to others.
Online only bank, Egg, does worst, while the three with brands most closely associated with people’s everyday lives and with the most touch-points – the supermarket banks of Sainsbury’s, Tesco and M&S – do best.
In the middle are the high street banks Barclays, NatWest and HSBC. Note how the “recommend” scores follow the pattern, allowing for an interesting lowering effect within the sub-sector of supermarket banks.
Verizon vs. AT&T: iBash too far?
Interesting story which has been gathering traction over the last week:
‘AT&T has reportedly asked a federal court to make Verizon immediately stop airing a new series of ads comparing AT&T’s 3G coverage map to Verizon’s. Among them is an ad in which the iPhone is welcomed to the Island of Misfit Toys.
AT&T has asked a federal court in Atlanta to force Verizon Wireless to pull a series of ads immediately, according to reporting from USA Today. Verizon responded by standing by its ads. “What we are saying doesn’t change,” spokesperson Jim Gerace told the paper.’
Verizon have been waging a dirty ad war, attacking AT&T’s 3G network coverage and criticising the iPhone’s technological limitations (rather than its sleek design). In turn, they have promoted their own 3G network coverage and Android device: unlike the iPhone, it has a physical keyboard; a flash camera; can run several applications at once; and can be customized with widgets.
More concerning for AT&T is the fact that YouGov’s BrandIndex data suggests that Verizon’s campaign is working.
Kraft and Cadbury: Takeover talks add value to the brand
Business news only rarely makes it into the wider public consciousness, but as the graph shows, this is different when an iconic British brand is facing a takeover by an American company. In early August, Cadbury’s BrandIndex score and share price were around +47 and 536p respectively. The possibility of Kraft’s takeover saw Cadbury’s share price jump by 250p between four and eight September, with the BrandIndex score rising to +51.
The graph suggests that consumers, whether consciously or subconsciously, feel the increasing value of the Cadbury’s brand as it becomes more attractive to other players.
This story first appeared on 11/9/09 in City AM
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