Retail Brands: What’s in Store, and Why Shoppers Should Care

By Lee Carpenter

Retail brands are in a more competitive environment than ever before, with e-commerce giants able to outmaneuver them and undercut pricing, and more agile digital and mobile startups also taking aim. With Amazon and eBay both seeing their brand value grow 20 percent or more in this year’s Best Global Brands report, it’s clear that retail is no longer all about the physical store. E-commerce retailers offer seemingly endless variety and in-stock positioning, easy 24-7 access, and free and fast shopping, all with lower overhead and fewer employees.

Given the incredible pressure on the retail sector, we are rapidly moving toward a future where brick-and-mortar retailers could become irrelevant. Yet, the physical store can be a great asset—if looked at through a new lens. Retailers that reinvent themselves by creating demand, versus accommodating demand, will see the physical store as a formidable weapon against e-commerce rivals. Digital may have been the destabilizing force, but two significant facts remain that will re-center the retail world around physical stores: People are analog and digital is portable.

It’s all just shopping

The line between shopping online and in-store is no longer a line at all; it has blended into just shopping. Stores are not obsolete, but the business model that fueled the current retail landscape faces that danger. Retail has presumed demand and been merely the means of supply. This is accommodating demand and is the realm of merchants, not brands. In contrast, brands generate demand by creating value beyond price and convenience.

Rethink the physical store

E-commerce brands use data to create a one-on-one relationship with shoppers that can scale through technology. This model must translate to physical stores, and blend together into an omnichannel experience with the brand as the consistent thread. Linking shoppers’ adoption of mobile devices with the physical store to create a unified, branded experience will be critical to fueling innovation for the next five years.

Ask why shoppers should care

The retail revolution isn’t just digital; it’s a commitment to treating shoppers as individuals (yes, segmentation is dead). Digital can be tailored to shoppers’ individual needs and preferences. It’s the key platform to partner with shoppers—but it isn’t a panacea. What retailers do with a digitally enabled customer relationship, and why shoppers should care, is the real work and opportunity. Retailers who embrace brand realize that the experience isn’t a place; it is an idea that can re-energize the relationship and drive traffic in its own right, not just fulfill the shopping list.

Lee Carpenter (lee.carpenter@interbrand.com) is Chief Executive Officer, Interbrand North America

RankBrand NameBrand Value ($m)Change in Brand Value
19Amazon23,62027%
28eBay13,16220%