Retail's Good, Bad and Ugly in 2019

The retail industry today is experiencing some turbulence, to say the absolute least. Technology is advancing faster than we can say “Hey Alexa,” and consumers now have the ability to control many aspects of their lives at the touch of a button. No market is safe from this reinvention revolution. Consider that by 2040, nearly 95 percent of purchases will take place in e-commerce channels. The modern consumer is no longer interested in going to a department store to get their shopping fix; now, people strive to be the first to discover a hot new retailer in the age of social media. In WD Partners’ GBU 20, the report examines what consumers think of today’s top 100 brands in order to discover which are best suited to survive this retail apocalypse.

Methodology

This annual report evaluates which brands are dominating the new consumer market (the Good), which brands are barely getting by (the Bad), and which seem to be falling to the wayside (the Ugly). We polled over 11,000 consumers across the nation (with annual incomes above $35,000) to evaluate 100 of the most well-known brands in retail today, and weighed the data from 2017, 2018, and 2019 to identify year-over-year industry trends. We asked three simple questions:

1. Which of the following retailers are you aware of?
2. Considering each of the retail brands you are aware of, please rate them as:
   • Good: This retailer "gets me," takes care of me, and has a great future.
   • Bad: This retailer is just OK; it's not my favorite, but it serves a purpose.
   • Ugly: I don’t care if this retailer disappears tomorrow.
3. Name any retailer that serves its customer the best/worst. Then share some of your thoughts on what makes this retailer the best/worst.

Findings

As to be expected, Amazon.com continues to dominate across the board in terms of consumer perception, topping the Good and Best lists for the third year in a row. Following the e-commerce giant is Walmart, Target, Costco, and The Home Depot, showing that big-boxers know how to innovate to win. The beauty and grocery verticals are also strong performers in our study, with financial institutions and specialty retailers being the lowest rated sectors.

Seventy-five percent of our top Ugly brands are traditionally millennial, with specialty apparel brands like Justice, lululemon, Hollister, and Abercrombie & Fitch topping that list. Possibly the most surprising finding, though, was that Walmart was our worst brand by a large margin. Target, Macy’s, Kohl's, and Amazon all also made both the worst and best lists, showing that consumers have a love/hate relationship with these brands.

It has become evident that general brand awareness is eroding as consumers are beginning to seek out smaller brands instead of remaining loyal to larger conglomerates. However, many brands are still popular despite the fact that their awareness is slowly decreasing. If they can maintain a positive perception with their existing base, retailers can still come out on top in terms of public opinion.

Implications

Brick-and-mortar locations are shuttering in droves, legacy brands are being beaten by fresh startups, and even Amazon is headed towards a peak saturation point despite its customer-centric mentality. With Gen Z and millennials now being the most dominant consumers in the market, their shift in purchasing habits has pushed the industry to become more consumer, convenience, and digitally focused. These buyer segments are interested in the impact, speed and reputation of the brands they buy from, and there's no doubt that they're now watching for those brands willing to accommodate their need for change.

John Bajorek is the executive vice president, strategic growth and innovation at WD Partners, a customer experience expert for global retail and consumer goods brands.