Brand Reputation Series - Issue 4: Who Is Winning In The Retail Sector?

From the beginning of April, we asked UK consumers how much they trust the retail, banking, telecommunications and grocery sectors. We’ve discovered that since the start of April, trust in all of these sectors has decreased.

However, the trend in retail differs slightly from other sectors, such as telecommunications, as we observed a steady decline from the beginning of April to 6th June. In April, McKinsey predicted that 80% of retail stores would be in financial distress if they remained shut for a further two months (Source: Retail Gazette). But, from 15th June, when the government lifted the restrictions allowing non-essential retailers to re-open, we saw an increase in the number of people who thought this sector responded well to the pandemic: from 30% to 31% by the end of August. We now expect a steady increase in the number of shoppers who think the sector has responded well. 

Besides analysing consumer trust in various sectors, and perceptions of responses to the pandemic, we also asked people how much they like brands operating in those sectors. Until 15th June, non-essential retailers were forced to close physical stores with many brands turning to online sales. What effect did policies like this have on likeability?

Argos

Argos was ranked the most-liked retail brand during the pandemic. However, this decreased from 73% in April to 63% by the end of August. One of the reasons that likeability reduced over the course of the pandemic could have been some Argos stores remaining closed even after non-essential retailers reopened on 15th June (Source: York Press). 

Primark

Likeability went down from 64% in April to 50% in August. This could be due to the brand’s inability to adapt to the pandemic. Despite generating £7.79bn in 2019, the business did not turn to ecommerce, and so remained closed for the vast majority of lockdown (Source: Business Cloud).

M&S

This is one retail brand which has managed to bounce back from the pandemic to increase likeability. We observed a more negative sentiment until 27th July where the number of people reportedly liking the brand started to return to similar levels of likability as in April (67%) by the end of August (62%). One crucial influencing factor could be M&S’ acquisition of Ocado, with ecommerce even more vital to overall sales since the pandemic began (Source: Financial Times). However, M&S has recently announced it will cut 7,000 jobs (Source: BBC) so customer perceptions may change during the coming weeks. 

Home Bargains

Near the beginning of the pandemic, Home Bargains started off strongly with 69% of the UK population reporting they liked the brand. This steadily declined before a brief recovery in mid-July when we saw likeability at 63%, but it then dropped to 56% by the end of August. More recently, Home Bargains implemented a traffic light system to monitor not only the number of people inside the store to “keep the environment COVID-19 safe” but to also map customer journeys in-store providing behavioural insights about consumers (Source: Essential Retail). It will be interesting to see if this technology affects likeability in the coming weeks. 

Source: Rare: Consulting. UK adults 18+. Data collected between 7th April and 31st August 2020 (N=8,167). Those aware of the brand: Primark (N=6,523), Argos (N=6,540), Home Bargains (N=5,548), B&M (N=5,895), Marks & Spencer (N=6,483). Full data tables available from www.rare.consulting.

Where we have seen an increase in likeability towards M&S and their move towards e-commerce and a decline in Primark with their inability to move sales online, we expect liability is linked to brands adaptability to current Coronavirus restrictions and so increasing e-commerce presence may increase the number of people reportedly liking brands in the retail sector. 

The click and collect service Argos provides, as well as being present in Sainsburys stores diversified the offering for customers, their products are more widely available than most and convenient, could be one of the reasons Argos dominated the likeability tracker for retail and another store brands can look to when implementing strategies to increase consumer perception. 

Providing customers with utilitarian offerings will also help brands keep the number of customers reportedly liking the brand and in turn the sector stable, as seen with Home Bargains, which was able to stay open throughout the pandemic due to the essential items they offered, it is understandable that not all brands are able to do this but highlighting the need for products may be beneficial for some brands. 

The likeability trend in the retail sector has generally declined and the slow recovery in the last period analysed might be suffering further fluctuation as further safety measures are issued by the government.

Keep an eye out for our other sector-specific blog, which deeper dives into the Banking sector! 

For more information on the data gathered, email hello@rare.consulting.