By Mark Richards.
We all have our favourite brands and our favourite shops. But just because a brand is popular now does not mean that it will stay popular in the future. The UK has lost some iconic names and brands. And now the Chinese brands are on the march. The next ten years could see some big changes…
So what are the most loved and loathed brands in the UK right now? Let us start off with the good guys. According to a poll for a well-known financial website, top of the list is Aldi, followed by Amazon, John Lewis, M&S and Lidl. The rest of the top ten is made up of Ikea, Home Bargains, eBay, Waitrose and Lidl.
That is an interesting list – not least because I clearly live in a cave, having never heard of Home Bargains.
We wrote recently about Tesco’s decision to launch the discount retailer Jack’s in a bid to win back market share from the discounters Aldi and Lidl. The presence of both of those brands in the top 10 – and the complete absence of the big supermarket brands – illustrates what a difficult job that will be.
But two of the names on the list have issued stark warnings of late. Marks and Spencer currently seem to be competing with Debenhams in the ‘who can threaten to close most stores’ competition. While John Lewis – now becoming a victim of its ‘never knowingly undersold’ promise – saw its profits fall by 99%. With John Lewis also the owner of Waitrose, three out of the top ten ‘most loved’ are facing difficult trading conditions, to put in mildly.
The bad guys
So what about the bad guys? Taking the ten most loathed brands in reverse order, the first five are Debenhams, Asda, Tesco, WH Smith and (the only company to appear in both lists) Amazon. With Debenhams and WH Smith in there, that must sound the alarm bells for town centre managers all over the UK.
Next up – still in reverse order – are Primark, House of Fraser, Currys/PC World and Apple. Top of the list – the most disliked brand in the UK – is Sports Direct, which means that Mike Ashley, owner of the most disliked brand, has just added the fourth most-disliked brand to his empire.
Brands do not last
Inevitably, brands do not last. Over the last ten years, BHS (once owned by the shy, retiring Sir Philip Green) has closed its doors. As has Toys R Us, Staples and Austin Reed. What else has disappeared? Phones 4U has gone, plus Athena, Blockbuster, Barrett’s shoes shops and Comet Warehouse. And Tie Rack – once upon a time you could not walk through a major underground station without seeing a branch of Tie Rack. Now? Well, I went to a funeral a couple of years ago and wore a tie then…
Food and drink
What about food and drink? If we look back at the top-selling tea and coffee brands as an example, then ten years ago our favourites would have been Nescafe, Tetley, Kenco, PG Tips and Douwe Egberts. They were the ones which racked up the sales in a £1.4bn market – with Nescafe well out in front.
Jump forward six years to 2013 and PG Tips is at the top, followed by Nescafe, Tetley and – fourth on the list – supermarket own brands. Then we have Kenco, and some upstart called Yorkshire Tea.
Four years later Yorkshire Tea was the nation’s favourite brand. But the most noticeable trend – and one we are certain to see more of – was the rise of smaller labels with a focus on ethical and ‘green’ production methods.
So even if a brand is popular now, that is no guarantee of permanence. As we have written many times technology is changing at an ever-faster pace and it will unquestionably sweep some of today’s brands away with it.
Perhaps more importantly, the Chinese brands are on the march. Let us look at just one example…
Here comes Huawei
First things first. How do you pronounce the Chinese brand that is taking an ever-larger slice of the mobile phone market? The answer is ‘Wah-way.’ And that might be an interesting lesson for the business strategists – people mispronouncing your name is not a barrier to business success. Are those Nike or ‘Nikey’ trainers you are wearing? The official answer is ‘Nikey:’ which means that I – and millions like me – have been wrong for most of my life.
So – irrespective of whether you can or cannot pronounce it – why is Huawei gaining an increasing market share?
The brand is firmly established in China and has been working to gain a foothold in Europe over the last two years, with people becoming more and more aware of the brand.
YouGov is probably best known for telling us who is going to win the next General Election, but they also publish a ‘brand index’ – simply put, a measurement of which brands are on the up and which are sliding in the opposite direction. Over the last two years, Huawei’s ‘awareness score’ has jumped from 45% to 66% on this index, no doubt helped by launching its latest phone, the Mate 20 Pro, in London.
Alongside the awareness score, Huawei’s ‘impression score’ has also improved. This indicates whether consumers have a positive or negative view of the brand and, over the last two years, it is up from two to 10. More importantly, though, the impression score among existing customers stands at 70 – so once someone makes the jump to the brand they like it, and they are likely to recommend it.
And, no surprise, even that can be measured. Huawei’s ‘word of mouth’ score – which measures whether someone has talked about a brand with friends, family or colleagues in the last two weeks – has improved from 20% two years ago to 40% now. The percentage of people considering buying a Huawei phone has increased from 5% to 14% in the same period.
Quite clearly, breaking the dominance of brands such as Apple and Samsung will be a tough task, but Huawei is steadily gaining ground. What will come next? Do not be surprised to see a Premier League club run out with Huawei on the front of their shirts in the near future.
And I suspect they have a far greater chance against Apple and Samsung than Jack’s has against Aldi and Lidl…