Welcome to the second InternetRetailing Brand Index, in which we’re again focusing on brands selling direct to consumers across Europe. In the context of a global economy where overall growth forecasts are buoyant and consumers increasingly optimistic, it seems an apposite time to be returning to this subject. Increasingly, as consumers, we don’t just stick with brands from our own countries. Quite the opposite, as we’re all drawn to international brands that seem to represent values that are distinct from those of domestic names. This can lead to some seemingly unlikely cross-cultural collisions, such as when the hip-hop community adopted Clarks shoes in the 1990s.
But whether they come about through such fortunate accidents or as the result of more structured work, well-run brands build on the opportunities afforded by cross-border trade. As they do this, they have a key advantage over more conventional retailers, a sense that brands are so consistent that a pair of shoes bought in Los Angeles, London or Paris will be of the same quality and design. Last year, we looked in depth at how this was a potential threat to more conventional retailers, that by going direct brands would somehow eclipse retailers.
This year, though, our focus has shifted. One of the great advantages of doing original research is that you are able to test ideas. With the benefit of hindsight, we probably over-emphasised the tension between direct-selling brands and their retail customers. The best retailers, after all, showcase brands’ wares in ways they can’t in their own stores and enable brands to reach different parts of the market. It’s safe to say there are consumers who would much rather buy Apple products from a John Lewis associate than a roving Apple employee in a store that looks a little like an open-plan office.
This kind of dynamic, a microcosm of what’s happening across the world, will be fascinating to observe in the years ahead, especially as new technologies come online that enable both brands and retailers to gain richer data about customer behaviour. As to which brands are best set for this brave new world, the pages ahead, which draw on our ongoing research for the IREU Top500, should offer plenty of clues as to which companies will prosper.
We also aim to highlight effective and practical ways of performing at the highest level. We hope it will prove a useful tool for both brands and retailers across Europe as they look at how their peers and colleagues in other countries trade.