Millennials are breathing life into retail brands, according to new research from The Harris Poll. Compared to older generations, millennials award higher brand equity to all retail categories assessed, except hardware and home stores, which is favored by baby boomers. The Harris Poll’s 29^th annual EquiTrend Study, which measures brand health over time, reveals the strongest brands across the media, travel, financial, automotive, entertainment, retail, restaurant, technology, household and nonprofit industries, based on consumer response.

According to the research, while brand equity in the retail category has held steady over time, a different pattern emerges when millennials are singled out versus baby boomers. Sporting goods store brand equity is 7.7 points higher among millennials compared to baby boomers, while luxury department stores (+5.6) and electronics stores (+5.7) are nearly 6 points higher. Millennials’ brand equity score for off-price retailers is 4.9 points higher compared to baby boomers, while footwear and department stores are 4 points and 3.8 points higher, respectively. Only hardware and home stores (-3.8) have lower brand equity among millennials compared to baby boomers.

“Strong brand equity – including greater familiarity with your brand, a greater bond with your brand, a better-perceived quality of your brand – translates into a larger share of wallet,” said Joan Sinopoli, vice president of brand solutions at The Harris Poll. “It’s no secret that the retail industry is undergoing tremendous challenges, but knowing how to best cater to different customer segments is critical. As a result, several retailers are working to revamp their stores into ‘millennial playgrounds’ to help woo and wow desired customers.”

The EquiTrend Brand Equity Index is comprised of three factors - Familiarity, Quality and Purchase Consideration - that result in a brand equity rating for each brand. Brands ranking highest in equity receive the Harris Poll EquiTrend “Brand of the Year” award for their respective categories. This year, more than 100,000 U.S. consumers assessed more than 4,000 brands across more than 450 categories.

Off-Price Shows Equity Growth, Other Retail Categories Show Generational Movement

According to Harris Poll’s research, off-price is the only retail category to increase its brand equity compared to last year, up 2.1 points. While luxury department stores and sporting goods stores are flat among consumers overall, we see equity growth among millennials. Generation X shows a 3-point equity increase for off-price retail and negative growth for all other retail categories. Baby boomers award positive equity to off-price retail (+1.3) and hardware and home stores (+0.4).

Luxury Doesn’t Offer Retail the Same Advantage it Provides to Auto, Hotel

Harris Poll’s analysis shows that when attached to department stores, the luxury designation doesn’t offer brands the same benefit it does in other categories, such as automotive and hotels. Consumers grant stronger equity scores to mainstream department stores brands compared to luxury department stores. Additionally, there is a less pronounced gap in perceived quality between luxury and mainstream department stores and purchase consideration favors the mainstream.

“Department stores have struggled with Gen X and millennials for some time; Gen X led the charge toward brick and mortar specialty stores and millennials followed suit, favoring online specialty shopping,” said Sinopoli. “Meanwhile mainstream retailers like Kohl’s and Target, experimenting with different formats and designer names, have forced luxury stores to play price wars. To many consumers, luxury stores have simply stopped offering a luxury difference, and that’s why we see retailers like Nordstrom actively working to bring millennials into their stores with rotating pop-up shops and personalized customer experiences, and Lord & Taylor taking steps to reposition and differentiate as the shopping destination for dresses.”

The 2017 Harris Poll EquiTrend Retail Brands of the Year

Additional retail findings include:

• Nordstrom holds on to the Luxury Department Store Brand of the Year title for the second consecutive year, but the Ivanka Trump controversy seems to have had an impact. Nordstrom's decline in brand equity among conservatives contributed to a decline in brand equity overall. Among liberal-leaning consumers, Nordstrom’s brand equity rose slightly; among conservative-leaning consumers, Nordstrom’s brand equity declined four points.
• This year marks The Home Depot’s fifth consecutive Brand of the Year award, with familiarity as its key equity distinction. Ninety-six percent of consumers are familiar with The Home Depot. Baby boomers give the equity advantage to The Home Depot, with stronger quality and purchase consideration marks compared to younger consumers.
• Kohl’s, Department Store Brand of the Year 2012 – 2015, reclaims its title from Macy’s. Although the retailer has lower familiarity ratings than JCPenney and Sears, it shows higher marks overall for quality and purchase consideration. Gen X consumers push Kohl’s to its higher equity score, with higher familiarity and purchase consideration ratings.
• TJ Maxx, Off-Price Retailer Brand of the Year, and Best Buy, Electronics Store Brand of the Year, maintain their titles for the second consecutive year, and TJ Maxx receives its highest equity score ever (67). With consumers consistently seeking deals, outlets are a popular option, but Harris Poll data shows TJ Maxx besting some of the more luxury outlet options.
• Dick’s Sporting Goods reclaims its Sporting Goods Store Brand of the Year honor from Cabela’s; Dick’s was also Brand of the Year in 2015. Dick’s equity is driven by millennials and Gen X consumers.
• DSW is Footwear Store Brand of the Year for the fourth consecutive year, helped by stable quality and purchase consideration ratings.

http://www.theharrispoll.com/business/Millennials-Breathe-Life-Into-Retail.html