Success

Fairness

Trust

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REPUTATIONGROWING IN IMPORTANCE IN A WORLD OF DECLINING TRUST

REPZ

As corporate and brand reputations converge, positive behavior helps build trust, grow share

June 2017USA | Electrical Retailers

and

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“ A business that makes nothing but money is a poor business”.

Henry Ford

This report can benefit your business with new insights about brands, corporations and reputation. We have specifically analyzed for you the performance of Amazon in the Electrical Retailers category in USA for 2016.

AMAZON ACHIEVED A HIGH REPZ SCORE OF 129. WITH THIS REPZ SCORE, AMAZON RANKS 1 IN THE ELECTRICAL RETAILERS CATEGORY IN USA FOR 2016.

Benchmarking your brand against immediate category competitors, as well as country champions and global leaders, should yield valuable lessons. For more details about how we compute RepZ, please see page 16.

This report outlines the rising importance of reputation. Even if it contains a few difficult truths, we hope it will help stimulate improvement or continued success for your brand and corporation.

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Contents

Introduction 4

PART 1. 6 REPUTATION: CONNECTING PURPOSE AND PROFITA Brief History of Corporate Responsibility 7

Key Findings 8

PART 2. 14 REPUTATION: CULTIVATING COMPETITIVE ADVANTAGEDefining RepZ 15

Computing RepZ 16

Benefits of High RepZ 17

The Top Leaders in RepZ and RepZ Components Across Categories in USA 2016

20

Amazon RepZ and RepZ Component Scores Compared with the Competition in the Electrical Retailers Category in USA 2016

23

The RepZ Scores of Amazon in the Electrical Retailers Category in USA Over Time

28

The RepZ Scores of Amazon in the Electrical Retailers Category Across Countries

29

The RepZ Scores of the BrandZ™ Top 10 Most Valuable Global Brands 2014

30

Conclusion 31

About the Authors 32

WPP Resources 33

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INTRODUCTION

Trust is the new differentiator, highly prized because it’s so rare.Sadly, people today expect betrayal — by banks, government, religions, and sports — by the very institutions that exemplify society’s values.

As new scandals reinforce the public’s disappointment, distrust becomes generalized across all industries and most brands.

CONSUMERS CONSIDERED ONLY 25 PERCENT OF BRANDS TRUSTWORTHY IN A RECENT BRAND ASSET VALUATOR (BAV) SURVEY..

People haven’t abandoned the human need to trust. But they seek trust elsewhere—in each other rather than in institutions. That’s one of the reasons why they find social media a more authoritative information source than traditional marketing or the mainstream press.

Forming opinions with this information, consumers assert their will online, in the street, in the stock market or at the cash register. Businesses cannot control the process. But they can influence it, by scrupulously regulating what they can control—their own behavior—in several ways.

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FIRST, EARN TRUST.

First, earn trust by producing products and services that genuinely are trustworthy. People care about the stories behind the products they buy: the place of origin, working conditions and the impact on the environment. Social responsibility becomes a new bonding agent for the compound of functionality, design and emotional appeal that forms brand loyalty.

SECOND, ELIMINATE THE WINDOW DRESSING.

As we’ve learned, the public often condemns the cover-up more than the transgression. Being disingenuous about improving product safety, supply chain justice and environmental impact can be worse than doing nothing.

THIRD, MAKE NO DISTINCTION BETWEEN THE CORPORATION AND ITS BRANDS.

Customers don’t. For them, the corporation and brand are becoming one—too often for worse, but potentially for better. Corporate and brand reputations reinforce or erode each other. Aligning the values and actions of corporations and brands with integrity, not spin, becomes a commercial imperative.

This alignment reverses an evolution that over time split corporation and brand into separate entities and weakened management. The corporate function focused on shareholders and lost the feel and pulse of the market, while the brand function became insulated from the business strategies in the quest to follow the customer.

THE REUNIFICATION OF CORPORATION AND BRAND CAN HELP RESTORE AND SUSTAIN TRUST.

And trust is an immutable differentiator in a transparent and hypercritical world where consumer opinions appear instantaneously and echo eternally on YouTube, Facebook, Twitter and other social media.

That’s why the world’s leading brand analytics and valuation specialists, BrandAsset® Valuator and BrandZ™, collaborated on this ground-breaking study, which finds that strong reputation correlates with high market share and improves key brand metrics.

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REPUTATION: CONNECTING PURPOSE AND PROFIT

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A Brief History of Corporate Responsibility

Corporate responsibility activities have existed for nearly as long as corporations themselves. At the end of the industrial period, “barons cum benefactors” from Carnegie to Rockefeller returned corporate profits to society through trusts, foundations, charities and public works. The buying public in turn rewarded this philanthropy with approbation and patronage.

Along with serving the public welfare, the titans of industry had another agenda, of course—cultivating goodwill as they battled government attempts to outlaw their monopolistic practices. In that era of enlightened self-interest, the public made no distinction between a corporation and its brands.

By the latter half of the twentieth century, corporations answered to many interest groups, including government regulators, activist shareholders, labor and the media. Corporations charged their communications departments with influencing the opinion leaders among these constituencies. At that point, corporate and brand reputation mistakenly were split.

Corporate communications professionals continued to cultivate elite audiences, but they also spent a lot of time reacting to problems. Intended to be architects of corporate reputation, they instead became experts in damage control. They spent little time creating value that the consumers could see. As a result, the vision and the values of the corporation became disconnected from the perceptions of customers.

TODAY, CORPORATE REPUTATION AND BRAND REPUTATION ARE REUNITED – IN THE MIND OF THE CONSUMER, WHERE IT COUNTS.

It’s important for businesses to catch up to this new reality and to restructure, if necessary, so that corporate communication and brand marketing are not isolated from each other in separate organizational silos. Corporate reputation and brand reputation are complementary and mutually dependent and, to the consumer, they are indivisible.

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Previously, companies used corporate responsibility as a tactic to draw consumer attention, as if waving the good citizenship flag. This type of pull strategy may have worked when corporations targeted discrete audiences with vested interests in the company, such as shareholders. But it does not work as well with the broader contemporary audiences that expect companies and brands to come to them. Today, the most impactful corporate activities are those people see and feel.

SINCE THE FINANCIAL CRISIS, KINDNESS AND EMPATHY HAVE INCREASED NEARLY 400 PERCENT AS ATTRIBUTES PEOPLE MOST DESIRE FROM CORPORATIONS AND BRANDS.

This phenomenon explains the success of Hyundai’s Buyer Reassurance Program. To encourage consumers to buy a car, despite economic uncertainty, the Korean company promised to release purchasers from the any contractual obligation if they became unemployed. Brands need to exhibit this kind of empathy and creativity to thrive in a post-crisis world, where the marketplace has moved from mindless to mindful consumption and marketing is about action instead of words.

In this world, corporate responsibility cannot be an awkward add-on. It needs to be a fundamental and naturally expressed aspect of the corporation and brand. Consumers accept that companies are in business to make money. But they’re less inclined to patronize companies that are in business only to make money.

Key Finding 1: Consumers respond to companies that show they care

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Key Finding 2: Trust is the new black

Trust is in short supply. Public distrust includes most institutions, politicians and brands. This skepticism is especially dangerous for brands because, as marketing scholar John Quelch reminded us, “People vote for candidates every couple of years or so. But they vote for brands everyday.”

ALARMINGLY, TRUST IN CORPORATIONS AND THEIR BRANDS DECLINED BY OVER 50 PERCENT SINCE 2001, ACCORDING TO BAV RESEARCH.

People trust only one in four brands, making it that much more difficult for marketing and communications to penetrate the customer consideration set. Previously, trust did little to differentiate a brand. People took trust for granted. Not anymore.

A trustworthy company has a 35 percent greater chance to drive brand differentiation. Restoring and reinforcing trust must be at the center of every brand manager’s growth strategy.

With the explosion of social media and collaborative platforms, any brand secret or inconsistency can be shared in a New York minute. The possibility of a corporation or brand becoming the focus of negative attention is magnified by the brittle social climate characterized by high unemployment and low levels of trust. Unprecedented flux in the marketplace intensifies the public’s sense of instability. Category disruption forces the public to revise its view of companies and brands almost overnight as Apple provides music or Google enters banking.

Corporations and brands can expect a better ROI when they invest in reinforcing lasting reservoirs of trust rather than in quick fixes when the dam cracks.

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Key Finding 3: Conversations replace declarations

As trust in brands declined precipitously, as measured by BAV research, social media gained in relevance and esteem. The correlation confirms how much the relationship has changed between corporations, brands and customers. The risk, as noted, is that all mistakes are public and amplified.

But the benefit in this new relationship can be significant. A customer in dialogue with a brand indicates a level of deep engagement and potential loyalty. The customer who becomes a partner in shaping corporate responsibility policy, it would seem, is more likely to become an advocate for the brand.

Consider the Patagonia approach. Visitors to Patagonia’s Foot Print Chronicles website can click on any garment and scroll over a map of the supply chain to virtually track every step of the production process. They can learn about factory conditions, distribution and environmental impact. Rather than claiming its supply chain is perfect, Patagonia is self-reflective, offering a critical assessment of every step of the supply chain and inviting visitors to “Join the Discussion.”

Chevron has a similar plea to “Join the Conversation” on its website, while American Express can crowd-source funding of corporate responsibility projects through its “Members Project.” And the Pepsi Refresh Project awards grants to socially beneficial initiatives as determined by online voting. A cautionary warning to companies: Recently ComScore found that 90 percent of questions on a brand’s Facebook fan page went unanswered.

TWITTER DEMONSTRATES THE POWER OF PARTICIPATION.

Although Twitter is the most niche of social media platforms, it is also the most trusted. Twitter’s trust has grown the most rapidly, while traditional broadcast media has declined, according to BAV data, a reflection of the open, communal and participatory role that the micro-blogging service has played in culture, from the Arab Spring to the Occupy Wall Street movement.

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Key Finding 4: Corporate responsibility builds loyalty

While a link between corporate virtuosity and customer affection seems intuitively correct, there’s more going on.

CORPORATE RESPONSIBILITY ALSO HELPS CONVINCE CUSTOMERS THAT THE COMPANY IS RELEVANT TO THEM.

This relevance directly affects purchase behaviors. In this way, corporate responsibility is not just about creating a warm glow, it’s an impactful customer retention mechanism.

There’s ample proof that the impact of corporate responsibility is not simply theoretical. Take for example the positive effects that the Bill and Melinda Gates Foundation has on the Microsoft brand. Among those who are aware of the foundation, the Microsoft brand gains tremendously in perceptions of innovation, prestige, leadership, accessibility and quality. Not coincidentally, these same customers are more likely to continue using and purchasing Microsoft’s products, and have a stronger preference for Microsoft compared with those who are unaware of the foundation’s philanthropy.

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Key Finding 5: Social responsibility impact varies by age and gender

Conventional wisdom asserts that corporate responsibility is highly important to younger people, like Millennials. Young people have been leading advocates for responsible capitalism, through the Occupy Wall Street movement and campaigns to slow global warming, for example.

BAV RESEARCH DISCOVERED THAT PERCEPTIONS OF SOCIAL RESPONSIBILITY STRENGTHEN AS A STRONGER DRIVER OF BRAND CHOICE AS PEOPLE AGE.

With maturity comes greater appreciation of how corporate activities affect communities, and how individual choices have consequences.

This awareness leads to increased action (purchasing behavior and preference) for brands with strong corporate responsibility reputations among older and more affluent segments. Additionally, this effect is more pronounced among women than men, which is important to consider because women are becoming the dominant force of consumerism in the marketplace. In 2011, 55 percent of all US college graduates ages 25 to 29 were female, up from 26 percent in 1980. Women earned 60 percent of all bachelor’s and graduate degrees awarded in 2010. Woman comprise the majority of the workforce and, according to BAV data, directly purchase or influence 85 percent of all household buying decisions. Women generally care deeply about the ethics and integrity of companies. These findings suggest that firms should exhibit more traits generally associated with women, such as openness, sharing, and concern with relationships.

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Key Finding 6: Corporate responsibility can balance negatives

In the old paradigm, companies deployed corporate responsibility tactically to impress a narrow band of stakeholders. Consumer concerns could be ignored as long as profits remained strong and labor peace prevailed.

YET IN CATEGORIES WITH STRONG NEGATIVE PERCEPTIONS, CORPORATE RESPONSIBILTY POTENTIALLY PROVIDES A NEW PATHWAY TO IMPROVE CORPORATE AND BRAND IDENTITY ALONG WITH CONSIDERATION AND USAGE.

In categories, such as oil and gas, where brands often are differentiated for negative reasons, corporate responsibility potentially provides a positive balance. The message must be honest, however. Corporate responsibility only works when it’s adopted strategically and not as a band-aid tactic, when product negatives have been maximally mitigated and the good far outweighs the bad.

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REPUTATION: CULTIVATING COMPETITIVE ADVANTAGE

Now that we’ve considered the potential of reputation, let’s look at its components and the way we can measure reputation in order to cultivate it for competitive advantage. To accomplish these goals we’ve used proprietary BrandZ™ research to create a new metric called RepZ. RepZ measures corporate reputation, a corporation being the parent of the product brand that consumers interact with. In some cases corporation and brand are the same entity. More often they’re not. But their reputations always are interrelated.

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Defining RepZ

As explained, corporate reputation matters, especially today. RepZ reveals exactly why and how much it matters to the success of businesses and their brands. Here are three important reasons:

• Strong corporate reputation correlates with high market share.

• Strong corporate reputation improves key brand metrics.

• Corporate and brand reputation are increasingly one in the same.

Corporate reputation emerges from consumer perceptions of current and past performance. RepZ divides these perceptions into four components:

Success – Innovative, associated with quality products, financially strong

Fairness – Well priced, offering good value for money, honest and decent in relationships with customers, suppliers and other companies Responsibility – Respectful of employees, scrupulous about supply chain practices and protective of the environment

Trust – Consistently deliver on promises about products and services

These four components move along a continuum from characteristics that can be seen as “hard” and practical business considerations (Success and Fairness) to other important issues seen as less core to business achievement and therefore “soft” (Responsibility and Trust).

Until now these four components were not well integrated. The hard issues drove the business. Too often the soft issues formed the “moat” around the business, an afterthought done for pragmatic reasons and lacking conviction.

SUCCESS TODAY REQUIRES INTEGRATING THESE COMPONENTS INTO ALL LEVELS OF THE BUSINESS.

This approach produces brand integrity, a tensile internal strength that’s much more durable than the “moat.” The approach depends on an attitude that begins at the top and permeates the organization.

CORPORATE

REPUTATION

Success Fairness Responsibility Trust

Innovative/Leading the way

Offer investors a good financial return

Charge fair prices

Deal fairly with suppliers and other companies

Socially responsible

Treat employees well

Environmentally responsible

Can be trusted

Market performance

HardGood citizen

Soft

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Computing RepZ

Trust

16%

Responsibility

17%

Fairness

32%

Success

35%

Factors have different contributions:

The average RepZ score is 100. Generally, scores over 105 demonstrate reputation superior strength, under 95, weakness. The four components are weighted. Success and Fairness together account for about two-thirds of RepZ, while Responsibility and Trust together make up theother third.

The RepZ scores are based on BrandZ™ data. BrandZ™ is the world’s original brand equity database, containing data on brands gathered from interviews with over 2 million consumers in more than 40 countries.

Weighted

RepZ Score

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R2 = 0.6849

Benefits of High RepZ: Greater Market Share

Most would agree that positive reputation is important. Few would argue that achieving Success with Fairness, Responsibility and Trust is intrinsically the right thing to do. But as a practical matter, implementing best practices can be costly. And it’s reasonable to ask about the ROI.

BRANDS WITH HIGHER REPZ SCORES ENJOY GREATER MARKET SHARE.

Analyzing the RepZ scores of the roughly 3,000 brands worldwide that comprise the BrandZ™ database revealed a dramatic correlation—Brands with higher RepZ scores enjoy greater market share.

Greater market share (consumer loyalty)

Hig

her

Rep

Z s

core

Higher RepZ CorrelatesWith Greater Market Share

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Benefits of High RepZ: Crises Protection

Major brands are especially vulnerable to unforeseen events that can quickly threaten the equity cultivated over a long period of time. Market share alone does not provide adequate protection for these crises.

IN FACT, SIZE CAN BE A NEGATIVE FACTOR, INTENSIFYING RESENTMENT.

However, high market share, when combined with strong RepZ, results in a measurable difference in the quality and depth of customer relationships.High RepZ strengthens each of the three levels of brand-customer connection measured by BrandZ™, the brand equity relationship building blocks. Brands with weak or neutral reputations produce BrandZ™ equity scores that reflect an unexceptional relationship with customers.

THE BRANDZ™ COMPONENTS OF SUCCESS (BEING MORE MEANINGFUL, DIFFERENT AND SALIENT) ARE SIGNIFICANTLY HIGHER FOR STRONG REPZ BRANDS, ILLUSTRATING A MORE SUSTAINABLE COMPETITIVE ADVANTAGE.

Strong reputation

(top third)

Meaningful 116

Different 114

Salient 116

Weak reputation

(bottom third)

Meaningful 86

Different 87

Salient 87

(Average brand scores 100)

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+21%

+16%

+7% +8%

+12%

+17%

+10%

Benefits of High RepZ: Better Performance on Key Brand Metrics

Positive RepZ Strengthens BrandsAt Each Point on the Path to Purchase

% that brands with strong reputations (top third) exceed those with weak reputations (bottom third)

Brand Promise Consideration Trustworthy Recommendation Brand Clarity Brand PotentialBrand Premium

Consumers feel measurably more positive about brands offered by corporations with strong reputations. Corporations that score high in RepZ (top third) are 21 percent more likely than poor scorers (bottom third) to have their branded products included in the consideration set prior to a purchase decision, for example. But consideration is just the start.

STRONG REPUTATION CORRELATES WITH HIGH LEVELS OF TRUST AND WILLINGNESS TO RECOMMEND A BRAND WHICH IN TURN CREATES A BETTER PREMIUM

As indicated by the correlation with positive Brand Potential, strong reputation also increases the likelihood of future purchases. A metric derived from BrandZ™ data, Brand Potential combines brand loyalty and current purchasing to predict future sales prospects.

A positive corporate RepZ score, in other words, strengthens the consumers’ relationship with the company’s brands at each critical point from the initial encounter through experiencing the brands and, ultimately, adding them to their brand repertoire.

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152 141 166 139

129

Along with ranking the RepZ leaders in USA, these charts rank the leaders in the four RepZ components: Success, Fairness, Responsibility and Trust. These rankings yield useful findings.

First The charts illustrate how the competing brands rank in overall RepZ strength relative to each other.

SecondThey reveal that there’s not one right way to achieve a high RepZ score. Corporations achieve RepZ scores with differing proportions of the four RepZ components.

Third They clarify the RepZ strengths and weaknesses of various corporate brands compared with the competition.

The balance of components comprising the RepZ score varies by country and category. In China, for example, the four components are relatively balanced, while in other countries one component, often Success, dominates.

FedEx ranks Number One in RepZ in USA. It achieved this status because the brand scored especially high in these RepZ components: Success and Responsibility.

It is important to note that top scores occur across a variety of categories indicating that a strong reputation is relevant for every brand and corporation.

Success Fairness Responsibility Trust Total

RepZ Leaders in USA: The Top Leaders in RepZ and RepZ Components Across Categories in USA

The Top 10 RepZ Leaders in USA

161 135 164 98

135

149

136

120

131

144

135

105

115

108

107149121

118 134 120 139

124 133 122 121

142

119

110

121

110

125

104

115

106

144

140124

127

126

123

121

Uber

UPS (United Parcel Service)

Microsoft

The Home Depot

Amazon

Lipton

Google

Enterprise

Huggies

FedEx149

143

134

130

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Disney Resorts (Disney World/Disneyland) 164Uber 161Apple iPhone 159Apple 157FedEx 152

Facebook 149Google 149Amazon 149Microsoft 149Nike 143

FedEx 141Walmart 141UPS (United Parcel Service) 136Uber 135Lipton 134

The Home Depot 133Amazon 131Lowe’s 128US Postal Service 123Suave 122

The Top 10 Success Leaders in USA

As might be expected, brands that score highest in the RepZ Success component tend to be big and established, dominating or leading their categories and managing to be seen as being meaningfully different from the competition. In some cases, however, the brands that lead in Success score lower in the other components: Trust, Responsibility and Fairness. Their contract with the consumer could be better balanced to sustain long-term brand leadership.

The Top 10 Fairness Leaders in USA

The brands that score high in the RepZ Fairness component are usually those with a strong value proposition. Value is the consumer’s perception of how well a brand has balanced its desirability and price. (Complete information is contained in the report ValueD: Balancing Desire and Price for Brand Success, available from WPP companies.) Brands known for a strong value proposition help create a sense of Fairness about the corporation.

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FedEx 166Uber 164Honest Diapers 158Disney Resorts (Disney World/Disneyland) 155Seventh Generation 146

UPS (United Parcel Service) 144US Postal Service 144Google 143Earth’s Best 140Lyft 140

Enterprise 144Huggies 140Pampers 139Lipton 139FedEx 139

Lowe’s 131Hershey’s 128Tylenol 127Visa 127Bose 126

The Top 10 Responsibility Leaders in USA

The Top 10 Trust Leaders in USA

Brands with the highest scores in the RepZ Responsibility component in USA tend to score well across the other three components. This interconnection of Trust, Responsibility, Fairness and Success, in the mind of consumers, indicates how much brand experience influences potential corporate performance.

Trust is important, especially in today’s world where trust in institutions is declining. And brands that score high in the RepZ Trust component make an important contribution to corporate reputation. But trust alone is not enough. It needs to be reinforced by brand and corporate behavior.

(Complete information is contained in the report TrustR: Engaging Consumers in the Post-Recession World, available from WPP companies.)

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Amazon RepZ Performance: Amazon RepZ Score Compared with the Competition in the Electrical Retailers Category in USA 2016

Looking at corporate brands by category and country shows how much corporations vary in the way they build and sustain reputations.

TWO CORPORATIONS CAN ACHIEVE THE SAME REPZ SCORE FOR COMPLETELY DIFFERENT REASONS.

This is because the RepZ score is a composite achieved by adding together four weighted components: Trust (16 percent), Responsibility (17 percent), Fairness (32 percent) and Success (35 percent) (see illustration on p16). Refer to these general guidelines to interpret the scores.

Superior Strength: 105 and aboveStrong: 101 to 104Average: 100Weak: 96 to 99Excessive Weakness: 95 and below

RepZ measures how consumers feel about a corporation overall. Consumers link corporate reputation with a company’s brands. High RepZ scores correlate with greater market share and other benefits. Amazon in the Electrical Retailers category in USA 2016 showed Superior Strength in RepZ.

All RepZ Scores in the Electrical Retailers Category in USA 2016

Amazon 129Walmart 111Target 107The Home Depot 106Costco 104Apple Store 102eBay 101

Sam’s Club 101Best Buy 101Sears 99Lowe’s 99RadioShack 98Staples 96

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One of the more important drivers of RepZ, Success is based on business performance indicators such as innovation, product quality and financial stability. Amazon in the Electrical Retailers category in USA 2016 showed Superior Strength in the Success RepZ component.

Amazon Success Score Compared with the Competition in the Electrical Retailers Category in USA 2016

Success Scores in the Electrical Retailers Category in USA 2016

Amazon 149Apple Store 126Walmart 113eBay 102The Home Depot 102Target 102Best Buy 101

Costco 99Sam’s Club 98Lowe’s 95RadioShack 95Staples 94Sears 93

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Fairness, which accounts for about one-third of the RepZ score, indicates how consumers feel about the corporation’s reputation for pricing and its relationships with suppliers, customers and other companies. Amazon in the Electrical Retailers category in USA 2016 showed Superior Strength in the Fairness RepZ component.

Fairness Scores in the Electrical Retailers Category in USA 2016

Amazon Fairness Score Compared with the Competition in the Electrical Retailers Category in USA 2016

Amazon 131Walmart 128Target 110The Home Depot 110eBay 109Sam’s Club 103Costco 101

Sears 101Lowe’s 101RadioShack 99Best Buy 98Staples 98Apple Store 78

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Responsibility concerns a corporation’s reputation for being respectful of its employees, workers along the supply chain and the environment. It makes up about one-sixth of the RepZ score. Amazon in the Electrical Retailers category in USA 2016 showed Superior Strength in the Responsibility RepZ component.

Amazon Responsibility Score Compared with the Competition in the Electrical Retailers Category in USA 2016

Responsibility Scores in the Electrical Retailers Category in USA 2016

Target 115Costco 114Apple Store 112Sam’s Club 108RadioShack 106Amazon 105The Home Depot 103

Walmart 101Staples 100Best Buy 100Sears 100Lowe’s 98eBay 93

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Trust makes up about one-sixth of the RepZ score and measures the corporation’s reputation for Trust, meaning the consumer belief that the corporation will consistently deliver on its promises. Amazon in the Electrical Retailers category in USA 2016 showed Superior Strength in the Trust RepZ component.

Amazon Trust Score Compared with the Competition in the Electrical Retailers Category in USA 2016

Trust Scores in the Electrical Retailers Category in USA 2016

Costco 108The Home Depot 108Sears 107Amazon 107Best Buy 107Target 107Lowe’s 103

Staples 96Sam’s Club 96eBay 95RadioShack 94Apple Store 88Walmart 88

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Corporate reputation normally builds slowly and remains fairly constant year-to-year, although substantially negative news can trigger wild fluctuations. The chart here compares the change in RepZ between 2010, 2011, 2012, 2013 and 2014 where we have a measure.

The Historical View of RepZ for Amazon in USA

The RepZ Score of Amazon in the Electrical Retailers Category in USA Over Time

2016129

2014122

2011115

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The Global View of RepZ for Amazon in the Electrical Retailers Category

Few corporations have achieved brand reputation consistency across the globe. Rather, RepZ scores typically vary by country. Mapping these variations, reveals both the countries where corporate reputation needs more cultivation and the countries where strong corporate reputation can be expected to help build market share.

The RepZ Scores of Amazon in the Electrical Retailers Category Across Countries

Italy 151USA 129

UK 117Russia 98

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RepZ and the BrandZ™ Top 10 Most Valuable Global Brands

Each of the BrandZ™ Top 10 Most Valuable Global Brands 2016 scores high in RepZ.

The information is derived from the annual BrandZ™ Top 100 Most Valuable Global Brands report. The report is available at brandz.com.

The correlation between corporate reputation and brand value is not surprising. But the brands don’t score equally high. And their scores on the components that comprise RepZ vary.

While most of the Top 10 score high in the Success component, the levels of Fairness, Responsibility and Trust are uneven. The Apple corporate brand scores somewhat lower in Fairness, for example, because consumers deem its branded products expensive.

Brands can learn at least three lessons from the RepZ scores of the BrandZ™ Top 10 Most Valuable Global Brands:

• High brand value and strong brand reputation correlate closely; but

• How brands achieve strong reputation varies; and

• Most brands, even the world’s most valuable, have room to improve.

The RepZ Scores of the BrandZ™ Top 10 Most Valuable Global Brands 2016

118 119

110 120

104 111

112 115

128 104

Google 229.2 $bn

Apple 228.5 $bn

Microsoft 121.8 $bn

AT&T 107.4 $bn

Facebook 102.6 $bn

Visa 100.8 $bn

Amazon 99$bn

Verizon 93.2 $bn

McDonald’s 88.7 $bn

IBM 86.2 $bn

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Distrust is a societal phenomenon that potentially affects all businesses no matter how scrupulously they’ve been run. Using BAV and BrandZ™ data, this study offers insights to show how that larger societal trend is impacting corporations and brands. It also provides a prescriptive direction for how businesses can effectively respond. In summary:

• Reputation is the bulwark for cultivating and protecting trust. Reputation was fractured into pieces: how consumers viewed the corporation; and how they viewed the brand. Increasingly, consumers don’t make that distinction. And as corporate and brand reputation converge it’s critical to get the impact right.

• Reputation is based on four factors: Success, Fairness, Trust and Responsibility. Their relative influence on reputation varies by business, circumstances and timing. But the factors are interdependent. And, especially today, the “harder” factors (Success and Fairness), typically associated with corporate and brand reputation, can be reinforced —or quickly eroded—by weakness in “softer” factors (Trust and Responsibility).

• Reputation should strengthen as any of the four component factors are improved. But as described in this study, Trust and Responsibility are especially powerful today. Businesses that embed Trust and Responsibility deeply into the organization should gain a reputation that becomes enduring strength and point of differentiation.

We’ve described a merger of purpose and profit that represents a sea change, linking the business of ethics and the business of selling. It’s an opportunity for companies to differentiate on the basis of their integrity by making brand building and consumer understanding strategic concerns that touch all aspects of the business.

Corporate responsibility was once solely intended to impress elite audiences of shareholders and decision makers, but now in the age of social media, corporate and social responsibility are vital levers for engendering consumer loyalty, preference, and market share. Responsibility not only provides rainy day protection from potential future scandal, but also a basis for sound brand differentiation in an increasingly commoditized world.

Achieving this level of corporate responsibility requires reversing the historic mistake of fracturing corpora-tion and brand into separate silos.

The corporate function focused on shareholders and lost the feel and pulse of the market, while the brand function became insulated from the business strategies in the quest to follow the customer.

TODAY IT IS VITALLY IMPORTANT FOR COMPANIES TO UNDERSTAND THAT THEY HAVE TWO TYPES OF SHAREHOLDERS, THOSE WHO HOLD STOCKS AND THOSE WHO BUY PRODUCTS AND SERVICES

As an additional by-product of eliminating these silos, firms themselves may discover new ways to achieve greater integration and synergy. Here are three suggested steps:

1. Assess the business to determine the areas where a lack of consumer trust may be a misperception of the company’s activities and the areas where lack of trust may be justified.

2. Understand how both the corporation and the brand are perceived and work to align these entities.

3. Develop and communicate a social responsibility ethic that is part of the strategic core of the corporation and its brands.

None of this is necessarily easy or can be accomplished overnight. Trust eroded over time and it won’t be restored overnight. Some consumer attitude is out of your control. A generalized sense of distrust attaches to many categories whether merited or not. Those presumptions make the work more difficult, but also more necessary.

Conclusion

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About the Authors

About BAV Consulting

About BrandZ™

This paper was a collaboration between BAV and BrandZ™, proprietary brand strategy centers of WPP Group, plc.

David Roth CEO The Store WPP, EMEA and Asia

Peter Walshe Global BrandZ™ Director Millward Brown

John Gerzema Executive Chairman BAV Consulting

Editorial by:Ken Schept

For more information, please contact David Roth at droth@wpp.com or John Gerzema at John.gerzema@brandassetconsulting.com

BAV Consulting, a unit of the Young and Rubicam Group, part of WPP plc (NASDAQ: WPPGY), helps business executives and marketers assess, drive, and monitor the direction of their brands as strategic corporate assets, using the proprietary BrandAsset Valuator (BAV) models and metrics created from the world’s most comprehensive study of brands, to link the more emotional aspects of brand affinity to the harder quantitative measures of finance. BAV Consulting has been measuring brands since 1993 and today over 50,000 brands have been evaluated on 75 metrics, among 900,000 respondents in over 50 countries.

www.bavconsulting.com

BrandZ™ is the world’s largest customer-focused brand analytics and equity intelligence tool. Created in 1998, BrandZ™ is continually updated. With consumer insights and brand analytics based on its more than 2 million consumer interviews in over 46 countries. This information also forms the basis of many studies, such the definitive BrandZ™ Top 100 Most Valuable Global Brands, where brand valuations are based on financial information combined with quantified consumer brand metrics gained from BrandZ data. BrandZ is commissioned by WPP and conducted by Millward Brown, the annual study measures the brand equity of thousands of consumer-facing and business-to-business brands around the world.

www.brandz.com

33 BRANDZ™ REPZ

WPP Resources

WPP is the world’s largest communications services group with billings of US$74 billion and revenues of over US$19 billion. Through its operating companies, the Group provides a comprehensive range of advertising and marketing services including advertising & media investment management; data investment management; public relations & public affairs; branding & identity; healthcare communications; digital, eCommerce and shopper marketing and specialist communications.

The company employs over 205,000 people (including associates and investments) in over 3,000 offices across 112 countries.

WPP was named Holding Company of the Year at the 2016 Cannes Lions International Festival of Creativity for the sixth year running. WPP was also named, for the sixth consecutive year, the World’s Most Effective Holding Company in the 2017 Effie Effectiveness Index, which recognizes the effectiveness of marketing communications. In 2017 WPP was recognised by Warc 100 as the World’s Top Holding Company (third year running).

www.wpp.com

For further information contact David Roth david.roth@wpp.com

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For more information contact:

David Roth CEO The Store WPP, EMEA and Asia +44 (0) 20 7318 4901 david.roth@wpp.com

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