All about the brand

Target is the fourth most valuable retail brand in the United States, according to a new study released today by InterbrandDesignForum called, appropriately enough, “The Most Valuable U.S. Retail Brands 2009.”

Walmart, Best Buy and Home Depot, in that order, were ranked ahead of Target, while CVS, Dell, Walgreens, Lowe’s, Sam’s Club and Coach rounded out the top 10.

“Target’s iconic bullseye is recognized by 96% of Americans, and it claims a disproportionate share of affluent shoppers under 45,” the study noted. “The brand spends roughly $1 billion a year on advertising, well above their biggest competitor, Walmart, and continues to steal share from the apparel industry by offering high design ‘cheap chic’ merchandise branded by major fashion designers.”

Any effort to rank the most valuable retail brand is going to generate some controversy, based on where companies fall on the list and which companies were included or excluded. For example, computer maker Dell is ranked sixth, but Apple didn’t even make the list. Macy’s, the nation’s largest department store chain, wasn’t included either, but such chains as Gymboree and Men’s Wearhouse were. Also, acknowledged warehouse club leader Costco was ranked at 15, while Sam’s Club came in at No. 9.

“Interbrand determines brand value the same way analysts value other assets: on the basis of how much they’re likely to earn in the future,” according to an explanation of methodology employed to produce the ranking contained in the study. “Those projected profits are then discounted to a present value based on how risky the projected earnings are — that is, financial forecasting. The economic value added by the brand, or role of brand, is discovered with a proprietary analytic framework that expresses brand earnings as a percentage of economic value added.”

Based on that methodology, “Walmart tops the list, not simply because of its offering and scale, but because of its place in shoppers’ hearts and minds,” said Lee Carpenter, president and CEO of InterbrandDesignForum. “It is, in fact, the world’s most valuable brand, proof that brand not the sold province of famous makers such as Coca-Cola or Rolex.”