Following the regrettable news that Wilko were to enter administration in August, we wanted to see if there were any early indicators or signs that could have led to preventative measures being taken from our market intelligence and brand equity tracker, BrandVue Retail.
We had seen some troubling results in this year’s Most Loved Retail Brands report, with Wilko losing ground on our Brand Love rankings, both in absolute score as well as their relative position. Whilst the retail environment has been tough across the board, many of the discount retailers like Home Bargains, Poundland and Savers have performed well during the cost-of-living crisis, increasing their Brand Love scores amongst shoppers.
When we look at the scores for Wilko in the last 12 months, it’s clear that one of the main issues for the brand has been a loss of ‘connection’ to consumers. The brand has declined most on the measure “For people like me”. This drop in relatability has been exacerbated by declines on both “Quality” and “Good value” perceptions.
We spoke in the report earlier this year about the expectation of affordability without the compromise of quality, and Wilko’s scores demonstrate that this expectation is held even in the discount retail sector. Value for money isn’t just about low prices, but also about quality and reassurance.
The decline amongst these metrics has also seen Wilko fall further from the competitive average for “Good value”. The brand has also had an advantage in “Quality” in the past, yet that advantage seems to have been eroded – and that’s been an ongoing issue for some years now.
Opportunities for recovery?
Although perceptions of “Good value” have suffered in the past year, there is a sign of some hope. We believe that the brand still possesses key strengths. Wilko still over-performs for “Trusted” against the average of the discount retailers. This lead is sustained even when we consider responses from those who state they “Love” the respective brands in the discount category and demonstrates a high index when comparing the advocates and detractors for Wilko. So, how can this be used to reverse the Brand Love trend and potentially combat the barrier with relatability?
These kinds of questions will be on the minds of the administrators that are weighing up potential bids for the retailer. We have observed other discount retailers thrive by providing excellent value without compromising customer satisfaction.
If an investor can be found for Wilko and the brand is able to rebuild sustainability on these existing assets, then we are hopeful that there will still be a spot on the high street for Wilko.
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Further reading:
- Why is price research important?
- Beyond binary: the power of nuance in understanding consumers
- Why is NPS important to a company?