The severity of Target’s challenge can be seen in brand rankings released Monday, from YouGov’s BrandIndex. Its 2013 brand rankings have some bad news for the retailer.
After consistently claiming a place within BrandIndex’s top 10 brands, Target has now dropped out of the top 20, according to new research from the company. BrandIndex ranks more than 1,100 brands, interviewing 4,300 people each day on their views.
“The fact that Target not only fell out of the top 10 but out of the top 20 is a big deal, especially since the incident only happened in December,” BrandIndex head of client services Lance Fraenkel told CBS MoneyWatch. “This kind of drop isn’t something that happens often.”Target, which is now ranked No. 21 on BrandIndex’s list, may decline further given the company’s disclosure on Friday that the security breach
Brand may seem like a nebulous concept, but how consumers perceive a company can affect their purchasing decisions. Just take a look at what happened with Target’s business after it disclosed the theft: store traffic fell, leading to what the company projects is a 2.5 percent sales decline in the fourth quarter. Before the theft was announced, sales were on track to be stronger than expected.
So far, Target is taking some early steps to win back consumer trust.
The company is running ads in national newspapers including The Wall Street Journal and The New York Times this morning with an open letter from Target chief executive Gregg Steinhafel. The letter will also appear in in local papers in the top 50 U.S. markets.
“Please know we moved as swiftly as we could to address the problem once it became known, and that we are actively taking steps to respond to your concerns and guard against something like this happening again,” Steinhafel wrote.
Other steps include free credit monitoring and identify theft protection to all Target customers, the letter notes.
“We want to earn back your trust and confidence,” he added.
Target may be able to climb back to its brand dominance, Fraenkel notes.
“Strong brands can weather storms,” he says. “Target has done a great job communicating to this point. The best thing they can do is to be transparent as possible.”
There’s some sign that public opinion may shift back in favor of Target. With the news that Neiman Marcus fell victim to data thefts over the holidays, it’s clear that Target isn’t alone in getting targeted by criminals.
In response to Steinhafel’s letter, one customer wrote on the retailer’s Facebook page, “I love Target, and know this can happen anywhere, but it's nice that he finally said ‘sorry.’”
Still, the final tally of the damages created by the data breach have yet to be counted. For both Target and its customers, the costs are likely to be significant.