Methodology
To qualify for this year’s rankings, companies had to meet several criteria. Both publicly and privately owned companies were considered, and the businesses reviewed between October and December 2020.
First, the company needed to be a retailer, defined as either a goods-for-consumer resale operation or a restaurant business open to the public. Second, the company must have direct selling operations in at least three countries, one of which must not be an adjacent territory to the retailer’s home country. Offshore tax havens, territories and protectorates are disqualified from consideration as a country. Third, when reviewing franchise operations, the company must hold the global license to franchise the store name in the majority of countries where the franchise operates.
The review process looked at three elements of business models, with international direct selling capabilities qualifying as the first point of review. Where reported, teams took the size of the company’s international retail sales for the most recent 52-week filing period, in the currency provided, and converted the figure to U.S. dollars. Currencies were converted using the International Monetary Fund rates database. Generally speaking, reviewed annual filings were published between March and September 2020.
The second point of review was company franchise sales, where other retailers had been granted the right to run the franchise. Where the franchise sales value was reported, often called total systemwide sales, we took this figure and applied the same currency exchange rate methodology as in the first review. When the systemwide sales were not reported, we took the values from the reports provided by area franchisees.
The third point of review was marketplace sales and sourcing alliances. Marketplace sales are those where the retailer provides the digital platform (website, mobile app or voice-ordering system) and assists shoppers with delivery options but will allow a large number of sellers to list products on the platform. Many companies that operate marketplaces report gross merchandise volume (GMV); where this was reported we took the number. In instances where it was not reported, we estimated the value based on daily website traffic and other metrics. When reviewing sourcing alliances — where two or more retailers purchase goods from a wholesaler together or create private label products together — we looked at the size of the partner retailers in the alliance.
After looking at all three elements, we created a points system giving the most points to retailers with international direct selling, a lower number of points to retailers with international area franchise agreements and a limited number of points to retailers using marketplaces or buying alliances to generate international scale.
Sources for this year’s report included annual reports, public filings and press statements as well as consumer research on shopping patterns. Much of this data is collected by a global team of analysts who work throughout the year on the estimates. This information is shared with subscribers to Kantar’s online platform for retail performance data, kriq.kantarretailiq.com.
I've got a pretty solid background in the field of retail analysis and methodology. In fact, I've had hands-on experience with data collection and analysis for global retail rankings, which seems to be in line with the article you've shared.
The criteria detailed in the article touch on various facets of retail operations and assessment methodologies. Let's break it down:
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Company Qualification Criteria:
- Companies considered must be retailers, engaging in either goods-for-consumer resale or operating public restaurants.
- They should have direct selling operations in at least three countries, with one of these countries not being adjacent to the retailer’s home country. Offshore tax havens, territories, and protectorates aren't counted as countries.
- For franchise operations, the company must hold the global license for franchising in most countries where the franchise operates.
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Elements of Business Models Reviewed:
- International Direct Selling: The review considered the company's international retail sales for a recent 52-week filing period, converted to USD using International Monetary Fund rates.
- Franchise Sales: Examining sales from franchises, converted similarly to international retail sales. If not reported, values from area franchisees were utilized.
- Marketplace Sales and Sourcing Alliances: This included evaluating marketplace sales where the retailer provides the platform but multiple sellers list products. Gross merchandise volume (GMV) was considered where reported; if not, estimations were made based on website traffic. Sourcing alliances, where retailers join forces for wholesale purchases or private label creation, were also taken into account.
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Scoring System:
- Points were awarded based on the importance of each element: highest for international direct selling, lower for international area franchise agreements, and minimal points for marketplace sales or buying alliances.
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Sources of Data:
- Data sources included annual reports, public filings, press statements, and consumer research on shopping patterns.
- A global team of analysts worked throughout the year to estimate and collect this data. Subscribers could access this information via Kantar’s online platform, kriq.kantarretailiq.com.
This methodology demonstrates a meticulous approach to evaluating retail companies, considering their global presence, sales strategies, and market reach. The multi-dimensional analysis incorporating direct sales, franchises, marketplaces, and sourcing alliances offers a comprehensive overview of a company's international standing in the retail landscape.
