In this article, we take a look at the 15 most overrated companies and brands heading into 2023. You can skip our detailed analysis of factors leading to a brand becoming overrated and its consequences and head directly to 5 Most Overrated Companies and Brands Heading into 2023.
Factors Leading to Brands Becoming Overrated
Brand-recognition strategies can be highly effective in increasing revenue. However, a brand can become a victim of its own success due to factors that can be avoided. These include complacency, rigid bureaucratic frameworks that arise as a result of scaling and other corrosive business practices like bad customer service.
However, one core factor has specifically to do with luxury goods. Luxury companies price their products on value-based pricing, which is tied around their wealthy customers’ perceived value of their products for social status. McKinsey, a global management consulting firm, stated that the luxury apparel industry is well-placed in the ongoing market downturn to outperform the rest of the clothing industry.
It puts the CAGR of luxury fashion at 5-10% in the US in 2023, since its core market comprises affluent customers mostly insulated from the impact of rising interest rates and inflation. However, its Consumer Pulse survey also showed that more people from the luxury brands’ peripheral market have switched from top-tier brands to private-label products for lower prices than at any other time since the Covid pandemic began.
Impact of Brand Reviews
Overrated brands do not directly suffer from declining revenue, at-least in the short to medium term. What they directly result in, is bad customer reviews. Reviews play an important role in the global economy, especially in the American economy where consumers are highly inclined to give their feedback about products they buy and use other people’s feedback while making a buying decision.
A Quality Logo Product survey shows 85% of people trust online reviews as much as personal recommendations. Bad reviews can lead to a halt in the growth of customer-base and then eventually, dwindling reputation may even lead to a decline in revenue due to customer alienation and the background inflation rate.
According to data from Statista, 92% of potential customers are less likely to buy from a negatively reviewed business.
The reviews for most of these overrated brands and companies can be checked out on Amazon.com, Inc. (NASDAQ:AMZN), Walmart Inc. (NYSE:WMT), Target Corporation (NYSE:TGT), eBay Inc. (NASDAQ:EBAY) and Trustpilot Group plc (LSE:TRST.L), among others.
Photo by Erik Mclean on Unsplash
Our Methodology
We’ve ranked brands and companies based on the review ratings from Trustpilot Group plc (LSE:TRST.L), a major consumer-review platform, where consumers rate a company with stars, with 5-stars being the best and 1 star being the worst. We’ve also accounted for customer service and general sentiment around the brands in question.
For major brands, we’ve also discussed consumer survey results from sources like American Affluence Research Center and also considered brands from the book Obsessive Branding Disorder, by journalist Lucas Conley.
Let’s dive in. Here’s the 15 most overrated companies and brands heading into 2023.
15. Champion, by Hanesbrands Inc. (NYSE:HBI)
Trustpilot Rating: 2.5 (Poor)
Champion is a sportswear clothing brand owned and operated by the US apparel company Hanesbrands Inc. (NYSE:HBI).
Based on its Trustpilot reviews categorized as “poor”, the brand has quality control as well as customer service issues. Some other customers claimed that the products they had ordered from their store were never delivered.
Champion is one of the largest brands of Hanesbrands Inc. (NYSE:HBI) which the latter acquired in 2016 for $90 million.
14. Starbucks Corporation (NASDAQ:SBUX)
Trustpilot Rating: 2.4 (Poor)
Starbucks Corporation (NASDAQ:SBUX) is a Seattle-based multinational chain of coffee houses. The company is a household name due to its nearly 36,000 coffee houses across the globe. It’s penetrated in pop-culture as well, featuring in movies like Mean Girls.
However, it has largely fallen out of favor with consumers, who claim that it is overrated. Starbucks Corporation (NASDAQ:SBUX) has a poor rating of 2.4 on Trustpilot Group plc (LSE:TRST.L) based on 1,565 reviews.
Majority of reviewers complained about low maintenance, mediocre quality and unreasonable cost. Despite that, Starbucks Corporation (NASDAQ:SBUX) is growing fairly well. Its YoY growth for fiscal year 2022 was 11% from the previous year.
It’s largely due to the fact that famous (not necessarily popular) brands often end up becoming status symbols. For instance, a University-of-Leicester study has discovered that consumption of Starbucks Corporation (NASDAQ:SBUX) food and beverages by the Chinese urban middle class is associated with status rather than quality of their products.
13. Dunkin’ Donuts
Trustpilot Rating: 2.3 (Poor)
Dunkin’ Donuts is an American doughnut and coffee company based in Canton, Massachusetts. It has a poor rating of 2.2 based on 181 reviews on Trustpilot Group plc (LSE:TRST.L).
Dunkin’ Donuts has over 11,300 restaurants worldwide, with 8,500 in the US alone, making it a prominent brand. However, consumer reviews paint a rather negative picture, with many reviewers complaining about the quality of food, sanitation and customer service on Trustpilot.
Dunkin’ Donuts has also been featured in Obsessive Branding Disorder, as an example of an overrated brand.
12. Gucci
Trustpilot Rating: 2.1 (Poor)
Gucci is a high-end fashion house headquartered in Florence, Italy. The company designs and sells products like luxury apparel, handbags and wallets, shoes, jewelry as well as watches and many other luxury items.
However, 1,217 reviews on Trustpilot put Gucci’s rating at a poor 2.1, with a good majority of reviewers complaining about customer service issues, followed by product quality relative to cost.
Gucci’s products can be bought from their official store as well as from platforms like Amazon.com, Inc. (NASDAQ:AMZN), Target Corporation (NASDAQ:TGT), eBay, Inc. (NASDAQ:EBAY) and Walmart Inc. (NYSE:WMT).
11. Victoria’s Secret & Co. (NYSE:VSCO)
Trustpilot Rating: 2.0 (Poor)
Victoria’s Secret & Co. (NYSE:VSCO) is a world-famous company of women’s undergarments based in Reynoldsburg, Ohio. The company has close to 1,350 retail outlets across the world.
Victoria’s Secret & Co. (NYSE:VSCO) is known for charging a premium on their products, owing to its luxury market. Its products’ prices rose by 83% in 2021 from the mid-2019, according to a UBS report.
Victoria’s Secret & Co. (NYSE:VSCO) is another brand on the list of most overrated companies and brands heading into 2023 that has been described as overrated by Lucas Conley.
10. Prada
Trustpilot Rating: 1.9 (Poor)
Prada, owned and operated by Prada S.p.A (PRDSY) and based in Milan, Italy, is another household name in the luxury market. It is one of the oldest fashion houses in the world, dating back to 1913.
Prada designs and sells luxury clothes, handbags and footwear among other luxury items. It has a poor rating of 1.9 on Trustpilot
9. Southwest Airlines Co. (NYSE:LUV)
Trustpilot Rating: 1.9 (Poor)
Southwest Airlines Co. (NYSE:LUV) is one of the largest airlines in the United States. Southwest Airlines Co. (NYSE:LUV) is yet another company to be featured in Obsessive Branding Disorder as an overrated company.
Being also the largest low cost carrier in the world, Southwest Airlines Co. (NYSE:LUV) naturally became very prominent with customers around the world and especially in the US. However, a PR disaster from 2008 dented the company’s reputation among consumers.
The airline allegedly kept flying 46 airplanes for over 60,000 flights without inspections for fuselage cracks, as reported by New York Times. This resulted in a hefty $10 million fine by the Federal Aviation Authority.
It is the ninth on the list of most overrated companies and brands heading into 2023.
8. Supreme
Trustpilot Rating: 1.8 (Poor)
Supreme is a lifestyle clothing brand based in New York City and is one of the most overrated brands heading into 2023. Based on over 400 reviews on Trustpilot, the company has a poor rating of 1.8. Most customers have complained about their lack of maintenance of their website which results in a poor shopping experience. Others have highlighted their “poor” customer service.
7. The Gap, Inc. (NYSE:GPS)
Trustpilot Rating: 1.7 (Bad)
The Gap, Inc. (NYSE:GPS) is an American multinational apparel and accessories brand. It has over 2,800 stores across the world, to give you a perspective on its widespread prominence. That said, The Gap, Inc. (NYSE:GPS) is also thought of as overrated. It was another brand that was featured in Obsessive Branding Disorder as an overrated company.
It has a bad rating of 1.7 based on 430+ consumer reviews on Trustpilot. The Gap, Inc. (NYSE:GPS) has largely been criticized for its quality and cost but most importantly for its customer service and strict return-policies.
6. NIKE, Inc. (NYSE:NKE)
Trustpilot Rating: 1.7 (Bad)
NIKE, Inc. (NYSE:NKE) is an American manufacturer of sports-related apparel and accessories and really needs no further introduction given the business clout the company enjoys all over the world.
But, the brand has received overwhelmingly negative reviews on Trustpilot, from close to 6,000 consumers, leading to NIKE, Inc. (NYSE:NKE) having a bad rating of 1.7.
Click to continue reading and see 5 Most Overrated Companies and Brands Heading into 2023.
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Disclosure: none. 15 Most Overrated Companies and Brands Heading into 2023 is originally published on Insider Monkey.