The 2017 BrandZ report has been unveiled, with retail leading the ranking in category value growth, increasing 14%, driven by e-commerce, with Amazon and Alibaba up 41% and 20% in value.
In its 12th year, the 2017 Brands Top 100 Most Valuable Global Brands report, which is published by WPP and Kantar Millward Brown, conducted a comprehensive study into brand value from over 3 million consumer interviews.
The report includes an in-depth analysis of consumer and business-facing brands across 14 categories as well as the Global Top 100 ranking. In a turbulent year, brands have continued to deliver.
This year the retail category took top spot in value growth. The report for that fastest-rising category, retail, rose 14%. But beyond the numbers, the category faced new turbulence, as both Amazon and Alibaba prepared to open extensive networks of physical stores, and Walmart acquired an e-commerce startup
E-commerce still rules, according to the report, which found that retailers in mature markets continue to close excess real estate. But stores are back. Physical stores—smaller, convenient, interactive, and loaded with technology—became an important expression of brand experience, especially in categories like apparel and luxury.
Adidas launched a women’s studio with fitness classes in London. A Lululemon Lab store opened in New York. The online eyeglass brand Warby Parker opened more physical locations. Despite the rise in FinTech, bank branches remained an important way to personalise the consumer relationship and build trust. Shell gas stations continued to become a place for shopping on the way home or for dropping off or picking up parcels. Even Hermès experimented with pop-up stores.
Shell gas stations continued to become a place for shopping on the way home or for dropping off or picking up parcels. Even Hermès experimented with pop-up stores. And the ultimate confirmation that physical stores are important came from their nemesis, Amazon, which opened a book store and prepared to open Amazon Go, its chain of automatic-checkout grocery stores. Still, while physical stores are proving to hold it’s place, e-commerce was the clear leader, with technology being the main driver when it came to brands and brand value, as the report confirms.
The Top 100 brands increased in value by 8 percent year-on-year to now be worth $3.64 trillion. The Fearsome Five technology giants – Google, Apple, Microsoft, Amazon and Facebook – take the top places in this year’s ranking and combined are worth 25% of the total value of the Top 100.
Twenty years after its IPO, Amazon grew 41%, and rose three ranks to enter the Global Top 5 at No. 4, after Google, Apple, and Microsoft, and ahead of Facebook. Tencent, the Chinese internet portal, also rose three ranks to enter the Top 10 at No. 8.
Adidas ranked as the fastest-rising brand, which increased 58% in value, because its retro sneakers connected perfectly with the fashion moment and the brand made operational and marketing changes to strengthen its US business.
Technology was the main driver behind those brands which topped the BrandZ Global Brands Value list this year. The evolution of the Global Top 10 over the past 12 years reflects the dominance of technology and the disruptive impact of the global financial crisis, technological innovation, and changing consumer attitudes about health.
Only three brands that appeared in the Global Top 10 in 2006—Google, Microsoft, and IBM—remain in the Top 10 in 2017. These technology leaders demonstrate the ability of relatively young brands, like Google and Microsoft, and heritage brands, like IBM, to be relevant, each in its own way: Google primarily with search and constant innovation; Microsoft with the versatility of its Surface devices and its expanding cloud business; and IBM with its reinvention, cloud focus, and cognitive computing.
When it comes to the most valued brands this year, geopolitics also stood out, which typically hums in the background of daily life, until it actually becomes a loud soundtrack of life. The surprises of Brexit and the US election demonstrated the power of people to shape the destinies of nations—and potentially brands, which could not avoid the reverberations. Still, decisive brand-building activities took place across categories.
“Some consumers, especially young people, expected brands to take astand. Although most brands avoided becoming directly embroiled in controversy, the scrutiny prompted discussion of Brand Purpose. Leading technology brands—including Apple, Google, Facebook, and Microsoft— publicly opposed the Trump administration’s immigration policy, saying it contradicted their values and their need for a diverse workforce. Other brands, such as Coca-Cola, Starbucks, Nike, and Ford also spoke up for inclusion,” as stated in the report.
5 actions for building valuable brands today
- Be purposeful
Purpose is not new for brands. But it is now more important. In an uncertain and unsettling world, people are looking for answers and security. Purpose makes a difference to people—and to brands. Brands with a clear Purpose grew in value at three times the rate of other brands, on average, over the past 12 years according to BrandZ™ research. Purpose can be completely utilitarian. Or it can be about helping improve the world in some way. Increasingly, consumers, especially young people, are attracted to brands that, in an authentic way, are about making money, but are also about more than making money.
- Be different
Difference gives the brands their competitive advantage. It is one of three components (along with Meaning and Salience) that comprise Brand Power, according to the report’s key takeaways. Consumers usually view technology brands as Different. Achieving Difference is more challenging for brands with long heritage. But buried in every successful brand that has survived for decades is the Difference that drove its success initially. It is important to rediscover that Difference and make it relevant today.
- Be elastic
Certain brands, particularly technology ecosystems, benefit from elasticity. It is easier for those brands to extend across categories. Think like a disruptor brand, and focus on the needs of the consumer rather than the boundaries of the category. Categories help organise and define markets, but they are less useful when they become arbitrary definitions and constraints on innovation.
- Be responsible
Words like “authenticity” and “transparency” have been part of the brand lexicon for a while, almost long enough to lose their meaning. However, they have become even more important. As major institutions continue to disappoint the public, brands have an opportunity to face growing scepticism, even cynicism, with honesty, by doing what brands are supposed to do—provide people with good products and services— and by reminding people that the brand is there to help.
- Be prepared
Brands have invested a lot of effort to cultivate personalised customer relationships, sometimes based on shared values. To consumers, that closer connection makes some brands seem more like friends than strangers. And people have different expectations for their friends. They expect friends to speak up when important shared values are violated. Amid the current geopolitical turmoil around immigration, inclusion, climate change, and other issues, consumers often expect brands to take a stand. Taking a stand can be risky, especially for mass market brands that reach a broad constituency. Niche brands and brands with clearly articulated values may have more permission to take a stand. Usually, it is better to take a stand on principle, not politics. But the decision to take a stand—or not—is not always left to the brand. In these agitated times brands are called out all the time. Brands need to be prepared. Have the earthquake kit ready.
Continuing the theme of disruption, the 2017 Brands Top 100 Most Valuable Global Brands report focuses not only on the world’s most valuable brands, but also at the emerging brands which are shaking up the status quo and challenging the established order.
This report includes in-depth analysis of what it is that makes valuable brands so enduring, looking at the importance of branding over price, strong brands and meaningful difference.