Innovation is the main growth driver for Brands – Report BrandZ Top 100 2016

14 Jun Innovation is the main growth driver for Brands – Report BrandZ Top 100 2016

In a world driven by digital communication to increase consumer engagement and loyalty, no surprises that technology companies have replaced consumer goods companies on the podium of the Brandz Top 100 Report 2016.

Brand value increases to $3,4 Trillion in 2016 (+3%) according to the new BrandZ™ Top 100 report compiled by MillwardBrown, the research agency. Over the past 10 years, the value of the top 100 brands has more than doubled —increasing by 133%.

This year, four of the top five most valuable brands are technology companies: Google, with a brand value of $229bn, Apple ($228bn), Microsoft ($122bn) and Facebook ($103bn). AT&T, valued at $107bn and ranked fourth while a decade ago. Consumers (especially the Millennials) have become less brand loyal, so companies are having to change their marketing strategies — through greater use of digital methods, which has enhanced the value of these technology brands. The role of technology is also a thread which runs through the last ten years, and has played a central role in brand-building. Those companies who have been able to make the most of technological advancements –  from the development of cloud services, IOT and e-commerce, to the ubiquity of Social Media and new publishing strategies – have profited most.

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Innovation is the main growth driver

The report shows also that brands outperforming this year Top100 growth have combined different elements: Innovation – Brand Experience – Brand love.

Here the lessons of brands that performed especially well in this period of disruption:

1 They disrupted before being disrupted.

The three fastest-rising brands – Amazon, Starbucks and Facebook – each came into being as a category disruptor, and they continued to disrupt, often with the use of technology. Amazon, for example, introduced Amazon Dash, the first iteration of a program that reaches the consumer at the exact moment of need, anticipating the world of automatic replenishment promised by the Internet of Things.

2 They excelled in digital and social media.

JD.com benefitted from its strategic partnership with Tencent, China’s giant Internet portal. Because JD.com is present on WeChat, Tencent’s ubiquitous messaging service, users can move easily between texting, e-commerce purchasing and payment without changing platforms.

3 They expressed a clear and consistent brand purpose.

It is possible to have a higher purpose about improving life for humanity, or a narrower purpose about improving life for the consumer. But the purpose needs to be genuine, clearly articulated and consistently executed. Google, which articulates its mission of helping humanity, increased 32 percent in brand value. The Home Depot, which focuses on serving the home improvement needs of consumers and small businesses, also improved 32 percent.

Apparel is the fastest growing category, rising 14% to $114bn.

There is an emphasis on high performance, with brands including Nike (+26%) and Uber Armour (a new entry) launching specialist premium lines. Incorporating technology such as heart monitors into their clothing, and integrating sportswear with free apps to provide a total consumer experience.

The newcomers: Chinese and retail brands enter the Global Top 100.

The seven brands that entered the Top 100, illustrate several trends, including the impact of China and the strength of the retail category in this years’ ranking. Two of the newcomer brands are Chinese and a third accelerated its expansion in China; and three of the brands are retailers. The other two brands are from the technology and beer categories.

The total value of the BrandZ™ Top 100 Most Valuable Chinese Brands has risen 13% to $525.6bn in the last year despite China’s slowing economic growth.

Tencent remains China’s most valuable brand, growing its brand value 24% to $82.1bn. The highest new entries are telecoms brand Huawei (no.7; $18.5bn) and online retailer JD.com (no.15; $9.4bn). The BrandZ research also shows that Chinese brands are now as competitive as multinationals. They score more highly on two of the key factors that create competitive advantage – building brand awareness, and connecting with consumers on both a functional and emotional level – but lag behind on differentiation.

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The key conclusions drawn from this report are: First, brands that do not proactively build and protect value can anticipate more disruption; second, the counterpoint, disruption, is the precursor of extraordinary possibilities for brands. In the world of the Internet of Things, for example, brands will compete to be on the consumers’ list of items for automatic replenishment, and brands will also compete to be on the consumers’ list for more considered purchases that may command a premium. Brands that imagine the future and respond early to the questions it raises have the best chance of sustained success.

We at Selinko believe in the power of purpose to drive Brand Value through innovative digital technologies creating omnichannel consumer engagement and empowering consumer’s role. Consumers will respond to brands that communicate transparency and drive innovation. Transparency will dictate brand-customer relationships. Currently, customers are seeking more engagement from brands. This trend will continue with customers becoming more demanding in their expectation of transparency. Genuine brands – the ones that “walk the talk” and create real value – will be rewarded. This is even more marked when we look at the millennials audience.

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