Top 30 Italian brands worth close to EU72.5 billion
The combined value of the BrandZ Top 30 Most Valuable Italian Brands 2018 is US$85,302 million, or roughly EU72,483 million. This positions the value of leading Italian brands as less valuable than the Top 30 in several neighboring markets; the French Top 30 Most Valuable are worth US$221,876 million, the Top 30 in Spain are worth $103,013 million, and in Germany, the Top 30 are worth US$277,023 million. The relatively low value of the Italian Top 30 could reflect the fragmented nature of the Italian economy, and the fact that many of the companies and brands behind the country’s GDP do not originate in Italy.
Gucci is Italy’s most valuable brand
Gucci is approaching its centenary year, but this is a brand that builds on its heritage with what it describes as a “wholly modern approach to fashion”. The Gucci brand, valued at US$16,273 million in the BrandZ Italy ranking, was launched in Florence in 1921, made its US debut in the early 1950s, and is now a truly global brand representing elegance, romance and eclectic influences as well as traditional Gucci quality craftsmanship and attention to detail. The brand is now under the guidance of creative director Alessandro Michele, and is the third-most valuable luxury brand in the world (after Louis Vuitton and Hermès), according to Global BrandZ rankings, having risen 8 percent in value in the past year.
Mega brands dominate the ranking
Value is concentrated at the top of the Italian ranking, with the top two brands – Gucci and telecom provider TIM – between them accounting for 30 percent of the value of the leading 30 brands combined. This domination of the ranking by a small number of mega brands is a pattern we see in other markets. In France, Italy, Germany and China, around half of the Top 30’s value comes from just five brands, and in Spain, it’s even higher, at 67 percent. In the UK, the top two brands provide 24 percent of the Top 30’s value, and the top five make up 46 percent.
Luxury fashion sets Italian ranking apart
The presence and influence of so many high-end fashion brands lends the Italian Top 30 ranking a unique flavor. There are seven leading luxury brands in the Italian Top 30; France is the only other market in which luxury names have such a significant impact on the BrandZ ranking. Between them, brands like Prada, Fendi, Armani and Ferragamo make the luxury category the most valuable in the ranking, and together account for 34 percent of the total brand value of the entire Top 30.
Diversity of brands reflects Italian daily life
A look through the Italian Top 30 ranking is a like a passeggiata through any Italian town or city. There are daily essentials – Barilla pasta, Nutella spread, Lavazza coffee and Kinder chocolate bars, along with little luxuries like Campari and Ferrero Rocher. Then there are the bigger luxuries – not just the high-end fashion labels but also fast cars. There’s daily entertainment from Rai and Mediaset, and then the brands that simply make life tick – telecom providers, energy suppliers, banks and insurers. In total, 14 categories make up the Italian Top 30.
Brands communicating well, but need more focus on what they represent
The most valuable Italian brands are good at achieving visibility among consumers and coming to mind when people think of a category – something we call “salience”. Where they are outperformed by brands in other markets is on being different in a way that is important to consumers. Meaningful difference, a key ingredient in what makes strong brands valuable, is lacking among Italian brands, and this puts even the most valuable brands at risk. By overlooking meaningful difference, brands leave the door open for newcomers to win market share and brand value by simply standing apart from the status quo, and in a way that consumers find relevant and appealing.
Brand vitality on par with top global performers
Brands that make the Top 30 ranking in Italy this year are performing almost as well as the leading brands in the world on the BrandZ measure of health and vitality. Among the leading 30 Italian brands, 43 percent are classed as being healthy, having achieved great scores on the five components of vitality: purpose, innovation, communication, experience and love. This is not far behind the performance of the Global Top 30 in 2017, 67 percent of which were classed as healthy. This picture of vitality sets Italian brands apart from those in other large European markets; the top brands in the UK and France were considerably less healthy, though top German brands are fighting fit.
Trust and growth are natural partners
Some of the most trusted brands in Italy are also the most highly recommended by consumers, and this matters enormously given the increasingly widespread usage of social media. Trust often takes many years to earn, and some of the most trusted Italian brands have indeed been around for decades – names like Pirelli, Armani, Lavazza and Esselunga, and the cruise companies MSC and Costa. These trusted brands feature among the most likely brands to be loved and recommended, factors that also correlate with brand value.
Top 5 learnings for marketers
1 Big brands need to watch their step
Many of the brands that feature in the Italian Top 30 are among the most widely recognized and loved brands in the world, and their current scale shows that they have built both brand and business simultaneously. But businesses that nurture the power of their brands can punch above their financial weight and create the best conditions in which to grow future sales. This is especially important now, given that powerful startups are shaking up entire sectors and challenging established business models. To remain strong, brands need to balance their need for hard business results in the short term with investing in their brand for the long term. The Top 30 have an average Brand Contribution score of 3.6 out of a possible five, showing there’s room for improvement.
2 Make branding a priority and reap the rewards
Analysis of the BrandZ ranking shows that the healthiest and strongest brands are those that can best generate volume sales, justify a premium, and grow their value at a pace that outperforms brands in general – factors that all add to their bottom line. Over 12 years of Global BrandZ rankings, it has become clear that the share price of valuable brands is better insulated when external factors buffet the market, and these brands make a faster return to growth when conditions improve. Over time, their returns to shareholders have averaged four times the returns of a global market tracker.
3 Youth is no barrier to success
Brands featuring in the BrandZ Italy ranking are old by world standards – an average of 78 years old, compared to relatively youthful 60-year average age among the Global Top 30. But the difference in average value of the youngest and oldest Italian brands in the Italian ranking is negligible, showing that age is no impediment to success or growth in brand value in this market. While it’s an advantage to have generations of happy customers, heritage is not enough to ensure a brand’s continued relevance in people’s lives. Brands must constantly demonstrate to consumers that they stand for something that’s relevant to people’s lives today, or they risk losing their ability to win sales and command premium pricing.
4 Emphasis on creativity can help brands shine
It may be home to 40 percent of the world’s art treasures, but when it comes to modern-day creativity in the minds of consumers, Italy and Italian brands are lacking dynamism. Creativity is a key ingredient of innovation, which in turn drives love and brand value. Yet the Top 30 Italian brands are barely any more creative than the average brand from anywhere in the world. Even the Top 10 are seen as lacking creativity, and many of these are brands that have originality and design at their heart. The most innovative brands are seen as shaking things up and are regarded as “leading the way” in their categories, but without creativity, both in their products and services and in the way they communicate with consumers, a key element of innovation is lacking. In this environment, it only takes a small dose of true creativity to make a memorable impact.
5 Innovation, experience generate biggest rewards
Innovation and experience are two of the five key factors that contribute to the BrandZ measure of brand vitality. While the brands that are in the best shape perform well on all five measures, it’s clear that in Italy, investment in innovation and experience pays disproportionately high dividends. Brands that are especially strong on these two factors have significantly higher brand value than those that are not. Innovation is strongly linked to consumer love, which is important not just because it’s nice to be loved, but because it helps sustain sales and brand value during the periods between innovations. And innovations that are used to improve the consumer experience are loved for making life easier and perhaps a little more fun.
Cooking up something new
Ensuring future brand strength means building on the best of the past, but also being agile enough to move with the times. Galbani is a brand of cheese that was founded in the 1880s. While the dishes its products are used in are probably little changed since those early days, Galbani uses creativity in its communications to show that it remains relevant today. The Galbani “Recipe for Millennials” campaign draws on the point that while meals are traditionally a time for families to share and talk, younger people increasingly prefer the company of their smartphone. The video recipe, which ran on YouTube and Facebook, therefore guides parents, step-by-step, through a humorous procedure in which kids’ cellphones are wrapped thoroughly in tinfoil so they no longer receive a signal. Suddenly, everyone pays attention to the meal and to each other.