Why now is the time for something different
The most valuable UK brands are being outpaced by the leading global brands on a range of important brand measures that contribute to long-term brand health and stronger financial returns.
Although this is the first UK Brand Ranking, BrandZ’s global valuations have included some UK brands since 2006, and it’s therefore possible to track the Top 10 UK brands of 2017 over time. The picture this data paints is not pretty; it serves as an alarm call for brands that think they’re doing well enough. They’re probably not – or at least not well enough to protect their future value.
Over the past 11 years, the Top 10 UK brands have grown their brand value by 67 percent, while the Top 10 global brands have grown at more than three times that rate, and are now worth 249 percent more than they were in 2006.
These top UK brands are now quantifiably less able to generate volume sales than a decade ago, less able to justify their pricing, and – most concerning of all – score below average on the BrandZ measure “Potential”, which is an indicator of future growth. They are less likely to be described by consumers as “meeting people’s needs” than they were in 2006, and they’re less loved.
What these brands have in their favour is that they are incredibly well known, even if that measure – what we call “saliency” – has also slipped over time. But fame alone is no longer enough. Brands need to be demonstrably different to the competition and they have to be different in a way that has meaning to consumers.
Necessity, the mother of innovation
This has all been accompanied in a drop in how innovative these brands are perceived to be, and not from a particularly strong starting position. The Top 10 brands in today’s UK ranking were seen as 10 percent more dynamic than the average brand back in 2006, and are now just 4 percent above average.
Brands that are innovative – and are recognised by the public as such – are more valuable than those that stick with what they know. In the UK Top 50, brands that score high for innovation (at least 10 percent above average) are almost twice as valuable as the brands with low innovation scores.
There is a powerful link between innovation and brand love. Love is more than a “nice to have” factor for brands; it makes a real difference to the bottom line. A look at the strongest global brands tracked over a decade reveals that the most loved brands more than doubled their brand value, while the least loved grew by just 22 percent. Love is what helps maintain brand strength and a bond with consumers in between innovations.
When we consider a broader group of 1,700 UK brands – not just those that made the Top 50 ranking – it is clear that there is plenty of innovation going on among smaller brands, and that bigger brands need to watch their back if they don’t focus more intensely on innovation. Only a handful of the 10 most innovative brands in the UK are actually in the most valuable Top 50.
HEAR THEM ROAR
Learning from the global ‘Fearsome Five’
The five brands at the top of the BrandZ Top 100 Global Brands are not just huge and valuable, they’re continuing to grow at a tremendous pace, and much of that comes down to innovation.
Google, Apple, Microsoft, Amazon and Facebook - the Fearsome Five, as we call them – are in what might be considered a hot category in which it’s easier to grow. But let’s not forget that while these are youthful brands, aside from Facebook, they are not particularly young any more. They do work hard to stay fresh, however, and they are seen as being among the most disruptive brands in the world from any category, even though they are all market leaders.
This commitment to innovation is evident across all five of these brands.
These brands have shown a long-term commitment to innovation that has paid dividends over many years, and continues to reward them now. Amazon’s brand value has almost doubled in the past year alone.