First French ranking highlights opportunities for innovators
Top 50 French brands worth US$240 billion
The combined value of the BrandZ Top 50 Most Valuable French Brands 2018 is US$240,407 million (or roughly Eu201,413 million ). This is broadly comparable with the value of the Top 50 UK Brands 2017, which are together worth US$234 billion.
Louis Vuitton is France’s most valuable brand
The luxury brand whose initials alone have come to signal quality and craftsmanship around the world is the most valuable brand in the inaugural BrandZ Top 50 French Brands ranking. LV has a brand value of $35,505 million. The brand began with the decision by a young Louis Vuitton, then just 16 years old, deciding he would make trunks for travel. The brand is still known for its monogrammed luggage, as well as a regularly refreshed range of clothing, shoes and accessories. From humble beginnings, it has become a truly global brand.
Mega brands dominate the ranking
Value is heavily concentrated at the top of the French ranking, with the number one brand, Louis Vuitton, accounting for 15 percent of the value of the entire Top 50, and the top five brands contributing 49 percent of the brand value of the leading 50 brands combined. This domination of the ranking by a small number of mega brands is a pattern we see in other markets. In the UK, for instance, the top brand accounts for 12 percent of the Top 50’s value, and more than 40 percent of the brand value in the ranking comes from just five major brands. This phenomenon is less pronounced among the Top 50 brands in the 2017 BrandZ global ranking; that ranking has a greater proportion of high-value brands, and the number one brand, Google, accounts for only 8 per cent of the Top 50’s value.
Luxury marques set French ranking apart
The prevalence and influence of luxury fashion, accessories, fragrance and cosmetics brands lends the French Top 50 ranking a flavor that is completely distinct among other BrandZ rankings from around the world. There are seven luxury brands in the Top 50, and they account for a disproportionately high level of the ranking’s value, contributing 37 percent of the value of the entire Top 50. Personal care brands – there are eight in the Top 50 – contribute a further 19 percent of the ranking’s total value. Many of these brands have a century or more of heritage, and both reflect and have helped create France’s image on the international stage as a hub of beauty, fashion and quality craftsmanship.
Delivering on fame, but often lacking meaning
The most valuable French brands are household names, even if many are priced out of many consumers’ reach. On the BrandZ measure we call salience, which indicates how easily they spring to mind when a consumer thinks of their category, they massively outperform the average of all French brands – counting those that fall outside the Top 50. Where they falter, however, is being meaningful, which is essentially a measure of how a brand makes people’s lives better. They are well known, it is clear, but what they are known for is becoming somewhat less clear in people’s minds, and there are signs that some of the top French brands risk losing relevance. Innovation is one of the attributes that BrandZ research shows is strongly linked to increases in relevance to consumers – and which adds value to a brand and nurtures consumer love. This is an area where French brands tend to under-index compared to strong global brands, and provides a strong opportunity for improvement.
Diversity of brands reflects French economy
The range of brands and categories represented in the Top 50 French brands signals much about what makes the country and its consumers tick. There are the most prestigious names in fashion and perfumery, as well as more affordable personal care brands that offer more modest pampering. There are the brands that quite simply make the country work – banks, insurers, telecom providers and energy suppliers – as well as transport service providers and manufacturers, soft drinks and alcoholic drinks. Retailers also play a prominent role in a ranking comprising 14 categories.
Brand vitality lags top global performers
Some of the most valuable and globally successful French brands have been neglecting aspects of their vitality, which BrandZ measures with a score called vQ, or a brand’s Vitality Quotient. BrandZ has been tracking some of the leading French brands over many years as part of the annual BrandZ Top 100 Global Brands ranking. These French brands have grown in value at less than half the pace of the leading global brands over the past decade, and this mirrors their vQ performance, which is generally poor compared to the most valuable global brands. While they have scale that has sustained them in the past, their lack of brand vitality now makes them vulnerable. This is important because France is home to a great many entrepreneurial brands – as well as being welcoming of strong global brands – which are well positioned to exploit any weaknesses.
TOP 5 LEARNINGS FOR MARKETERS
1 Even global giants need support
Many of the brands that feature in the French Top 50 are among the most widely recognized and coveted brands in the world, and their current scale shows that they have built both brand and companies simultaneously. But businesses that nurture the power of their brands can punch above their financial weight, improve their resilience during a financial downturn, and create the best conditions in which to grow future sales. This is essential for French brands now, as, like many brands across Europe, they are being challenged by evolving consumer priorities and high levels of competition, often coming from unlikely quarters.
2 Make branding a priority and reap 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 10 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 the MSCI World Index, a global market tracker.
3 A strong history doesn’t guarantee future relevance
Longevity in the market and generations of satisfied customers are of course a great advantage to brands, and many of the brands that feature in the French Top 50 have earned their place over decades, if not centuries. But heritage alone is not enough; 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 Emotional connections can deliver growth
It should be taken as read that brands must live up to or exceed the expectations they create in customers’ minds, and they must deliver an experience that the customer feels is “worth it”. But this is just the starting point for building strong, valuable brands. Meaningful brands are those that meet consumer needs and at the same time generate a strong emotional bond between consumer and brand. When brands are meaningful in a way that helps them stand out from the crowd, they tend to be healthier, and this has a positive impact on their bottom line. Meaningful difference is conveyed through products and services as well as also through compelling and memorable communications. Advertising by meaningfully different brands doesn’t just hit the target audience – it moves them.
5 Dynamism and innovation can unlock potential
French brands put in a lacklustre performance when it comes to innovation, a crucial aspect of brand health because it is closely linked to love. Love, in turn, helps sustain sales and brand value during the gaps between innovations. Yet the brands that are seen as the most innovative by French consumers are largely outside the BrandZ Top 50. This should serve as a sign of a healthy competitive market in which progress is in the pipeline – but also a word of warning to some of the biggest French brands. Innovation doesn’t mean tearing up a successful, century-old perfume formulation or switching from haute couture to fast fashion; rather, it is about being seen as leading a category, being dynamic, and feeling as fresh and relevant as ever. Challenged by increasing competition brands from across Europe and beyond, and by consumers’ rising expectations, it is essential that businesses invest in brand equity, and be relevant and meaningful to the next generation of global consumers.