BrandZ™ Analysis | Category Changes
As disruption spans categories,
some brands counter the trend
Retail and technology rise most in value
Each of the 14 categories analyzed in the BrandZ™ Global Top 100 report experienced disruption from geopolitical and economic forces, changes in consumer attitudes and values, and technology. Only two categories increased in double digits, retail and technology, which rose 14 and 13 percent.
Seven categories improved modestly in value, from 1 to 7 percent. Soft drinks and cars registered no change. And three categories declined: global banks, insurance, and apparel. Illustrating the turbulence, apparel declined 7 percent, the most of any category, after leading the categories in value growth last year, with a rise of 14 percent.
Ironically, apparel brand Adidas, from the category with the greatest decline, caught the nostalgia fashion wave with its classic sneakers and increased 58 percent in brand value to become the Global Top 100’s fastest-rising brand.
Similarly, Tesla was among the Global Top 100’s fastest risers, increasing 32 percent in value, while the car category stayed flat.
Even as technology disrupted most categories, retail led all categories in value growth because of technology. Amazon, the colossus of disruption, increased 41 percent in value, as it continued transforming life with innovations such as checkout-free physical stores. And Walmart acquired an online start-up to complement its physical stores with stronger e-commerce.
Car brands planned for a future of mobility alternatives, including electronic and autonomous cars, but focused immediate attention on driving sales of SUVs, and lifting margins with technology that improved safety and added connectivity, personalizing entertainment and other aspects of the driving experience.
Banks and insurance brands acquired technology startups both to become more customer-responsive and to compete with smaller organizations aimed at attracting customers, millennials in particular, to online sites for services like mortgage lending and car insurance. Both global banks and insurance brands declined 1 percent in value, while the regional banks increased 2 percent.
The telecom providers disrupted themselves with technology. Through a series of major acquisitions, category leaders AT&T and Verizon continued to transition from transmitters of voice and data to providers of rich content and branded entertainment. Fast food brands, especially Domino’s Pizza and Starbucks, expanded use of digital technology to speed online ordering and improve customer experience.
The fast food, soft drink, and personal care categories responded to ongoing consumer concern about healthy ingredients. In a strategic shift to refocus on its core customers instead of appealing to a more upscale audience, McDonald’s returned to basics—the burger, but a better burger made with fresh, not frozen, beef.
Bottled water outsold colas in the US for the first time, and sales of carbonated soft drinks (CSDs), which have historically defined the soft drink category, declined for the 12th consecutive year. Coca-Cola and PepsiCo marketed alternative dairy drinks, flavored seltzers, and other sparkling options, which increased in popularity.
Diet drinks performed poorly because of consumer distrust of artificial ingredients in food and drinks. Distrust of artificial ingredients applied onto the body affected the personal care category. More varied and inclusive perceptions of beauty resulted in wider selections of makeup skincare tones and other products.
The diversity of the US population and the taste preferences of millennials drove a proliferation of beer variants. In a year when the corporate marriage between AB InBev and SAB Miller created the world’s fifth-largest consumer products company, the beer category also fragmented with more craft brands.