Fortune Favors the Brave
INNOVATION, CREATIVITY, BRAVERY
Fortune Favors the Brave
Innovation is the engine room of brand value growth in Italy. The most innovative brands in the past year have posted average growth of 17 percent, while the least innovative have grown by just 1 percent.
This is compelling evidence for a business to rethink its approach to innovation.
When we talk about brand innovation, we don’t advise tearing up a winning recipe, fragrance formulation or approach to design. Innovation for its own sake – or so a brand can issue a press release – is not true innovation at all, and could actually be damaging to a brand.
Meaningful, powerful innovation is about staying relevant to existing audiences and appealing to new ones over the long term. It’s about leading a category and offering something fresh and creative – being brave in undertaking something new, and then being bold enough to shout about it, so that the innovation is recognized by consumers.
Overall, perceived innovation is by far the largest driver of brand growth in Italy – driving brand value growth at double the rate of any of the other Vital Signs (purpose, communication, experience and love).
In this year’s Top 30, the leading 10 brands have grown at 4.8 times the rate of the next 20 – and they score, on average, significantly higher than the next 20 on innovation.
Yet the average innovation score for the Italian Top 30 is the lowest of any of the Vital Signs.
And, when the performance of leading Italian brands on innovation is compared to that of other markets’ brands, Italy is a laggard. In fact, Italy ranks only fifth on the world stage.
There is, therefore, a significant opportunity for Italian brands.
Brands perceived to be both innovative and meaningfully different are much more likely to grow. Innovations must therefore be meaningful to the consumer in order to fuel brand value growth.
Time to get creative
So, how does a brand improve consumer perceptions regarding innovation?
There are three aspects of innovation, and strength in any or – ideally – all of them can help boost a brand’s reputation for innovation.
1 Disruption – shining examples in Italy include MSC Cruises, Costa Cruises, Barilla, Ferrari and Enel
2 Creativity – in Italy led by brands like Armani, Gucci, Bulgari, Bottega Veneta and Salvatore Ferragamo
3 Leadership – think here of Enel, TIM, Barilla, MSC Cruises and Costa Cruises
All three of these innovation factors are closely linked, and while the Top 30 Italian brands compare well against the rest of the world’s top brands for leadership, average creativity scores for the Italian Top 30 are only marginally higher than the average for all Italian brands. Almost all the creativity is seen as being in the luxury brands.
This perceived lack of creativity is at the heart of the innovation gap for Italian brands. By improving their creativity credentials, Italian brands could influence consumers’ perceptions of innovation and, ultimately, unlock value growth.
SPOTLIGHT ON … ARMANI
Armani is the most creative brand in the 2019 Top 30, and has earned its reputation in this field through a bold approach to design, coupled with a willingness to extend a brand rooted in fashion into entirely new spheres. Having conquered the accessories, footwear, jewelry and cosmetics sectors more traditionally associated with fashion, Armani then moved into home interiors, and now has two Armani hotels and a number of restaurants around the globe.
In the fashion world, Armani has been pushing boundaries, with the launch this year of a men’s vegan fur range featuring coats, boots and a shawl. The latest Emporio Armani collection for men launched at Milan Fashion Week in January, but not at the men’s event, rather in a “coed” runway show during the women’s event.
In its home city of Milan, the brand uses a converted granary, called Armani/Silos, to host art exhibitions and display pieces from past Armani collections. There is also a digital archive, and each year the center hosts Armani/Laboratorio, a training scheme for young creatives. The most recent course focused on cinema.
MAKE IT HAPPEN – Action Points for Innovation
- Consider scrapping the ‘I’ word – The word “innovation” can be intimidating, and make the process feel off limits to all but a few individuals or department. “Ideas” is more inclusive, as everyone can come up with ideas.
- Think beyond product renovation – Sometimes the greatest innovators make only incremental changes to their products; others change not just the product but their service or the experience around it.
- Let consumer needs and desires be the driving force – Focus on purposeful innovation that serves real human desires, needs and feelings. This is how many startups are disrupting established brands.
- Look afresh at your organization, not just new tech – Technology can be a great way to deliver innovation or make it possible, but it’s rarely the tech itself that makes a difference to someone’s life. Every brand touch point plays a role in perceptions of innovation so pay attention to them all, not just the newest and shiniest. There may be a need for more fundamental change – inventing new institutions, creating networks and partnerships not hierarchies.
- Shout about your innovations – The first step is to innovate, and the second is to shout about it. The brands perceived as being the most innovative are often those that communicate clearly and frequently about what they’re doing.