Austerity and uncertainty hit brand value in 2019
Top 75 brands worth US$263 billion
The leading 75 brands in the UK have a combined brand value in 2019 of $263,275 million – a decline of 3 percent since last year. The dip reflects the fact that many UK businesses have endured another tough year. Brexit uncertainty has dampened consumer confidence and affected buying behaviour, and many brands are holding back on investment in marketing, particularly campaigns with long-term brand-building goals. The result is a period of stagnation for many brands, though there are some notable exceptions that show what can be achieved in difficult circumstances.
Vodafone tops ranking for 3rd year running
The brand behind the UK’s first ever mobile phone network is the UK’s Most Valuable Brand in 2019, with a brand value of $26,499 million. Vodafone has topped the BrandZ Top 75 every year since the inaugural ranking in 2017 It operates in an intensely competitive sector, in which all but two brands in the BrandZ ranking this year has seen a decline in brand value. As it evolves to meet changing consumer needs, Vodafone is rolling out 5G connectivity, and is creating offers that cater to the data-heavy demands of young people. The brand’s CSR focuses on the power of connectivity to help people create a better future.
Decline contrasts with international growth
The BrandZ UK ranking is one of only three in the world to shrink in value this year; the leading brands in other major European economies have grown significantly over the same period, and those in Asian markets are also on the rise. UK brands risk losing ground to fast-growing brands in other markets; indeed, the number of UK brands in the BrandZ Global Top 100 has plummeted to just three this year, from a peak of eight. That said, the strongest UK brands are still delivering far higher returns to shareholders than the FTSE 100.
Services dominate but feel the pinch
Retail and services brands such as those in telecommunications and banking account for the lion’s share of value in the 2019 Top 75, but these are sectors under extreme pressure. They are being caught in a pincer movement caused by heightened industry competition on one hand, and changing consumer priorities and spending habits on the other. But being in a challenging category doesn’t need to be a barrier to growth; in all of these service categories, there are exceptions to the rule – examples of how strong brands can buck the general trend.
Agility and emotion mark out winners of 2019
Brands with the strongest current momentum in the UK are succeeding thanks to an innovative, disruptive mindset. They are not only meeting people’s changing needs, but also effectively communicating the fact that they’re doing it, resulting in a clear sense of difference from other brands in their categories. The fastest-growing brands this year include Deliveroo, Costa Coffee, BrewDog, Ocado and Dyson – all very different, but united by a sense of leadership and distinctiveness, and the strength of the emotional connection they have forged with consumers.
Meaningful difference makes the difference
Brands that are meaningful, which means they make a positive impact on people’s lives, and those that are also viewed as different to other brands in their category, are those that are growing fastest in the UK. Overall, however, the Top 75 UK brands are losing Meaningful Difference compared to other leading brands on the world stage, and this is behind the stalling we see this year in brand value growth here.
It must be love
There are two key factors behind growth in Meaningful Difference – and, in effect, brand value. They are innovation and love, two attributes that sound very different but are actually very closely linked in consumers’ minds. Brands that innovate tend to be seen as leaders in their field and are often seen as highly creative, which makes them more appealing than others in their category. When consumers have positive experiences with these brands, it leads to a deep emotional connection we call brand love, and that sustains their preference for the brand in the gap between innovations.
Opportunity knocks for brands with global vision
Leading UK brands are in high demand internationally, according to the 2019 Best Countries study, carried out by our sister agency VMLY&R BAV. The UK is a powerful global brand, known for its global connections, influence and alliances. This reflects well on “Made in the UK” brands, which have strong pulling power both at home and around the world. Consumers trust and want to buy British goods, particularly when it comes to cars, pharmaceuticals and cosmetics. What emerges from the data is that there’s a strong opportunity for fashion and technology brands to generate more international revenue.
Key learnings for marketers
- Fame is not enough. Brands need to be known if they are going to be part of people’s lives, but there’s strong evidence that fame alone – without dynamism and relevance – is not enough to sustain a brand in tough times. The retail sector is littered with famous High Street brands that were household names but that failed to maintain their usefulness in a fast-changing world.
- Tech brilliance is simply expected. Technology allows new entrants to a category to quickly build up brand equity, especially compared to relatively slow-moving legacy brands that might not be so nimble in responding to a changing market. Commit to upgrading, refreshing and renewing a brand’s online presence and capabilities in order to remain at the cutting edge.
- Focusing on brand is the key to long-term growth. Use brand-building – with a long-term outlook – as the basis of defence against disruptive new challengers and a platform from which to attack as the market shifts. A strong brand protects a business from imitators, and from rivals that seek to succeed by focusing solely on being the cheapest.
- Powerful communications can establish difference and emotional affinity. Short-term cuts to marketing budgets threaten to damage growth in the long term. Keep the conversation going with current customers and reach out to potential new recruits, focusing on how a brand meets specific needs in a meaningful way. Reinforce positive brand associations and unlock the power of distinctive brand assets to stand apart.
- Brands need to self-disrupt to keep pace with cultural shifts. Brands need to made disruption part of everyday business, and look outward as well as inward for inspiration regarding how to move next. The speed of response is critical, and news of emerging trends needs to reach decision makers fast. A diverse workforce helps a brand keep in touch with the breadth of consumers’ tastes and needs.