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Key Takeaways

by Ellis Malovany

Key Takeaways:

Leveraging Heritage: South Africa, the adventurous “mover”

South Africa’s strongest attribute as a “mover”, according to BAV cultural rankings stems from its unique, different, and distinctive characteristics which are ranked #2 in Africa and #18 in the world. South Africa is also seen as a country of “adventure” (#25 globally), that can be harnessed by South African brands that are well positioned to distinguish themselves from global competitors by embracing these attributes while conveying purpose both in local and global markets. South Africa also ranks #11 in the world as the best place to study and #16 in the world as the best place to start a career. As South Africa plots a course for a brighter future, an improving economy should attract global investment while also providing local companies with a continuous pool of talent enabling South African brands to grow for many years to come.

Meaningful Difference predicts Long-Term value

Since 2006, global brands that are highly Meaningfully Different have grown by 253%, five times more than brands that are not.  In South Africa, the Top 30 brands that are the most Meaningfully Different are Woolworths, Dis-Chem, Nando’s, and Clicks. However, being Meaningfully Different is not the same as differentiation. Differentiation speaks to a brand’s ability to distinguish itself from other brands. Meaningful Difference is a more holistic view which amplifies a brands long term value potential (see Meaningful Difference). The collective Top 30 are significantly more meaningfully different than regular brands which is a healthy sign for these brands to continue to build value into the future.

Where is the Creativity?

Creativity isn’t something that can simply be acquired or magically evolve from boardroom meetings. Often, creative sparks and innovation emerge from the in-depth understanding of customer behavior, along with identifying both the obvious and subtle hurdles and bottlenecks that leave brands stagnant and obvious. Together with disruption, creativity drives innovation. As online commerce continues to flourish helped by increasing mobile usage, top brands lacking in these qualities should take note as boring and stale can be replaced. With the exception of Nando’s, the Top 30 brands are absent in the Top 10 creativity ranking. Brands that are seen as creative by consumers will capture interest and grow. Throughout the world, many brands invest in technologies like machine learning and artificial intelligence to provide the critical raw data that decision makers need to freshen and revolutionize their brands.  

Leading Disruptors

Disruption is generally tied to innovation and is about challenging the status quo of a category, usually to the benefit of all consumers. It forces the evolution of a category in some significant way. Brands that are successfully disruptive can quickly gain momentum and fuel rapid expansion. Four Top 30 brands including Capitec Bank, Nando’s, First National Bank, and Dis-Chem are ranked in the top five in disruption, and six Top 30 brands made the Top 10. South Africa’s Top 30 brands (other than the six in the Top 10) could all benefit from looking globally for fresh ideas and new approaches to spark creativity locally.  This will help brands defend against foreign competition while strengthening relationships with customers. For brands figuring out how to disrupt, adapting technology in novel ways can have a dramatic impact on consumers, especially for South African consumers who seek memorable experiences and exposure to things new and exciting. However, disruption can also stem from more analogue approaches too. Absa’s Africanicity platform might be an example of a brand attempting disruption through communication, and will require support if the organisation is to deliver on this promise.

Brand evolution: Marry Purpose with Emotion

 Today, South Africa’s best brands deliver effective “needs-based” communication strategies. Attempts at engaging consumers emotively have been sporadic and inconsistent. Brands would do well to start evolving their communications more purposefully towards more emotive platforms. Delivering functionally is of course a requirement for success, but for those brands looking to increase their value and the ROI on their marketing efforts, a transition to a stronger and richer engagement with consumers is going to be important. Many of the Top 30 brands have already achieved strong clarity of purpose, and even experience, but have not yet converted that strength into love.  

Differentiation is key

Many of the Top 30 brands do a good job of differentiating themselves against their competitors. Woolworth is by far the best. Capitec Bank, Nando’s, and other category leaders in the Top 30, as well as other brands like Fatti’s & Moni’s, Amarula, and Food Lover’s Market, all stand apart by clearly differentiating their brand from competition. Not surprisingly, the average Top 30 brand scores significantly higher than the average non-Top 30 brand.  What is interesting is that the group of non-banking Top 30 brands are the most differentiated relative to both Banks and non-Top 30 brands.  Banks certainly have room to improve in this area. Furthermore, when measuring the Top 30’s differentiation metrics against the world, the Top 30 rank below average relative to their Top 30 counterparts.  For South African brands expanding overseas, greater emphasis on differentiation will be important in achieving success.

Healthy brands

Over 22,000 global brands have been measured with respect to their vQ score .  Consistently, brands that are “Healthy” and score well across all key measures and in this regards grow exponentially over those that are less-healthy.  Interestingly, South Africa has a higher proportion of healthy brands in the Top 30, relative to global brands. Local South African brands deliver effective communication of how they meet their customer’s needs, and deliver a clear sense of their brand’s purpose.

Trust

Building trust builds equity and drives exponential growth. Across the world, brands with high trust have grown up to five times more than brands with low trust. The Top 30 South African brands are trusted more than the average South African brand and there is a clear correlation between trust and brand equity. South African consumers are not as trusting as their global consumers in general, and especially for many large brands in the most valuable categories, trust is a difficult commodity to achieve.  Only three Top 30 brands rank in the Top 10 most trusted brands in South Africa suggesting that the otherwise strong brands in Banking, Insurance, and Retail can improve in this area.

Own your niche

Many of South Africa’s most valuable brands dominate important niche markets. However, not every successful brand needs to infiltrate people’s lives and strong niche brands know how to do a few things completely right rather than a bunch of things somewhat well. Owning a niche helps create the meaningful difference that drives Brand Value. Brands including Nando’s, Sasol, Woolworths, and DStv each do well in owning their niche, which helps to build brand value and defend against competitors.

Other Brands of note

A brand’s vQ measure quantifies five key attributes that magnify a brand’s value.  Many brands do a lot right, but only a few are able to demonstrate prowess in all the key factors. Of all the Top 30 brands, only First National Bank, Clicks, and Pick n Pay appear in the Top 10 for four of the five measurements, and none appear in all measures.  Brands outside the Top 30 like KOO and Takealot rank in each vQ category and KOO ranks #6 or above in every measure. No surprise as KOO has been loved and trusted for 75 years, and has successfully integrated its products into all of South Africa’s walks of life, while Takealot successfully rides the wave of internet adoption and ecommerce in the country.

Digital integration

South Africans have embraced technology, particularly mobile computing and smartphone usage, and positive attitudes towards technology in general outpaces global consumers in the excitement of how technology is transforming society and helping individuals get ahead. Brands both in South Africa and around the world are increasingly investing in artificial intelligence (AI), machine learning (ML) and personalization technology. However, many South African consumers are more afraid than their global counterparts of how AI will affect them individually along with the rest of society.  Brands considering investments in AI need to pay attention to how digital integration can be harnessed to deliver value and meet consumers’ emotional need for new and exciting, while educating them as to the benefits of AI in improving their lives.

Analysis beyond demographics

Data capabilities have become highly sophisticated and provide marketers with new tools to move past simple demographic shifts that target collective groups, and instead enable deep understanding into the individual psychographics. Marketers can now leverage vast data sets informing decision-making processes to help brands communicate why and how they can fill needs down to the individual.These tools can result in the hyper-personalized feeling that “this brand gets me.”

Data security

As the South African population is projected to double by 2050, brands will need to be prepared to accommodate this dramatic growth, and securing data is a core component of building trust. Data breaches have occurred throughout the world and have become headlines with greater frequency in recent years. While everyone is concerned over their private information, Gen Z is particularly sensitive, ranking privacy as one of the highest priorities. The trend is expected to continue. So as brands expand their capabilities in collecting data on customers, privacy and security must be ensured and effectively communicated.

The Digital Workforce

Many leading global and local companies have invested in technologies allowing their employees to improve quality of life by reducing the pressure, time and expense of commuting to work. For South Africans who are cost conscious and value professional challenge along with a sense of ownership, enabling digital workforce capabilities can be a great method of helping employees balance work and life, create a sense of independence and ownership.  In turn, investing in the digital workforce can be highly profitable as turnover, recruiting, and training new recruits can be costly.