The science behind getting ahead
Innovative brands achieve more than novelty value. Investment in being innovative – and being seen to be doing so – has a very real effect on the way consumers feel about a brand, and that, in turn, drives brand equity.
There is also a powerful link between innovation and brand love. Love is more than a “nice to have” factor for brands; it makes a real difference to the bottom line. A look at the strongest global brands tracked over a decade reveals that the most loved brands more than doubled their brand value, while the least loved grew by less than a quarter. Love is what helps maintain brand strength and a bond with consumers in between innovations.
Innovative brands often have several things in common: they are more meaningful, different and salient than other brands in their category. This is certainly the case with the top UK innovators, which has the effect of turbo-charging their Brand Power – the BrandZ measure of a brand’s ability to win market share. The average Power score of all UK brands is 100; the most innovative 10 brands generate Power of 221, while the bottom 10 on innovation manage just 84.
Investment in innovation makes a clear difference to the dollar value of a brand. In the past year alone, the most innovative half of the ranking has collectively grown in brand value by 19 percent, while the least innovative has lost value and is down 10 percent.
These are not just among the most innovative among the top BrandZ brands – the most valuable UK-born brands. They’re seen by UK consumers as among the most innovative brands they have available to them from any market.
The Apple Watch is the most innovative brand on the UK market, with an innovation score of 145, but Dulux is not far behind, followed by a cluster of overseas-born tech brands: Apple iPhone, Spotify and Amazon. Of the 35 most innovative brands from any country, ranked by UK consumers, 10 are UK brands.
Lush personal care, Farrow & Ball paints and Teapigs tea are three highly innovative UK brands that don’t yet have the financial scale to make it into our Top 75 ranking, but their high scores (119, 117 and 116 for innovation) are a reminder that there are strong challenger brands that are shaking up markets by shifting consumer expectations.
They are also a reminder that while it’s often technological innovation that fuels headlines, category is no barrier to creativity and a spirit of can-do willingness to explore fresh ideas – key steps in being perceived as innovative by consumers.
Value: It’s in the way you innovate
When an innovative brand is also meaningfully different – so it stands out from the competition in ways that consumers value – it is likely to be an even stronger performer on BrandZ. Brands with both these qualities in the Top 75 are worth twice as much on average than low performers on both measures.
The brands scoring well for both innovation and meaningful difference saw their brand value rise by 11 percent in the past year, while those that performed poorly on both had a 37 percent average drop in brand value.
The most innovative, meaningfully different brands in the UK Top 75 include: Dulux, Just Eat, Dyson, the BBC, BrewDog, Comparethemarket, Tesco, Sky, John Lewis and Innocent.
Manifesto 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 new product launches – 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.
- Don’t pin your hopes on 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 touchpoint plays a role in perceptions of innovation so pay attention to them all, not just the newest and shiniest.
- Be bold – 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.