Online blurs with ‘bricks and mortar’ as consumers expect frictionless multichannel brand experiences
Amazon has become the World’s Most Valuable Global Retail Brand in the 2016 BrandZTM Top 100 Most Valuable Global Brands ranking, released today by WPP and Millward Brown.
The year saw Amazon expand its reach into the logistics sector by shipping its own packages. It also extended the brand experience to include new technology devices that cater for consumers’ personal needs at home, building on last year’s introduction of Amazon Dash, automated replenishment buttons for key FMCG items. These activities paved the way to the company boosting its brand value by 59% to just under $100 billion.
It replaces Chinese e-tailer Alibaba, which now takes the no.2 spot in a retail sector that has performed extremely strongly overall with an 8% rise in total value to $377bn for the Top 20 brands.
The ability to drive seamless multichannel strategies was a key factor behind the success of many of the brands that have grown their value in this year’s Retail Top 20. This is a process that will have to continue as the sector adapts to a consumer audience that no longer distinguishes between shopping on and off-line and expects the same brand experience and quality of service in all channels.
Over the next five years, successful retail brands will have to respond to these demands by reducing friction in the online world, improving delivery times as well as creating physical environments that are as much about retail theatre as selling.
The goal is to create a new definition of 21st century service that will redefine retail in the next five years. IKEA is one of the brands that understands the importance of this, with plans to significantly expand its e-commerce business and improve the logistics of delivering goods to customers to build an online business with a strong service and distribution offer that seamlessly links with its physical estate.
David Roth, CEO EMEA and Asia, The Store WPP, said, “Consumers no longer perceive shopping online and shopping on the high street as discrete activities. The challenge for retailers is to make moving between the two channels a seamless experience. The next five years will be pivotal for retailers as they look to ensure they have frictionless experience wherever consumers choose to shop.“
The BrandZ Top 20 Most Valuable Retail Brands 2016
Rank 2016
Brand
Brand value 2016 ($M)
Brand value change
Rank 2015
Rank in global Top 100
1
Amazon
98,988
59%
2
7
2
Alibaba
49,298
-26%
1
18
3
The Home Depot
36,440
32%
4
26
4
Walmart
27,275
-23%
3
32
5
Ikea
18,082
6%
5
55
6
Costco
14,461
29%
9
68
7
Lowe’s
13,001
21%
10
76
8
Aldi
12,077
4%
8
87
9
CVS
12,074
17%
11
88
10
Ebay
11,509
-19%
6
91
11
JD.com
10,496
37%
16
99
12
Walgreens
10,364
22%
13
-
13
7-eleven
9,360
25%
17
-
14
Target
9,301
11%
14
-
15
Tesco
8,923
-5%
12
-
16
Kroger
7,905
N/A
New
-
17
Carrefour
7,736
-3%
15
-
18
Woolworths
7,459
-37%
7
-
19
Lidl
6,846
14%
20
-
20
Macy’s
5,419
-24%
18
-
Summary of the main global stories
· Google is the world’s most valuable brand. Continual innovation, increased revenue from advertising, and growth in its cloud business helped to boost its brand value 32% to $229.2 billion. Apple has moved into second place after its value dropped 8% to $228.5 billion.
· Disruption is a catalyst for value growth. The categories that increased in value were all either shaken up by challenger brands founded on a unique and meaningful proposition, such as Under Armour and Victoria’s Secret in the apparel category (+14%), or innovated to a high degree in response to a new trend, such as the brands in the fast food category (+11%) which successfully responded to global demand for healthier products.
· Innovation is the main growth driver – but it must be seen and felt by consumers. The brands that are the strongest innovators have increased their value the most over the 11 years of BrandZ Top 100 rankings. However, to have an impact on brand value, innovation must be clearly communicated and delivered through the brand experience: the brands that are perceived as innovative by consumers – which include Disney (no.19) and Pampers (no.37) – grew nine times faster than those seen as less innovative.
· Apparel is the fastest growing category, rising 14% to $114bn. There is an emphasis on high performance, with brands including Nike (+26%) and Under Armour (a new entry) launching specialist premium lines, incorporating technology such as heart monitors into their clothing, and integrating sportswear with free apps to provide a total consumer experience.
· Strong emotional connections are boosting local brands. With a clear understanding of their consumers’ needs, local brands are gaining market share at home and, with improved functionality and marketing, are also winning share in new regions. China’s Huawei (no.50, +22%), for example, has rapidly globalised and taken market share from both Apple and Samsung.
NOTES TO EDITORS:
The full global and retail ranking is available from www.millwardbrown.com/brandz
About the BrandZ™ Top 100 Most Valuable Global Brands Ranking
Carried out by WPP's marketing and brand consultancy Millward Brown, the BrandZ™ Top 100 Most Valuable Global Brands ranking is now in its eleventh year. It is the only study to combine measures of brand equity based on interviews with over three million consumers globally about thousands of global ‘consumer facing’ and business-to-business brands with a rigorous analysis of the financial and business performance of each company (using data from Bloomberg and Kantar Worldpanel) to separate the value that brand plays in driving business and shareholder value. Consumer perception of a brand is a key input in determining brand value because brands are a combination of business performance, product delivery, clarity of positioning, and leadership. The ranking takes into account regional variations since, even for truly global brands, measures of brand contribution might differ substantially across countries.
About Millward Brown
Millward Brown is a leading global research agency specializing in advertising effectiveness, strategic communication, media and brand equity research. Millward Brown helps clients grow great brands through comprehensive research-based qualitative and quantitative solutions. Specialist global practices include a leading Digital practice (focused on digital effectiveness), Firefly Millward Brown (a global qualitative network), a Neuroscience Practice (using neuroscience to optimize the value of traditional research techniques), and Millward Brown Vermeer (a strategy consultancy helping companies maximize financial returns on brand and marketing investments). Millward Brown operates in more than 55 countries and is part of Kantar, WPP’s data investment management division. Learn more at www.millwardbrown.com.
About WPP
WPP is the world’s largest communications services group with billings of US$73 billion and revenues of US$19 billion. Through its operating companies, the Group provides a comprehensive range of advertising and marketing services including advertising & media investment management; data investment management; public relations & public affairs; branding & identity; healthcare communications; direct, digital, promotion & relationship marketing and specialist communications. The company employs 194,000 people (including associates and investments) in over 3,000 offices across 112 countries. For more information, visit www.wpp.com. WPP was named Holding Company of the Year at the 2015 Cannes Lions International Festival of Creativity for the fifth year running. WPP was also named, for the fifth consecutive year, the World's Most Effective Holding Company in the 2016 Effie Effectiveness Index, which recognizes the effectiveness of marketing communications. In 2016 WPP was recognised by Warc 100 as the World’s Top Holding Company (second year running).