Today’s most valuable brands disrupt before being disrupted.
Globally, the top 100 most valuable brands are now valued at a combined $3.4 trillion dollars. Given the global economic slowdown of 2016, it’s an impressive statistic that the group as a whole increased its value by 3% for the year.
But who were the year’s winners and losers—and what can they tell us about success in today’s market? Martin Guerrieria, global BrandZ research director at Millward Brown, discussed his major takeaways in a conversation broadcast by Millward Brown and WPP coinciding with the release of the 2016 BrandZ™ Top 100 Most Valuable Global Brands ranking and report.
“The main factor relevant to all categories is disruption and innovation,” Guerrieria said. “We could pick any category to talk about. Disruption and innovation are critical for brand success.”
In fact, the three highest-rising brands for the year—Amazon (59% growth), Starbucks (49%) and Facebook (44%)—started off as category disruptors, and continue to innovate.
Apparel was the fastest-growing industry in 2016 with a 14% increase in value, propelled largely by the rise of “athleisure.” As consumers worldwide introduced trendy sports pieces into their everyday wardrobes, Nike (#24) posted a 26% jump in value for the year, Lululemon grew 5% after a slow 2015, and Under Armour entered the apparel top 10 for the first time.
Adobe (#100) entered the Top 100 for the first time this year, increasing its value 41% from 2015. The company switched from a software model to a subscription-based cloud computing model in 2012 and has hit it big with the new model, growing 55% in 2015. Amazon also beefed up its Amazon Web Services, a cloud-storage company.
An obvious symbol of disruption, Tesla appeared in the top 10 most valuable car brands for the first time this year. The company’s designs for long-lasting electric battery power have spurred heated competition in the electric car market. More than 350,000 people have pre-ordered the Model 3, and at just $35,000, the company is no longer a luxury player but a mass-market contender.
Brands that were able to integrate with apps frequently had a leg up on their competitors. Chinese e-retailer JD.com landed on the top 100 for the first time this year, rising 37%. The site undoubtedly benefited from its presence on WeChat, one of China’s largest messaging platforms that also includes mobile payments. Chanel, the only luxury brand to land on the top 20 fastest-growing companies, also benefits from a strong presence on the app.
More than ever, consumers expect the convenience of mobile ordering or check-in. “Within fast food, it’s important that brands are able to have some sort of application to let the customer place their order for arrival at the restaurant to get around big queues, for example,” said Guerrieria. Starbucks and Domino’s Pizza, two groups that have poured significant resources into mobile ordering systems, both landed on the top 10 fastest-growing companies.
For some industries the year’s effects were unavoidable. “What we’re seeing this year is the perfect storm of making the brand growth environment tougher than ever,” said Guerrieria. “We’ve had the oil price decline, low interest rates, and slowing growth in China for the first time in recent years.” Oil and gas companies decreased in value by 20%, while global and regional banks, tied to large investments in the oil sector, fell 11% and 12% respectively.
For the full rankings, check out the list here.