WPP's research agency Millward Brown has again revealed the list of the world's most powerful brands and key to topping the list is something that most businesses claim to be doing already – innovation.
There's a catch, however, a business just can't innovate for innovation's sake – the innovation has to be at the heart of the organisation, it needs to be constant and it needs to be relevant to consumers.
On the BrandZ Top 100 Most Valuable Global Brands list, brands that are perceived as innovative by consumers – which include Disney in 19th place and Pampers in the number 37 spot – grew nine times faster than those seen as less innovative.
Hamish Asser, senior account director at Millward Brown, explained that innovation doesn't have to be product–based, it can also be about changing processes that simplify how consumers interact with a certain brand. He also adds that this is particularly important for the big name brands which feature on the BrandZ list.
“As a brand you operate in a competitive environment, so if you're not innovative, one of the challenger brands below you will be,” he said.
“Really large brands are in leadership positions so they need to defend where they are. If you’re a leader, you also need to be constantly moving the market forward, you need to think like a leader.”
This year saw only three Australian brands make the cut for the top 100 brand list with Commonwealth Bank, Telstra and ANZ taking out the honours. Last year there were five Aussie brands on the list, with Woolworths and Westpac dropping out this year. Asser said when it comes to the banks, the brands are holding stable, but the global economy is affecting the overall score.
“It's mostly due to the financial climate that we're operating in, to be honest,” he explained.
“The valuation is built up from two things: the first is the bank's financial results and the second is contribution that the brand brings to the overall valuation. What we've seen is the value of the brand is not really dipping, it's the financial contribution and that’s causing the valuation to drop back.”
It's a slightly different story for Woolworths, however, with the brand’s divestment from Masters and the growing competition from Aldi and Coles being factors that could have caused it to drop from the list. When it comes to the question of whether Aussie brands are doing enough to innovate, Asser said: “I think they're doing okay in a very competitive environment”.
“Operating in banking is hugely competitive, they’re getting pressure from China and Europe – the banks are being as innovative as they can – contribution to the brand is remaining stable ... they're still a presence in the top 100 which is a positive thing.”
Behind the news
Innovation is something that every business talks about and it’s something that is clearly easier said than done. Even Apple struggled with it this year. The brand released no new products and played its hand very close to its chest, meaning that it fell to the second slot on this year’s top brand list.
Even though it still sounds like a buzzword, innovation can clearly drive brand uplif t so why do so many brands struggle with it?
Potentially it’s because the concept is actually more basic than they think. Instead of thinking about changing the game or turning a business model on its head, what if a brand listened to its customers and found innovative ways to fulfil their needs? This sounds a lot less daunting and, in some cases, the results may turn out to be ‘innovative’. Zara and Starbucks are doing this and both saw strong brand uplift this year.
Neither brand is reinventing the wheel, rather Zara is putting more of its stock online and Starbucks is incorporating tap and pay. These ideas aren’t out there, boundary–pushing ideas that incorporate buzzwords, but small innovations that improve customers’ experience of the brand.
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