"A brand like a friend": that's what every company wants. A strong label is a particular advantage in the commercial sector. If a brand manages to become omnipresent in advertising and everyday life, this is often the key to success. Groups with well-known brands generally don't just profit from their good reputation when the economy is booming, though – they also suffer less than others when times are hard. Historical data from BrandZ show that companies with the strongest brand value recovered from the 2008 financial crisis nine times faster. On the stock market, too, prominent names often perform better. McDonald's is a prime example of this. The restaurant chain managed to come out of the economic downturns over the last few decades relatively well, which was in turn reflected in its share price. While the Dow Jones Index appreciated by around 130 per cent since the start of the millennium, McDonald’s saw its value increase fivefold.
It is especially in industries where there is significant competition, as is often the case in the retail sector, that a strong brand is a useful differentiating factor and gives groups a competitive edge. BrandZ, a joint venture of WPP and Kantar, provides information on which are the world's most valuable brands. The "BrandZ Top 100 Most Valuable Global Brands" list has been published every year for more than a decade. The experts also analyse the individual sectors. In the most recent ranking, the retail category, which includes supermarkets, chain stores, DIY stores and e-commerce specialists, accounts for the greatest share of the global brand volume. These brands occupy 45 places of the world's top 75. View more information on investment solutions on the topic “Commercial groups: It's all in the brand”.
Last year the total value of the BrandZ top 75 world's most valuable retail brands climbed 12% to reach USDtn 1,514. The growth was driven by the fast food brands, of which McDonald's is to the fore. BrandZ emphasised that the industry leader not only adapted its menu last year, but has also been increasingly focusing on the origin of the ingredients and on new technologies. The retail top 75 also includes 10 luxury brands. Number one is Louis Vuitton, part of the world's largest luxury group, LVMH. According to the market researchers, the French label has continued to expand recently, opening a new flagship store in the trendy Gangnam district of Seoul, among others.
Although McDonald's and Louis Vuitton make it into the top 5 in the retail ranking, they have no chance against the big players from the e-commerce sector. As they also did last year, Amazon and Alibaba defended their top two positions. With a brand value of USDbn 415.9 in 2020, up almost a third on the previous year, the internet group from the USA has again come out in front. Amazon contributes a hefty 27% to the total brand value of the top 75. According to BrandZ, the strong are getting ever stronger: on average, the value of the top 10 brands has increased by a disproportionately high 16.4% within twelve months.
