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European Best Global Brands don’t fear change

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Originally published in Spanish by marketingdirecto.com

We live in a world in which the only constant is ever-accelerating change. To grow in an unstable ecosystem is a formidable challenge that itself increases every day, but the solution isn’t to run or hide. If the brands featured in the 2017 Best Global Brands report demonstrate anything, it’s that the only way forward is to embrace the call to be an agent of positive change and not a mere witness, to act instead of waiting to react. One third of the ten most valuable brands didn’t exist twenty years ago, but they’ve disrupted sectors and created new realities, and lead the vanguard for future global change.

In this context, the most powerful European-based brands defend their position in Best Global Brands, demonstrating that they too are masters of growth in times of great change. The general and sustained growth that prevails in Europe, and that we see reflected in successive positive macroeconomic indicators (such as GDP) are in good part propelled by the successful results of the strongest European businesses.

Of the 100 Best Global Brands worldwide, 36 are European and 27 have grown in brand value. Their origins are diverse (Germany, France, Sweden, United Kingdom, Spain, the Netherlands, Switzerland, Italy, Denmark) as are the sectors in which they principally operate: automotive, luxury, technology, electronics, financial services, diversified, FMCG, and energy. In their sum, these European brands represent 428,557 $m USD, or 23% of the total brand value of the Best Global Brands, an increase of 2.86% YOY.

Among the brands with the most growth this year, four European ones stand out: Top Growing Best Global Brand adidas (+17%), Spanish “democratic luxury” powerhouse Zara (+11%), French meta-luxury brand Hermès (+11%) and the ninth most valuable Best Global Brand, Mercedes-Benz (+10%). Also of note, the return of Ferrari to the Top 100 after four years’ absence.

With all the data at hand, European brands reinforce their role and fundamental importance, not only in the region but in the global economy, regardless of sector. While the industry with the most value represented in Best Global Brands is technology, when we close in on the European brands, we see leadership and growth from multiple and varied sectors. As such, the European economy continues to show proof of solidity and wealth, and that it is a principal protagonist in the new global economy thanks to its most relevant businesses that have understood the power of their brands as vehicles for sustained growth.

But how exactly are these brands achieving this? In The Age of You, the Best Global Brands have put people at the center of everything they do, and not on a whim or because of some trend promoted by the latest marketing guru, but rather because it is the only way to respond to today’s demands and create value for new audiences who are open, international and digital and interact with brands in a way that is diametrically opposed to the generations before them.

It is already a fact, not a prophecy, that the youngest generations will establish a completely new world order in which purpose, and not mere ambition, gives meaning to their lives. For this reason, their concerns and interests are different than those of their parents and grandparents. These generations are creating their own ways to engage. The results will affect all areas of life, not simply the economic, but also the social, political and ecological. No other generation has been so conscious about sustainability and purpose at every decision-making point, or demanded such a depth of connection with their leaders (be they political, business, or cultural). Millennials are immediately turned off by a lack of transparency. In fact, this absence of an authentic connection with traditional party leaders—moreover, the sense of not being heard, and in real time—is one of the explications for the growing populisms taking parliamentary seats across Europe.

Indeed, the brands that triumph and share success stories are those that listen to and understand these new audiences who demand the same from their political representatives that they do of their favorite brands: a one-to-one relationship of equals, transparency, relevance, and problem-solving.

An advertising campaign for equality or about climate change might go viral, but only brands that truly invest in and contribute to equality and sustainability from the inside-out are valued by these audiences. The rest are short-lived campaigns if they don’t build on real values that give the brand meaning and purpose. In a permanently and ever-more connected world, lies and hollow declarations are quickly uncovered, and with them the ensuing reputation crises.

As such, the brands that contribute to bettering people’s lives in meaningful ways and offer valuable benefits through design and technology-based innovation are those who will see sustainable and continued growth. The European-originating Best Global Brands reveal specific strategic brand and business insights that light the way for those who wish to take note.

 

    • The art of alliance is more important than ever. The strongest European businesses demonstrate that they have learned that their growth will depend, in large part, on their ability to integrate technology into their innovation processes. Alliances between traditional giants and new companies have become a preferred business strategy as the strengthen both parties’ offers and combine resources with talent and creativity. Mercedes-Benz has not only launched a new brand (EQ) to encompass all of its electric mobility products, but it has also worked hand-in-hand with Qualcomm to bring wirelessly recharging vehicles to market. In this way, Mercedes-Benz closely connects and commits its brand to the planet’s sustainability. At the same time, the German automotive moves to the frontline of innovation and change to confront global problems with researched and implemented solutions. And it is no surprise that the business performance results follow these decisions: Mercedes-Benz is the most valuable premium automotive brand worldwide and maintains its position as the ninth most valuable Best Global Brand (and the first among 36 European brands in the ranking).

 

    • Every brand, regardless of sector or provenance, should be driven by a clear purpose that is no more and no less than the reason that business exists. The brands that build from this foundation define a clear strategy that, together with excellent design, is capable of offering unique experiences to connect with all of its audiences. The Top Growing European brand, and also one of the top growers worldwide in the 2017 edition of Best Global Brands, adidas, bases its brand strategy on three pillars (cities, open source, and agility) that weave a coherent narrative through every one of its initiatives, global and local, and that starts on the ground with innovation and personalization. In the last year, adidas has presented products created with the latest generation fabrics that include ocean plastic, like in the Ultra Boost model. Likewise, the Knit for You store that adidas opened in Berlin allows its customers to create their own sweatshirts after passing through a body scanner that takes their measurements, creating a unique piece through an unrivaled experience, and moreover, cultivating brand lovers.

 

    • Successful brands build admiration from within first, starting with their employees as their partners. These brands understand that their employees are the first and should be the proudest ambassadors of their businesses as they continually seek to be relevant to the world. Only the strongest brands can attract the best talent and engage these people for the long-term. We’re all familiar with how Zara’s “democratic luxury” strategy has enabled it to grow into a global fashion giant. But if year after year Zara continues to achieve double-digit brand value grow—this year reaching the 24th position among the 100 Best Global Brands with 11% YOY growth—it’s because it first ensures the commercial success of each new collection with a continual search for multidisciplinary, international talent. Zara’s Cantera (“youth league,” or “young blood”) project allows the brand to be in touch with design schools around the world and with aspiring young designers, offering them training and a professional training that at the same time develops them creatively.

 

    • In an era marked by constant change, leading brands must be flexible and agile, permanently in beta, always prepared to start anew and to align themselves with citizens and markets. However, it’s just as important to remember the power of a clear-headed “no.” Sudden change for the sake of it, without a purpose and value to guide it, can backfire miserably. Bucking the dominant SUV trend in the automotive sector, Ferrari didn’t want to fall into the temptation of aligning itself with a category that clashed loudly with the DNA of its brand. By staying true to its brand strategy and saying no, Ferrari has come out triumphant in the most important recent industry competitions, winning Engine of the Year for the 3.9 V8 Biturbo. With these achievements and more, and its determination to reach the top at the Formula 1, the Italian brand returns to the Best Global Brands with a value of 4,876 $m USD (#88).

 

    • Relationships are based on trust and are built every single day. The leading organizations in financial services and insurance know very well that their futures will be very complicated if they are not able to build close, trust-based relationships with their clients. Cultivating engagement day by day is how brands like Santander – with its core values of Simple, Personal & Fair – have gained four million new clients in the last year, and how their brand value has grown 8% to reach 6,702 $m USD. In its Ambition 2020 plan, global insurer AXA –whose brand value grew 5% YOY (to 11,073 $m USD)—aspires to become the true partner to its payees. Meanwhile, the Allianz brand has grown 6% this year (to 10,059 $m USD) after completing a restructuring of its brand architecture that aims for clarity and simplicity: key ingredients in order to be seen as a trusted partner in their clients’ lives.

If there is anything that we should all clearly take away from the European-originating Best Global Brands, it’s that age and industry are no obstacle to triumph in the present or in the future. Both the brands with deep historical legacy and the youngest disruptors dig deep into and build on their raison d’être to make the most of every new opportunity offered by the exhilarating technological, social and industrial global changes of the 21st century.

For more data and deep insights into all of the 2017 Best Global Brands, download the report.

Contributors

Chief Executive Officer, EMEA & LatAm