Choice as consent: a new compact between business, brands and consumers
In 2020, in a year of turbulence so seismic in scale and rapid in impact that the world is still computing the effects, the aggregate value of the Top 100 Best Global Brands has grown by 9%. Their total brand value exceeds $2 trillion.
As the pandemic and wider social outrage exposed fault lines in society and polarized people further; we see a similar divergence in the Best Global Brands with 43% of brands growing, and 57% declining in value (vs 29% in 2019). This years’ winners are notable for particularly fast growth; the average increase amongst the top 3 brands alone was 50%. It’s clear that in 2020, strong brands have become stronger as a result of the COVID effect, which has accelerated digital transformation trends, such as cloud-based tech and streaming, across sectors, reinforcing the dominance of technology first brands.
Crises recast the tacit contract between organizations and people. Certainly, we are seeing that now. As rising expectations dissolve into anxiety, people are demanding more of the businesses they buy into. There is a growing sense of human disempowerment, a growing awareness of the power of brands, and consumers are beginning to see their consumption choices as votes of confidence. In some instances, organizations have more power than governments.
At a time of deep reflection, the deepest form of relevance is increasingly being driven by an uncompromising approach to fundamental human issues. Businesses that do not yet know, very specifically, which constituents they are systematically disadvantaging (and how) are at risk because in this hyper transparent world, the truth will out, and customers will “cancel”.
PayPal is one of 2020’s fastest risers, thanks to a radical application of its values and the trust those actions drive. In 2015 it decided to prioritise customers’ financial interests over its own higher revenue products. Despite an immediate stock market drop of 9% this move unleashed long-term growth.
More recently, Paypal has begun a program to redistribute capital from shareholders back to its lowest paid employees to ensure that everyone who works at PayPal can pay their bills. At a time of anxiety, there’s not much that matters more.
Microsoft has become a Top 3 Best Global Brand in 2020. It’s CEO, Satya Nadella, argues that in the future: “you’ll only have permission to profit as a business if you have the consent of customers.”
As we begin to hold business to account, choice is morphing into consent. Brands are mediating the commitments a business makes to its constituents. In this mix brand is still a still a promise, but a promise of something deeper. Done right brands offer an equilibrium between business and customer. A set of shared values.
As we begin to hold business to account, choice is morphing into consent.
Only 41 brands from our 2000 ranking remain on the table today. At one time, it was inconceivable that the DotCom Boomers Yahoo or AOL could fail, or that we’d fall out of love with our Nokia handsets. But Google and Apple showed us a more compelling vision of the future and the rest is history.
The lifespan of an organization was contracting before 2020; the pandemic and our collective awakening will only serve to accelerate that trend. Jeff Bezos, CEO of Best Global Brand, Amazon, a business so large it is almost planetary, said: “I predict one day Amazon will fail. Amazon will go bankrupt. If you look at large companies, their lifespans tend to be 30-plus years, not a hundred-plus years.”
While it’s hard to conceive of a world in which the 100 Best Global Brands are no longer in our lives, we are undoubtedly at a point of divergence. A tipping point for many. Businesses that cannot serve citizens and brands that fail to gain the consent of consumers will not stay ahead of our constantly renewing expectations and they will fail.
Climate change is the next apocalyptic event we face, so sustainability has to become a radical priority for organizations and brands. Microsoft has committed to being carbon negative (not just neutral) by 2030 (and Shell dropped off the Best Global Brands list this year). Change, once again, is creating winners and losers and posing difficult choices. The real question may be, are you going to lead from the future or manage your decline?