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Globalisation and innovation gap highlights opportunities for growth in BrandZ report
Australia’s first-ever BrandZ Top 40 Most Valuable Oz Brands ranking has seen finance brands lead the way, coupled with a strong showing from select telecommunications providers and retailers.
The new annual study by WPP and Kantar Millward Brown tracks the performance of Australia’s most valuable brands through the world’s largest brand equity platform, using a brand valuation methodology that combines interviews with consumers and financial and business performance analysis.
Highlighting the continued critical role of the banking sector within Australia’s economy, the Big Four banks have all made it into the Top 5, with Commonwealth Bank of Australia taking the lead (US$16.4 billion/£12.5 billion). ANZ bank (US$11.9 billion/£9.1 billion) and Telstra (US$10.8 billion/£8.2 billion) were placed second and third respectively.
Retail was the second top performing sector (US$19.6 billion/£14.9 billion), followed by telecom providers (US$17.3 billion/£13.2 billion). Retail chains Woolworths and Coles came in at sixth and seventh position.
Retailers had the highest number of brands represented in the BrandZ Top 40, with a total of 11 brands (including Westfield, Bunnings, BWS and Harvey Norman) across product subcategories. Whilst retailers have always enjoyed a central role within the Australian economy, they now face a growing threat from disruptive foreign players offering personalised shopping experiences.
“Technology is reshaping the Australian business landscape. Digital transformation, artificial intelligence and the accelerating speed of change have significantly reduced barriers for competitors like Amazon to enter and disrupt markets with greater efficiencies and reduced costs, whilst offering consumers access to highly desired global brands,” said David Roth of The Store, WPP.
Australia’s geographic isolation has historically led to a lack of outside competition. Increasingly, this geographic isolation is being flattened by technology, and global brands are now a mere click away.
Unlike other countries, there is a distinct absence of technology brands within the BrandZ Australia Top 40, with consumers perceiving an innovation gap across local brands. They expect more and favour brands that are more “tech savvy” and offer greater convenience and efficiency.
“Whilst retail platforms and technology make it easier for Aussie brands to expand, they also bring new players to our shores – and as such, the best defence is a strong brand. Applying innovation across your product, business and customer experience in an agile environment are essential to survival in this global market,” said Jon Foged, CEO of Kantar Australia.
Australia’s top 40 brands do not have a strong presence on the world stage. Only 13 of the ranked brands report any overseas revenue – with such contributions making up just 7 per cent of total revenue.
Alcohol brands like Bundaberg, and Victoria Bitter and airlines like Qantas and Jetstar only derive a fraction of their revenues from global markets. In fact, only Fosters derives the bulk of its revenue from outside of Australia.
Brands can defend their markets and accelerate growth through new market penetration, by focussing on improving capabilities across business areas from logistics and communication to customer care.
Brands that differentiate themselves from their competitors by building Trust would be well placed to achieve rapid growth. On average, Australian brands that are trusted have a brand value of US$2.8 billion/£2.1 billion higher than those that are not.
Qantas was ranked as Australia’s Most Trusted Brand with a score of 129, where 100 is an average brand, primarily related to Qantas being seen by consumers as a responsible brand.
In general, Australia’s group of highly differentiated brands like Dan Murphy’s and Foxtel are over 50% more valuable than those that are poorly differentiated. Brand equity and brand health can be improved through better differentiation, innovation, and strong communication.
The BrandZTM Australia Top 40 report also includes new research from Y&R’s BAV Group in partnership with US News & World Report and the Wharton School, examining what it takes to build powerful nation brands.
According to BAV Group’s 2018 Best Countries report, Australia ranks 7th out of the 80 countries studied across all measures. The country’s low cultural and integration barriers also make it the No 3 country for “desirable headquarter location”. Australia also scores highly for cultural influence and entrepreneurship which help to attract global talent, support entrepreneurs and draw investment.
The BrandZ Top 40 Most Valuable Australia Brands report and ranking and extensive analysis are available here.
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