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50
2019
The annual report on the most valuable and strongest retail brands
March 2019
About Brand Finance. Contents.
Brand Finance is the world’s leading independent About Brand Finance 2
brand valuation and strategy consultancy.
Get in Touch 2
Brand Finance was set up in 1996 with the aim of ‘bridging
the gap between marketing and finance’. For more than
Request Your Brand Value Report 4
20 years, we have helped companies and organisations of
Brand Valuation Methodology 5
all types to connect their brands to the bottom line.
Foreword 6
We pride ourselves on four key strengths:
Brand Finance Retail 50 (USD m) 12
++Independence ++Transparency
++Technical Credibility ++Expertise Regional Analysis 14
We put thousands of the world’s biggest brands to the Sector Reputation Analysis 16
test every year, evaluating which are the strongest and
most valuable. Brand Strength Analysis 18
Brand Finance helped craft the internationally Definitions 20
recognised standard on Brand Valuation – ISO 10668,
and the recently approved standard on Brand Evaluation Consulting Services 22
– ISO 20671.
Brand Evaluation Services 23
Communications Services 24
Get in Touch. Brand Finance Network 26
For business enquiries, please contact:
Richard Haigh
Managing Director
rd.haigh@brandfinance.com
twitter.com/brandfinance
www.brandfinance.com/events
facebook.com/brandfinance
4 Brand Finance Retail 50 March 2019 Brand Finance Retail 50 March 2019 5
Foreword. Amazon
What is the purpose of a strong brand: to attract customers, to build loyalty, to
motivate staff? All true, but for a commercial brand at least, the first answer must
always be ‘to make money’.
Continues to
Storm Ahead
Huge investments are made in the design, launch, and ongoing promotion of
brands. Given their potential financial value, this makes sense. Unfortunately, most
organisations fail to go beyond that, missing huge opportunities to effectively make
use of what are often their most important assets. Monitoring of brand performance
as World’s
should be the next step, but is often sporadic. Where it does take place, it
frequently lacks financial rigour and is heavily reliant on qualitative measures, poorly
understood by non-marketers.
David Haigh
As a result, marketing teams struggle to communicate the value of their work and
Most Valuable
CEO, Brand Finance
boards then underestimate the significance of their brands to the business. Sceptical
finance teams, unconvinced by what they perceive as marketing mumbo jumbo,
may fail to agree necessary investments. What marketing spend there is, can end up
poorly directed as marketers are left to operate with insufficient financial guidance
Retail Brand.
or accountability. The end result can be a slow but steady downward spiral of poor
communication, wasted resources, and a negative impact on the bottom line.
Brand Finance bridges the gap between marketing and finance. Our teams have
experience across a wide range of disciplines from market research and visual
identity to tax and accounting. We understand the importance of design, advertising,
and marketing, but we also believe that the ultimate and overriding purpose of
brands is to make money. That is why we connect brands to the bottom line. ++ Tech giant Amazon lunges further into retail space,
By valuing brands, we provide a mutually intelligible language for marketing and defending title as world’s most valuable retail
finance teams. Marketers then have the ability to communicate the significance of brand, brand value US$187.9 billion, AAA- brand
what they do, and boards can use the information to chart a course that maximises
profits. Without knowing the precise, financial value of an asset, how can you know strength rating
if you are maximising your returns? If you are intending to license a brand, how can
you know you are getting a fair price? If you are intending to sell, how do you know ++ Stark contrast in China: Alibaba up 51% to
what the right time is? How do you decide which brands to discontinue, whether to
rebrand and how to arrange your brand architecture? Brand Finance has conducted
US$14.6 billion, JD.com down 42% to US11.4
thousands of brand and branded business valuations to help answer these billion
questions.
Brand Finance’s research revealed the compelling link between strong brands and
++ US giant Lowe's jumps three spots to 4th place,
stock market performance. It was found that investing in highly-branded companies growing 49% to US$23.9 billion, closing gap with
would lead to a return almost double that of the average for the S&P 500 as a whole.
rival Home Depot
Acknowledging and managing a company’s intangible assets taps into the hidden
value that lies within it. The following report is a first step to understanding more ++ Canada’s Circle K fastest growing, up 60% to
about brands, how to value them and how to use that information to benefit the
business.
US$5.9 billion
The team and I look forward to continuing the conversation with you. ++ 7-Eleven is strongest retail brand, 85.9 out of 100
BSI score
6 Brand Finance Retail 50 March 2019 Brand Finance Retail 50 March 2019 7
Executive Summary.
Executive Summary.
Home Depot vs Lowe’s Top 10 Most Valuable Brands
increasing 39% to US$47.1 billion and 49% to US$23.9 2019: $187,905m +24.6%
billion respectively. This increase is fuelled by a number 2018: $150,811m
of factors in the market including: income growth;
lower federal tax rates; and continued home price
appreciation.
2 02
continues to put his stamp on Lowe’s, the brand has the 2019: $47,056m +39.4%
potential to further reduce the gap with Home Depot. 2018: $33,748m
China’s Alibaba (up 51% to US$14.6 billion) and 2019: $23,938m +49.4%
Amazon remains the standout brand in the Brand Amazon is continuing to JD.com (down 42% to $US11.4 billion), ranked 10th 2018: $16,024m
Finance Retail 50 2019 ranking, growing 25% to and 11th respectively, have had polar opposite shifts in
grow at an unprecedented
US$187.9 billion, and holds its position as the world’s
most valuable retail brand. rate, through snapping up
their brand value. Both brands have the pressure of the 5 26
USD bn
8
US$47.1 billion), Lowe’s (up 49% to US$23.9 billion),
IKEA (up 11% to US$21.5 billion) and CVS Health (3% e-commerce giant as it 100 29
to US$21.3 billion).
leaves competitors in the 2019: $16,483m +20.5%
2018: $13,679m
Amazon’s CEO, Jeff Bezos, took the top spot on Brand traditional bricks and mortar
9
Finance’s inaugural Brand Guardianship Index study.
However, the mixed public reception of his recently
space lagging further behind. 50
18
0
announced high-profile divorce poses a reputational
2019: $15,930m +2.5%
challenge for Bezos and brand Amazon as a whole. David Haigh 2018: $15,546m
If mishandled, the separation process could cost CEO, Brand Finance
10
the brand well in excess of US$10 billion; with the 2013 2014 2015 2016 2017 2018 2019
8 Brand Finance Retail 50 March 2019 Brand Finance Retail 50 March 2019 9
Executive Summary. Executive Summary.
slowing Chinese economy and the US-China trade war BSI Change 2018-2019 (%) Fastest growing is Canada’s Circle K Top 10 Strongest Brands
to contend with, meaning an uncertain future.
high-profile coverage of the CEO’s arrest and the the retail rankings with an impressive 60% increase 2019: 85.9 AAA+ 0.0
Lowe's +49.4% 2018: 85.9 AAA+
reputational damage suffered as a result. This has in brand value to US$5.9 billion. Circle K posted a
impacted both its customer base, shrinking for Costco +40.5% 21% increase in revenue in the second quarter of
the first time in four years in November 2018, and
its shares which fell 6% overnight as news broke.
Home Depot
suning.com
+39.4%
+37.9%
2018, which can largely be attributed to: the steady
increase in fuel prices; the continued roll out of newly-
2 2 6
Striving to diversify, the brand has recently announced branded branches across more than 4,050 stores in 2019: 84.4 AAA +4.7
El Corte Inglés +37.9%
partnerships with Google Express, to increase its North America and 1,800 stores in Europe; and the 2018: 79.7 AAA-
Marshalls +37.4%
footprint in the US, and with Rakuten to develop drone completion of the Bloomington acquisition and its
delivery, however it remains to be seen what the impact
of these ventures will have on its brand value in the
Sam's Club
Carmax
+35.6%
+34.7%
Holiday Stationstores network of convenience stores,
which total over 500.
3 0 3
bring NBA content to Alibaba platforms and boost Amazon +24.6% Finance also determines the relative strength of brands 2019: 80.5 AAA +3.5
online shopping opportunities for Chinese consumers. through a balanced scorecard of metrics evaluating 2018: 77.0 AAA
Kohl's +24.6%
Alibaba has forged partnerships with global brands marketing investment, stakeholder equity, and business
including Starbucks, boosting its delivery and digital
presence in China, and Intel, collaborating on hybrid -10.4%
Safeway
Carrefour
+23.1%
performance. Along with the level of revenues, brand
strength is a crucial driver of brand value.
5 2 15
cloud, internet of things, and smart mobility. -13.1% Asda 2019: 80.4 AAA +3.8
2018: 76.6 AA+
-42.0% JD.com According to these criteria, 7-Eleven has maintained its
position as the world’s strongest retail brand. The brand’s
Brand Strength Index (BSI) score sits at an impressive
85.9 out of 100, with a corresponding AAA rating.
6 1 2
7
looking towards India for new store openings. With
over 2500 convenience stores in Tokyo alone, the 1 5
brand also has a presence across Thailand, China,
Brand Value 2019: 80.3 AAA +0.2
Denmark, Australia and the UAE, through area license
Country (USD bn) % of total 2018: 80.1 AAA
and master franchise agreements.
●
8
United States 496.7 73.4%
2 12
● China 32.0 4.7%
2019: 79.7 AAA-
● Germany 26.4 3.9%
2018: 77.4 AA+
+2.3
● United Kingdom 26.0 3.8%
●
●
France
Sweden
22.3
21.5
3.3%
3.2%
9 1 8
10 0 10
10 Brand Finance Retail 50 March 2019 Brand Finance Retail 50 March 2019 11
Brand Finance Retail 50 (USD m).
12 Brand Finance Retail 50 March 2019 Brand Finance Retail 50 March 2019 13
Definitions.
Definitions.
Brand Value Brand Strength
+ Enterprise Value Brand Strength is the efficacy of a brand’s Each brand is assigned a Brand Strength Index
The value of the entire enterprise, made performance on intangible measures, relative to its (BSI) score out of 100, which feeds into the brand
up of multiple branded businesses. competitors. value calculation. Based on the score, each brand
is assigned a corresponding rating up to AAA+ in a
[Sam's Club] Where a company has a purely mono-
Enterpr In order to determine the strength of a brand, we look format similar to a credit rating.
ise branded architecture, the ‘enterprise value’
Val is the same as ‘branded business value’. at Marketing Investment, Stakeholder Equity, and the
ue
impact of those on Business Performance. Analysing the three brand strength measures helps
+ Branded Business Value inform managers of a brand’s potential for future success.
Brand
ed B The value of a single branded business
us operating under the subject brand.
ine
ss [Walmart]
V A brand should be viewed in the context of Marketing Widely recognised factors deployed by marketers to create brand loyalty and
between marketing investment, brand- Stakeholder Perceptions of the brand among different stakeholder groups, with customers
n
tracking data, and stakeholder behaviour. Equity being the most important.
+ Brand Contribution
Brand The overall uplift in shareholder value
that the business derives from owning Business Quantitative market and financial measures representing the success of the
Value the brand rather than operating a Performance brand in achieving price and volume premium.
[Walmart]
generic brand.
14 Brand Finance Retail 50 March 2019 Brand Finance Retail 50 March 2019 15
Consulting Services. Brand Evaluation Services.
How are brands perceived in my
1. Valuation: What are my intangible 2. Analytics: How can I improve category?
assets worth? marketing effectiveness?
Valuations may be conducted for technical Analytical services help to uncover drivers Brand Finance tracks brand fame and perceptions
purposes and to set a baseline against of demand and insights. Identifying the across over 30 markets in 10 consumer categories. Clear,
which potential strategic brand factors which drive consumer behaviour insightful signals of brand performance, with data mining
scenarios can be evaluated. allows an understanding of how brands options for those who want to dig deeper – all at an
N 2. A create bottom-line impact. accessible price.
+ Branded Business Valuation IO NA
+ Trademark Valuation AT Market Research Analytics +
What if I need more depth or
U
LY
AL
TIC
1. V
S
Brand Scorecard Tracking +
Brand &
Business Our bespoke brand scorecards help with market
S
4. Transactions: 3. S 3. Strategy: How can over time, against competitors, between market
Is it a good deal? I increase the value of
T
TR
Can I leverage my NS
AT my branded business? database of brand KPIs enables us to benchmark
intangible assets?
EG
4. TR
A Y Strategic marketing services enable performance appropriately.
Transaction services help buyers, brands to be leveraged to grow
sellers, and owners of branded businesses businesses. Scenario modelling will Do I have the right brand
get a better deal by leveraging the value of identify the best opportunities, ensuring architecture or strategy in place?
their intangibles. resources are allocated to those activities which
have the most impact on brand and business value. Research is conducted in addition to strategic
+ M&A Due Diligence
Brand Governance + analysis to provide a robust understanding
+ Franchising & Licensing
+ Tax & Transfer Pricing Brand Architecture & Portfolio Management + of the current positioning. The effectiveness
+ Expert Witness Brand Transition + of alternative architectures is tested
Brand Positioning & Extension + through drivers analysis, to determine which option(s)
will stimulate the most favourable customer behaviour
and financial results.
16 Brand Finance Retail 50 March 2019 Brand Finance Retail 50 March 2019 17
Communications Services.
How we can help communicate your brand’s performance
in brand value rankings
SERVICES
• Research and Insights
• Integrated Communications Planning
• Project Management and Campaign Execution
• Content and Channel Strategy
TOP 50 MOST VALUABLE STRONGEST • Communications Workshops
RETAIL RETAIL RETAIL
BRAND BRAND BRAND
For more information, contact enquiries@brand-dialogue.co.uk or visit www.brand-dialogue.co.uk
We also offer aVideo
variety of other services to help communicate
Endorsement – record video with Brand Finance CEO or Director
your brand’s performance
speaking about the performance of your brand, for use in both internal and
Brand Dialogue is a member of the Brand Finance plc group of companies
external communications.
MEMBERS' CLUB
personally signed by Brand Finance CEO to recognise your brand’s
performance.
18 Brand Finance Retail 50 March 2019 Brand Finance Retail 50 March 2019 19
Brand Finance Network.
For further information on our services and valuation experience, please contact your local representative: