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Innovation drives brand growth

News, 09 June 2016

GLOBAL: Brands that innovate and showcase those innovations to consumers through the brand experience are likely to grow faster than others, according to a new study.

The 2016 BrandZ Top 100 Most Valuable Global Brands ranking, from researcher Millward Brown, highlighted disruption as a dominant trend, with brands changing the status quo with their offerings in a number of ways, often beyond the use of digital technologies.

An example of that, the report said, would be Amazon (ranked seventh) building its own logistics network using independent contractors to enable it to offer flexible and one-hour delivery options.

In the digital sphere, Facebook (ranked fifth) began hosting of publishers' original content to keep members active.

"The brands that thrive, regardless of sector, are those that behave like challengers and adopt disruptor models and mindsets," said David Roth, CEO EMEA and Asia, The Store WPP.

"They're shaking up other categories with innovation that goes beyond new products or technologies – transforming the way a service is delivered, enhancing the consumer experience or changing a format."

But innovation alone is not sufficient to affect brand value – it must be clearly communicated and delivered through the brand experience. According to the study, brands that are perceived as innovative by consumers – which include Disney (ranked 19th) and Pampers (ranked 37th) – grew nine times faster than those seen as less innovative.

The report further noted how strong emotional connections are boosting local brands. And these are not only gaining market share at home – with improved functionality and marketing – they are also making inroads in new regions.

China's Huawei (ranked 50th), for example, has rapidly globalised and taken market share from both Apple and Samsung.

While the strongest brands were seen to be expanding through innovation and moving into new categories, that brings new risks, warned Doreen Wang, Global Head of BrandZ.

"It blurs the lines between categories and can leave brands struggling for identity," she said. "Defining and articulating a very clear positioning and purpose will play a more crucial part than ever in building a strong, distinct brand."

Google, Apple and Microsoft remain the top three most valuable global brands in the study.

Data sourced from BrandZ; additional content by Warc staff