Amazon tops Brandz and Brand Finance rankings, is winning big during global lockdown
Two reports released this week highlighted just how much Amazon is emerging as the winner in the modern retail world generally and also from the retail fallout surrounding the global coronavirus crisis.
And importantly, one of them also said that continuous marketing is proving important for all brands, at the moment with savvy operators still investing in advertising and those that don’t dropping out of consumes'r minds.
WPP/Kantar’s third annual Brands Top 75 Most Valuable Global Retail Brands Ranking showed Amazon growing 32% to $415.9 billion to remain the world's most valuable retail brand. It even commands 27% of the entire Top 75's brand value.
The value of those top retail brands has grown 12% to $1.5 trillion in the past year, according to the report that’s been launched in conjunction with the Word Retail Congress.
Overall, the top 10 most valuable retail brands are Amazon, Alibaba, McDonald’s, The Home Depot, Louis Vuitton, Nike, Starbucks, Walmart, Chanel and Hermès.
The report called out the fact that the “top retailers in the 2020 ranking illustrate the scale and breadth of activity making brands meaningfully different and salient to consumers in the coronavirus age”.
Amazon, for instance, “is managing demand and reducing its speed of delivery to prioritise key products”. And Alibaba, in second place on a value of $152.5 billion, is seeing its subsidiary Ali Cloud “use its AI expertise to help medics in China significantly shorten the coronavirus diagnosis time”.
At number five with a $51.8 billion value, Louis Vuitton’s parent company LVMH “took only 72 hours to convert its production lines to make hand sanitiser”. And Chinese e-commerce brand JD (number 13, $25.5 billion) “delivered medical supplies and food using its extensive distribution network”.
The report also highlighted athletic apparel company Lululemon (number 25, $9.7 billion) growing 40% to become the ranking's highest riser with current activity including offering online training programmes, “a purposeful marketing tactic to keep it front-of-mind that has also been adopted by Adidas” (number 18, $14.8 billion).
Importantly, WPP/Kantar said it has noticed that the “smart retailers are resisting the temptation to cut back on advertising investment, learning lessons from China where brands that 'went dark' are struggling to reconnect during the early stages of recovery as consumers opt for those that actively demonstrated support. Marketing is being adapted as people are confined to staying indoors, with tone of voice being as important as the media mix”.
BRAND FINANCE: GOODBYE TO APPAREL BRANDS
Meanwhile, the new Brand Finance Retail 50 report also put Amazon at the top, but based on a different set of metrics, it was listed with a value of $220 billion.
It overtook Japan’s 7-Eleven to become the world’s strongest retail brand, with its Brand Strength Index (BSI) scoring 89.1 out of 100.
And the new list “does not include apparel brands, which are predicted to suffer significant damage,” Brand Finance said. It has calculated that the apparel sector “will be heavily impacted by the Covid-19 pandemic, with brands across [the] sector potentially losing up to 20% of their brand value”.
Brand Finance assigned 18% growth in brand value to Amazon for the new list with its valuation putting it well ahead of second-placed Walmart with a brand value of $77.5 billion.
“The majority of Amazon’s revenue still comes from its retail division and despite the growing challenges to the brand — particularly in its international operations -– the brand is untouchable in the sector,” it said. That’s because “Amazon has been benefitting from the unprecedented surge in demand as consumers turn online following store closures”.
But it’s also interesting that Taobao is in fourth place with a value of nearly $37 million, Tmall is in fifth place with a value of $30.6 million, and Alibaba.com 10th with a value of $18.8 million. Their combined value would have put them in second place if they’d all been listed under the banner of parent company Alibaba.
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