UK’s 50 most valuable brands and why they must innovate to survive globally
The health and future growth of British brands depend on a serious commitment to innovation, according to BrandZ’s first UK top 50, especially if homegrown companies want to compete on a global scale.
By Charlotte Rogers
Entering the precarious world of post-Brexit Britain, homegrown brands will need to stay ahead of the global pack in order to survive. British brands are, however, less healthy and innovative than their global counterparts according to new BrandZ research by Kantar Millward Brown.
BrandZ’s first ranking of the UK’s top 50 most valuable brands does not include a single pure-play tech business, whereas 47% of the global top 50 are technology businesses. The British ranking is skewed heavily towards telecoms, finance and utilities companies, which comprise well over half (69%) of the top 50.
The lack of innovative British businesses breaking through at scale is affecting the overall health of UK brands. Just 22% of the UK top 50 are considered by BrandZ to be ‘healthy brands’, compared to 50% of the global top 50. The majority (64%) of British brands are described as being in ‘OK health’, with a further 12% considered ‘frail’.
By comparison, 50% of the global top 50 are considered healthy, with just 4% being classed as frail.
Health is measured according to five metrics – purpose, innovation, communications, brand experience and love. According to BrandZ, companies are at risk of damaging their brand health and underperforming in the market if they fail on any of these metrics. Brands that fail on all five measures are classed as frail.
Peter Walshe, BrandZ global strategy director at Kantar Millward Brown, says: “If you compare to France, Germany and Spain, their brands are not as good as the global top 50, but they’re better than the UK. We’re behind the pack.
“We’ve been slow to adapt and adopt, particularly technology-related aspects for the benefit of consumers and brand experience.”
Jane Bloomfield, head of sales and marketing at Kantar Millward Brown, believes British brand innovation has been affected by our widespread adoption of global tech brands, especially American imports like Amazon, Apple and Google.
“We have lost our way somewhere in that we have not fostered that industry or invested in that side of things and the US brands that you see in that global top 10 have led the charge,” she explains.
Bridging the innovation gap
For brands that commit to innovation, there is a real opportunity to stand out from the pack. A notable example is Dyson (32nd in the ranking), which is Britain’s best performer in terms of overall brand health.
Dyson topped the lists for innovation and purpose, as well as being the only brand to make it into the top 10 for the other metrics – communications, experience and love – as well.
Global category director for Dyson Professional and Lighting, Sam Bernard, explains that Dyson’s innovation is rooted in developing technology that solves the frustrations in people’s daily lives.
“Take the Dyson Supersonic hair dryer. It didn’t come about because we thought it would be lucrative to enter the hair dryer market. We had been developing small, powerful motors for nearly 20 years,” Bernard explains.
“Combined with extensive scientific research into the effects of moisture, heat and airflow on real hair, we were able to create a totally different hair dryer – which solves the problems of conventional designs, such as excessive noise and weight, and imprecise control of heat and airflow.”
Bernard explains the company’s ethos is to encourage everyone to be bold, take risks and learn from the outcomes. Having the freedom to fail comes from being a family business which prioritises perfecting technology over making quick returns for shareholders.
Dulux (2nd for innovation), Sky (3rd), Virgin (4th) and Royal Mail (5th) make up the rest of the top five for innovation.
British Gas (21st in the overall top 50 and 8th for innovation) is another brand leading on innovation. Director of brand marketing, Margaret Jobling, explains how the company has invested in innovation from the inside out, focusing on the potential of a collaborative, digital workplace.
From a product perspective, innovation has included the development of its Hive smart heating meter, which helps users control their heating and hot water from their smartphone. Crucially, innovation is only useful if its consumer relevant, says Jobling.
“Sometimes innovation loses sight of the customer, but we’re very clear that technology starts with the customer. Technology is a key part of our investment, recruitment strategy and proposition development strategy,” she explains.
Reflecting on the perception that the UK is lagging behind on innovation, Jobling believes the perception problem is driven by the fact British tech does not get enough airtime.
“I see a lot of innovation going on in the UK and one of the biggest concerns for me if I look at the future is around talent and how do we make sure Britain retains talent and investment in tech as we move out of the EU,” she explains.
“We have been known historically as an innovative market, whether that’s in fashion, music or technology, and I wonder if we talk about it enough? Is there enough of a conversation about innovation or is all the focus on the big guys that are very global?”
Betfair brand director Stephen Mault agrees that while British brands are a hive of innovation, their achievements are often not as high profile as their global counterparts.
“There’s a huge amount of innovation that’s continuing to go on in the UK and maybe we just haven’t had those big successes like the Facebooks and Ubers that have really captured the audience’s imagination,” he explains.
Founded in 2000 as a disruptor in the bricks-and-mortar bookmaking sector, Betfair (48th) aims to innovate both in terms of product and marketing. Mault believes new campaigns like ‘Defender to Contender’, which will see former Manchester United defender Rio Ferdinand train to become a boxer, show the company’s innovative approach to marketing.
“We’re thinking outside the box and doing some really big scale brand marketing activity that will put us above the parapet in terms of being innovative and working slightly differently from a brand perspective,” he argues.
The Co-operative Group’s director of Co-op brand, Helen Carroll, agrees that innovation does not have to be solely product focused. She notes the introduction of the Co-op’s (38th) membership proposition in September 2016, which offers members a 5% reward for any purchases of Co-op own-brand products and services, with a further 1% directly benefiting local causes.
Carroll does, however, acknowledge that often it can be a problem for a heritage business to shake off the perception that it resists innovation.
“I totally agree that perception is reality with brands and actually we find that a lot when we look at the brand perceptions of people who aren’t using us. Their view is very much based on a traditional view of the Co-op from a bygone era,” she explains.
“If you are a newer tech business you’re not having to shift perceptions from one thing to another, you’re not having to create a new reality and actually it takes time to do.”