Disruption and Value Growth
Disruption and Value Growth
Global 100 increases in disruptive power
Meaningful disruption is the key to scalable relevance
The disruptive power of the BrandZ™ Global Top 100 has increased significantly over the past five years, driving the overall volatility of the market and underscoring the necessity for brands to be able to disrupt and to defend against disruption.
Brands in the 2019 Global Top 100 scored 112 in their ability to disrupt, a step-change increase from a score of 107 in 2015. An average score is 100 in this BrandZ™ measurement of the extent to which consumers see a brand as “shaking things up.”
One of the benefits of being disruptive is accelerated value growth. Between 2015 and 2019, brands that appear in the rankings of both years increased an average of 40 percent in value. In contrast, the Top 10 disruptor brands in 2015 more than doubled in value by 2019, increasing 110 percent.
This value appreciation happened not simply because these brands were disruptive, however, but because they were Meaningfully disruptive. Consumers felt connected to these brands because they fulfilled their needs in ways that were functionally and emotionally relevant.
Meaningful is a component of brand equity, along with Difference (being unlike competitors, setting trends) and Salience (coming quickly to mind during consideration). In 2015, the Global Top 100 scored 117 in being Meaningful, a strong score on a scale where 100 is average.
However, the Top 10 disruptor brands in 2015 scored 155 in being Meaningful. Their disruptive power was anchored in meaning. Simply put, Meaningful disruption meets evolving consumer needs and expectations. It is the key to scalable relevance.
How disruptive brands meet or anticipate consumer needs, and even re-define consumer expectations, can vary. But brands usually adopt one of these four approaches:
- Introducing an original product or service (Netflix, the streaming service);
- Introducing a radical new business model (Jio, the Indian telecom provider);
- Renewing a purpose or target audience (Gucci, the luxury brand); or
- Using technology to achieve scale and diversity of offer (Meituan, the Chinese online-to-offline services platform).
Original Products and Services: Netflix
Netflix disrupted the market for viewing video in 1997. At time when people went to physical stores to rent video tapes or DVDs, Netflix sent DVDs through the mail in iconic red envelops. Ten years later, Netflix again disrupted the market—and itself—by introducing streaming service, and then original content. The brand equity score of Netflix has increased dramatically from 113 in 2010 to 144 in 2018. A score of 100 is average. Its value has almost tripled over the past three years, and Netflix has moved up from rank No. 92 in the BrandZ™ Global Top 100, in 2017, to rank No 34 today.
Radical New Business Model: Jio
Jio disrupted the Indian telecom provider category with its deep discount prices for data consumption. It forced competitors to lower their prices and drove category consolidation. All telecom consumers, not only Jio customers, benefited from Jio’s action. Although launched in 2016, Indian consumers see Jio as Meaningfully Different as Airtel, which entered the market in 1995. Having attracted almost 300 million customers in just three years, Jio potentially could leverage this audience with the sales of advertising and content.
Renewed Purpose and Audience: Gucci
A legacy luxury brand established almost 100 years ago, Gucci renewed the brand by democratizing its appeal with bold designs that appealed to a new, younger audience, and with an inclusive ethos that invited people to experience the brand even if they could not afford its products. Gucci’s brand value has increased steadily, and it rose from No. 80 in the BrandZ™ Global Top 100 in 2017, to No. 52 in 2019.
Technology to Achieve Scale and Diversity of Offer: Meituan
Less than 10 years old, the lifestyle platform Meituan, began as a group buying site and today is China’s largest booking site for services, such as reserving a restaurant or renting a bike. Investing in technology to achieve scale and diversity of offer, Meituan helped create China’s convenience phenomenon and the seamless integration of online and offline purchasing and delivery. It is a newcomer to the BrandZ™ Global Top 100, ranking No. 78. Its rapid success demonstrates the power of a brand ecosystem.
The Varieties of Disruption
A disruptive brand has a radical impact on the value of a category, usually in one of three ways:
- Redistributing value within an existing category: When the Indian telecom provider Jio launched with its free data offer it did not increase the value of the category but made a play to consolidate the value.
- Adding value to an existing category: Apple’s introduction of the iPhone opened a new space within a category where other brands, if they were nimble or innovative enough, also had an opportunity to win.
- Adding value and creating an entirely new category: Brands like Uber or Airbnb invented new categories based on cultural changes, technology, and anticipated human needs.