Top 30 worth $29.7 billion
The combined value of the BrandZ™ Top 30 Most Valuable South African Brands 2020 is $29.7 billion, a 20 percent decrease over last year. This comes as nearly all of the world’s brands are facing steep declines due to COVID-19 and the ongoing shutdowns. However, South African brands are facing particularly challenging times, with ratings agency downgrades and a recession dragging on the economy. Still, it’s hard to take comfort in any decline, let alone one this steep.
First National Bank takes #1
the headline this year is that First National Bank overtook rival Standard Bank, becoming #1 for the first time in history of the rankings. FNB is riding a wave of strong investments in digital innovation, which has bolstered its brand equity in a challenging climate for financial institutions. Young people have particularly embraced the brand, often voting it the Sunday Times’ Gen Next Awards’ coolest bank. As a result, FNB is the second-best performing bank in the rankings on a percentage basis, trailing only the gravity-defying Capitec Bank.
Meanwhile, Standard bank has been doing some soul-searching, and recently launched a new brand identity, “It Can Be,” so it may be able to claw its way back.
FNB has grown both meaning and salience since 2019 and leads on corporate reputation
Clicks jumps most
Clicks has the distinction of being the only brand in this year’s ranking to have gained brand value. The health and beauty retailer has seemingly benefited from an intense focus on its home market and using a saturation strategy to build recognition with consumers. It scores particularly well on Meaningfulness, which shows that it is meeting people’s needs and delivering a great shopping experience. Like many retailers, it is facing a tough environment in which consumers are less likely to be out shopping and thus less likely to be buying, but it is still managing to find areas for growth.
Salience will not save you
The good news for South Africa’s top brands is that consumers are well aware of who they are in their particular categories. The Top 30 score best in terms of Salience, which is an important metric for brands in the present day. Kantar analysis has shown that Total Brand Communication Awareness (TBCA) can fall as much as 39 percent when brands stop advertising. And that can occur even at the best of times.
At the same time, recent analysis of the Global Top 100 showed that brands that were declining in value often had a steep gap between how Salient they are and how Meaningful and Different they are. The bottom line is that if you’re over-investing in Salience and not providing a differentiated brand experience, you may be creating a loud but fragile brand.
Our validated measures of equity continue to be stronger for the more resilient brands
- Top 30 South African brands rely heavily on Salience and Meaning
- There is a lack of strong Difference
Difference is critical
The flipside of this is that Difference really helps in the South African market. If a brand is seen as Meaningfully Different, consumers are much more likely to pay a premium for it. The most different brand in the top 30, Woolworths, proves this point and then some.
Mzansi’s beloved Woolies needs no introduction in its home market, where its high value and occasionally high-priced assortment make it singular among the country’s retailers. While the country’s retail sector has been hit hard — both of the brands that dropped out of this year’s rankings are retailers — Woolies has held up surprisingly well, climbing two spots in the ranking to #9.
Global research has also found that Difference is the best predictor of resilience. It provides a reason choose at the time of purchase, helps justify the price asked, and offers a strong justification post-purchase, especially when customers like the product.
The power of Purpose
BrandZ™ defines Purpose as making people’s lives better. It’s what you do, why you do it, and how you behave. Clarity of purpose tends to bring focus to brand positioning and marketing — and serves as a foundation for building strong relationships with consumers. As a result, brands with Purpose tend to grow in value at a much faster rate than those that ignore it.
COVID-19, in particular, has demonstrated that if you’re not clear on your purpose, it’s time to get to work. 90 percent of South Africans want brands to talk about how they can be helpful in the new everyday life.
While top South African brands overall do not score particularly well for Purpose, the ones that do are seeing the benefits. Among the top five brands on the Brand Purpose Index you can find Capitec, Flying Fish, Clicks, Netcare, and Pick n Pay. Apart from Netcare, all these brands are also among the best performing in their categories. Capitec was the #1 performing bank, Clicks and Pick n Pay the top-performing retailers, and Flying Fish the top newcomer.
Innovation, not Mzansi’s strong suit (but wait)
Overall, top South African brands have one of the lowest scores of any country for Innovation. In fact, even the brands in the ranking that score best for it — Nando’s, Woolworths, and Capitec Bank — aren’t really standouts by global standards. None of the Top 30 have achieved scores that puts them in the top 5 percent of brands worldwide.
Change does seem to be in the air, however, as COVID-19 has forced brands to find innovative ways to reach their customers. For example, Pick n Pay has partnered with online alcohol delivery service Bottles to deliver grocery essentials via a contactless delivery system. And Shoprite has created Usave mobile shops that bring shopping to underserved communities and reduce the need for public transportation. Such efforts are more imaginative than costly and should serve these brands well into the future.
A final area where brands could look to improve is in experience. Experience and innovation can be two sides of the same coin, where new products and services serve to improve customers’ lives. Brands that offer great experiences tend to increase customer loyalty, which can be extremely healthy for the bottom line. One classic study, for example, found that if a company can increase customer retention by 5 percent, it can also increase profits by 25 percent to 95 percent.
South Africa’s top-performing brand in this area by some margin is Woolworths. The brand not only outperforms its peers in the country, Kantar’s recent CX+ 2020
Retail Ranking ranked it the #1 grocery brand in the world for customer experience, and by some margin (it scored a remarkable 132, the next closest brand came in at 125). Woolies ranked extremely well for its clear brand promise, empowered employees, ability to form lasting memories, and reinforcing brand choice (at which it was the best brand in the world). The Woolies clothing store customer experience, which was measured separately, also ranked high at #8 in the world.
Other South African brands should take notice because overall, however, experience is an area where the country’s brands have plenty of room for improvement. And chance does seem to be in the air. Virgin Active South Africa has partnered with DStv, for example, to bring workouts to homes across sub-Saharan South Africa. Discovery and Vodacom, have also partnered to provide an online doctor consulting service for all South Africans. It would be surprising if these scores did not improve year-over-year in 2021.