Top 100 worth $3.81 trillion
The combined value of the BrandZ™ Top 100 Most Valuable US Brands 2020 is $3.81 trillion, a five percent jump over last year. In total, it is comparable to the GDP of Germany, which is the fourth largest economy in the world. It is also nearly four times as valuable as the top 100 Chinese brands, which are the second most valuable ranking in the world. That’s a lot of value.
US vs. the world—not close by a long shot
Amazon cruises to #1
As predicted in this report last year, Amazon has taken over the top spot in the ranking with a total value of $335 billion, or more than a third of a trillion dollars. It did this on the back of a 20 percent gain for the year, which has now placed its brand value at roughly $30 billion more than its nearest rival Apple.
Part of the reason is that even though Amazon is large, it is still finding quick growth in both new and existing markets. Its overall revenue rose 31 percent last year, while in its mature North American market, it rose even more at 33 percent. This gain in financial value is certainly a contributing factor to its increase in brand value.
But brand has a role to play as well. Amazon is also the top 100’s most meaningfully different brand, with a staggeringly high score of 182. The reasons for this hardly need to be explained to anyone in the markets in which it operates. Amazon is now at such a scale that its Prime Day has become an international shopping event. Its Amazon Prime service continues to notch impressive gains, including a roughly 46 percent jump in 2018. And with the brand set to introduce many new innovations, including its first large-scale implementation of its Amazon Go automated stores, it seems poised to lengthen its lead in the coming years.
Google and Apple stumble a bit
For the first time since this ranking began, technology brands on average failed to grow their value as fast as the average brand. This is almost entirely due to the slight losses incurred by both Google and Apple which fell 3 percent and 4 percent respectively. The two brands are at such a scale that their slight hiccup managed to drag down an entire category, but there’s no reason to cry over them. They are both still incredibly strong brands and a new round of innovation could certainly put them back on top.
A diverse set of brands
While the United States may be tearing itself apart over questions of inclusion and diversity, its top brands have no such problem. They come from a surprisingly diverse and balanced set of subcategories, with no sector accounting for more than 50 percent of the total brand value. This shows that nearly every kind of company can build a strong brand in the United States, and no one has an excuse for not trying.
A look back in time
Given that this is the third year BrandZ™ has ranked United States brands, we can now look back into time. Since 2018, 88 of the top 100 brands have remained in the rankings unchanged. Over that period of time, those brands have grown an impressive 21 percent, with a total gain of over $600 billion. This growth has occurred from top to bottom, with the value of the number 100 brand increasing 46 percent in just three years.
Value of the #100 US brand
It gets even better than this. The pace of growth for the top brands over the last three years is three times that of the Global Top 100. And if you’re looking for an outside confirmation of their success, the brands in the US BrandZ™ Strong Brands Index has delivered a 135 percent higher return than the S&P 500 since November 2017.
BrandZ™ Strong Brands index vs. S&P 500
So what is driving the success of these brands? The answer is Meaningful Difference. The more meaningfully different a brand is the more valuable it is likely to be both in the present and the future. Since 2018, for example, the most meaningfully different brands in the US Top 100 grew their value 44 percent faster than the least meaningfully different brands.
US brands are also very salient, but Salience is not typically a factor that drives brand value growth and instead correlates more neatly with sales and revenue. It may help maintain market share in a poorly differentiated category, but high Salience and low Meaningful Difference are also a proven risk factor for brands. However, while top US brands are more salient than they are meaningful different, the disparity is not enough to cause any worry.
The distinct value of difference
Difference is the dominant factor driving financial success for top US brands. The reason is that brands that are different offer something that people cannot get elsewhere. That enables them not only to weather storms more effectively, but also charge a price premium for their services and products.
If a chart could be worth a thousand words, the one below would be particularly eloquent. It shows a very close correlation between perception of Difference and ability to charge a premium for products and services. At the far end of it, we find brands like Apple and Disney, both of which are both beloved and extremely proficient at separating consumers from the contents of their wallets.
At the other end, we can find McDonald’s. As the most valuable US fast food brand by a wide margin, it has many great qualities as a brand, but its difference score is only 77. And no one needs to be told that with its dollar menu and other inexpensive options for eating, McDonald’s is not a place with a particularly stringent dress code.
You do not have to be a gifted analyst to discern a pattern in the fastest growing brands in the Top 100. Nine of the top 10 come from the technology sector, with Instagram, Pinterest, and Salesforce leading the charge. The only exception is fast food restaurant Chipotle, which is a unique story. It had fallen from public favor due to a foodborne illness scandal but is rapidly returning to form with new digital strategies.
The fastest riser by far is Instagram with a 98 percent gain, which is a single-year record for a brand in the US Top 100. Another social network gained the number two spot for fast growth, with Pinterest growing at 45 percent. Both of these are benefiting from rapid growth due to accelerated international penetration rates. Number three was Salesforce, a rapidly growing business-to-business software company.
In general, the top 10 fastest risers this year share a fair number of characteristics. Many are smaller highly distinct brands that have not yet saturated their target market. At the same time, most of them are cloud-based, which makes it easy for them to scale as new customers come on board.
A final thing to note is that many of these brands are much more meaningfully different than they are salient. Instagram, for example, is the 88th most salient brand in top 100, while Pinterest is the 96th. This dovetails nicely with BrandZ™ research that shows that brands with low Salience and high Meaningful Difference are often poised for rapid growth. Expect positive trends to continue for these brands in the coming year.
Top 5 learnings for marketers
A recent Kantar study of BrandZ™ data, “Mastering Momentum,” showed that it is extremely difficult to grow market share, an important factor in building brand value, over time. Looking at brands over a three-year period, it found that only six percent of brands gained market share in the first year. Then, only 60 percent of the brands that have made gains maintained them, and only one in 10 managed to grow further. This growth business is obviously difficult, but, the top 100 US brands can help offer some lessons forward.
1. Deliver a great experience
In order to grow revenue, the most critical part is retaining existing customers. An analysis of 3,907 brands over three years showed that those that retained customers above average grew 10 times faster than those that did not. As a result, the experiences customers have with your brand must convince them to continue with it. Many of the top brands for experience are known for the seamless quality of the services they provide, like FedEx, UPS, and Uber. But Pampers also scores quite highly on this measure, showing that continuous innovation in your core competency can be more than enough to keep your customers coming back.
2. Frame your experience well
You might think that delivering a great experience is solely the job of the innovation and customer service teams. But part of delivering a great experience is setting expectations—and here marketing takes the lead. Brands can prepare customers for their products most effectively by clearly articulating who they are and what they stand for. But be careful. The experience customers have must match the expectations marketers set, or disillusionment will follow.
3. Do something different
Several of the fastest growing brands in the top 100 this year are highly unique social networks. LinkedIn, for example, has become a global repository of resumes as well as an excellent way to reach potential employees and employers. However, established companies like Salesforce, Adobe, and Cisco are also growing their brand values at a torrid pace. The reason should be obvious: they are innovating to create new categories or separate their offerings from those of their competitors.
4. Get the word out
Today, marketers can match existing first-party databases with much larger third-party databases to find look-alike audiences and target them with communications that predispose them to buy the brand. For smaller brands, the task is simply to reach new audiences; for larger brands, it may be necessary to cross categories or find new audiences that can use existing products in novel ways.
5. Master the buying experience
The last mile of shopping has become a critical battleground for brands in the US and elsewhere around the world. Whether it’s to amass data, increase sales, or improve the customer experience, many brands are embracing direct-to-consumer strategies or partnering with delivery services like DoorDash and Postmates. The idea is to ensure that you can make the purchasing experience as smooth as possible and then deliver a brand experience that makes people come back for more. The fastest growing brand in the fast food category this year was Chipotle, which, among other things, has greatly increased its investments in mobile ordering and delivery.