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BRAND VALUE : TECH IS TOPS

Tech is tops

Technology not surprisingly dominates the BrandZ Top 100 Most Valuable US Brands 2018 ranking. Nineteen of the most valuable brands come from the sector, including 5 of the top 10, for a total value of $1.2 trillion, or more than a third of the total value.

 

While technology brands do contribute heavily to the total brand value, valuable American brands in most categories tend to be global leaders in their own rights. Colgate, for example, was once found to be the only brand purchased by a majority of the world’s households. Visa is the world leader in payments outside of China. The Coca-Cola logo is recognized by 94 percent of the world’s population.

 

So even if value is concentrated in one sector, that’s a relative measure that speaks more to the overall strength of American brands than anything else.

 

 

 

 

 

 

 

Categories and brands

Technology is clearly the strongest component of the Top 100 brands, with 19 brands and 38 percent of the total value. They also make up a significant number of the fastest rising brands, with Adobe, Salesforce, and Netflix all increasing their value quickly.

 

The retail category paints a different picture. While the category is well represented with 13 brands and 10 percent of the total value of the Top 100, digging deeper we find both decline and disruption. More than 50 percent of the category’s value comes from Amazon, while eBay ranks as the 50th most valuable brand. Home improvement, however, remains a bright spot in the retail landscape with The Home Depot and Lowes faring well in the digital world.

 

Telecommunications is a saturated but increasingly interesting category in the United States. As people are cutting cords and looking for ways out of pricey TV subscriptions, a wide range of over the top (OTT) services are offering them new ways to access their favorite content. In response, cable and Internet providers are increasingly looking for ways to create their own content, including purchasing large television studios and Internet content platforms. The result is something of a golden age of television in the country, in which the latest developments in popular series are often covered in news media.

 

Payments are another growing category, with Visa making the top 10 most valuable brands. This likely reflects a growing desire for cash-free transactions worldwide. The next strongest category, fast food, is a surprisingly dynamic one in the United States as consumers are increasingly looking for convenience and premium ingredients. Digitally savvy brands like Domino’s Pizza are seeing tremendous growth. Other premium brands in the category, like Starbucks, are also doing well.

 

Not well represented in the Top 100 are home and food brands, once mainstays of American life. Many such brands are under pressure as the American middle class continues to shrink, and incomes at the bottom stagnate. Affluent consumers are increasingly choosing new and disruptive premium brands, while the those earning less choose store brands and low cost generics.

 

Theory in Action

 

Tesla is a premium electric-only car brand that creates meaningful difference by, quite simply, being meaningful and different. Tesla has not only produced products that fulfil its customers’ desire for more environmentally conscious vehicles, it has invented an entirely new, direct-to-consumer sales model. It equips its cars with different driving modes, depending on their moods, and can update their firmware, just as you might upgrade the OS on a mobile phone. All this has built an enthusiastic, nearly rabid fan base that helps the brand grow through WOM advertising. Its valuation should grow throughout 2018 as the company releases its lower cost Model S, enabling it to build financial momentum with a wider customer base.

 

 

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