We’ve stopped what we are doing and creating your personalized BrandZ™ report, which will appear in your inbox soon.

Creativity the way to fill innovation gap

Innovation, Creativity, Value



Creativity the way to fill innovation gap


Innovation is the engine room of strength in brand value in Australia, with the brands seen as most innovative protected from the worst of the conditions that are dampening sentiment in their sector. But it is also the attribute that many Australian brands are sorely lacking.


This innovation gap – between what’s needed to drive success and what consumers feel about Australian brands – is compelling evidence for a business to rethink its approach to innovation.


By innovation, we don’t mean tearing up a winning recipe, fragrance formulation or approach to design. Innovation for its own sake – or so a brand can issue a press release – is not true innovation at all, and could actually be damaging to a brand.


Meaningful, powerful innovation is about staying relevant to existing audiences and appealing to new ones over the long term. It’s about leading a category and offering something fresh and creative – being brave in undertaking something new, and then being bold enough to shout about it, so that the innovation is recognised by consumers.


Overall, perceived innovation is by far the largest driver of brand growth in Australia – driving brand value growth at 10 times the rate of any of the other Vital Signs (purpose, communication, experience and love).


Yet the average innovation score for the Australian Top 30 is the lowest of any of the Vital Signs (although is matched by a similarly low score for experience).


And, when the performance of leading Australian brands on innovation is compared to that of other markets’ brands, Australia puts in a poor performance. In fact, Australia ranks only 10th on the world stage out of a dozen markets.


There is, therefore, a significant opportunity for Australian brands.



World Leaders on Innovation


The average innovation score of all brands in each market is 100.




Brands perceived to be both innovative and Meaningfully Different are much more likely to grow. Innovations must therefore be meaningful to the consumer in order to fuel brand value growth.


Of the 32 brands common to both the 2018 and 2019 BrandZ Australia rankings, those with low scores for innovation and Meaningful Difference have an average value of $1,960 million, while those perceived as being strong on both measures are worth an average of $4,054 million.



Time to get creative


So, how does a brand improve consumer perceptions regarding innovation?


There are three aspects of innovation, and strength in any or – ideally – all of them can help boost a brand’s reputation for innovation.


They are:


1 Disruption – in Australia led by brands like Australia Post, Afterpay, Bunnings and Sportsbet


2 Creativity – shining examples in Australia include Westfield, Bundaberg, Arnott’s and Star Entertainment


3 Leadership – think again of Bunnings, Australia Post, Arnott’s, Telstra and Qantas


All three of these innovation factors are closely linked, and while the Top 30 Australia brands compare well against the rest of the world’s top brands for leadership and disruption, average creativity scores for the Australian Top 30 are actually lower than the average for all Australian brands, and significantly lower than the creativity levels of leading brands in other markets.


This perceived lack of creativity is at the heart of the innovation gap for Australian brands. By improving their creativity credentials, brands here could influence consumers’ perceptions of innovation and, ultimately, unlock value growth.





Westfield, Bundaberg and Arnott’s lead the way on creativity among the Top 40 Australian brands. Each demonstrates in a different way how creativity-fuelled innovation can ensure continued relevance for long-established brands, and can help brands beat market-wide trends that put pressure on brand value. All three brands outperformed the market for brand value strength this year.


Westfield has been creative in its approach to its entire reason for being; it is rethinking the role of physical shopping centres in light of the surge in e-commerce, and is reinventing its centres with a view to making them leisure destinations that provide much more than a place in which to buy things. Its “Destination 2028” vision describes a future of shopping malls featuring sensory gardens, waterways and flying drones. The new Westfield Coomera centre, on the Gold Coast, is a move towards that vision, with almost half the space there devoted to dining, leisure and entertainment.


Bundaberg expresses its creativity in a very different way. The product itself, a dark rum prepared in the same way since 1888, hasn’t changed at all. But the way the brand communicates is where its creativity and innovation shine, ensuring that this heritage brand is just as relevant to today’s drinkers as it has been in decades past. Bundy’s recent partnership with Aussie swimwear brand Budgy Smuggler not only emphasizes its local heritage, but also shows the fun side of the brand. A “Bundy Smuggler” range of brightly coloured swimwear has been released, linked to the ready-to-drink Lazy Bear Bundy rum with ginger and lime drink.


Arnott’s is taking the varieties that generations of consumers have grown to love, and using them in different ways to create new moments of consumption. Many of these are built on creative collaborations with other much-loved businesses. Chicken shops working with Deliveroo and Arnott’s are now offering Shapes Fried Chicken, and Hungry Jack’s is offering Arnott’s Shapes Barbecue Shaker Chips. Flavoured milks based on classic Arnott’s biscuit flavours are among other recent launches.



MAKE IT HAPPEN – Action Points for Innovation

1.     Consider scrapping the ‘I’ word – The word “innovation” can be intimidating, and make the process feel off limits to all but a few individuals or department. “Ideas” is more inclusive, as everyone can come up with ideas.

2.     Think beyond new product launches – Sometimes the greatest innovators make only incremental changes to their products; others change not just the product but their service or the experience around it.

3.     Let consumer needs and desires be the driving force – Focus on purposeful innovation that serves real human desires, needs and feelings. This is how many startups are disrupting established brands.

4.     Look afresh at your organisation, not just new tech – Technology can be a great way to deliver innovation or make it possible, but it’s rarely the tech itself that makes a difference to someone’s life. Every brand touchpoint plays a role in perceptions of innovation so pay attention to them all, not just the newest and shiniest. There may be a need for more fundamental change – inventing new institutions, creating networks and partnerships not hierarchies.

5.     Be vocal – The first step is to innovate, and the second is to shout about it. The brands perceived as being the most innovative are often those that communicate clearly and frequently about what they’re doing.