Why now is the time for something new
The most valuable French brands are being outpaced by the leading global brands on a range of important brand measures that contribute to long-term brand health and stronger financial returns.
Although this is the first French BrandZ Ranking, BrandZ’s global valuations have included some French brands since 2006, and it’s therefore possible to track the Top 10 French brands of 2018 over time. The picture this data paints is not pretty; it serves as an alarm call for brands that think they’re doing well enough. They’re probably not – or at least not well enough to protect their future value.
Over the past 12 years, the Top 10 French brands have grown their brand value by 93 percent, while the Top 10 global brands have grown at more than three times that rate, and are now worth 249 percent more than they were in 2006.
These top French brands are now quantifiably less able to generate volume sales than a decade ago, less able to justify their pricing, and – most concerning of all – score below average on the BrandZ measure “Potential”, which is an indicator of future growth. They are less likely to be described by consumers as “meeting people’s needs” than they were in 2006, and they’re less loved. This is a pattern that BrandZ data is identifying in several advanced European markets so is not unique to France, but should be spurring a shift in brand behavior.
What many of these brands have in their favor is that they are very well known, even if that measure – what we call “salience” – has also slipped over time. But fame alone is no longer enough. Brands need to be demonstrably different to the competition and they have to be different in a way that has meaning to consumers.
Filling the widening innovation gap
This has all been accompanied in a drop in how innovative these brands are perceived to be, and not from a particularly strong starting position. The Top 10 brands in today’s French ranking were seen as 9 percent more dynamic than the average brand back in 2006, and are now just 1 percent above average.
Brands that are innovative – and are recognized by the public as such – are more valuable than those that stick with what they know. In the French Top 50, brands that score high for innovation (at least 10 percent above average) are more than twice as valuable as the brands with low innovation scores.
There is a powerful link between innovation and brand love. Love is more than a “nice to have” factor for brands; it makes a real difference to the bottom line. A look at the strongest global brands tracked over a decade reveals that the most loved brands more than doubled their brand value, while the least loved grew by just 32 percent. Love is what helps maintain brand strength and a bond with consumers in between innovations. In France, the Top 10 brands were 20 percent more loved than the average in France back in 2006. Now, that love premium is just 2 percent. It’s barely there.
Don’t reinvent the wheel
In a market where so many heritage brands dominate not just the BrandZ ranking but the national economy, it is worth underlining what we mean when we call on brands to innovate – and what we are not saying.
We are not calling on Chanel to change the formulation of No 5, nor for Hermès to try a different color for its packaging. Shaking things up doesn’t mean starting from scratch. There is tremendous value in a brand having a long heritage, in being seen as a market leader and in being seen as genuine – the real thing. This rich history does not need to be denied in order for a brand to be innovative. But without innovation, there is the risk of stagnation.
Being seen as dynamic and setting trends is about being relevant; as relevant today as a decade ago or a century ago. For some brands, that might mean changing recipes, ranges and designs, and for others, it’s less about the product and more about the way the brand relates to consumers and projects its brand voice. Coca-Cola is regularly ranked one of the most innovative brands in the world. The drink in the can hasn’t changed, but the brand has an incredible focus on relevance, and bringing something to people’s lives that goes well beyond refreshment. In a completely different category, Italy’s Gucci is an outstanding example of a heritage brand that has made itself hyper-relevant to young consumers, by embracing the digital channels young people are using, and providing interactions that they find genuinely engaging and valuable. A brand of any age can surprise and delight people. This is all part of innovation.
When we consider a broader group of 1,350 French brands – not just those that made the Top 50 ranking – it is clear that there is plenty of innovation going in France. Some of it is by smaller French brands that don’t make the most valuable Top 50 due to a lack of scale, and much of it is by international brands that have a strong presence in France and are rewriting the rules in their categories. French brands that aren’t innovating need to look out; others around them are innovating and are preparing to steal their lunch. There are several ways a brand can position itself as an innovator. One of the strongest factors in innovation is “shaking things up”. Many of the best brands for shaking things up in France are outside the BrandZ Top 50.
Shaking things up – France’s best performers
Being seen as a category leader is another way of being innovative. In France, Decathlon is again a star performer, with a “leading the way” score 22 percent above the average for all brands. The telecom provider Free is, similarly, seen as a category leader, as are Michelin, EDF and Orange.
Creativity is an aspect of innovation, and the top performers from the BrandZ ranking for being creative in consumers’ eyes are: Yves Saint Laurent, L’Occitane, Decathlon, Leroy Merlin and Free.
Hear them roar
Learning from the global ‘Fearsome Five’
The five brands at the top of the BrandZ Top 100 Global Brands are not just huge and valuable, they’re continuing to grow at a tremendous pace, and much of that comes down to innovation.
Google, Apple, Microsoft, Amazon and Facebook - the Fearsome Five, as we call them – are in what might be considered a hot category in which it’s easier to grow. But let’s not forget that while these are youthful brands, aside from Facebook, they are not particularly young any more. They do work hard to stay fresh, however, and they are seen as being among the most disruptive brands in the world from any category, even though they are all market leaders.
This commitment to innovation is evident across all five of these brands.