It’s crunch time for Spanish brands
Value of Top 30 plunges 15%
The headline news for Spanish brands this year is far from good. The BrandZ Top 30 have lost 15 percent of their value in just 12 months, declining to $88.4 billion. A decline is no surprise given that we are launching this ranking in the midst of a global pandemic – and given that Spain’s GDP fell by 18.5 percent in Q2. But Spanish brands are suffering more than leading brands in several other major markets, and have taken a much bigger hit than the BrandZ Global Top 100. This indicates that in Spain, brands face a challenge that runs deeper than COVID-19. The virus has accelerated and intensified the pressures on brands, but even a vaccine will not provide all the answers Spanish brands are looking for.
Every category has been affected
From fast fashion to food, automotive to insurance, no category has been spared this year. In fact, only two brands have performed better this year than in 2019, a fact that reflects the changes that have affected every aspect of Spanish life in 2020. Some brands have fared better than others, though, and there are lessons to be learned in building resilient brands from those that are withstanding the pressures of the current crisis.
It’s now or never – brands need to make big, bold decisions
Spanish brands need to take this opportunity to reassess everything about what they do and why, as well as how they do it. Understanding new behaviors and how brands can help consumers navigate these uncharted waters will be essential to surviving this period and building stronger, more resilient brands in future. Change needs to start now. Brands can't wait for a “new normal” to become clear and the “old normal” wasn’t a great place for Spanish brands anyway, which grew by only 1 percent in 2019 even without a pandemic. Brands need to take part now in creating a hopeful, different future for consumers.
Time for something different – fame alone falls flat
Too many Spanish brands are stuck in the old ways of business success, wedded to the idea that the most famous brand in a category is the one consumers automatically reach for when they buy. There’s no doubt that fame is still important; for a consumer to opt for a brand they first need to have heard of it. But brands need to go beyond being well-known or having been a fixture on city streets for generations. They must be famous for something that’s important to consumers and that sets them apart from the competition. At BrandZ we call this Meaningful Difference, and in Spain, Meaningful Difference is sadly lacking.
Brands need to see the bigger picture
In an increasingly digitized world for consumers, brands are no longer just competing for share of the domestic market with other home-grown brands. The competition – and the prize – is now international. Spanish brands should be looking afresh at overseas opportunities to expand in order to spread their exposure to risk and capitalize on those markets where the potential for growth is strongest. That means thinking beyond the traditional export markets for Spanish brands: Portugal and Latin America.
Creative innovation is one way out
There are some positives to be drawn from this year’s BrandZ analysis, and that is that those brands faring better than the rest, both in Spain and internationally, are those seen by consumers as innovative. They are willing to shake things up in a creative way, whether that’s with their products, their communications or their business models. Spanish brands used to be great at this but, as with brands in many other “old Europe” markets, they now tend to lack the pizzazz of brands in fast-growing markets like China, the USA and Japan. If they can change this, they can change their future.
Sustainability is no longer ‘nice to have’
COVID-19 has acted as a catalyst for many macrotrends that were already gathering momentum. Environmental and social concerns have become increasingly mainstream, and consumers want to engage with brands that reflect their views. Sustainability does not need to be costly to a business, but rather the opposite; in fact, BrandZ data shows that the brands with the best reputations for sustainability tend to be 60 percent more valuable than those perceived at being worst on this scale. Spanish brands have to demonstrate not just how they care for their customers, but also how they are genuinely contributing to a better world.
Action points for Spanish brands
Seismic shifts in the business landscape and consumers’ attitudes mean there are tough times ahead, but also big opportunities for brands to engineer growth in the months and years ahead. Brands should focus on the following:
*New habits mean fresh opportunities – This year has created new ways of working, learning, shopping and living, and many of them will become long-term shifts in approach. Brands cannot take for granted that existing customers will keep coming back, even when the crisis abates. The fact that so much has changed this year means people are looking afresh at the brands that they make part of their lives. They see brands as being able to provide comfort and creativity, meaning, reliability and leadership. Brands that invest in showing they have these attributes stand to gain considerably from a world in flux.
*Customer-centricity must be more than a buzzword – All brands talk about putting the customer first but that mission must now, more than ever before, translate into the consumer experience online, offline, on the phone and in brand communications. Uncertainty means consumers are looking for brands they can depend on to do what they promise, every single time. Brands that win consumer trust tend to be those that get recommended and therefore tried by other people.
*Agility and flexibility are essential qualities – This year’s greatest lesson has been that absolutely anything can happen, and no doubt there will be other challenges for brands in the months and years ahead. Being fast, flexible and adaptable – in practical terms and in terms of a strategic approach – is essential not just now but in order to be prepared for future shocks.
*Meaningful Difference is vital - Being different is not just about the product or service being offered, but also the experience consumers have of a brand, and it increasingly relates to how brands are responding to people’s emotional needs, social issues and environmental concerns. Look for what is really meaningful and different about your brand, and then shout about it through powerful communications.