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Regions Continental Europe: Strength in luxury sectors explains Europen growth

 

Strength in luxury sectors

explains European growth

 

The Continental Europe Top 10 rose 15 percent in brand value. The brand value of Continental Europe Top 10 closely correlates with the fortunes of the luxury category. A year ago, the luxury category rose 4 percent, and the Top 10 rose 4 percent. This year the correlation was not that close—the luxury category increased 28 percent— but the story was more positive.

 

More than half of the Continental Europe Top 10 are luxury-related. Three are in the luxury category. Two are French—Louis Vuitton and Hermès—and one, Gucci, is Italian. The two car brands, both German, are luxury—Mercedes and BMW. And the personal care brand, L’Oréal Paris is positioned at the premium end of the market.

 

The luxury category brands rose most in brand value. Gucci, which increased 66 percent in value, and Louis Vuitton, up 41 percent, ranked in the BrandZ™Top 20 Risers, brands that increased most in value year-to-year. Hermès rose 20 percent. Factors influencing the rise in luxury brand value included a strong global economy and the rebound of China.

 

But these influences provided lift because the brands had already spread their wings—improving the customer experience both instore and online, and more effectively reaching out to new younger customers, while also serving their traditional clientele. Most significantly, the brands caught the spirit of the times, most notably in the bold designs and colors offered by Gucci.

 

The luxury cars did not achieve the same level of growth, but they increase more in value than they did a year ago, despite a slowdown in the rate of car sales worldwide, even in China. In their own ways the luxury car brands also responded to the times, adding luxury appointments to SUVs, the most popular vehicle among consumers.

 

Three of the Continental Europe Top 10 brands are technology-related. The two telecom providers, Spain’s Movistar and Deutsche Telekom of Germany, Europe’s largest telecom provider, rose moderately in brand value, in character with a slow-growth category. SAP, the German business-to-business software company, accelerated its move into cloud with an acquisition and partnership with Microsoft.