Top 100 worth $134.8 billion
Taken together, the BrandZ™ Top 40 Most Valuable Canadian Brands 2020 are worth $134.8 billion, which represents a decline of 6 percent, or $9 billion. Canada’s top 30 brands, when compared to other countries’, are roughly average in value, though ahead of similarly sized European economies, like Spain and Italy. On the bright side, most countries’ brand values tend to be similar to each other when you adjust them for the size of their GDPs. By this measure Canada’s brands come out just a bit ahead.
Banking is by far the largest category in the Top 40, accounting for 42 percent of the total value across 6 brands. The brand value of the Top 40 is also quite concentrated, with the top 5 brands accounting for 53 percent of the total. In addition, the banking, insurance, and telecom providers comprise 72 percent of the total value. These are highly regulated and lightly differentiated categories, and as a result, they tend to weigh heavily on the overall brand health and equity metrics of the Top 40.
Brand value is concentrated in Canada
RBC remains on top
For the second year in a row, RBC has maintained the top spot in the ranking with a total value of $21.7 billion. That places it ahead of rival TD bank, which clocks in at $17.2 billion.
The two also continued to excel in terms of Brand Contribution, or the percentage of value attributable to the brand rather than financials. Both scored in the top 10 for this metric, and RBC again repeated as the top bank, likely due to its pervasive influence on Canadian life.
The top gainer in terms of brand value is, by a huge margin, Lululemon, which grew 60 percent. Lululemon is benefiting from a combination of ongoing trends for casual fashion together with a pandemic that has sent consumers looking for home workout gear and comfortable loungewear. Much of the increase in brand value can also be attributed to its overseas contribution and a 90 percent year-over-year increase in its stock price.
Welcome to the party
The only new member of the Top 40 club is discount retailer No Frills. While you might lay this at the feet of the pandemic, which has stressed consumer wallets, such a simple explanation shortchanges the brand. No Frills has greatly strengthened its equity in the past three years with its successful outreach to savvy value shoppers, which it has termed “haulers.” It is also the number one brand in the Top 40 for fair pricing.
Safety lies in difference
Difference is a BrandZ™ metric that shows, unsurprisingly, that a brand is offering consumers something that they can’t find anywhere else. This year, it has proved decisive for brand stability and growth. The top 10 brands by this measure grew their brand value 6 percent year over year, while the Top 40 overall fell 6 percent. Different brands are also charging a greater premium and derive more of their brand value from overseas contribution.
Difference is also an area where many top Canadian brands have work to do. The Top 40’s average for the metric is 96 (where the average brand scores 100). This places Canada last among the seven countries that have already been ranked in 2020. However, as noted elsewhere, 72 percent of the ranking is comprised of brands in lightly differentiated categories.
Have brand, will travel
Relative to their G7 counterparts, Canadian Top 40 brands underperform when it comes to generating equity beyond their borders, with only 28 percent of the total brand value coming from overseas contribution. Banks and insurance made up two- thirds of that total, with most of the rest coming from Lululemon. Difference also appears to play an outsized role in international expansion, as Lululemon is widely seen as having a unique offering that enables it to penetrate markets around the world.
The experience deficit
Top Canadian brands also lag behind their global peers on Brand Experience, a metric that shows how well a brand is able to anticipate and meet consumers’ needs. One reason might be that Canadian consumers are willing to trade off some of the experience in favor of a good value, and that large brands are forgoing developing experiences in order to meet that preference. This approach may be short-sighted. Seventy-eight percent of Canadians also report that they have had such a good experience with a brand that it will always be their first choice.
Retail or re-frail?
Value and grocery retailers dominate the Top 40 numerically, contributing 13 of the top 40 brands. Together, they grew 13 percent year-over-year. Much of this is naturally due to people staying home, and thus purchasing more food in stores. The category’s success is driven largely by how Salient, or well known, these brands are. That said, they appear to be falling short with both their brand and online experiences, even as 58 percent of Canadians report they have shifted to online shopping for certain products during the pandemic.
Top 5 learnings for marketers
1 Innovate or risk everything
Canada is awash in technology talent, yet the Top 40 lacks a single technology brand large enough to be included in the ranking. In addition, Canada’s top brands score the lowest of any country in terms of innovation. Clearly, there is an opportunity to start rethinking how to interact with consumers. And if brands choose to do so, it’s likely they will find plenty of young Canadian technologists willing to help them.
2 Elevate the experience
Canada is not alone in its citizens’ initial reluctance to shop online, but it also is not alone in the degree to which attitudes have changed during the pandemic. With a 100 percent increase in online buying, Canadian brands have a huge opportunity to lock customers down as they transition into new ways of buying. It’s essential that they create the kind of modern, ultra-convenient shopping experiences that have shaped consumer expectations around the world.
3 Dare to differentiate
From an armchair with a glass in hand, it is easy to urge brands to find something that can differentiate them from the pack and make them stand out in consumers’ minds. However, no one said brand building was easy. Identifying an approach or offering that can make a brand unique and valuable in a customer’s mind is essential to preserving value, driving growth, and expanding overseas. Let the hard work begin.
4 Lean into Brand Canada
Canada has probably never cut a more dashing and respected figure on the world stage than today. And since the pandemic has begun, the positive vibes of its own citizens have only accelerated. According to Kantar MONITOR, 87 percent of Canadians, for example, say that buying products made in Canada is better for the environment. So, if you’re a Canadian brand, it’s time to stop being shy about it.