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Why the smart brands shine …

INNOVATION, CREATIVITY, VALUE

Why the smart brands shine …

and how to shine even brighter

Germany’s top brands are the leaders in Europe on innovation, outshining the Top 30 brands in Italy, France, the Netherlands and the UK.

By innovation, we don’t mean tearing up a winning recipe, fragrance formulation or approach to design. Innovation for its own sake – or so that 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 recognized by consumers.

What makes Germany’s strong position in Europe even more special is that while the Top 30 German brands score 11 index points higher than all brands surveyed, German brands generally are already highly innovative, so the baseline is high.

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

Thinking caps on!

For those German brands that are confident they are already performing well on innovation, here is a timely reminder of the difference that innovation excellence can make to brand strength: the Top 25 brands in the German Top 50 this year are perceived to be significantly more innovative than the next 25. Remember, the “next 25” are all outstanding brands that already lead the country on innovation.

The fastest-rising brands in this year’s Top 50 feature are also at the top of the charts when it comes to innovation. adidas is both the fastest-mover and the most innovative brand in Germany in 2020. Fielmann is in third place in the growth charts, and is second only to adidas as the brand most strongly linked with “shaking things up”, a key aspect of innovation.

When many people think about innovation, they imagine laboratories and people in white coats. It’s true that some innovations come about in this way, but innovation – and, more importantly, perceived innovation – is not about traditional research and development.

Upgrades to a product are just one aspect of innovation; brands providing innovative emotional benefits rather than functional benefits can also shift perceptions around innovation.

What’s just as important as being innovative is shouting about it. If innovation isn’t recognized as such by consumers, it will have no benefit for the brand.

An important part of communicating innovation is to make the message clear and simple. Talk about too many innovations and the effect is the opposite of that you might expect: it creates a confused picture that doesn’t improve consumers’ perceptions at all.

The average Innovation index score of all brands in Germany is 100

Turbo-charging innovation

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 Shaking things up – in Germany this is led by brands like DHL, Sixt and NIVEA

2 Creativity – shining examples in Germany are Lenor, Zalando and Puma

3 Leading the way – think here of DHL, Persil, Aldi and dm

All three of these innovation factors are closely linked. It’s important to note that innovation isn’t just the preserve of sexy startups and small disruptors. Older and bigger brands can create strong perceptions of innovation if they do it right.

Look at Deutsche Telekom, which has grown its brand value by 9 percent in the past year. The brand is over 20 years old and is the sector leader, which puts it at something of a disadvantage when it comes to building perceptions of innovation. Newcomers to the category are instantly going to be thought of as offering something novel.

Yet the brand has managed to shine as a business that consumers believe is “shaking things up", thanks to innovative products such as its Magenta TV streaming service, and a fresh approach to communications. Its #dabei (take part) campaign urges people to seize the possibilities of a digital future. The idea builds on the finding that many German people feel left behind by the fast pace of change, so Deutsche Telekom shows consumers new ways they can #dabei.

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 organization, 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.