Movers & Shakers: See How Your Favorite Luxury Brands Fared On 2015s Best Global Brands Report
Last month, brand consultancy Interbrand released its annual Best Global Brands report, ranking the world’s 100 most valuable global brands. Here, we reveal which luxury players made the cut.
The theme of Best Global Brands 2015 centers around “Brands at the speed of life” and supports Interbrand’s prediction that the brands that will succeed in the coming age “are those that take the time to empathize deeply with people’s priorities; meet them wherever they are, when and where they want; and use technology to power products and services that align and integrate into their everyday lives: because business and brands need to happen at the speed of people’s lives." It’s not surprising then that this year’s top 10 most valuable global brands all hail from the technology sector, with behemoths Apple and Google leading the charge. For the third year in a row, Apple (#1) and Google (#2) – valued at USD $170.3 billion and USD $120.3 billion respectively—claimed the top positions, with Apple increasing its brand value by 43 percent, compared to Google’s 12 percent rise. Microsoft (#4) edged ahead of IBM (#5), with Amazon (#10) entering the Top 10 for the first time with a brand value of USD $37.9 billion. Luxury, however, again staked its claim as an ever-increasing force, with 17 luxury brands ranked in the Top 100 Best Global Brands, up from 14 in last year’s report.
It was luxury automotive brands, which dominated this year’s ranking, with BMW (#11), Mercedes-Benz (#12), Audi (#44), Porsche (#56) and Landrover (#87) all making an appearance in the top 100. As is evident from its track record, Mercedes-Benz in particular is a stand-out example of a luxury brand which has managed to navigate the changing luxury landscape and evolve, without diluting its brand identity. Despite having embarked on a series of projects to diversify its brand power and capture new markets—including its ‘Mercedes me’ lifestyle concept and a set of luxury apartments in London in collaboration with Fraser Hospitality Group, to be unveiled this fall—Mercedes-Benz always stays true to its roots and continues to innovate in its core category – luxury cars. The automaker recently released its re-invented Mercedes-Maybach S600 model into India on September 25, and revealed this month that it is currently busy working on its next model for its prestigious E series which it plans to roll out in 2017.
Overall though, the rising prevalence of luxury brands in the rankings reflects the staying power of luxury despite market challenges, particularly in China, which have battered a few of the fashion players – including Prada whose first half profit this year declined by 23 percent to 188,6 million euros, amidst “recent instability in Asia”. Yet, despite this, the Italian house moved up in the rankings this year and increased its brand value by four percent to USD $6.2 million, having recently committed to a strategic move set to adapt and streamline its operations to the new working environment and reduce costs. The latter will include cuts to “discretionary expenses,” according to a company statement earlier this year, along with a review on expansion, with the retailer pledging to open just half the number of stores it did last year. It’s this calculated approach to business and flexibility in adapting to market changes which has clearly served the brand well over the years, as demonstrated by its stellar rise from a #93 ranking in 2005, to #69 today.
Photo Credit: Luxury Society
Moët & Chandon—a new entrant at #99—represents another brand fighting back, having slipped off the rankings in 2014, following a tumultuous brand value journey since its #92 ranking in 2005. More interestingly though, the renaissance of Moët & Chandon—one of the oldest brands in the LVMH portfolio which dates back to the 18th century—also signals a new trend in what makes a brand boom these days. As Rebecca Robins, Interbrand Regional Director EMEA LatAm, and co-author of the leading book Meta-luxury, notes, Moët & Chandon also tops the five oldest brands in the list (accompanied by Colgate, Citi, AXA and Hermès) which span a combined legacy of over 1000 years—suggesting that legacy brands are back.
As identified in Luxury Society’s recent summary of the BrandZ Most Valuable Brands Report, heritage is still playing a major role in the future survival and differentiation of luxury brands from the crowd. Hermès—with 178 years of history behind its brand, and counting—ranked as one of the top five ‘Risers’ in the entire report, rocketing from #46 in 2014, to #41 this year. The brand’s trajectory since its debut in 2005 at #82 has been steadily heading north, jumping one to three places up the ranking each year, barring its stellar leap from 2008 to 2009, where it skipped six places from #76 to #70. Last year, the brand again soared to new heights, jumping eight places—#54 to #46—with Robins attributing its continued performance to its long-term strategic focus, a strong sense of self, and a solid history in the luxury milieu.
Photo Credit: Moët & Chandon
“In the vernacular of luxury, you might say legacy brands are the new black,” Robins mused in a recent piece for The Guardian UK. “When Apple surpassed Coca-Cola three years ago to take the #1 spot in Interbrand’s best global brands study, it triggered a cascade of commentary on the rise of brands born of a new and different age. However, delve deeper into the study and what’s fascinating is the ascent of brands that have spanned generations.”
“Eschewing conventions of the term ‘luxury’, Hermès is a brand that has always represented excellence as a conviction, and continues to do so with an uncompromising level of focus,” Robins adds. “There is absolute clarity in what the brand stands for and consistency in how the brand is experienced. Hermès has achieved a compelling balance between business growth and the protection of the brand’s integrity and desirability.”
Cartier, ranking at #57 today, is another example of how history is holding down luxury—the jewelry marque has 169 years behind it and has slowly but surely made its way up through the ranks since 2005, when it debuted in 89th place.
Harley Davidson—arguably the most authentic luxury motorcycle brand on the market and the only one to make the list—also increased its brand value by 14 percent to USD $5.5 million.
Photo Credit: Apple/Herm?s
While authenticity is important, however, brand value doesn’t just accumulate with experience, Robins says. “The success of a brand has little to do with a brand’s age, but everything to do with its ability to stay relevant.” Often, strategic partnerships, innovative campaigns, or steps into new, digital territory are the catalysts for brand growth, and boost reputation through collaboration. Indeed, as identified through Luxury Society’s recent analysis, leveraging influencers in particular is both a lucrative and rising trend amongst luxury brands looking to further their reach and maximize impact. The success of this strategy is reflected through various luxury brands which made the ranking cut this year, many of which have also made moves during the last few months to increase brand desirability through linking with influential platforms, social media stars, fellow brands, key opinion leaders, and the like.
Hermès, again, is also good example on this front, having recently hitched its wagon to the rising star power of the number-one ranked technology brand, Apple, through the Apple Watch/Hermès design collaboration. LVMH, owner of Moët & Chandon and Louis Vuitton, has also asserted a serious commitment to technology and e-commerce of late—most recently revamping Louis Vuitton’s global hotspot City Guides which will be available via a mobile app for the first time as of November 2015. Despite the fact that Louis Vuitton slipped one place to #20 this year—it still lays claim as the highest-ranking luxury fashion brand, with its value more than doubling Hermès’ to date.
Hugo Boss—also up one place in the ranking to #96—has similarly renewed its commitment to e-commerce and has also been seen boosting its brand by leveraging new influencers via its #MasterTheLight project with bloggers Bryan Yambao of Bryanboy, Rumi Neely of Fashion Toast and Mariano di Vaio of MDVStyle.
Photo Credit: Burberry
Despite reporting stagnant financials for the first half of 2015, Burberry stood its ground and was the only luxury fashion brand this year to maintain an even keel, staying put at #73—supporting its brand growth via a number of innovative digital partnerships and initiatives launched in quick succession over the past year. The British behemoth revealed revenue for the six months ended Sept. 30 came in at £1.1 billion (€1.5 billion), unchanged from the same period last year, citing a sharp sales slowdown in China and Hong Kong.
Never one to rest on its laurels, however, Burberry re-fueled positive buzz around its brand earlier this week, announcing that it has tapped legendary fashion photographer Mario Testino to shoot an exclusive 2016 campaign, for its Snapchat fans. The move follows another recent Burberry x Snapchat initiative last month, which saw the two team up to produce a multi-tiered program surrounding the Burberry spring runway show.
Photo Credit: L'Oreal
Similarly, L’Oreal, the only luxury beauty brand to feature in the ranking at #43, has embraced digital technologies this year and made a commitment to “accelerate L’Oreal’s digital transformation regarding consumer experience, service-based innovation, customer service and technology platforms”, as Chairman-CEO Jean-Paul Agon put it. The number one cosmetics brand in the world has since strengthened its brand through both digital innovations—the company recently unveiled its Makeup Genius, an app that redefines digital engagement—and strategic tie-ups, such as its License Agreement with Proenza Schouler in June for the creation and development of fine fragrances. Its brand strategy is paying off—L’Oreal ranked #43 in the Best Global Brands report, raising its brand value by six percent from 2014 to USD $10,798 million, and reported a 14.1 percent rise in first-quarter sales, with quarterly sales of 6.436 billion euros (USD $6.93 billion), up four percent on a like-for-like basis.
Tiffany & Co., which has been on the expansion trail—announcing its entry into the Chilean, New Zealand and Thai markets this year—has also upped its brand value by six percent to rise from #71 to #66 this year.
Photo Credit: Gucci
Still reeling from their respective business restructures, Ralph Lauren and Gucci were the only two luxury brands to fall significantly in the rankings this year, slipping -7 percent and -14 precent in brand value correspondingly. Designer Ralph Lauren stunned the luxury industry last month when he confirmed his departure as chief executive of the fashion company he founded nearly 50 years ago and handed the top job to Old Navy executive Stefan Larsson. However, the business had been in a state of fluctuation far before that, with several moves—including a restructure which saw five percent of staff (or 750 jobs) slashed from the company in May as part of its approach to building a new business model, impacting on its brand image.
Similarly, Gucci—which appointed the relatively unknown Alessandro Michele as its new creative director earlier this year—has been in a state of flux as it moves to become comfortable in its evolving brand skin. However, the shift has clearly had repercussions on its brand value, as have its struggles in China as demand weakens. Commenting to The Wall Street Journal in April as sales slid for the label in the first quarter, Kering Chairman & CEO François-Henri Pinault said the figures reflected “a complex economic and monetary environment as well as the transition under way at Gucci,” but said the revamp of the business would be the parent company’s “top priority” in the year ahead. In tandem with this, Michele has been tasked with redefining luxury and, since his appointment, the brand has visibly altered its look and focus, moving away from the ostentatious and into a new realm—even introducing a new motif to its jewelry collections, drawing inspiration from the brand’s spring/summer 2016 runway presentation.
Photo Credit: Luxury Society
Commenting on its brand value trajectory, despite the fact that it is today one of the top five steepest decliners in the ranking, Robins says that Gucci is well on its way to staging a comeback. Given that sales at Gucci increased for the first time in two years in the second quarter—up 4.6 percent on a comparable basis—it looks like she’s on the money. “Gucci is embarking on a new creative direction. After a few years of slowdown, the focus now will be on enabling this iconic brand to become highly relevant and trendsetting again,” Robins concludes.
Commenting on the 2015 results overall, Rebecca Robins, Interbrand Regional Director EMEA LatAm, and co-author of the leading book Meta-luxury, said the rankings ring in a stark reality for luxury brands. “The movement that we’re seeing in the Best Global Brands in luxury this year is indicative of further potential change to come. The shifts in brand value are not insignificant, with Hermès, one of the top five highest risers in the report, to Gucci, one of the top five steepest decliners. The increasing imperative now is for luxury brands to look long and hard at sustainable, brand-centric plans for growth.”