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Interbrand-2020-Press
Matt Furkan Kocer

Matt Furkan Kocer

Brand Leadership Review

For more than 45 years now, Interbrand has emerged to be the best brand consultancy (Vasileva, 2016). It is considered the founder of iconic work and developed several brand-building tools in the modern world where customer expectations supersede business because of innovation speed and abundance of choice. Along with other leading brands, Interbrand is designing the future of branding. When customers are turned to active customers, clients will continuously develop their brands, making them confident enough to create utility and spark desire courtesy of the iconic moves made. There is an overall increase in value for the table to US$2,336,491m, whereby big tech is the driving growth. Interbrand grew on average by 14% compared to other growing brands. Tech platforms and technology increased by 20%. Tech platform and technology brands stand for 48% of the total table value compared to 17% in 2010. Through its annual report, Interbrand analyzes how the best companies successfully are sailing a business landscape that is rapidly changing. With more than 30 years’ experience possessed by Interbrand, the company came up with its brand evaluation methodology. The three fundamental key pieces forming the evaluation method are the brand’s ability to create loyalty and stay competitive, the role the brand acts in purchase decisions, and finally, the financial performance of branded services or products.

Interbrand top 100 Ranks Review.

According to Raja Rajamannar, Mastercard chief marketing, and communications officer, Interbrand’s Best Global brands report is significant for organizations and brands. They help them know how customers perceive them in their minds and hearts.  He says that the messages are essential in this unprecedented time when consumers’ trust is crucial, and their behaviors change. The reports are helpful to companies to help the companies understand how they can offer excellent services to the community. The 2020 ranking of the Best Global Brands was affected by the effects brought about by Covid-19, which resulted in the closure of many global brand shops. The Covid-19 development saw some brands rise in value while another drop in value immensely.  The logistics industries and brands benefitted from the Covid-19 pandemic effects, whereby they recorded an average growth of 5%. The increase in valuation of logistics resulted from the lockdown imposed in different countries, making the logistic industry play a central role in our lives.

Tesla and Zoom found their way through the 2020 Interbrand’s Best Global Brands Report, whereas the biggest risers in Ranking were Netflix, Spotify, and Amazon amid the Global Covid-19 lockdowns. Microsoft entered the top 3 by overtaking Google. The 2020 re-entrants in the Global ranking are Johnny Walker(#98) and Tesla(#40). The 2020 new entrants include Johnny Walker at number 98, Zoom at number 100, YouTube at number 30, and Instagram at number 19. The Retail industry suffered amid the Covid pandemic while the technology sector is growing at a fast rate.  The Tech industry was dominant in the top 10 with three brands Apple taking the first spot, Amazon at number two, while Microsoft took the third spot. According to the Interbrand ranking table, Instagram leaped a lot while Amazon had the most significant increase in value. Netflix (#41) and Spotify (#71) achieved the highest rise in ranking. Netflix brand value increased to US$12,665m, which is a 41% increase, while Spotify brand value increased to US$8,398m, which is a 52% growth rate. These media companies benefitted from  Business models. Model business subscriptions contributed to 62% of the double-digit risers. 

Amazon had an exemplary performance in the ranking taking position two while Apple retained its position 1. Amazon’s value increased by US$200,667m, which is a 60% increase, while Microsoft increased by US$166,001m to overtake Google and attain the third spot. Google moved to position 4, the lowest since 2012. On the other hand, Samsung, for the first time, entered the top 5 positions. The value of the top 10 brands represents half of the table’s value. The other top brands include Coca-Cola, Toyota, Mercedes-Benz, McDonald’s, and Disney, taking positions 6 to 10. The top 10 brands are the same as the previous year though there are slight changes in the order.  The brands Zara and H&M dropped in value by 13% and 14%, respectively, which made these brands drop by at least six spots in the 2020 Interbrand Top 100 Global Brands ranking. Luxury Brands were negatively affected by the Global pandemic after two years of success, with only Hermes (#28) depreciating by 1-9%. The brands DHL (#81) and FedEx (#75) recorded an increase in value within the logistics industry. The brands Mastercard (#57), Visa (#45), and PayPal (#60) rose in ranking to 5, 10, and 12 spots, respectively.

Inter Brand - Best Brands 2020 by Kocer Media

On the other hand, Samsung, for the first time, broke into the top 5.  Lastly, too many people’s predictions and expectations, there were supposed to be changes in the top 10 from the previous year’s ranking due to the Covid effect though this was not the case since the top 10 brands retained their spots. It was surprising how the value of the table increased from 2019 by 9%, which is equivalent to US$ 2,336,491m.

In my opinion, high-profile payment brands like PayPal, Visa, and Mastercard should be ranked slightly above the positions they attained in the 2020 Interbrand Top 100 Global Brand ranking. The brands rose by between 5-12 places. However, there is a strong argument that they should rose higher than that due to the Global Pandemic that necessitated the faster implementation of programs to support businesses locally. The covid effect also resulted in an unexpected change to Electronic payment as the primary method. The shipping companies and logistics brands were also supposed to perform better than they did, even though they had positive growth. This is because of the lockdown-induced boom in online shopping. Netflix was considered to be ranked higher than it was because of the increased usage and demand that resulted from people staying indoors. As much as social media and communications performed well, it is not justifiable to rank Instagram(#19) and YouTube (#30) because they made entry to the list for the first time. A place below number 50 would have been at least since they were new entries. The clothing brands and industries suffered greatly from the pandemic due to the closure of Brick-and-mortar retail operations. Zara was expected to drop more than six spots In the ranking while the Luxury Brand –Hermes, was supposed to be among the top 50 but below the 28th spot, it attained.

Factors Changing Future Brand Leadership Positions

Consumer Demand Shift and Its Impact On Future Leadership Board

The pandemic has pushed people’s behavior in a different direction, whereby some aspects are irrevocable. The economic instabilities due to the lockdown and public health measures hint about changes in market dynamics. Customers or consumers drive the market competitiveness, but due to the covid effect, they are experiencing behavioral transformations, which will bring about permanent demand shifts. The permanent demand shifts that irrevocable behavioral modifications will cause will significantly impact the future leadership board. The changes affect people’s spending patterns as they tend to spend less on non-essential products like clothing and luxurious brands. The irrevocable behavior includes e-commerce, mobile and social media platforms, and digital payment modes. This behavior leads to digitalization in consumer shopping and buying, making these brands rise high on the leadership board. The technological platforms will play a crucial role in customer retention and transaction, creating awareness and reaching customers post –Pandemic.  The change in consumers’ demand and priorities as seen markets suffer adversely positively and negatively. The irrevocable behavior will see certain brands grow in value while others fail, affecting the overall leader board in the future.

The shift in demand for certain products and services

The demand for certain products and services is likely to shift. The changes are likely to be attributed to the global pandemic that is affecting the universe. The covid effect will contribute to unprecedented shifts in demand for various products.  On the other hand, the pandemic’s impact resulted in an economic crisis that challenges businesses and governments to adapt quickly to the new world of uncertainties. The new world that emerged has two workforces whereby one is connected remotely and digitally while the second is on the frontline of the pandemic, carrying out essential services and performing physical labor. Technology is becoming a ‘mission critical’ infrastructure and urgent investment for operations in the two cases. Technology through predictive analytics, cloud-based data, teleconferencing, tracking, diagnostics, and automated services will be in high demand than bricks & mortar retail and offices, which will be demanded less. Teleconferencing brands like Zoom will be highly demanded, while brands like Zara will be demanded less. Brands that depend on human interactions will suffer negatively since their demand will reduce. The communications and media industry, healthcare and medicine, and online shopping brands will be advantaged because of the imposed lockdown and travel bans.

Impact of brand attachment and loyalty to dynamics of leadership

Brand attachment and loyalty are the top key factors that will change the dynamics of leadership. The majority of brands try to identify their valuable customers through numerous ways that range from sharing messages to measuring affection and attention to the length of the tune. Therefore, emotional attachment and loyalty are critical attributes that will result in a brand’s success, impacting leadership dynamics. Brand attachment and loyalty have the power to influence profitability and sales. According to different surveys and studies, emotionally attached loyal customers cement the highly profitable customer base. Emotional attachment and loyalty increase one’s chances of engaging with certain brands, making them grow in value (Levy, & Hino, 2016). Brand success is driven by attached and loyal customers who enhance ROI growth by facilitating more sales, higher resonance, and retention. The brand will be seen as ‘talking to’ customers, hence improving engagement. There are three levels of attachment that that will contribute to changes in leadership dynamics.

The first group of customers is Enthusiasts, who are perceived to have a higher attachment to a brand. Enthusiasts are always responsive to ads, highly engaged, and dedicated to advocating for a brand. This group can increase sales, engagement, and potential, and positive viral social sharing, thus making a brand grow in both its value and position on the leadership board. The second group is known as conquests, which comprises customers slightly attached to a brand than enthusiasts even though they are highly responsive to ads and highly engaged. Conquests can also increase sales; hence they are a target by many brands’ marketers. Their allegiance is not as strong as Enthusiasts; therefore, they steal shares from competitive brands. The last group is known as Expansions. Expansions develop the slightest attachment to a brand; hence, brands wish to expand their customer base to build their brands effectively. Targeting Conquests and Enthusiasts’ audiences can lead to an increase in ROI in terms of improved sales.

Existing consumers are more accessible to sell to; hence brand loyalty increases the chances that a current consumer will try a new product (Bilgin, 2018). the possibility of selling to an existing customer is high compared to selling to a new one. It is always less costly to cling to a current consumer than bring a new one in the field—the more satisfied the customer, the more he will spend, which means more revenue. Loyal customers are likely to share the satisfying experience they always get with family members, friends, and loved ones. Therefore, brand loyalty creates momentum, taking a brand farther in value growth and leadership. Brand loyalty and attachment provide one a chance to cement relationships that will sail the business forward compared to its competitors.

Surprises for Next Year’s Ranking

The ‘Covid effect’ impacted Interbrand’s Best Global brands whereby it saw some brands rise in value while others fall drastically. One of the industries that have benefitted from the pandemic is the payment industry. People are shifting to Electronic mode of payment and rolling out programs that support businesses during this period of Corona. The shifting has dramatically benefitted and will continue to help the trusted brands ensure that online transactions are effective during this uncertain economic period. Through the 2020 Best Global Brands analysis, it was concluded that three factors could make brands make a better possibility of a promising future and build individual confidence and economic resilience. The factors will also determine how the brand will perform in the following ranking. According to Global Interbrand, Charles Trevail, the factors relevance, engagement, and leadership will enable brands to sail through these economic uncertainties associated with the accelerated business landscape change. One of the brands that are projected to rise drastically in the following ranking is PayPal.

Nothing matters most, like keeping customers’ money safe and mitigating their concerns around fraud in these times of economic uncertainties and heightened anxiety. PayPal is rising among the ranks rapidly to keep its customers safe (Trautman, 2015). It is considered among the trusted electronic payment method, and it has immensely benefitted from the pandemic where it rose by 12 positions. PayPal is projected to increase drastically in the following ranking done by Interbrand again. The projection is based on the role the brand plays in purchase decisions, its services’ financial performance, and the brands’ ability to create loyalty and compete favorably. 2020 was momentous for PayPal since it performed exemplary compared to other digital payment methods. Its heavy reliance on e-commerce saw it outdo other payment methods. The new push in the physical world has enabled PayPal to grow in ranking, and the same is projected for next year. There are three reasons that I think will result in a drastic rise in PayPal’s rank.

The first reason why PayPal is expected to rise drastically is its advancements in ‘digital Wallet’ abilities. PayPal recorded its highest growth rate in the third quarter of 2020. There was a 25% increase due to the new 15.2m active accounts. The driving force behind this increment was e-commerce due to the travel bans. The brand is expected to reap more in 2021 since the global economy is normalizing faster. Through its new mobile app, PayPal is taking measures to ensure it has grown to be a tech-based financial institution rather than a digital payment mode. Abilities added to users like investing in cryptocurrencies, merchant service launch, and integrations between honey acquisition and its digital payment capabilities will see the company perform well in 2021. Another promising segment is PayPal credit which has a zero-interest rate. Credit and debit cards correlated to the digital wallet blur the line between a full-brown bank and financial technologies. Capabilities and abilities added by PayPal will give businesses and consumers reasons to use their services often.

Another reason why PayPal will rise higher is its more profound presence in the physical world. The catalyst behind PayPal’s success over the years has been active user transactions. PayPal’s active user transactions have shown an upward trend moving from an average of 28 per user in 2015 to over 40 transactions per user in 2020. The brand comes first in customer’s minds concerning daily spending. The reason why PayPal has an upward trend is that it is geared towards e-commerce. PayPal is expected to benefit significantly from its QR code payment, giving it exposure to the physical world. It is anticipated that PayPal will reap heavily from its push into physical stores through its Point-of-sale mobile-based contactless system for users. The QR code system will ensure that it becomes a daily use app if it makes its way into more stores. The last reason that will ensure PayPal improves in ranking is that profits are gained faster than revenue. This is attributed to the increase in its users, which means more transactions. The brand has an already established tech infrastructure, which implies that little extra costs will be spent from the incremental revenue, thus boosting profits. The heavy spending in the new initiatives like integration of honey and QR code projects resulted in more gains which means that the free cash flow is expanding faster than revenues.

Conclusion

In conclusion, Interbrand is considered the founder of iconic work and developed several brand-building tools. Interbrand’s Best Global brands report is significant for organizations and brands since they help them know how customers perceive them in their minds and hearts. The 2020 ranking of the Best Global Brands was affected by the effects brought about by Covid-19, which resulted in the closure of many global brand shops. Tesla and Zoom found their way through the 2020 Interbrand’s Best Global Brands Report, whereas the biggest risers in Ranking were Netflix, Spotify, and Amazon amid the Global Covid-19 lockdowns. The Retail industry suffered amid the Covid pandemic while the technology sector is growing at a fast rate.  The Tech industry was dominant in the top 10 with three brands Apple taking the first spot, Amazon at number two, while Microsoft took the third spot. Amazon had an exemplary performance in the ranking taking position two while Apple retained its position 1.

The pandemic has pushed people’s behavior in a different direction, whereby some aspects are irrevocable. The economic instabilities due to the lockdown and public health measures hint about changes in market dynamics. The demand for certain products and services is likely to shift. The changes are likely to be attributed to the global pandemic that is affecting the universe. Brand attachment and loyalty are the top key factors that will result in changing the dynamics of leadership. Many brands try to identify their valuable customers in numerous ways. The various ways range from sharing messages to measuring affection and attention to the length of the tune. Nothing matters most, like keeping customers’ money safe and mitigating their concerns around fraud in this times of economic uncertainties and heightened anxiety. PayPal is rising among the ranks rapidly for the work it is doing to keep its customers safe

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