#10things on brand value to drive consumer demand
SA brands have proved pandemic resilience. These are the brand-building fundamentals that drive consumer demand.
The annual Kantar BrandZ research into ranking South Africa’s most valuable brands shows that brand value is on the road to recovery in 2021. This is reflected by the cumulative value of the Kantar BrandZ Most Valuable South African Brands 2021 ranking, which this year stands at $28.8 billion. It highlights the power of brand resilience in the face of macroeconomic turbulence and pandemic effects with rebound and recovery on the horizon. Albeit still a slight decline of 3% from $29.7 billion in 2020, the rate of decline has slowed significantly since the massive drop of 2018, reversing a long-term trend of steep erosion of brand value in South Africa.
First National Bank has again outperformed its rivals, with a brand value of $2.7 billion in the fourth Kantar BrandZ ranking of South African-born most valuable brands. Vodacom moved up the ranking to No.2 this year with a brand value of $2.57 billion, with beer brand Castle holding steady at No.3 with a brand value of $2.52 billion. The Kantar BrandZ study now includes the opinions of over 31,335 South African consumers on 660 brands in 47 categories. But strong brands do far more than win consumer recognition and press accolades, the value of a brand has a clear measurable link with the share price of the company behind it proving that marketing is an investment and not a cost. These are the 10 things to note:
1. Takealot enters Kantar BrandZ’s Most Valuable South African Brands ranking in 2021, as digital-first brands continue to dominate. As this year’s only new entrant, Takealot enters the ranking off the back of its acceleration towards digitisation and the rapid adoption of ecommerce during the pandemic, featuring at #23 with a brand value of $446 million.
2. First National Bank’s repeat performance as top brand in the ranking is based on strong investments in digital innovation pre-pandemic; and showed strong consumer understanding in the face of the pandemic.
3. Discovery was this year’s fastest riser, with a 26.6% increase in brand value for being one of the fastest-thinking brands in its response to the pandemic. Discovery introduced a digital consultation service available beyond its membership. Discovery, Capitec Bank and Absa are further bucking a declining trend in financial services with a 26.6%, 10.4% and 3.2% growth in brand value respectively.
4. Value is more than a price point. Cheaper unknown imports are not necessarily winning over trusted, more expensive, favourite brands.South Africans increasingly value things like trust and convenience. Brand value today is therefore also about emotional value for money.
5. Sustainability: Kantar’s COVID-19 Barometer revealed that consumers increasingly want brands to lead the way when it comes to sustainability, so overlaying brand purpose with wider societal concerns is becoming crucial for brand development and growth. To complete the brand equity equation, brands need to address issues of responsibility and purpose.
6. Meaning and difference: Diving deeper into the local findings, key drivers for growing brands have been: meaning, value and difference.
7. Affordability: The pandemic further tightened wallets in a stretched economy. All the economic upheaval means retail categories have become more price-driven since 2018, creating a favourable growth environment for value brands like Mr Price and Clicks. Kantar’s COVID-19 Barometer reveals that while South Africans would love to continue purchasing familiar and loved brands, 60% can no longer afford to do so. But brand does matter, as South Africans still seek difference and value when times are tough. South Africa’s most valuable brands can therefore improve on difference – it can be real, perceived, product- or communications-driven.
8. Growth: South Africa’s growth brands are doing especially well to justify their price on perceived difference, as this means they are seen to be meaningful to people. In addition, Woolworths keeps proving that difference pays, because in a market where price and value are very important, difference enables brands to charge a premium for quality. Discovery also embodies this, standing out on driving purpose; while last year’s new entrant Flying Fish still stands out for shaking things up, moving up the ranking from No.28 last year, to No.24 in the brand ranking this year.
9. Innovation: A brand that has maintained meaning while also growing their difference, is Checkers. The brand is hugely meaningful in this tough economic climate where South African consumers are seeking value. Their three-pronged approach includes the Xtra Savings reward initiative that reimagines the value equation; the FreshX concept supermarkets that meet new consumer needs; and the Sixty60 grocery delivery ecommerce strategythat speaks to the importance of Innovation is an area where South African brands can step up and can find opportunity for future brand growth.
10. Brand-building: Kantar also revealed four brand-building fundamentals that drive consumer demand. In South Africa, the proportion of brand equity driven by these is 62%, so it’s vital to achieve at least parity with competitors on these fundamentals:
- Experience: Offer superior experience across all branded touchpoints.
- Function: Create a range of well-designed products and services.
- Convenience: Ensure these fit well into consumers’ everyday lives.
- Exposure: Cut through with advertising, featuring memorable icons and messages.
Main image credit: Pixabay.com.
– Receive the Retailing Africa newsletter every Wednesday • Subscribe here.