For the first time the Brand Finance Retail ranking has been expanded to include 100 brands to give a fuller picture of the diverse sector. Unsurprisingly, various types of retailers have been impacted by the pandemic differently, with e-commerce brands faring the best, recording an average brand value growth of 38% and department stores suffering the worst, losing 11% of brand value on average.
Amazon thrives in 2020
Amazon has retained the title of the world’s most valuable retail brand, recording a 15% brand value growth to US$254.2 billion. The giant is one of the few brands that has benefitted considerably from the pandemic and the resulting unprecedented surge in demand as consumers turned online following store closures. Over Q2 and Q3 of 2020, e-commerce platforms experienced the highest revenue growth since 2016.
Most recently – further leveraging the circumstances of the pandemic – Amazon has acquired 11 passenger planes from struggling North American airlines to expand its air logistics capabilities. A tactical purchase to support its fast-growing customer base, but also a strategic move towards building its own end-to-end supply chain, the fleet can allow the brand to become a serious contender in air transportation in due time.
The recent announcement that founder and CEO Jeff Bezos is stepping down from the helm, could mark a new positive direction for the brand that has found itself at the centre of controversies, from negative coverage of his divorce, allegations regarding poor treatment of workers, and criticism for Bezos’s apparent reluctance to use wealth for philanthropic goals.
Apart from calculating brand value, Brand Finance also determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. Certified by ISO 20671, Brand Finance’s assessment of stakeholder equity incorporates original market research data from over 50,000 respondents in nearly 30 countries and across more than 20 sectors.
According to these criteria, Amazon has also retained the title of the world’s strongest retail brand with a Brand Strength Index (BSI) score of 89.9 out of 100 and a corresponding elite AAA+ brand strength rating. Despite controversies, Amazon is loved by consumers. The
brand has completely transformed the way in which purchases are made, and with a world-class reputation for speed, reliability and convenience, consumers continue to return to the site for all their shopping needs.
Richard Haigh, Managing Director, Brand Finance, commented:
“Playing a crucial role in supporting a new economic mode in lockdown, Amazon has found itself at the centre of attention more than ever before. Many consumers find themselves converts to a reliance on the polished purchase experience Amazon provides, but the brand is not without critics. From questions about the treatment of workers, to pushback against a global corporation in support of local retailers, the company will have to deal with these challenges over the coming years. With Bezos recently announcing he is stepping aside, only time will tell the direction the brand will take under new leadership and if this will signal a marked change in operations.”
E-commerce brands cash in
E-commerce brands are the fastest growing in the Brand Finance Retail 100 2021 ranking, recording a 38% brand value increase on average. Leading the way as the fastest growing brand in the ranking is China’s equivalent to Amazon, Alibaba.com. Also benefitting from the unprecedented surge in demand, as consumers turned to online shopping during the pandemic, the giant’s brand value has been boosted by an eyewatering 108% to US$39.2 billion, simultaneously jumping from 10th to 6th in the ranking. Alibaba.com has also seen an impressive increase in its BSI score, up 11.3 points to 88.5 out of 100, making it the second strongest retail brand in the world. Alibaba Group subsidiaries, Taobao, up 44% to US$53.3 billion, and Tmall, up 60% to US$49.2 billion, have enjoyed parallel successes, their online business models providing ease of access and convenience for consumers.
The story is similar for JD.com, which has enjoyed an 82% brand value increase to US$23.5 billion, following a 30% rise in its annual shopper count – its fastest pace in two years. Japanese e-commerce brand, Rakuten, has also cashed in an impressive brand value boost, up 49% to US$7.7 billion, and simultaneously jumped 8 positions to 26th place in the ranking.
German online retailer Zalando is the highest new entrant in 39th, following a 49% brand value increase to US$4.7 billion. Europe's leading online platform for fashion and lifestyle recorded exceptionally strong profits citing the shift in demand to online shopping and solid performances from Zalando’s Partner Program and Zalando Lounge as the main drivers.
Mixed fortunes for brick & mortar
Many traditional brick-and-mortar retailers, which have successfully leveraged technology to offer online delivery options and develop digital in-store improvements, have also fared well during the COVID-19 lockdowns. Hypermarket, Walmart has celebrated a 20% increase in brand value to US$93.2 billion and retained its spot in second, following an impressive spike in earnings. With targeted investments in e-commerce and over 400,000 workers hired in the last year to stock shelves and fulfil online orders, Walmart has been quick to adapt to the surge in demand.
Similar strategies have been beneficial to fellow hypermarket Target (up 30% to US$20.7 billion), Dollar General (up 28% to US$9.6 billion), and Costco (up 28% to US$28.9 billion) in the US, as well as E.Leclerc (up 27% to US$8.3 billion) and El Corte Inglés (up 19% to US$6.1 billion) in Europe, which have all seen significant brand value growth as they offered quick turnaround for online orders, reserved slots for elderly and at-risk shoppers, and implemented ship-from-store order fulfilment processes.
With a different story to tell, TJ Maxx has endured a difficult year, becoming the fastest-falling retail brand, down 32% to US$6.5 billion. The retailer’s struggles are largely due to store closures and a decline in apparel sales during the pandemic. Department stores have taken the biggest hit over the last year across the whole sector, losing 9% of brand value on average.
Foot Locker and Ross Dress for Less are the second and third fastest falling brands in the ranking respectively, losing 30% and 29% of their brand values. Despite Foot Locker (brand value US$1.4 billion) benefiting from some positive trends from the pandemic – from pent up demand following store closures and new launches from its key supplier Nike – the brand has suffered from volatile sales, which show no sign of improving as sport and regular school patterns are disrupted and questions around federal stimulus support remains.
Ross Dress for Less (brand value US$4.6 billion) has no online presence and no e-commerce availability, which has completely halted growth and profits as the brand negotiates store closures amid lockdowns.
Supermarkets up 6%
The second most valuable sub sector, behind e-commerce, is supermarkets. 37 supermarket brands feature in the Brand Finance Retail 100 2021 ranking, with a cumulative brand value of US$185.3 billion. This year, supermarkets have increased their brand values by an average of 6%.
Mixed results have been posted across the world’s biggest and most valuable supermarket brands. The two highest ranked supermarkets are Germany’s Aldi and Lidl, posting an 8% brand value increase and 9% brand value decrease, respectively. Aldi has embarked on a foray into the online retail space, successfully pivoting its offering in the face of the pandemic. The same strategy has not been undertaken by rival Lidl, with the CEO of the UK arm, Christian Härtnagel, arguing the pandemic has artificially inflated demand for online shopping and that the costs are simply too high.
In the UK, supermarket brands have also recorded mixed results. The most valuable supermarket brand in the nation, Tesco, has dropped 9% to US$10.0 billion. Conversely, Asda (brand value US$6.5 billion) and Morrisons (brand value US$3.3 billion) have both seen a slight uptick in brand value this year, increasing by 2% and 6%.
France’s Carrefour has lost 7% of brand value to US$8.2 billion, losing out on its top 20 spot, slipping to 24th.
Notable new entrants from around the world
The newly expanded ranking now includes brands from nations that have not been represented before. Argentina’s MercadoLibre enters the ranking in 68th position with a brand value of US$2.8 billion. Founded in 1999, the online marketplace and e-commerce platform was partially owned by retail giant eBay (up 2% to US$8.3 billion) until 2016. The brand continues to go from strength to strength, consistently recording impressive numbers of registered users, which stood at 320.6 million at the end of 2019.
One of Poland’s most recognisable brands, discount retailer Biedronka (up 3% to US$2.0 billion) enters the ranking for the first time as the 79th most valuable retail brand in the world. Biedronka has the largest retail network in the country with over 3,000 supermarkets in more than 1,000 towns. It is also Poland’s largest private employer, supporting 70,000 workplaces up and down the country.
Lastly, Finland’s Kesko claims 95th spot with a brand value of US$1.5 billion. With over 1,200 K-food stores across the nation, with an impressive 1.2 million daily customer visits, Kesko is renowned for its high-quality products and prides itself on stocking high levels of Finnish produce. Celebrating its 80th year last year, the brand is a staple across the nation and continues to gain market share.
Note to Editors
Every year, Brand Finance puts 5,000 of the biggest brands to the test, evaluating their strength and quantifying their value, and publishes nearly 100 reports, ranking brands across all sectors and countries. The world’s 100 most valuable retail brands are included in the Brand Finance Retail 100 2021 report.
The full Brand Finance Retail 100 2021 ranking, additional insights, charts, more information about the methodology, as well as definitions of key terms are available in the Brand Finance Retail 100 2021 report.
Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors. Please see below for a full explanation of our methodology.
About Brand Finance
Brand Finance is the world’s leading brand valuation consultancy. Bridging the gap between marketing and finance, Brand Finance evaluates the strength of brands and quantifies their financial value to help organisations of all kinds make strategic decisions.
Headquartered in London, Brand Finance has offices in over 20 countries, offering services on all continents. Every year, Brand Finance conducts more than 5,000 brand valuations, supported by original market research, and publishes nearly 100 reports which rank brands across all sectors and countries.
Brand Finance is a regulated accountancy firm, leading the standardisation of the brand valuation industry. Brand Finance was the first to be certified by independent auditors as compliant with both ISO 10668 and ISO 20671, and has received the official endorsement of the Marketing Accountability Standards Board (MASB) in the United States.
Definition of Brand
Brand is defined as a marketing-related intangible asset including, but not limited to, names, terms, signs, symbols, logos, and designs, intended to identify goods, services, or entities, creating distinctive images and associations in the minds of stakeholders, thereby generating economic benefits.
Brand value refers to the present value of earnings specifically related to brand reputation. Organisations own and control these earnings by owning trademark rights.
All brand valuation methodologies are essentially trying to identify this, although the approach and assumptions differ. As a result, published brand values can be different.
These differences are similar to the way equity analysts provide business valuations that are different to one another. The only way you find out the “real” value is by looking at what people really pay.
As a result, Brand Finance always incorporates a review of what users of brands actually pay for the use of brands in the form of brand royalty agreements, which are found in more or less every sector in the world.
This is known as the “Royalty Relief” methodology and is by far the most widely used approach for brand valuations since it is grounded in reality.
It is the basis for our public rankings but we always augment it with a real understanding of people’s perceptions and their effects on demand – from our database of market research on over 3000 brands in over 30 markets.
Brand Valuation Methodology
For our rankings, Brand Finance uses the simplest method possible to help readers understand, gain trust in, and actively use brand valuations.
Brand Finance calculates the values of brands in its rankings using the Royalty Relief approach – a brand valuation method compliant with the industry standards set in ISO 10668.
Our Brand Strength Index assessment, a balanced scorecard of brand-related measures, is also compliant with international standards (ISO 20671) and operates as a predictive tool of future brand value changes and a control panel to help business improving marketing.
We do this in the following four steps:
1. Brand Impact
We review what brands already pay in royalty agreements. This is augmented by an analysis of how brands impact profitability in the sector versus generic brands.
This results in a range of possible royalties that could be charged in the sector for brands (for example a range of 0% to 2% of revenue).
2. Brand Strength
We adjust the rate higher or lower for brands by analysing Brand Strength. We analyse brand strength by looking at three core pillars: “Investment” which are activities supporting the future strength of the brand; “Equity” which are real perceptions sourced from our original market research and other data partners; “Performance” which are brand-related measures of business results, such as market share.
Each brand is assigned a Brand Strength Index (BSI) score out of 100, which feeds into the brand value calculation. Based on the score, each brand is assigned a corresponding Brand Rating up to AAA+, in a format similar to a credit rating.
3. Brand Impact x Brand Strength
The BSI score is applied to the royalty range to arrive at a royalty rate. For example, if the royalty range in a sector is 0-5% and a brand has a BSI score of 80 out of 100, then an appropriate royalty rate for the use of this brand in the given sector will be 4%.
4. Brand Value Calculation
We determine brand-specific revenues as a proportion of parent company revenues attributable to the brand in question and forecast those revenues by analysing historic revenues, equity analyst forecasts, and economic growth rates.
We then apply the royalty rate to the forecast revenues to derive brand revenues and apply the relevant valuation assumptions to arrive at a discounted, post-tax present value which equals the brand value.
Brand Finance has produced this study with an independent and unbiased analysis. The values derived and opinions presented in this study are based on publicly available information and certain assumptions that Brand Finance used where such data was deficient or unclear. Brand Finance accepts no responsibility and will not be liable in the event that the publicly available information relied upon is subsequently found to be inaccurate. The opinions and financial analysis expressed in the study are not to be construed as providing investment or business advice. Brand Finance does not intend the study to be relied upon for any reason and excludes all liability to any body, government, or organisation.
The data presented in this study form part of Brand Finance's proprietary database, are provided for the benefit of the media, and are not to be used in part or in full for any commercial or technical purpose without written permission from Brand Finance.