PwC US Tracks Shift in Consumer Attitudes Towards Brands; Sees 47 Percent Attrition Rate in Brand Leadership Since 1999

Technology & Electronics Companies Emerge as Modern-Day "Leader Brands," Overtaking Media Companies

18 Nov, 2015, 09:00 ET from PwC US

NEW YORK, Nov. 18, 2015 /PRNewswire/ -- Between 1999 and 2014, 47 percent of brands fell off the top 100 "leader brands," according to a PwC US study. The number jumps even higher to 72 percent when the leader brand set is expanded to include product brands. While the list used to be led by media companies, today, electronics and technology companies are flourishing. Millennials are powerful drivers of this shift, elevating these companies to the top, whereas boomers have a higher regard for government institutions and historical brands. This is according to the firm's new Consumer Intelligence Series (CIS) report and research project, Bonfire of the Brands, which examined data on 6,700 global brands and 200,000 consumers, surveyed 4,000 consumers in the US, UK, China and Brazil; incorporated findings from New York and San Francisco thought leader discussions, and captured social chatter to conduct an in-depth analysis of brand leadership over the past 15 years with a focus on technology, entertainment, media and communications (EMC), retail and consumer goods, and financial services industries.

In today's highly social, interconnected and transparent world, consumers look at a number of factors to determine a brand's likability, including everything from who the company is to what the company does – well beyond a quality product/service, a striking logo and a riveting ad campaign. PwC's study shows that over the past 15 years, brands that consumers consider leader brands have grown in value at nearly five times the rate of the average S&P 500 company. Among the top attributes of leader brands are trustworthiness, authenticity, transparency, a focus on privacy, being visionary, and dedication to employee well-being.

The New Rules to Get Ahead
To fuel brand equity, companies will need to understand the new rules of leadership in order to develop a roadmap to future success. Among the considerations for companies seeking brand relevance and dominance are:

  • Consumers admire companies with a distinct culture, one that can be bettered from within, with a management system that allows for the distribution of authority.
  • Also, diversifying diversity to include both "inherent" diversity (i.e. a mix of age, gender and other demographics) and "acquired" diversity (i.e. varying life experiences) will allow for the creative combustion of opinions and ideas and bring about true innovation and disruption.
  • From insight to farsight, companies shouldn't just benchmark themselves against industry competitors; they should measure themselves against human imagination.
  • Leader brands are the ones that commit heresy, consistently questioning conventional wisdom, and actively looking for rules to break and obstacles to leap.
  • Across age and regions, PwC found that when consumers have favorable perceptions of company leaders, it translates directly to favorable perceptions of the brand, so companies should put a face on it.

Industry Implications
Sixty-six percent of US consumers say the importance of acting like a true leader brand is more important today than it was in the past, and they believe leader brands will matter even more 10 years from now. This CIS report outlines brand challenges and opportunities for companies across the following industries:

Technology

  • Technology is by the far the most highly regarded category when it comes to brand leadership. Tech companies make up four of the top five spots on the 2014 US top 100 leader brands list.
  • Seventy-two percent of consumers say they think technology and electronics companies are showing strong brand leadership, compared to 57 percent for automotive – the next highest category.
  • Technology is also the category in which consumers say brand leadership is most critical. Seventy-six percent of consumers say brand leadership is an important consideration when making technology and electronics purchases.

"While many of the products and services created by technology companies today have become ubiquitous and essential in our daily lives, tech companies dominate the brandscape because they do not rest on their laurels and constantly push boundaries," said Pierre-Alain Sur, PwC US technology industry leader. "The past two decades have been an exciting time to be a leader in tech—and these companies are poised to pave the way forward, especially with the proliferation of innovations that support the new digital enterprise ecosystem, such as the Internet of Things and data analytics, which are driving disruption across all industries."

Entertainment, Media and Communications

  • Today, the top 100 list of brand leaders includes 11 EMC brands. Only six of those brands are legacies of the 1999 brand leader list.
  • Roughly one in two consumers say brand leadership is an important consideration when they purchase entertainment and media. For Millennials, this is a bigger imperative: they are 37 percent more likely than adults ages 55+ to say this is important.
  • Brand leadership plays an even bigger role in choosing communication services. Sixty-four percent of consumers say this is an important consideration.

"Remarkable shifts have occurred in the consumer landscape that have drastically altered entertainment, media and communications as we know it. One thing is certain: consumers have and will continue to be passionate about brands operating within this space. But to regain their top position on the brand leaders list of the future, these companies should scrutinize their innovation goals to create distinctive and valuable consumer products and services," said Deborah K. Bothun, PwC global entertainment and media leader. "Innovation requires opening the aperture, taking a broader, deeper and potentially longer view of consumers' underlying wants and needs, including the desires they haven't yet articulated."

Retail and Consumer Goods

  • Just two-fifths of consumers say that retail and consumer brands show strong leadership; this figure skews higher for millennials, who are 32 percent more likely than boomers to have a favorable impression of brand's leadership in this category.
  • Increasingly, consumer-facing brands are not only on the hook for delivering authentic, good-for-you products; they are also being challenged to deliver social reform.
  • Retail brands should adapt to marked shifts that are being ushered in by technology, including The Sharing Economy, The Wearable Future, tech driven upstarts and 3D printing.

"Retail and consumer-facing companies face a new and dynamic landscape today compared to 1999, with mobile shopping, the abundancy of product review sites, the potential for social media backlash, and the need to offer a Total Retail omni-channel experience," said Steve Barr, PwC US retail and consumer leader. "But there are vast opportunities for those who are willing to think in unique ways to address consumer needs heads-on. By being able to steer their organizations through this evolution and align their workforce to their vision, companies stand a good chance at establishing a place on the leader board of the future."

Financial Services

  • Today, only eight financial services brands made it into the top 10 percent of brands.
  • The majority of consumers (66%) place more weight on brand leadership in financial services (FS) than most other sectors. However, the industry fell short on expectations with fewer than half of consumers (47%) finding that FS brands demonstrate brand leadership.
  • The industry is facing significant disruption as traditional players scramble to keep pace with nimble "fintech" start-ups, unburdened by costly legacy technology and operating models.

"Financial services is at a crossroads as it faces the complex confluence of rapidly evolving technology, shifting demographics, heightened consumer demands and lingering trust gaps," said Jeremy Fox-Geen, PwC US banking strategy leader. "Succeeding in this environment requires overcoming organizational restraints to deliver the type of customer experience that will recapture consumer confidence and enthusiasm. Financial services firms would be well-served to consider leading practices from transformative sectors like technology as they work to align their strategic approach with new market realities."

Brand Leadership Table Stakes
One-way marketing can no longer compete. For consumers today, it's imperative that brands deliver on the things that matter most, as it should be about enriching, not pitching. According to PwC analysis, today's top brands fall into one or more of the following archetypes:

  • Redefining-Luxury Leaders: Brands that reimagine status
  • Empathetic Leaders: Brands that put people first
  • Inspiring Leaders: Brands that uplift spirits
  • Power Leaders: Brands that do something best
  • Disruptive Leaders: Brands that deliver what you didn't know you wanted

Around the World
The brand upheaval seen in the United States over the past 15 years is mirrored by similar shakeups across the globe:

  • UK: Forty percent of the top 20 leader brands in the UK from 1999 remain on the list in 2014.
  • China: Of the top 20 brand leaders in China in 2001, only one made it onto today's list of leaders.
  • Brazil: Of the top 20 leadership brands in 1999, only ten remained on the list in 2014.

PwC has also illustrated the top findings of the report in an infographic and a short video that can be found here. The video includes a montage of nine C-suite executives across the four aforementioned industries, commenting on brand leadership, as well as highlights the from the New York and San Francisco salons.

About PwC US
PwC US helps organizations and individuals create the value they're looking for. We're a member of the PwC network of firms, which has firms in 157 countries with more than 195,000 people. We're committed to delivering quality in assurance, tax and advisory services. Find out more and tell us what matters to you by visiting us at www.pwc.com/US.

© 2015 PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.

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