Report: Woolworths Australia’s most valuable brand, Telstra flails
- 23 January, 2020 09:35
Woolworths has become Australia’s most valuable brand while Telstra has seen its brand value decline by 20 per cent in the last year.
According to the latest Brand Finance Global 500, Woolworth’s brand grew 5 per cent over the last year and is now valued at $11.8 billion. By contrast, Telstra’s brand value dropped 20 per cent to $11.7 billion, falling to second most valuable after four years of dominance.
The report states the NBN rollout significantly affected Telstra's profits, which dropped 40 per cent in 2019, and the long-term economic outlook for the brand looks challenging. Optus, meanwhile, became the nation’s strongest brand with brand strength index (BSI) score of 86.3 out of 100.
Engineering and construction brand, Worley, is Australia’s fastest growing brand, with its brand value up 88 per cent. Mining brands, BHP and Rio Tinto, both made gains, while Coles has achieved a AAA- brand strength rating for the first time, a reflection of the brand’s solid reputation for value for money, the report said.
In addition to measuring overall brand value, Brand Finance also evaluates the relative strength of brands, based on factors such as marketing investment, familiarity, loyalty, staff satisfaction and corporate reputation. Alongside revenue forecasts, brand strength is a crucial driver of brand value.
Woolworths’ increasing brand strength, up 4.2 to a BSI score of 81.9, enabled it to overcome a tough market, where retail activity is contracting, and economic growth forecasts are gloomy.
Brand Finance Australia managing director, Mark Crowe, cited a decreasingly optimistic market, where many of the country’s biggest consumer brands are suffering.
“Household names, Woolworths and Coles, are bucking the trend, supported by their long-standing position in the marketplace. Woolworths is facing a difficult year ahead after the damaging investigation into staff’s pay - how the brand responds in the coming year will be pivotal if it is to retain its title of the most valuable Australian brand,” Crowe said.
“Telstra and other telecos are facing significant challenges to implement effective strategies to fend off rising competition from newer, alternative media and communications brands. The way in which we consume telecommunications has changed for good and all telecoms brands will have to adapt if they want to survive this shift in the sector.”
Brand Finance noted Optus’ solid reputation for excellent customer service and value for money is reflected in the one million new post‑paid customers that subscribed in the last year. Among the top 10 strongest brands, Coles and NRMA Insurance have experienced significant strengthening - over 5 BSI points increase - of their brands.
All four of Australia's big four banking brands dropped in this year's list. The country’s biggest lender, Commonwealth Bank, lost 3 per cent of its brand value down to $10.2 billion, amid weak forecast revenue growth. ANZ suffered the second biggest monetary brand value loss in the ranking, down $2.3 billion, and the highest percentage loss in the top 20, down 26 per cent. Westpac is also down 21 per cent to $5.7 billion.
“Financial institutions are certainly familiar with being scrutinised closely and with the country’s banks feeling the heat following the Royal Commission, the spotlight will be closely on them as they try to rebuild and repair their damaged reputations," Crowe commented. "Australia’s banks all face the same brand challenge in the coming year, to restore trust, customer retention and satisfaction, and ultimately to rebuild their brand value."
Global brand value
Seven Australian brands feature in Brand Finance's global 500 ranking, including Woolworths, Telstra, Commonwealth Bank, BHP, Coles, NAB, and ANZ, with Woolworths ranked the highest at 235.
Defending its position as the world’s most valuable brand for the third consecutive year, Amazon has broken the US$200 billion brand value mark. Following 18 per cent growth from US$187.9 billion last year, Amazon’s brand value has now reached US$220.8 billion, over US$60 billion more than Google’s and US$80 billion more than Apple’s.
The global top 10 brand list is Amazon, Google, Apple, Microsoft, Samsung, ICBC, Facebook, Walmart, Ping An, and Huawei.
Brand Finance CEO, David Haigh, said Amazon, the disrupter of the entire retail ecosystem, continues to impress across imperishable consumer truths: Value, convenience and choice.
“Today, Amazon’s situation seems more than comfortable, but what will the roaring twenties hold in store?” he asked.
Every year, Brand Finance values 5000 of the world’s biggest brands. 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.Tthe report looks at marketing investment, stakeholder equity, and the impact of those on business performance.
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