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- 30 May 2012
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What the 2012 BrandZ™ Top 100 Means for Luxury

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The 7th annual BrandZ™ Top 100 Most Valuable Brands ranking highlights the continuing impact of recession, the rise of technology and the growing power of BRICs. But what does it mean for luxury brands?


“We have been monitoring the value of the great brands around the globe for a full seven years now,” explains Eileen Campbell, global CEO of Millward Brown. “But this year, we saw a first – the value of the world’s best brands barely inched up.”

“In this edition of the BrandZ™ Top 100 Most Valuable Global Brands report, you’ll see that the aggregate value of the world’s most powerful brands grew a mere 0.4%. This compares to 17% growth last year and 4% growth even on the heels of 2009’s Great Recession.”

But this was not the case when it came to luxury brands, whose value as an overall category, increased by 15%. In the Top 100 Most Valuable Global Brands, just two luxury brands made the cut; Louis Vuitton was the highest ranked luxury brand at #21, followed by Hermès at #32.


 The value of the world’s most powerful brands grew a mere 0.4%. The value of luxury brands increased by 15% 


Such growth in spite of anaemic market conditions was largely fuelled by the strength of individual performers. The brand value of Hermès (61%), Ralph Lauren (51%), Rolex (36%) and Hugo Boss (33%) accounted for four of the top ten risers, confirming the increasing importance of luxury in the minds of consumers.

“This year, we saw the growing importance of meaning,” continued Eileen Campbell. “For years we’ve known that consumers seek more from brands than just functional benefits. They’ve long formed emotional bonds with the brands they choose. But increasingly, we’re seeing those connections reserved for brands that consumers can be proud to call their friends.”


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2012 BrandZ™ Top 10 most valuable luxury brands


- Brand Contribution: the role brand plays in driving earnings (1-5 highest)
- Brand Momentum: the prospects for future earnings (1-10 highest)



In Established Markets…

Those who could again afford luxury indulged. Following several years of economic difficulty in Europe and North America, the wealthy returned again to the consumption of luxury goods, with a renewed focus on creating a unique personal look over collecting luxury labels.

In both developed and developing markets, luxury increasingly was less about bling and more about appreciating craftsmanship and sharing the pleasure, a recalibration of values coming out of the recession (Millward Brown).

More people of average means also engaged with luxury brands, purchasing an affordable item where possible. In fact individuals spent money at all price points, more in a quest for personal satisfaction than in a bid to impress others.


 In both developed and developing markets, luxury increasingly was less about bling and more about appreciating craftsmanship and sharing pleasure 


In Fast Growing Markets…

Luxury brands continued to enjoy healthy sales in China and other fast growing markets with expanding middle classes. The number of consumers who thought luxury was important increased in the BRIC economies, other than Brazil.

Emerging wealth segments were also identified as increasingly mobile, where research by Goldman Sachs suggested that travellers purchase approximately half of all the luxury goods sold in Europe. Chinese tourists alone as said to account for 18% of European sales.

Luxury goods unquestionably remained the domain of European and North American brands, but several luxury brands originating in Brazil and Russia began to appear. In China, where the upwardly mobile display luxury to denote status, consumers demonstrated a high level of brand knowledge and appreciation for craftsmanship.


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Key Insights…


Western brands are no longer a novelty in many of the BRIC markets as domestic brands improve in functional and emotional appeal. Luxury brands may be better positioned to ward off such a threat, due to their inherent relationship with provenance and regional craftsmanship, though BrandZ™ warns that no longer is brand success guaranteed by just showing up.

The ranking also suggested that across categories, technology is at the centre of the conversation for the world’s strongest brands. Retail is about being omni-channel, present everywhere all the time, which will only be made possible through technology.



 Travellers purchase approximately half of all the luxury goods sold in Europe. Chinese tourists alone as said to account for 18% of European sales 


Conclusions

The increased value of luxury brands mirrors the continued positive performance of luxury, despite the concerns of the greater economies in the United States and Europe. Again mirroring the recent performance of luxury brands, this interest is being fuelled by interest in both established and emerging markets.

Consumers are ready to spend again. Having tightened their belts for so long, they need to exhale and are willing to spend money at all price points. Consumers increasingly seek value, uniqueness, experience and self-satisfaction from brands, as they shift away from the accumulation of conspicuous luxury products.





To learn more about the BrandZ™ Top 100 and further insights into each category, please visit the Millward Brown BrandZ™ website




To further investigate Reports and Research on Luxury Society, we invite your to explore the related materials as follows:

- China’s Answer to Social Networking
- How to Reach the Digital Affluent Male
- Why Luxury Brands Need to Optimise e-Commerce in China


more

BrandZ™ Top 100 is an annual ranking of brand strength and value based on interviews with more than 1.5 million people in 31 countries about 50,000 brands.

millwardbrown.com/BrandZ