The marketing industry is replete with rear mirror-looking assessments of brand strength and also exercises in forecasting. Forecasting typically takes place at the end of a year. We defied these conventions somewhat in 2013 and have been thinking about the future of brand strength all year.
We ran an experiment called the FutureBrand Index, which led to the five key forecasts for 2014 and beyond drawn from our ‘Future 50’ report published this week. You will find the forecasts outlined below. But first a little on the experiment.
The Index brought together over 1,000 traders worldwide who bought and sold virtual shares in over 1,000 leading global brands. They hoped for a strong future return from brands they felt had hidden potential or were growing fast, in effect creating a real-time forecast of brand strength.
The brands that achieved the highest ‘prices’ are the Future 50 brands to watch in 2014 and beyond. Many of the usual brand suspects from other industry assessments of brand strength do not appear in this group because they were perceived not to have the same momentum as those that do, such as Tesla and Beats by Dre.
Monitoring the trading patterns has told us something about the forces that might influence brand strength and consumption into the future, starting in 2014. Here are the top five forecasts:
1. Back to reality in the West – the end of bling in everyday aspiration
Only five of the top fifty traded brands were in the luxury category, none of which qualify as ‘ostentatious’. Conversely, everyday brands that make quality and effectiveness accessible to everyone performed well. It is not about value, just an overdue return to reality in a world that has been dominated by the symptoms of ‘affluenza’, fuelled by lifestyle ideals out of reach for most consumers. For example childhood favourites such as Dreamworks, Heartbrand and Nesquik are in the Future 50 and remind us that a significant proportion of global consumption is driven by families looking for simple treats and shared experiences. The rise of nuclear families in growing economies such as India will fuel this. More authenticity and less bling entails a purer sense of brand, i.e. the promise of quality, reliability and a mature balance between ‘who I am’ and ‘who I aspire to be’. Out of touch brands will find themselves out of the picture next year.
2. Comfort & convenience will still be powerful across categories and markets
Global concern about unhealthy diets has never been higher, yet comfort and convenience brands, particularly in the restaurant and food categories, performed well in the Future 50. For example Nutella, part of the rising chocolate spread category in places such as India and the US (the latter growing 12% in 2012). Food is always important and comfort food is particularly so during recession according to research. Other research suggests people indulge when happy. In the media we are ‘fed’ a diet of radically different stories about growth and disaster so indulgence-creating mood swings are to be expected in 2014. The trick for brands, perhaps, will be to offer pleasurable foods in a way that does not compromise our long term health and wellbeing. Offering that balance will certainly win in a future where indulgence still plays a leading role.
3. Conscious brands will move from niche to mainstream
Consumers increasingly make decisions based on broader criteria than habit or availability, not least what their peer groups think and the behaviour and values of the organisations that produce the brands they love. There is a clear shift in consumption habits towards brands which consumers feel contribute some kind of social good or improve people’s lives in measurable ways. Toyota is one of the several Future 50 brands that stands out in this respect. It has built much of its growth and reputation around the mainstreaming of hybrid vehicle technology, providing the comforts of 20th century motoring, with the promise of 21st century fuel options. So sustainability is growing up, driven by consumer demand and a new understanding that sustainable business practices lead to real growth. Brands that understand this will define the new mainstream in 2014, changing the world for the better one consumer decision at a time.
4. Participation will be the norm, not the exception
Brands that harness consumer willingness to participate and improve their service, or even create their entire proposition around it, will become increasingly central to our lives next year. Future 50 brand Amazon.com is one of the former, arguably one of the main factors behind its rise to the world’s biggest online retailer. Facebook and Twitter which help people communicate and create relationships and Kickstarter, which harnesses communication and relationships in the service of a business outcome, are also present. Digital penetration means it has never been easier for brands to get smarter based on what their customers do and say. We forecast the next major categories to take full advantage of this will be automotive and transportation, with for example the mainstreaming of car sharing (Zipcar and Car2Go) as well as resource-efficient taxi services like Hailo.
5. From beer to technology – Chinese brands will power future growth
The presence of Snow and Tsingtao (pictured), respectively the world’s biggest selling beer brand and the China’s biggest beer export to the USA, in the Future 50 highlight that Chinese brands are increasingly being sold to everyone else but also the path that home-grown brands will take to make their way into global consciousness. Travelling Chinese will look for domestic Chinese brands and experiences abroad, mirroring the US experience from the 1960’s onwards when increasingly affluent Americans travelled and bolstered the global growth of American international brands – from fast food chains like McDonald’s to hotel groups like Holiday Inn and Hilton. The landscape of consumption and brands will change to reflect the Chinese Century…but gradually. Expect more signs next year.
Find more information in The Future 50 report.
Tom Adams is global head of strategy at FutureBrand.