Banks lead the first BrandZ Top 40 Most Valuable Canadian Brands ranking with RBC coming out as the country’s most valuable brand worth US$23 billion.
The study was done by WPP and Kantar and is the only brand valuation ranking to combine rigorous analysis of financial data with in-depth consumer research to determine the value the ‘brand’ brings to businesses, and their shareholders. Over the past 20 years BrandZ has interviewed over 3.7 million consumers from 51 markets around the world, including over 52,400 from Canada.
Kantar is the world’s leading data, insights and consulting company. WPP is a creative transformation company through communications, experience, commerce and technology.
“We’re very excited about this. This is part of a global study that Kantar has been conducting for 20-some years around the world over 50 markets. Although we’ve been doing this for some time around the world this is the first time, we have conducted the full valuation study in Canada,” said Scott Megginson, President of Kantar Canada.
“There are a number of different studies around the world that rank brands on trust or value but what’s really different about this study is that we do take a look at the brand valuation from publicly-released data but we’re the only study that talks to the consumer in the surveys and that way we can figure out the value that brand truly brings outside of all the other assets.”
Here are the BrandZ Top 10 Most Valuable Canadian Brands 2019:
The report said the strong performance of RBC, ranked No. 1, and TD Bank, ranked No. 2, reflects the significant role that banks have in the Canadian economy, with six bank brands accounting for 46 per cent of the total US$143.6 billion value of the Top 40.
The study found that Canadians generally have a more positive opinion of their banking brands than consumers in other markets. This could be attributed to confidence in the strength of government regulation, and a reflection of the fact that no major banking bailout was required during the last financial crisis. Canadian banking brands also score well for being wise (indexing 110, where 100 is the average) and assertive (113).
In fact, Canadian banks also index above average for social responsibility (118), although brand trust remains slightly below average at 97. However, that’s still significantly higher than in other markets; the category scores just 90 in France and 91 in Belgium.
The report also found that telecoms is the second-largest sector in the ranking, accounting for 22 per cent of total value.
“While the sector is highly valuable there is a lot of room to build brand equity. Potentially due to the high cost that Canadian consumers pay for their services in contrast to other markets, Canadians have a less positive view of brands in this sector, considering them to be untrustworthy (the trust index score is 93), with poorer advertising (98) and a lower perceived purpose (97) than telecoms brands in other markets. Globally, we see that healthy brands consumers love are on average 70 per cent more valuable than frail brands – creating a huge opportunity for an already valuable category,” said the report.
But Canadian consumers perceive even their most valuable brands to lack innovation. With 100 the average for all brands, Canada’s Top 30 indexes just above the average at 102, with only the Top 30 Spanish brands scoring lower (101), while the No.1 market for this measure, the U.S., is significantly higher at 116, said the report.
“Canada’s comparatively low innovation scores indicate there is a big opportunity for Canadian businesses, across all sectors, to grow their brand value by showcasing their innovation and clearly communicating how their products are better than those of their competitors,” said Megginson. “Focusing on innovation and differentiation will boost value and consumers’ perceptions of what is ‘premium’, enabling businesses to command premium pricing and, in turn, make their brands more exportable.”
Megginson said that when you take a look at Canada’s top 40 list every single one of them are in the service industry in one form or another.
“What we see here is that Canada’s service industry makes up the most valuable brands, but we have a lot of gaps in customer experience. That’s something we find in the study both as a challenge but a big opportunity going forward,” he said. “If you look globally at how some retailers are creating new experiences, how the ecommerce is, it’s probably the biggest opportunity for the Canadian brands
“One other point there’s also the big lack of differentiation. We’re seeing fewer and fewer disruptive brands in Canada than say in other markets.”
Although customer experience rates low in Canada, Megginson said this is a big opportunity for Canadian retailers.
“It just feels like we’re playing catchup. We’re not thinking about customer experience as part of our brands in the retail landscape in Canada and that is a big, big opportunity.”
On average, the Top 30 brands in the ranking get just 20 per cent of their exposure (a combination of revenue, volumes sold and profitability) outside Canada, said the report which is a dramatic difference to say France where the brands in the luxury dominated ranking get 75 per cent of their exposure overseas
“If we want to build bigger brands, then there is work to do,” said Megginson. “Canadian businesses can be much bolder about exporting, given the huge scale of the U.S. market next door and the highly positive perceptions of Canada internationally. Creating brands with a strong identity and a meaningful difference from other players in the market is an important foundation for Canadian businesses that want to be a success outside the country, proven by internationally successful brands like Canada Goose and Lululemon.”
Here are some of the other key trends highlighted in the report for Canada:
Having a strong purpose is key. Brands in the ranking consumers perceive as having a strong purpose are 78 per cent more valuable than those that score poorly. Among the Top 30 brands in the Canadian ranking, the average score is 109, the 10th highest of the 13 market-specific rankings published by BrandZ;
Retail accounts for seven per cent of the value of the ranking. The 12 retail brands in the Top 40 score highly for being approachable and trustworthy, but less so for differentiation and being well known. On the latter the category averages a score of 114, significantly behind the 144 average for the rest of the ranking; and
Being meaningfully different adds value to brands. Brands in the ranking that consumers see as bringing meaning to their lives in a way that is different are on average 46 per cent more valuable than those with a low difference. Lululemon (No. 5, US$7.6 billion) scores highest on perceived difference (178) followed by Canadian Tire (No. 22, US$1.3 billion) with 134.
Megginson said the brand contribution is generally quite low in retail in Canada which is driven by the lack of differentiation and “what we call salience which is being well known. There’s so many of them.”
“Canadian retailers are really in the shadows of these global ecommerce giants. We have these huge conglomerates dominating and differentiating in the market. We’re losing ground. Canadian retailers are really losing ground to what I call consolidated online solutions,” he said.
One bright light Megginson pointed out was Lululemon, which is the fastest riser in the global study and really making waves.
“And that’s through their understanding of their consumer, mastering trends like athleisure. Even helping create these trends.”