Local brands need to embrace change to remain relevant

As 2019 gets into full swing, local brands would do well to ask themselves how they can best remain relevant in the market this year.

A key finding contained in the “BrandZ Top 30 Most Valuable South African Brands 2018” report is that local brands are mainly driven by South African consumers, which demonstrates that the local economy is relatively insular.

However, local brands could be set for global growth and expansion, as the country finally faces an era of political and economic stabilisation.

Interestingly, the strongest local brands are banks, retailers and insurers who make up more than half of South Africa’s Top 30 brands.

According to the BrandZ report, banks dominate the ranking with six banks accounting for over a third of its value; and four banks ranked in the Top 10 (Standard Bank, First National Bank, Absa, and Nedbank). Retail brands are also strong with eight brands represented in the Top 30.

This trend can largely be attributed to the fact that local brands largely sell based on utility, price and functionality, rather than on emotional appeal. Hence, banks, retailers, telecoms, providers and insurers communicate how their brands meet a customer’s needs, with little or no attempt to engage emotionally and to truly leverage the power of the brand.

But, as the country looks to grow its brands, it may be time to inject some emotional appeal, which will become a key driver as global brands are competing for attention locally.

Another important trend that has gained traction internationally, as well as locally, is the use of social media. Brands have taken to social media to entice, educate, and build communities. Social media allows brands to build trust and utilise the power of storytelling to share customer journeys with their audiences.

It is important to keep in mind that customers and their needs are constantly evolving, therefore, successful brands are those that can redefine themselves and incorporate agility, as well as a collaborative approach.

In short, brands need the ability to obtain fast feedback to quickly identifying opportunities and respond to changing needs and to defend against the moves of competitors.

In terms of a global outlook, the Interbrand Best Global Brands 2018 report found that branding has shifted from ensuring consistency to stimulating desire; from marketing-centric to enterprise-centric; from simply creating functional and emotional differentiation to fundamentally changing the way a business goes to market; and from communicating the consumer experience to shaping it.

Globally, the brands that have generated the most stable growth over the past decade are those that achieve the highest overall scores on relevance and responsiveness. The report notes that luxury brands that increased in responsiveness over the past five years have 2018 Brand Values 43% greater than those that didn’t.

Like local brands, global brands operate in an environment that is constantly changing and evolving as customer expectations shift, and technology empowers them to meet these expectations in new ways.

Change is imperative and making bold moves is critical to long-term success. But change has to be well-planned and thought out. There must be a vision that spurs the organization and gives it confidence to make the right choices to transform.