After rocketing up 18 positions on the 2012 Fortune 500 list, it is no surprise that two separate research studies have found the Apple (AAPL) brand to be both the "Most Valuable Brand" and also the "Most Culturally Vibrant Brand" in the world.
While recent Wall Street prices put the value of the Apple company at around $600 billion, the research team at financial consultancy MillwardBrown Optimor put the value of just the Apple brand itself close to $193 billion. That Apple brand value, the annual BrandZ Most Valuable Brands list concludes, has nothing to do with Apple's real estate holdings, inventory, patents, or supply chain. Rather, the BrandZ brand value is a calculation that indicates the ability of a brand to generate consumer demand, and in doing so, create future earnings.
The BrandZ calculations attempt to quantify the value of the intangible concept of "branding." And while the valuations of brands might seem as fabricated as the concept of branding itself, a look at the Multi-Year Comparison of Retail Brand Values reveals that the BrandZ calculations have credible predictive power.
An even less tangible brand research study released this month attempted to identify and measure the "cultural vibrancy" of some of the world's most well-known brands. Cultural Vibrancy, according to the AddedValue marketing consultancy firm, is a valid indicator that can predict future growth because the brands that are the most culturally vibrant are also the ones that are visionary, inspiring, bold, exciting and "inventing the future."
While the conceptual focus of the Added Value research might be difficult for the numbers-oriented retail industry to buy, an easily understood part of the report for a rapidly changing retail industry is the identification of "Product Experience" as a key cultural trend, and the description of what "product experience" means. The Culturally Vibrant Brands report describes the product experience this way:
"Brands on the forefront are moving away from handing people a pre-defined, finished article to creating a more engaging experience. One that allows a person to participate, play a role, and interact at various stages, possibly even before they ever come into actual contact with the finished article. This fosters a meaningful, all-encompassing relationship with the brand."
Starbucks (SBUX) and its customer-concocted half-caf double mocha soy whipped cream and salty caramel drizzle happy frappuccinos is an easy example of this. Apple and its captivating and viscerally connective retail stores is another. Google (GOOG) allows you to you "plus." IKEA encourages you to design. Subway puts your taste buds in control. The Harley Davidson HD-1 Bike Builder allows you to build your own motorcycle without any mechanical ability or know-how.
Traditional retailing was all about buying low, selling high, and convincing consumers that whatever was on the retail sales floor was a must-buy item. The engaged retailing concept of the future is about connecting with individual customers in a meaningful way, focusing more on value added than sales generated, and shifting focus from how you can get people to buy more stuff to how your stuff-selling company can be a unique and vital force in a global economy.
This is not meant to imply that stuff sellers like Wal-Mart (WMT), Dollar General (DG), McDonald's (MCD), Dillards (DDS), and OfficeMax (OMX) will disappear from the retail landscape. But it is to say that that retail brands can no longer rely on brand "image," and need to shift focus to delivering on the promise of their brand more than ever before.
Consumers can easily recognize which retail brands have a unique and easily identifiable "vibe." When a brand loses its vibe, it also loses its relevance. And a retail company without relevance soon becomes a retail company without customers. Sears (SHLD), Kmart, Talbots (TLB), and Blockbuster are great examples of retail brands with rapidly fading vibrancy that are going to need to find some vision, inspiration, and excitement if they intend to stay off the Biggest Bankrupt Brands of Retail History list.
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