The pandemic and how companies had dealt with its impact had shifted the value of brands, the report found.
“Down by 58 per cent to $406 million, Flight Centre has experienced the greatest decline in brand value this year due to the bleak prospects ahead for the global travel industry,” the report said.
“With heavy restrictions on domestic and global travel predicted to last for most of the year, the travel agency’s forecasts for recovery remain uncertain. The story is similar for Australian casino operator, The Star (down 46 per cent to $410 million), which was heavily impacted by disruptions to its operations due to COVID-19 and subsequently experienced a significant decline in financial performance.”
The report said aerospace and airline brands account for six out of the 10 fastest-falling brands globally. Australian airlines brands have also taken a hit, namely Qantas (down 29 per cent to $2.2 billion), Jetstar (down 23 per cent to $503 million), and Virgin Australia (down 14 per cent to $484 million).
Many of the major chain stores had boomed during the pandemic restrictions when on-line sales boomed while the Australian banking sector suffered an overall 11 per cent drop in brand value due to weaker performance forecasts and unfavourable financial conditions caused by the COVID-19 pandemic.
“As increasing competition puts pressure on all telecoms brands, the value of the Telstra brand dropped by 18 per cent to $9.5 billion, reaching its lowest point since 2014. The story is similar for Optus which decreased by 19 per cent to $3.8 billion due to a drop in forecast revenue and external economic factors,” the report said.
While Woolworths’ brand was valued at $12.6 billion, BHP fell to fifth position this year following a 17 per cent decrease in brand value to $7 billion. The report said this is due to a greater economic risk across the market.
The strongest brand this year was Commonwealth Bank, with a Brand Strength Index (BSI) score of 84.9 out of 100, followed by Optus and NRMA.
Globally, Apple has overtaken Amazon and Google to reclaim the title of the world’s most valuable brand for the first time since 2016.
“Under Tim Cook’s leadership, especially over the past five years, Apple began to focus on developing its growth strategies above and beyond the iPhone – which in 2020 accounted for half of sales versus two-thirds in 2015. The diversification policy has seen the brand expand into digital and subscription services, including the App Store, iCloud, Apple Podcasts, Apple Music, Apple TV, and Apple Arcade. On New Year’s Day alone, App Store customers spent $US540 million ($A695 million) on digital goods and services.
Brand Finance chief executive David Haigh said tech brands had experienced unprecedented demand for their products and services and brands that had pushed the boundaries of technological innovation were “a cut above the rest, able to pivot their business to adapt to consumers’ changing needs”.
“2021 is the final call to get on board for all brands still stuck in the 20th century,” Haigh said.
Retail brand, Officeworks, was the year’s fastest-growing Australian brand, recording 63 per cent growth in brand value to $476 million.
Brand Finance Australia managing director Mark Crowe said the Australian retail sector had benefitted considerably from the boom in spending on essential items such as food, medicine, and other household goods. While strong Australian supermarket brands such as Woolworths and Coles have been instrumental in driving up this brand value, the sector is not void of vulnerability to disruption, especially from tech-led challengers.
“After two years of significant brand value losses in 2019 and 2020 following the Royal Commission scandal, ANZ may be turning the tide on its misfortune, as its brand value only dropped by 5 per cent to AU$6.4 billion this year,” the report said.
“It has been a difficult year for Australian banks, who certainly have acclimatised to being closely scrutinised over the last few years. With forecasts and a difficult economic situation ahead, banks will need to invest to sustain their improvement in customer sentiment, which will ultimately help drive future revenues”.
WeChat has usurped Ferrari to become the world’s strongest brand with a Brand Strength Index (BSI) score of 95.4 out of 100. The Chinese mobile app is one of merely 11 brands in the ranking to have been awarded the elite AAA+ brand strength rating.