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In Massachusetts, Retail Brands Hold their Own

20 June 2018
This article is more than 2 years old.

· Five retailers included among the state’s most valuable brands despite the sector struggling nationally

· Gillette, Massachusetts’ second most valuable brand, is also the strongest with AAA rating

· Brand Finance US 500 2018 is the first brand ranking released in compliance with newly adopted ISO 20671 international standard on Brand Evaluation

· Nationally, with a brand value breaking the $150 billion-mark, Amazon becomes America’s most valuable brand, sending Google to #3

View the full list of 500 most valuable US brands here

The 2018 iteration of the annual Brand Finance US 500 ranking of America’s most valuable brands is the first study of its kind to be released in compliance with the ISO 20671 international standard on Brand Evaluation, adopted by industry leaders earlier this month. Brand Finance was instrumental in crafting both the newly released standard on qualitative Brand Evaluation as well as the ISO 10668 – the international standard on quantitative Brand Valuation, adopted in 2010.

David Haigh, CEO of Brand Finance, commented:

“Every year, Brand Finance puts thousands of the world’s biggest brands to the test, evaluating which are the strongest and most valuable across all markets and sectors. All our corporate brand valuations are compliant with both ISO 10668 and ISO 20671. The newly adopted international standard will be the guiding light for the entire brand valuation industry and Brand Finance is proud to be leading the way.”

In Massachusetts, Retail brands hold their own

The Brand Finance US 500 2018 report reveals that, at the state level, five retail brands are ranked on the list of Massachusetts’ 19 most valuable, including TJX Companies owned T.J. Maxx (brand value up 6% to $5.9 billion), ranked the 3rd most valuable brand in the state, and Marshalls (brand value up 8% to $3.0 billion), ranked 6th.

Massachusetts retailers buck the national trend, as across the country, the rise of the Tech sector, and particularly online shopping giants like Amazon, has dealt a blow to the prominence of the traditional brick and mortar model. This year’s Brand Finance US 500 study reveals that two out of every three Retail brands in the ranking have lost brand value over the last year, which contributed to the fall of Retail to third rank among the brand-rich industries. Worth $279.3 billion, Retail has been overtaken by Banking & Financial Services, and accounts for only 8% of the total value of America’s top 500 brands.

Still in the game alongside Retail brands from Massachusetts, are Walmart, 8th nationally and the state of Arkansas’ most valuable brand, and Home Depot, 11th and the state of Georgia’s most valuable brand, valued at $61.5 and $33.7 billion respectively. Walmart’s recent selling spree, which included the divestment of British supermarket brand Asda, point to the Retail giant’s growing focus on the home ground battle with Amazon.

Massachusetts brands are worth $81.1 billion

General Electric, the most valuable brand in Massachusetts, suffered a moderate contraction to its brand value, decreasing 9% to US$32.0 billion. The GE brand has lost 39% of its value since 2014, when it was worth US$52.5 billion, though it remains the world’s most valuable engineering and construction brand and the most valuable brand in Massachusetts.

GE’s medium-term revenue forecasts are tempered by growing global interest in new forms of renewable energy generation. This causes significant pressures and risks to an iconic industrial age brand in an increasingly green world.

Laurence Newell, Director of Brand Finance North America, commented:

“Earlier this year, GE came in as most valuable in Brand Finance’s Engineering & Construction 25 league table, owing to the brand’s capabilities to retain its strong brand amongst customers and other stakeholders, despite increasing challenges from new competitors outside its traditional fields of dominance. Moderate contraction in GE’s brand value this year points to the importance of leveraging the company’s reputation and credibility into new markets, away from its traditional turbine-based engineering works.”

With 19 brands in the ranking worth $81.1 billion, Massachusetts is the 7th state nationally according to number of brands and 11th according to brand value.

Gillette, Massachusetts’ second most valuable brand, is also the strongest

In addition to measuring overall brand value, Brand Finance also evaluates the relative strength of brands, through the Brand Strength Index (BSI) – a balanced scorecard of factors such as marketing investment, customer familiarity, staff satisfaction, and corporate reputation. Along with the level of revenues, brand strength is a crucial driver of brand value.

According to these criteria, Gillette is Massachusetts’ strongest brand, earning a BSI score of 87.1 out of 100 and a corresponding AAA rating. Nationally, Disney is America’s strongest brand, earning a BSI score of 92.3 and an elite AAA+ rating. Just a handful of brands in the world across all industries achieve such status. Interestingly, America is home to most of them as there are 15 other AAA+ brands in the Brand Finance US 500 alongside Disney, including Visa, Johnson’s, and McDonald’s.

Laurence Newell, Director of Brand Finance North America, said:

“A strong and valuable brand tends to deliver superior business performance. In periods of prosperity, strong brands serve as a launching pad for growth, equally, in times of crisis, they provide buoyancy to the business.”

Amazon becomes America’s most valuable brand

Nationally, Amazon takes this year’s top spot in the Brand Finance US 500 2018 league table, with its brand value growing by 42% to $150.8 billion. The surge in value for Amazon’s brand allowed it to overtake Apple (up 37% to $146.3 billion), which takes second place in the ranking, despite similarly strong growth. Google (up 10% to $120.9 billion) fell from first place to third, unable to keep pace with the remarkable growth of the top two brands.

This year’s study reveals that brands in the Tech sector have cemented their position as absolute leaders in the market as they now account for $977.0 billion or 30% of the total brand value in the league table. Overall, Tech brands have grown nearly $100 billion year on year and claim 5 of the top 10 positions in the ranking.

Commenting on the list’s frontrunner, David Haigh said:

“Amazon has built a brand that has no peer. They provide unmatched convenience, availability, and scale. The success of their brand is a reflection of an authentic obsession with their customers. Boldly expanding into new – seemingly unrelated – industries to respond to the evolving preferences of modern consumers, Amazon has completely revolutionized the brand world as we used to know it.”

View the full Brand Finance US 500 2018 report here. Highlights:

YouTube doubles brand value

YouTube (up 114% to $25.9 billion), which is owned by Google’s parent company, Alphabet, is the fastest-growing brand in the Brand Finance US 500 rankings, just ahead of new entrant Rockwell Collins (up 112% to $1.8 billion). Now the internet’s primary video source, YouTube registers hundreds of hours of video uploaded every minute. YouTube’s rise has opened up a new industry in its own right with the commercialization of vlogs and the creation of virtually unlimited marketing opportunities accessible to businesses large and small.

Another brand to achieve very fast brand value growth this year was Tesla (up 106% to $5.7 billion). Despite being founded only 15 years ago, Tesla has become one of the most valuable automobile brands in the world in a very short time. Tesla’s brand value has been built upon the environmentally friendly positioning, premium styling of their distinctive vehicles, and a very growth-focused corporate vision, which aims to bring a more affordable model to market very soon. However, doubts exist whether Tesla has the short-term manufacturing capability to satisfy consumer demand in terms of both volume and quality to match the brand expectations they have created.

Big banking brands boom

As the damaging legacy of the financial crisis is slowly fading away, Banking & Financial Services brands are back in black. Now America’s second most valuable sector, Banking & Financial Services contributes $307.1 billion or 9% to the total brand value of the league table. All four largest high street banks in the Brand Finance US 500 ranking: Wells Fargo (9), Chase (10), Bank of America (12), and Citi (17), recorded significant growth, each adding between $2.5 and $5.1 billion brand value to last year’s results. Chase broke into the top 10 this year, following significant expansion over the last few years and announcements of further plans to open branches in cities like Boston, Philadelphia, and Washington, D.C.

ENDS

Note to Editors

Every year, leading independent brand valuation and strategy consultancy Brand Finance values the world’s biggest brands. The 500 most valuable US brands are included in the Brand Finance US 500 2018 league table.

Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand strength is assessed through a balanced scorecard of factors (such as marketing investment, stakeholder equity, and business performance) and used to determine what proportion of a business’s revenue is contributed by the brand.

Additional insights, more information about the methodology, as well as definitions of key terms are available in the Brand Finance US 500 2018 report.

Brand Finance helped craft the internationally recognized standard on Brand Valuation – ISO 10668, and the recently approved standard on Brand Evaluation – ISO 20671.

Data compiled for the Brand Finance league tables and reports are provided for the benefit of the media and are not to be used for any commercial or technical purpose without written permission from Brand Finance.

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