Visualized: The World's Most Valuable Retail Brands 2018
Warren Buffett once said, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.”
The top 50 most valuable retail brands doing things better than everyone else are realizing substantial business value according to a new report from Brand Finance. Our latest map explores the geography of these globally dominant brands according to their overall strength ratings and monetary value.
Our data come from the Brand Finance Retail 50, a ranking from the world’s leading brand strategy and valuation consulting company. Brand Finance deploys two key metrics that we adapted into our visualization. The color of each circle corresponds to their brand rating, very similar to a credit rating, where AAA is exceptionally strong. The size of the circle represents the combined monetary value of the company’s retail brands. We also included the countries where these brands originate, letting you quickly and easily see which companies and countries dominate the retail world.
Top 10 Most Valuable Retail Brands
1. Amazon: $151B
2. Walmart: $61B
3. Alibaba: $55B
4. Home Depot: $34B
5. IKEA: $24B
6. CVS Health: $21B
7. JD.com: $20B
8. Walgreens: $16B
9. Lowe's: $14B
10. Target: $14B
How can we put a figure on a brand’s monetary value? Brand Finance judges the value of a brand by looking at “the efficacy of a brand’s performance on intangible measures, relative to its competitors.” For example, suppliers might be willing to make unique agreements with Amazon just to be sold on the platform, which adds value to Amazon at the expense of its competitors. Brand Finance also measures the hard value a brand adds to a company, taking into account marketing investments, stakeholder equity and business performance. The combination of these elements creates customer loyalty even if competitors offer the same products at a cheaper price.
Earlier this year we partnered with Brand Finance to create a map showing the most valuable brands by country. Amazon remains at the top of our list as easily the most valuable retail brand in the world, adding an astonishing $151B to the company. That’s roughly 2.5 times more than second place Walmart, worth “only” $61B. Keep in mind that Walmart generates significantly more revenue than Amazon ($485B vs. $178B in 2017). And Walmart’s brand value is only slightly ahead of third place Alibaba, a company that many analysts believe still has tons of room to grow. Our conclusion is that ecommerce companies are only just beginning to dominate the retail sector.
Our map also demonstrates how top-heavy the most retail brands are from a geographical perspective. The US dominates the world with 26 out of the 50 companies on our map with a combined value of $410B, followed by Germany (6), the UK and France (4 each). Exactly 0 companies made the list from South America, Africa and the Middle East, and only 3 from China and 2 from Japan. The West is clearly still in control of the retail landscape.
It is also interesting to explore the relationship between a brand’s overall value and its strength compared to competitors. The two are not the same. 7-Eleven has the strongest brand compared to other gas station/convenience stores at AAA, whereas its value is only $8B. Lots of brands are technically worth more but they aren’t so different from competitors. For example, there are 5 companies with the AAA- rating, including both Lowes ($14B) and Home Depot ($34B).
Regardless of the exact value, all these companies have spent decades building up brand name recognition. One only has to look at companies like Equifax to see how quickly that equity can slip away.
Data: Table 1.1