According to a new report* by Brand Finance® Amazon dominates world’s most valuable retail brand and is set for further growth from and post-COVID19. It makes history by exceeding US$200 billion this year (representing 18% growth from US$167.9 billion in the previous 12 months). This follows a report in the Wall Street Journal on 23rd April, alleging that Amazon is using third-party selling data to develop its own products. Republican senator, Josh Hawley, is urging the US Justice Department to open a criminal antitrust investigation into the company. Amazon is also accused to misleading Congress last year, when an Amazon Associate General Council allegedly testified that Amazon does not use individual seller data to compete.
Regardless of the validity of these claims whilst most brands are experiencing or expecting a slump in revenue during the pandemic, Amazon is set for continued growth. As with fellow e-commerce brands, Amazon has been benefitting from the unprecedented surge in demand as consumers turn online following store closures. With over 100,000 workers hired and more in the pipeline, the brand is fighting to meet this demand. This spike has not come without its challenges, as Amazon’s logistics and supply chain network are being stretched to uncharted levels and the brand’s illustrious next day delivery service is being tested, with fulfilment and third-party sellers extending their lead times considerably.
Amazon is rated far ahead of the pack in value terms ahead of Walmart, The Home Depot, Taobao.com, Tmall.com, Lowe’s, CVS, Costco, Ikea and Alibaba.com (all who appear in the Top 10 most valuable brands). Its closest follower be it in the traditional sector is Walmart, which has seen its brand value resurge, jumping 14% to US$77.5 billion. As well as committing to its expansion programme in key markets, Walmart has focused on an innovative digital proposition, through a partnership with Microsoft and with the launch of Alphabot – robots that pick and pack online grocery orders at high speeds. Walmart – along with fellow mass merchant stores and supermarkets – is likely to see a boost to brand value following the COVID-19 pandemic as demand reaches an all-time high and strong storage and supply capabilities can be leveraged.
All in all supermarkets (alongside home delivery apps, online video conferencing such as Zoom and Skype and digital media) are the few winners to emerge from the COVID-19 pandemic with brands seeing Christmas type levels of demand, resulting in temporary spikes in the hiring of workers. Discount supermarkets such as Lidl and Aldi (US$12.4 billion and US$14.3 billion) are the fastest growing retail brands in the ranking of the Top 50, growing 40% and 37% respectively. Lidl and Aldi have reshaped the supermarket landscape by winning market share from their long-established high street counterparts. Initially competing on price leadership, both chains have gradually earned their customers’ trust and loyalty.
Undoubtedly the worst hit industries are aviation, oil & gas, tourism & leisure, restaurants and retail. For example, the brand value of the world’s biggest companies is set to lose an estimated US$1 trillion as a result of the Coronavirus outbreak, with the aviation sector being the most affected (to put this into perspective the Sars outbreak in 2003, which infected about 8,000 people and killed 774, cost the global economy an estimated US$50 billion). Already is motion is the lay-off of 12,000 workers (out of 42,000) by British Airways this week with rumblings at German Lufthansa and other major airlines such as American Airlines and the 3 major Chinese air carriers seem sure to scale back in the very short term.
Retail of all types (excluding food) is being hit hard and hit fast: whilst some larger retailers such as John Lewis are managing to weather at least part of the storm with its active online business and ownership of grocery Waitrose, even these retailers seem doubtful that they will ever open up all their store locations once lock-down or the pandemic crisis has eased. It is likely that large swathes of the High Street have closed forever, never to reopen. In a country that had already been experiencing falling consumer confidence over the last 2-3 years with the imminent arrival of the UK’s departure from the EU, the pandemic has created a situation that will finally prove the death knell to larger department store groups that were already struggling for survival pre COVID.
There are some positives here: high performers in some markets are national brands who perhaps have a stronger emotional connection with consumers but offer value as well. A case of buying British? Likewise the confidence and reliance of consumers on their local and neighbourly small businesses, some who have been able to provide a reduced but still invaluable service to their local communities. Their contribution should not be underestimated in a post-COVID Britain. The physical necessity not to shop or travel more than absolutely necessary should prove a benefit to smaller, privately or family owned businesses.
*Retail 50 – 2020 (www.brandfinance.com)
