Despite coronavirus, top luxury brand’s value is still increasing

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Despite the economic downturn caused by the COVID-19 pandemic, the 2020 edition of the BrandZ ranking of the most valued brands in the world revealed that the world’s leading brands had grown by 6% in value to nearly $5 trillion. A growth explained by a luxury more in line with the new expectations of consumers, which was able to adapt to the change of era and the rise of a post-Covid-19 society.

 

Growing “brand value” in luxury goods

 

The BrandZ™ ranking, published on June 30, reported for the world’s 100 most highly valued brands a constant increase of +6% in value in 2020 against +7% in 2019, for a total value of nearly $5 trillion.

 

This means that despite the economic cost of the COVID-19 pandemic, the most powerful brands have continued to grow and increase in value.

 

The continued growth in the value of BrandZ’s Top 100 brands shows that strong brands are in a much better position than they were during the global economic crisis of 2008-2009″ , commented David Roth, President of BrandZ.

 

Specifically with regard to the value of luxury brands, which was calculated based on their financial data as well as consumer views, the top names on the list for 2020 are Louis Vuitton, Chanel, Hermès and Gucci, ranked 19, 34, 39 and 49 respectively.

 

In detail, Louis Vuitton (LVMH) reinforces its leadership with a brand value of $51.7 billion, up 10% from last year. Chanel – with a brand value of $36.1 billion and Hermès – with a brand value of $33 billion, are among the leading players in the luxury industry, although both have lost ground compared to last year’s ranking. Conversely, the Kering-owned Gucci company climbed three places with a brand value of $27.2 billion.

 

They are followed by Rolex, Cartier, Dior, Yves Saint Laurent, Burberry and Prada, which respectively complete the rest of the top 10 luxury brands. Together, these ten brands have a combined value of $177 billion, as measured by Kantar, and were one of six categories (out of a total of 14 categories) that saw their value increase.

 

In the end, the luxury industry is well represented in the rankings with a 3% growth in 2020 compared to 2019 (29%).

 

China, e-commerce, commitment to CSR: the drivers of growth

 

According to the report prepared by the consultancy firm Kantar, this increase in value is due to the fact that “luxury brands, compared to brands in other categories, tend to have strong brand equity, which gives them resilience“.

 

Within the luxury category, many brands have rich heritages that have underpinned and helped to instill the quality credentials that help build a premium offering.” continues the report, which believes that brands must go further and “keep their heritage relevant by finding ways to make yesterday’s stories connect with tomorrow’s customers

 

In addition, the enduring consumption by “Chinese buyers, who account for about one-third of luxury purchases worldwide” has allowed luxury brands to continue to grow despite difficult market conditions.

 

In addition, luxury brands have been able to adapt their centuries-old heritage to a more contemporary approach, reaching a broader customer base: “Louis Vuitton’s partnership with the streetwear brand Supreme, and the creation of the Fenty brand by LVMH and the singer Rihanna” are examples of how “luxury has become more deeply integrated into society” and has attracted the interest of young consumers.

 

Kantar notes that “the influence of young consumers continues to shape the luxury category, and even the definition of luxury itself“, and that, just like other brand categories, a brand’s ability “to be creative and innovative” (i.e., to “stand out and set trends“) is “the most important factor in determining whether brands increase or decrease in value from year to year“.

 

The increased focus on experience has also been a growth driver for the major houses. The report cites, for example, the acquisition by LVMH Moët Hennessy Louis Vuitton of the luxury travel operator Belmond Ltd, owner of the Simplon-Orient-Express Venice train and hotels including the Copacabana Palace in Rio de Janeiro. Now “increasingly, customers are engaging more of their senses to experience luxury. They want to see, touch, taste, smell, and hear luxury, which opens brand opportunities in entertainment, restaurants, hotels, transportation, and beyond” the report states.

 

The CSR commitment of the brands was also a key criterion. While 44% of consumers around the world said they have become more sensitive to environmental issues since the pandemic (source: COVID-19 Kantar Barometer June 2020), luxury brands have adapted and discovered that “the design, craftsmanship and packaging of products using sustainable materials can enhance appeal and exclusivity“.

 

With this in mind, “the desire for products crafted with sustainable materials and presented with minimal packaging makes sustainability the new luxury” according to the report, which explains in large part why brands like Loewe are rolling out sustainability-centric collections, and “32 fashion and luxury brands” such as Burberry, Chanel, the Prada Group, and the Gucci and Bottega Veneta’s parent company Kering Group, “are committed to reducing their environmental footprint“.

 

Finally, in light of the persistent COVID-19 pandemic and the various phases of reopening around the world, the report indicates that an already existing trend in the luxury category could accelerate: e-commerce, as high-fashion and luxury brands continue to be brought under the umbrellas of conglomerates (the recent LVMH acquisition of Tiffany & Co. is one example), and entities within this sphere move to place greater reliance on online shopping after years of attempting to avoid it in order to adhere to a more traditional understanding of what luxury looks/acts like.

 

Read also > What future for french luxury after the crisis ?

 

Featured photo : © Louis Vuitton[/vc_column_text][/vc_column][/vc_row][vc_row njt-role=”not-logged-in”][vc_column][vc_column_text]

Despite the economic downturn caused by the COVID-19 pandemic, the 2020 edition of the BrandZ ranking of the most valued brands in the world revealed that the world’s leading brands had grown by 6% in value to nearly $5 trillion. A growth explained by a luxury more in line with the new expectations of consumers, which was able to adapt to the change of era and the rise of a post-Covid-19 society.

 

Growing “brand value” in luxury goods

 

The BrandZ™ ranking, published on June 30, reported for the world’s 100 most highly valued brands a constant increase of +6% in value in 2020 against +7% in 2019, for a total value of nearly $5 trillion.

 

This means that despite the economic cost of the COVID-19 pandemic, the most powerful brands have continued to grow and increase in value.

 

The continued growth in the value of BrandZ’s Top 100 brands shows that strong brands are in a much better position than they were during the global economic crisis of 2008-2009″ , commented David Roth, President of BrandZ.

 

Specifically with regard to the value of luxury brands, which was calculated based on their financial data as well as consumer views, the top names on the list for 2020 are Louis Vuitton, Chanel, Hermès and Gucci, ranked 19, 34, 39 and 49 respectively.

 

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Despite the economic downturn caused by the COVID-19 pandemic, the 2020 edition of the BrandZ ranking of the most valued brands in the world revealed that the world’s leading brands had grown by 6% in value to nearly $5 trillion. A growth explained by a luxury more in line with the new expectations of consumers, which was able to adapt to the change of era and the rise of a post-Covid-19 society.

 

Growing “brand value” in luxury goods

 

The BrandZ™ ranking, published on June 30, reported for the world’s 100 most highly valued brands a constant increase of +6% in value in 2020 against +7% in 2019, for a total value of nearly $5 trillion.

 

This means that despite the economic cost of the COVID-19 pandemic, the most powerful brands have continued to grow and increase in value.

 

The continued growth in the value of BrandZ’s Top 100 brands shows that strong brands are in a much better position than they were during the global economic crisis of 2008-2009″ , commented David Roth, President of BrandZ.

 

Specifically with regard to the value of luxury brands, which was calculated based on their financial data as well as consumer views, the top names on the list for 2020 are Louis Vuitton, Chanel, Hermès and Gucci, ranked 19, 34, 39 and 49 respectively.

 

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Thanks to its extensive knowledge of these sectors, the Luxus + editorial team deciphers for its readers the main economic and technological stakes in fashion, watchmaking, jewelry, gastronomy, perfumes and cosmetics, hotels, and prestigious real estate.

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