March 20, 2012
The study examined 500 of the world’s top brands and found that consumers are staying loyal to luxury brands despite difficult economic times, creating an elite marketplace of alphabrands. Brand Finance concluded that luxury brands outdo lower-end brands by offering unparalleled quality in their products.
“Consumers turn to these alphabrands because they are keen to cast aside their worries about the economic downturn and allow themselves an indulgence in a brand which they know, trust and admire,” said James Baker, head of communications at Brand Finance, London.
“There is a definite aspirational aspect, especially when times are tough as people want to keep up with their peers and show that they are still able to afford these specific brands,” he said.
The Global 500 study measured the success of the world's 500 most popular brands.
Mainstream brands including Target, Walmart and Apple were the top brands, closely followed by luxury fashion and automotive labels.
Wearing down the competition
Luxury fashion brands earned coveted spots on the Global 500 list with billion-dollar brand values in 2012.
The report showed that consumers remain loyal to certain high-end brands and will splurge despite hard ecnomic times.
Longevity counts for luxury brands, since household names such as Louis Vuitton, Dior and Burberry had big accomplishments on the list this year.
Louis Vuitton spring/summer 2012
Luxury consumers will not sacrifice quality in what they wear. Moreover, they will choose brands with a stable reputation that follow trends, according to the study.
Louis Vuitton, Hermès and Ralph Lauren all rose to higher spots on the list, marking their territory as standout luxury fashion brands in 2012.
French brand Louis Vuitton took the highest spot for a luxury fashion house at 201 on the Global 500 list with a current value of $4.9 billion last year.
Also, Hermès is said to be worth $3.4 billion and Ralph Lauren is at $3.3 billion.
Meanwhile, high-end brands Dior and Burberry were first-timers on the Global 500 results table.
Actress Mila Kunis in her Dior ad campaign
Burberry took spot 371 at a $3 billion value, while Dior is at a $2.5 billion value.
Burberry spring/summer 2012
Prada and Gucci returned to the Global 500 list for the second time with values of $3.3 billion and $2.7 billion, respectively.
Prada spring/summer 2012
In addition, high-end jewelry brand has Cartier a $3.1 billion value while competitor and Tiffany & Co. was slightly below at $2.9 billion.
"Burberry is the real success story as it is a brand which is incredibly aware of the importance of the emerging markets," Mr. Baker said. "This is highlighted in the regional branding of Burberry Black Label which was solely for consumers in Japan and Hong Kong.
"Despite being a quintessentially British brand with a Royal Warrant from Elizabeth II and Prince Charles, it has become an enormous international presence and has managed to capitalize on the ever-growing markets of the Far East," he said. "Of course, what is most interesting is that Tiffany as well as Cartier have both re-entered the table in 2012.
"Both brands are hugely respected and associated with lavish luxury and an exclusive clientele."
Since 2011 was so turbulent economically, the fact that Tiffany and Cartier made the list was quite an accomplishment, according to Mr. Baker.
Drive for luxury
In addition to fashion getting most of the attention on the 2012 Global 500 list, it is luxury car brands that remain strong from year to year.
Luxury consumers know that quality comes with a high price tag, which explains why German automakers BMW and Mercedes-Benz are high-ranking alumni of the Global 500 list.
British carmaker Rolls-Royce also saw a noteworthy increase in brand value.
BMW topped the luxury automakers with the 22nd spot on the Global 500 list. It saw a 5 percent increase in its value to $21.2 billion.
Mercedes-Benz followed closely at 26 with a 2012 value of $19.7 billion. Also, Audi came in at No. 221 on the list, up 58 spots from last year with a value of $4.6 billion.
At spot 426 was Lexus with a $2.7 billion value in 2012.
Moreover, British automaker Rolls-Royce was the most improved of its kind with a brand value of $3.1 billion. This was a 17 percent increase from 2011.
Rolls Royce Phantom model
The overall value of the Global 500 list increased by 3.3 percent to $3.4 trillion from last year.
"It may seem odd that luxury brands are doing well, but one area of growth is certainly in China and the BRIC markets where commercial brands have truly taken hold," Mr. Baker said.
"One of the reasons for the strong appetite for brands is that increasingly status-conscious societies such as Chinese consumers see luxury brands as a way of demonstrating wealth and conferring prestige," he said.
"It appears that despite their economic worries, consumers are still keen to allow themselves some indulgence."
Tricia Carr, editorial assistant on Luxury Daily, New York