Opinion: What can be learned about premium brands from the FutureBrand Index?
Why are we prepared to pay extra for an iPhone when there are cheaper alternatives that are functionally as good – if not better? Why will we pay more for shoes adorned with the Nike swoosh, or sunglasses featuring the Gucci double G, or Louis Vuitton luggage that costs as much as a decent holiday? Oliver Michell answers these and other questions through the lens of the FutureBrand Index
An enviable few brands have reached the position of being able to command a price premium. Some – Louis Vuitton, for instance – are unashamedly luxurious, but others – such as Nike – are not. These premium brands can be found in most sectors and all regions. What are the factors that link them – and how can others follow their lead and become the sort of brands that consumers will happily dig a little deeper for?
Do it authentically. Like other premium brands, Nike is a category leader with an incredibly strong and clear brand vision. It communicates with its customers in a way that’s consistent and inspiring. It comes across as credible and authentic, connecting meaningfully with customers and displaying a genuine understanding of the sub-cultures they’re passionate about. When it advertises a pair of golfing shoes, Nike demonstrates a knowledge of the sport’s nuances and culture that golfers find completely convincing.
This is a brand that understands our sport and aligns with it in a way that we’d like to be seen to be doing too – so we’re prepared to spend a bit more on its shoes. And for every golfer having these thoughts, there are just as many runners, basketball players and footballers feeling just as faithfully represented and consequently just as happy to spend a little bit more on Nike products.
An inclusive model is key. Nike customers buy from the brand at least in part because its values reflect their own – or at any rate the values they’d like to be associated with. And the same principle increasingly applies to the world of luxury goods.
In the past, many luxury brands relied on stories about pedigree, quality and exclusivity. But Millennials are more interested in values than pedigree – and smart luxury brands are picking up on this. Look at how Gucci has turned perceptions of luxury on their head – and consequently transformed its own fortunes.
As part of the big shake-up that followed the arrival of its chief executive Marco Bizzarri in 2015, the brand turned its back on exclusivity to embrace inclusivity. It reached out to the creative community with an invitation to help produce inspiring products that express their identity – and is now known for dressing stars such as Brad Pitt, Rhianna and Blake Lively.
Bizzarri also set up a ‘shadow board’ comprising a group of Gucci Millennials in their 20s, with whom he regularly discusses the future of the company. It’s surely no coincidence that the brand announced last year it would be going fur-free.
Brands hoping to make a move to hallowed premium status might benefit from studying the trends that emerged from the recently published FutureBrand Index, which reorders PwC’s Global Top 100 – the largest companies in the world by market capitalisation – taking the views of an informed global group of 3,000 people to measure each firm’s ‘futureproof factor:’ how strongly they’re positioned for future success.
The index shows that the brands performing the best, irrespective of which sector they’re in or how well-established they may be, are those that consistently align the totality of the experiences they create with their wider corporate purpose. These are the brands that are most strongly positioned to charge a premium.
Consumers have always preferred values-based brands whose opinions they feel comfortable aligning with. But for Millennials and Gen-Zs in particular, that means eastern brands such as Chinese spirits company Kweichow Moutai, which is arguably the Index’s strongest performer, appearing for the first time this year in second place.
Kweichow Moutai and other Chinese brands stand for craft, education and knowledge that really counts. They give the impression that seeking a sense of harmony, well-being and balance is more important to it than profit.
One of the big themes to emerge from the index is that younger consumers especially are gravitating towards brands with opinions like this about how life should be – which could spell trouble for the big Western brands such as Apple and Nike.
Nike is strongly aligned with health and fitness, and Apple with creativity. But these are generic values that can easily be found elsewhere. Everyone knows these brands are supreme marketers but there’s a growing suspicion that this might be all they are – that they don’t really stand for anything meaningful.
Millennials and Gen-Zs feel they’re living in a nasty, polarised world. They’re looking for something different – something more positive – and eastern values represent an attractive alternative to traditional consumerism. If this shift continues to gather momentum, eastern values will become the world’s values. And if that happens, western brands wanting to charge a premium had better stand for something meaningful.
Oliver Michell is the chief creative officer at FutureBrand UXUS