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Section 05
Consumer and Retail // APPAREL
THE CATEGORIES
Apparel brands score high in differentiation
The BrandZ Apparel Top 10
caught up with the Global Top 100
in differentiation during the past 10
years. That rise led to a big increase in
Brand Value – 139 percent for apparel
compared to 126 percent for the Top
100. Differentiation is one of the key
drivers of brand success. An average
brand scores 100.
Over the same period, consumers
showed a greater interest in value.
Consumers choosing to buy on price
alone declined from 13 percent to only
6 percent, whereas the importance of
the brand increased from 55 percent to
63 percent.
The Apparel Top 10 appear to have
successfully persuaded consumers that
they offer fair value for money, with
pricing that sometimes even justifies
a premium. The Fairness score of the
Apparel Top 10, an indication of value,
rose sharply in 2011, suggesting that
brands listened to consumer spending
concerns coming out of the recession
and adjusted prices effectively. At the
same time, the Premium measure also
increased.
Six of the Apparel Top 10 brands –
Adidas, Nike, Ralph Lauren, Lululemon,
Hugo Boss and Tommy Hilfiger – tend
to have a more premium offer. These
brands are high Difference, scoring 139,
while the successful value brands score
113 on Difference, still well above the
average. Both sets increased over the
period.
Among the value brands, Uniqlo and
H&M ranked highest in Fairness, scoring
137 and 112 respectively. These brands
compete on more than one dimension.
They offer low price and perceived
added value: for Uniqlo, clothes
engineered for climate comfort; style in
the case of H&M.
Apparel Top 10 exceed Top 100 in Fairness and Premium
The BrandZ Apparel Top 10 exceeded the Global Top 100 in both Fairness and
Premium scores, indicating that apparel brands have successfully persuaded
consumers that they offer fair value for money with pricing that sometimes even
justifies a premium.
100
10-YEAR TRENDS & ANALYSIS
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
104
101
Top 100 Fairness
Top 100 Premium
Apparel Top 10 Fairness
Apparel Top 10 Premium
111
107
105
103
Shifting control to stores
Uniqlo planned to continue its aggressive
expansion in the US and Europe, where it
opened a Berlin store in 2014, its first in
Germany. The brand also opened its first
store in Australia.
Uniqlo experienced especially strong results
in Mainland China, Hong Kong and Taiwan,
where it operated around 374 stores and
planned to open 100 annually. Sales for
Greater China increased 66.5 percent for
the fiscal year 2014.
At the end of its fiscal year, Uniqlo operated
633 international stores and planned to
add about 200 in the next 12 months. It
operated 852 stores in Japan. The company
also announced plans to shift more
management control to the stores, to better
match the product mix to local tastes and
drive sales per store.
Uniqlo continued to differentiate with a
focus on functional fashion, emphasizing
fabrics with innovative technology that
provide comfortable warmth or coolness.
Lifestyle brands
While the fast-fashion brands succeeded
around style, value and rapid inventory
rotation, Tommy Hilfiger, an affordable
luxury brand built around an aspirational
preppy lifestyle, rose 29 percent in Brand
Value, the fastest riser in the BrandZ
Apparel Top 10.
The strength of the US dollar weakened
Ralph Lauren’s international business and its
share price declined. The brand’s US sales
took a surprising dip in early 2015 because
of aggressive discounting by competitors.
Ralph Lauren implemented a restructuring
plan to create a global brand management
model as the company continued
international growth, and it opened a flagship
Polo store on Fifth Avenue.
Several factors negatively affected the sales
and the share price of Hugo Boss, including
weakness in the luxury sector in some
important European and Asian markets and a
slowdown in Russian tourism.
BRAND BUILDING
ACTION POINTS
1. Build a total brand experience that’s
exciting and consistent across all touch
points.
Athletic performance
is mixed
The FIFA World Cup in Brazil presented an
important opportunity for athletic apparel
and footwear brands. Nike did not officially
sponsor the World Cup, but instead provided
kits to 10 of the teams. It also introduced
new products at the Sochi Olympics and the
Super Bowl.
The brand also focused on its digital
presence, expanding the Nike ecosystem,
which includes its digital fitness-monitoring
devices. Nike’s women’s business grew at a
faster rate than the men’s business. A new
advertising campaign called “Better for It”
motivated women to exercise and improve
fitness and health. Online business grew 42
percent.
Adidas officially sponsored the World Cup.
Its profit declined sharply in 2014, however,
because of difficulties in the Russian market
and its US golf division. The brand planned to
accelerate growth by concentrating on key
world capitals, including New York, London,
Paris and Shanghai. Over the next few years,
Adidas planned to add 55 more US stores.
Despite increased competition, the
overall strength of the athletic leisurewear
category helped Lululemon slowly recover
from negative publicity around the recall
of a line of yoga stretch pants that were
immodestly sheer.
2. Truly know your customer, his or her
needs and behaviors, and cultivate a
deep connection, showing through
your actions that you value the
relationship.
INSIGHT
Consumers seek
store and online
brand experience
Consumers are looking for the total
brand experience. On one hand,
there’s the experience in the shop,
where consumers want more than
just the racks of clothes. They’re
looking for ways to experience the
brand outside the products being
offered. Those experiences can
include interactive screens and
being inspired by how people wear
clothes and many other things.
The same need for experience
applies to the digital world - not just
plain advertising, but total brand
experiences, which are of course in
line with the in-store experience.
Marieke van den Toorn
Partner
Millward Brown Vermeer
Marieke.Vandentoorn@mbvermeer.com
3. Offer the consumer a combination of
value for money that differentiates and
emphasizes more than price alone, a
less compelling proposition.
FUTURE VIEW
Lower prices and more
competition will make it
more important to engage
consumers with the brand
in stores and online.
Brands will not be able to
ignore ethical supply chain
practices following the
Bangladesh factory disaster.
Online shopping will continue
to increase as a proportion of
total apparel spending.
The fast-fashion brands
will continue aggressive
global expansion with both
physical and virtual stores.
96
2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: BrandZ / Millward Brown
Average brand = 100
98 BrandZ Top 100 Most Valuable Global Brands 2015 99