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Technology Drives Value in Ranking of Top 100 Most Valuable Brands

Technology continues to rule and fuel the top ranked companies this year, and it plays a major part in boosting some of the fastest growing businesses as well.

Google, Apple and Microsoft were once again the three top ranked brands in the BrandZ Top 100 Most Valuable Global Brands list, as published by brand consultancy Kantar Millward Brown and WPP. In fact, the top 10 brands reads like a who’s who of the previous year, except WeChat’s owner Tencent, which had been No. 11, moved up to 8, bumping Verizon down three slots to number 11.

With few exceptions, the companies were either tech firms or those that have made significant investments in innovation. Specifically, e-commerce companies are responsible for making retail the fastest growing sector in this year’s ranking. The sector grew by 14 percent, and collectively these companies increased their value by more than 380 percent in the last 12 years compared to traditional retailers that have lost 23 percent of their value.

“The pace of retail was always fast and furious but in the 12 years since the BrandZ rankings began the rules of the game have radically changed. Walmart has been overtaken as the world’s most valuable retail brand by Amazon and two Chinese e-commerce brands are in the Top 10. E-commerce has radically reshaped the retail and brand landscape and these changes are set to accelerate,” said David Roth, WPP’s CEO of The Store, EMEA and Asia. “Retail brands that don’t deliver seamless, unique customer centric experience online and offline will continue to suffer. The future of retail is not what it used to be.”

Not surprisingly, Amazon topped this list, followed by Alibaba and The Home Depot. The movers were eBay, which gained two slots to No. 8, Aldi which dropped one to No. 9 and which claimed the 10th position, up from 11 last year.

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Amazon, which came in fourth in the overall rankings, was the fast-growing performer in the top 20 with a 41 percent spike to $139.3 billion. The engine behind its success was its focus on convenience through its Amazon Prime offerings and gadgets like Echo with the Alexa assistant, according to the report.

Rival Alibaba, which ranked 14th overall, was highlighted for its move into physical stores through its partnership with Bailian Group, which operates 5,000 stores, and its developments outside of the Chinese market into areas like automotives in Russia.

Walmart, the biggest retailer in the U.S., ranked as 31st overall on the strength of its online push, which has motived the chain to purchase as well as niche players like ModCloth.

Technology is having other effects on the overall brand ranking. Companies are getting younger, and it allows businesses to be global from day one, which is greatly impacting speed and scale, the report noted.

Activewear and fast fashion claimed the majority of the top 10 apparel slots again this year. Nike, Zara and H&M held onto the top positions. A second Intidex brand edged into the ranking in the No. 10 spot, squeezing out Next, which had been in eighth place in 2016. Massimo Dutti appeared in the top 10 for the first time, joining sister brand Zara, which sits at No. 2.

This year, activewear companies represented 49 percent of overall apparel value, up from 36 percent since 2006. Fourth ranked brand, Adidas, stands out for making the biggest leap up the chart. The activewear company increased its brand value by 58 percent to $8.3 billion in 2017. The report says the brand’s performance exemplifies how important technology is even for companies that are not tech pure-plays. In the case of Adidas, that includes innovations like 3-D printing.

The other notable point about the top 10 is that six companies saw a drop in brand value compared to last year. For instance, Nike, though No. 1, dropped by 9 percent to $34.2 billion from $37.5 billion. Seventh place apparel brand Victoria Secret lost the most value with a 19 percent drop to $5.0 billion from $6.2 billion.

Only Nike and Zara appear in the overall top 100 list. The activewear company landed at No. 26, two places below last year, and the fast fashion leader is 34th, up 1 spot. H&M had placed as 79th in 2016 but didn’t make the cut this year.

The report concludes that the top brands are those that create an ecosystem for consumers, allowing them to perform a range of functions under one umbrella. They are also the ones that are focused on making consumers’ lives better in some way, and those that are great communicators, which accounts for players like McDonald’s and L’Oreal on the list.