Global Brand Simplicity Index How Have Notable Global Brands and Select Industries Performed Over Time?
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Global Brand Simplicity See what’s inside Index How consumers rank leading brands, why disrupters are gaining ground and what companies can gain by simplifying. Industry Table of At Siegel+Gale, we believe that simplicity Symbols Contents is defined by remarkably clear and Simplicity Index Simplicity Highlights Appliances 4 Timeline 2 unexpectedly fresh brand experiences. Automotive 6 Highlights Banks/Retail For the past five years, we’ve surveyed 18 Global Electronics 18 Industry Ranking thousands of consumers worldwide to 19 Simplicity Index Fitness 20 Top 10 brands 22 Bottom 10 brands understand which brands provide the General insurance 24 Industry comparison simplest experiences. Health insurance 30 United States Internet retail 36 United Kingdom Each year, we’ve learned something Internet search 42 Germany new—but the brand benefits of simplicity Media don’t change. Simpler brands garner Restaurants 48 Sweden greater customer loyalty, foster innovation Retail/Fashion 54 Middle East Retail/General among employees and, in the long run, 60 India Retail/Grocery increase revenue. 66 China Retail/Health and beauty Shipping/Mail 70 Conclusion But a new generation of companies is Social media 70 Research methodology emerging to challenge the established order 72 Simple necessities Telecom/Cable 74 About Siegel+Gale 75 Acknowledgments of even the simplest brands. Born in a world 76 Contact us Telecom/Cell phone of complexity, they are rewriting the rules of Travel/Air service delivery and elevating consumer Travel/Booking expectations by putting simplicity at the Travel/Car rental center of the customer experience. What Travel/Hotels they offer is both fresh and clear—and they Travel/Train are beginning to reap the rewards. Utilities For more insights on how simplicity Proving that, for the brands that embrace drives business results, visit it, simplicity pays. simplicityindex.com Timeline Simplicity Index Simplicity IntroductionTimeline 4 Five years of the Global Brand Simplicity Index How have notable global brands and select industries performed over time? Simplicity stalwarts McDonald’s, Google, IKEA and Amazon perennially rank in the global Top 10, demonstrating a dedication to “simple” that consumers notice. Complexity Apple’s wild ride Social standings Banks hit bottom crowd The brand has been on a rankings The future looks bright for Citibank and HSBC rose to the Ryanair, Hertz, Budget and roller coaster since 2010, debuting singularly focused Instagram middle of the rankings at #39 and AXA haven’t been able to at #29 and hitting a high at #5 in (up 23 spots in the US Index and #48 in 2012, but have since fallen break out of the Bottom 10, 2012, before falling to #22 in 2014. debuting at #53 in the Global to #87 and #81 on this year’s proving that complexity Not far from the tree, iTunes fell rankings), while Facebook and global list—despite messages continues to plague global from #28 in 2011 to #65 in 2014. LinkedIn have historically had that speak of customer focus, brands across many sectors. trouble rising past the middle consumers see them as ranks, landing this year at #57 self-interested. and #84, respectively, on our Global Index. Highlights Simplicity Index Simplicity Highlights 6 Simple brands Percentage of growth of index/portfolio since the beginning of 2009 top market 200% +260% Simplicity indexes Portfolio 150% +115% S&P 100% +94% DAX +89% DOW Since 2009, a stock portfolio comprising the publicly traded simplest brands in our +51% FTSE Global Top 10 outperforms the major indexes. 50% 0% -50% 2009 2010 2011 2012 2013 2014 through Sep 2nd For more insights on how simplicity drives business results, visit simplicityindex.com Highlights Simplicity Index Simplicity Highlights 8 2014: Simplicity by the numbers 0 $1 170 % 70 % 38 % Complexity costs How much a portfolio of the world’s The percentage of consumers who The percentage of consumers In the most complex industries, simplest brands has beaten the average are more likely to recommend a brand willing to pay more for simpler customers are 2X more likely to call global stock index since 2009. because it provides simpler experiences experiences. a representative to find information and communications. than in less complex industries. Highlights Simplicity Index Simplicity Introduction 10 Simplicity Index Simplicity Highlights 10 Global movers and shakers Germany shows Battle for binge up to play watchers Not only did the Germans win the #5 Netflix is expanding into new global World Cup, they boast three brands markets beyond the US and Sweden, in the Global Index Top 10—ALDI, leaving #10 Amazon to play catch-up Lidl and Miele. on streaming capabilities and original Coffee break The Wal tumbles content creation. Omnipresent coffeehouse Starbucks Global big-box retailer Walmart dropped 26 spots to #43 in this year’s drops 28 spots this year to #42, Global Index. It appears that a demonstrating that more variety complicated menu and competition can create complexity. from niche baristas and brewers is making it hard for the brand to stay hot. Highlights Simplicity Index Simplicity Highlights What disrupters are doing 12 to deliver simplicity: They sidestep traditional industry protocols and shift power to The disrupter consumers. Brands like Airbnb and VRBO have usurped power Empowering from hotels and given it to local residents, allowing them to rent out people vacant properties—from spare rooms to vacation houses. Aereo gave viewers affordable access to broadcast television on their mobile factor devices and computers, and more incentive to “cut the cord.” Simple brands can’t be complacent. A new breed of brands is emerging, and they’re disrupting the status quo, changing consumer expectations. They turn underwhelming experiences into moments of delight. Though they span different industries, they possess a common Warby Parker brought buying eyeglasses to digital platforms by offering online look-books, sizing guides and at-home try-ons. characteristic—simplicity is at the core of the experiences they deliver. Reimagining experience Blue Apron reduces the complexity of cooking by delivering proportioned and pre-measured ingredients right to the customer’s kitchen, and eliminating the tedium of preparation. They identify pain points in everyday processes, and remove them. Venmo makes paying other people as easy as sending a text Removing message, and reduces waiting periods for available funds and friction bank fees. Uber comes to the aid of pedestrians who can’t hail a taxi by sending cars directly to them, after just a couple of taps on their mobile phones. They value people’s time by providing services to them where and when they’re most needed. FreshDirect saves people a trip to the store by delivering an online grocery shopping experience, and fresh groceries right to their door. Time is money, and smart thermostat Saving time Nest helps customers save both by learning people’s behavior to tailor household temperature—and the ability to manage it from a smartphone or tablet enables customers to conserve energy in more ways than one. Although Aereo, Airbnb and Uber face regulatory roadblocks, and others will likely face similar challenges, these upstarts know how to evolve—don’t expect them to go down without a fight. Highlights Simplicity Index Simplicity Highlights The disrupter index 14 This year, we asked consumers in the US and UK to evaluate select, regionally relevant disrupters based on the simplicity of their products, services, interactions Simplicity is the and communications in relation to established industry peers. Here’s how they ranked.* United States United Kingdom ultimate disrupter Brand SIMPLICITY SCORE Brand SIMPLICITY SCORE GrubHub 944 Netflix 851 It’s clear that simplicity is core to disrupters’ value propositions. Here’s what Uber 924 OVO Energy 791 survey respondents had to say about how disrupters perform vs. traditional Aereo 911 Airbnb 791 brands in their industries. Warby Parker 910 Citymapper 764 FreshDirect 910 Uber 753 Blue Apron 891 Spotify 752 Square 880 WhatsApp 747 Venmo 859 Eventbrite 726 Seamless 823 Snapchat 722 PeaPod 793 My Fitness Pal 703 GoPro 783 PayPal 701 VRBO 781 Tinder 701 Spotify 771 Dropbox 681 Pandora 762 Nest 661 “It’s a simple service with a simple pricing “It seems like their contract hides a lot of RunKeeper 758 TSB 657 model, so that makes it simple.” vs. small text and may hide legal language that works against customers.” Nest 738 RunKeeper 637 “Sign on, pay fee, watch TV. Sounds pretty simple to me.” “Completely not user friendly.” My Fitness Pal 737 Metro Bank 629 Etsy 735 Wonga 526 Google Wallet 704 Delivery.com 703 Airbnb 703 “You can easily transfer money from one “Complicated banking products.” person to another with a different bank, Soap.com 685 vs. “Hard to transfer money.” and it’s not complicated.” FitBit 682 “Easy to make and receive payments PayPal 676 on phone.” Ally 667 Jawbone UP 665 Gilt 655 Buzzfeed 627 “Website layout is better and easier “Hate searching through the website.” Beats Radio 602 to search and find what you need.” vs. “Services and prices are not clear.” BleacherReport 589 “Clearly defined terms and conditions.” “Too complicated to book a room.” Tesla 586 “Easy, quick access to low-cost, local * For information on our ranking accommodations.” WhatsApp 582 methodology, see page 70. Global Global Global Industry Ranking Simplicity Index RANK RANK RANK INDUSTRY SCORE CHG* BRAND SCORE CHG BRAND SCORE CHG BRAND SCORE 1. Internet search 950 1. 0 N ALDI 936 43. -26 � K Starbucks 656 85. 1 � Y E.ON 500 2. Electronics 761 2. 1 � H Google 927 44. -23 � D Lenovo 655 86. 1 � V Avis 496 Simplicity Index Simplicity Global 3. Retail/Grocery 733 3. N/A N Lidl 820 45. 11 � I Groupon 654 87. 1 � C Citibank 438 18 4. Internet retail 728 4.