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Amazon wins because people think they're getting a deal

CNBC logo CNBC 6/18/2018 Lucy Handley

Amazon is seen as one of the world's most disruptive companies because people love it so much they forget they've even paid for some of its services.

While Amazon Prime costs $119 a year as of Saturday for existing annual subscribers, or $156 in total for monthly subscribers, many people forget the charge because of services such as delivery, music and movies being included.

According to Doreen Wang, a senior executive at research consultancy Kantar Millward Brown, research shows that Prime customers are the e-commerce giant's most loyal. "Kantar monitors data and finds that (Prime customers) are nine times more loyal to Amazon and spend around 50 percent of their personal care budgets on Amazon (for example), so they are super loyal. They tend to forget they have paid for prime because of free delivery and returns for free," she told CNBC by phone.

The company scored highly in new research by Kantar Millward Brown that looked at the companies and brands people rate as being disruptive or creative.

Technology and entertainment brands such as DisneyDIS and Amazon are seen by consumers as the companies that are both creative and "shaking things up" in the research published Monday — and they are among the world's most valuable brands too.

Apple, the world's second most valuable brand at just over $300 billion, is seen as one of the most "disruptively creative" in the study, scoring 135 for creativity against an average of 100. Amazon, which has a brand valuation of $207.6 billion, scored 128.

Netflix also scored highly for being a creative and disruptive company and its brand value has also rocketed this year, up 71 percent to $20.8 billion, according to the research presented at the Cannes Lions international festival of creativity in France.

The link between creativity, how disruptive a company is and its brand value was analyzed by the consultancy based on interviews done with 3.6 million people over the past 12 years. It also took into account financial and business performance to come up with the brand valuation figure, part of its BrandZ rankings, an annual list of the 100 most valuable brands, originally released in May. Businesses use the BrandZ methodology to assess how much their brand names are worth, which helps them put a premium price on them if they are being licensed or sold.

While advertising also helps to improve a brand's valuation, according to the research, it is the experience people have of companies that also changes perceptions. "The most innovative brands are constantly looking at how they can continue improving the life of the consumer. Shaking things up means never being satisfied with today," said Wang, global head of BrandZ, in an emailed statement.

Disney scores highest on the new creativity and disruption measure, with 137, and its brand value has increased by 3 percent this year to $53.8 billion. It has made a reported $1 billion investment in digital transformation for its theme parks, including a digital wristband that creates itineraries for theme-park goers, is linked to their credit card and replaces tickets for rides — people just tap and go.

"Now you must create experiences that make the consumer say, 'That was so easy, I can't believe I didn't have to wait two hours in line.' We no longer create that bond by communications alone," said Dayoán Daumont, a consulting partner at agency OgilvyRed, writing in the BrandZ report.

Companies whose creativity correlated with their brand valuations also included Tesla, Tencent700-HK and Chinese liquor brand Maotai. JD.com also scored highly on the creative measure, and its brand valuation increased by 94 percent to $20.9 billion in the BrandZ list.

Related video: How has Amazon transformed Whole Foods one year later?

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