Small retailers are threatening large corporate giants.
But Goldman Sachs believes a few megabrands will continue to grow and dominate the industry.
Analysts at the investment bank recently analysed which brands will appeal most to millennials — the most powerful group of consumers — in the future.
Here are the huge brands Goldman Sachs believes will only get larger.
The tech company is the chief manufacturer of smartphones and other electronics which have become essential to millennial consumers.
Goldman Sachs says that millennials aren’t just willing to buy Apple products — they will pay a huge premium for them.
“There has been a premiumization in certain categories/brands of high value,” the analysts write.
This brand perception will help Apple grow even larger in the future.
While Disney is primarily known for movies, it is also dominating the toy and game categories for kids.
The brand has partnered with Hasbro to create toys and games based on its Star Wars, Marvel, and Frozen franchises.
This innovation will help drive profits at Disney.
The athletic shoe and clothing company is finding a way to shed its megabrand perception, according to Goldman Sachs.
“While we believe their success is a product of innovation, execution, and a culture that breeds success, we also believe these companies have also successfully segmented their brands in a way that markets them as smaller than they are,” the analysts write. “Nike, for example, has developed sub-brands like Jordan and Nike SB.”
Nike is facing competition from companies like UnderArmour, New Balance, Adidas, and Lululemon. The arms race has led to a rush of innovation, and products that consumers can’t resist.
For instance, Nike’s Flyknit shoes have been wildly successful.
The Flyknit material, which debuted two years ago, is lightweight, minimalist, and fits like socks.
Buying Lego’s toys makes millennial parents feel like they’re investing in their child’s development, according to Goldman Sachs.
“We consider Lego as an example of a company appealing to millennials’ value for child development and creative play,” the analysts write.
The company is also getting into entertainment through ventures like The Lego Movie.
Lego is also innovating products by exhaustively researching customers in its “Future Lab” run by scientific researchers.
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