The Brand Move Roundup – September 4, 2020
We’re tracking the notable brand moves & highlighting the companies who are tackling this challenge successfully.
In early March we began reporting daily on how brands were dealing with Covid-19. But it’s become clear that the current climate is one of near-perpetual disruption, so we decided to keep on telling the stories of inspiring brand leadership and strategy amid the latest crises in an anxious world. Our goal is to provide an up-to-the-minute source of information, inspiration and insight on brand moves as they happen.
Facebook will prohibit new political ads in the week before the presidential election in November, when there won’t be adequate time to rebut misinformation. It will also flag premature claims of victory, adding a label linking to current results. “This election is not going to be business as usual,” Chief Executive Mark Zuckerberg said, noting both the difficulties of voting during a pandemic and likely attacks on the credibility of the results. Other new Facebook election policies include limitations on the volume of messages that can be sent through its Messenger product and an expansion of Facebook’s rules against voter suppression to cover implicit attempts to mislead Facebook users about voting procedures.
Sales of organic food and drink rose sharply in the UK during lockdown – and have soared by double the rate of non-organic equivalents over the past year. Organic bananas, chicken, eggs and wine are among the standout winners that, from January, helped supermarkets enjoy the highest sales growth in the sector since December 2016. Data from the market research company Nielsen shows organic food and drink sales grew by 6.1% – almost double the 3.2% growth of non-organic food and drink products – in the year ending May 2020. It also reported a 18.7% increase in organic sales in the 12 weeks to the end of May – which includes 10 weeks of lockdown – compared with a 14.2% increase in non-organic equivalents. The figures were released by the Soil Association, the trade body which licenses organic products and promotes organic farming. The sector is on track to hit the £2.6bn mark by the end of the year, exceeding the £2.5bn originally projected, the association said. The UK’s largest supermarket, Tesco, reported a “steady increase” in the popularity of organic produce as its customers become more conscious about health and provenance. Its most popular organic product is its Fairtrade banana five-pack; customers buy on average about 261,000 bananas per day this way. It said organic fresh produce sales had risen 5% in volume compared with last year, while during the lockdown months this reached more than 12% growth on the same period last year. Beyond fresh fruit and veg, its most popular food is its organic egg six-pack, with more than 48m individual eggs sold over the past six months. At Waitrose, sales of organic food and drink have increased by 13% compared with last year. Categories which have shown some of the biggest sales increases include chicken (up 42%), vegetables (up 23%) and eggs (up 13%). The Co-op convenience retailer said sales of its organic wines outperformed those of its total range this year.
Michael Bloomberg, former New York City mayor and founder of information empire Bloomberg, is to announce a large donation to four historically Black medical schools, in an effort to improve the health and wealth of Black communities, particularly during the pandemic. The immediate goal is to ease the financial burden on about 800 medical students, who will each receive grants of up to $100,000. The donation to four institutions – Charles R. Drew University of Science and Medicine, in Los Angeles; Howard University College of Medicine, in Washington; Meharry Medical College, in Nashville; and Morehouse School of Medicine, in Atlanta – is one of the biggest by a single donor to historically Black schools. It follows other pledges to historically Black institutions by Reed Hastings of Netflix and his wife, Patty Quillin, and MacKenzie Scott. Mr. Bloomberg’s gift is the first major donation from the Greenwood Initiative, a racial justice program he started in the waning days of his presidential campaign. Its broader aim is to increase the number of Black doctors in the U.S. The data-driven Mr. Bloomberg and his team were convinced by statistics showing that Black doctors help provide better health outcomes for Black patients and are more likely to work in underserved communities. That became even more of a concern amid the pandemic’s disproportionate impact on Black people. “By increasing the number of Black doctors, we hope the gift will help to save more Black lives and reduce the health problems that limit economic opportunity in Black communities,” Mr. Bloomberg said.
According to the US National Retail Federation, holiday sales in November and December can bring in 20 percent of a retailer’s annual revenue, and 30 percent of sales for hobby, toy and game stores, while driving tremendous profitability. The most recent annual report for Macy’s, which also owns Bloomingdale’s, showed that the fourth quarter accounted for 34 percent of its sales. But this year a pause is expected on so-called doorbuster deals and the ensuing madness created by crowds rushing into stores for limited discounts and fighting over electronics. Companies including Hasbro, Target and Macy’s have signaled plans to offer discounts over a longer period, starting as soon as late October. Jeff Gennette, Macy’s chief executive, said in a July earnings call that he expected Black Friday deals “to start in full force after Halloween.” In preparation for customers who are nervous about crowds, Macy’s has been exploring new ways to manage store traffic and rethinking bustling sales events like Black Friday and the 10 days before Christmas, Mr. Gennette said. He added that this year’s new curbside pickup “is going to be a big secret weapon for us this holiday season,” and especially huge with shoppers who aren’t comfortable entering stores. Its performance will be crucial: Macy’s said Wednesday that sales for the first half of this year were $6.6 billion, compared with $11 billion last year. “We’re not going to see any of these crazy blowout sales; we’re not going to see a typical Black Friday — we’ve already seen the cancellation of Thanksgiving Day shopping,” said Stacey Widlitz, president of SW Retail Advisors, an independent research firm. “The stores cannot safely handle these.” Nordstrom, too, has been preparing for more pressure on its e-commerce business this holiday season and “doing a lot of scenario planning about what it’s going to take to make sure that we can fulfill the demand if it’s going to happen disproportionately in online channels,” Peter Nordstrom, president and chief brand officer of the company, said. “The wild card is going to be the traffic we get through physical stores, given the sensibility of customers around Covid,” he said. “And no one’s got a crystal ball on that.” Far more shopping is expected to take place online or through pickups at stores. That is safer for consumers, but means that retailers will lose out on the extra purchases people make once they’re in stores.
Louis Vuitton has just joined TikTok, becoming the latest in a smattering of high-end brands creating accounts in recent months. In July alone, TikTok welcomed Fendi, Balenciaga, Dior, and Stella McCartney, coming on the heels of newcomers like Burberry, YSL, and Gucci earlier this year. While the types of videos shared by these brands varies widely – as does the cadence, with some like Prada and Tiffany & Co. sitting idle with zero posts – it’s clear their presence on the platform is important. According to a recent survey conducted by YPulse, a marketing firm specializing in Gen Z and millennial consumers, 54% of Gen Z respondents said that they currently use TikTok. This compares to 35% in February 2020. The uptick is largely a result of the pandemic, said YPulse’s Vice President of Content MaryLeigh Bliss. “Luxury brands are beginning to join the platform and the reason is really clear: the growth of TikTok among the next generation of shoppers has been so enormous,” Bliss said. “Especially in the last six months, we’ve seen TikTok usage among Gen Z skyrocket and quarantines and the pandemic are certainly behind a lot of that activity.” Gucci, in particular, has found success in light-hearted posts like its Gucci Moves series, which features a series of diverse, non-models dancing in Gucci attire. Since joining in February, Gucci has racked up nearly half a million followers, with many of its videos generating millions of views. According to Thomas Rankin, cofounder and CEO of the visual marketing platform Dash Hudson, TikTok may ultimately become the fashion show of the future. “During the pandemic, and with fashion weeks currently a thing of the past, luxury brands must shift their perspectives on how to engage audiences, and deliver content that is not a replication of fashion weeks, but a reimagination of it that works on new channels like TikTok,” he said.
UK sandwich and coffee chain Pret a Manger is to offer customers up to five coffees a day if they sign up to a monthly subscription service. Meanwhile city centres, saturated with coffee shops, remain relatively deserted as many office workers continue to work from home; Pret has already announced it is closing 30 outlets and laying off a third of its staff. Pret boss Pano Christou told the BBC’s Today programme: “There’s no doubt that workers will come into the office less often than beforehand. Pret needs to adapt itself to the changes of customer patterns and that’s where we’ve been very focused.” Although many of the sandwich chain’s outlets are in central London, Mr Christou said that 40% of its business was in London suburbs and the home counties, where customers were starting to return “much more swiftly”. He added that Pret had seen its delivery business grow tenfold through the coronavirus crisis. The chain is launching YourPret Barista next week as part of new digital strategy which it hopes will help revive its fortunes. Briony Raven, Pret’s director of coffee and packaging, said the scheme aimed to help persuade customers to see Pret as the default choice, in the same way they do other subscription services such as Netflix. “It’s Pret’s way of doing loyalty,” she said. “It’s about giving people an easy choice, when they come back into their everyday routine.”
Cargo, one of the least glamorous aspects of flying, is proving a rare ray of light for airlines amid the coronavirus gloom. With much of the world’s population house-bound and shopping online instead of hitting the malls, analysts see no let-up in demand, particularly as the peak year-end holiday season approaches. “Airfreight is going to be a bright spot for carriers at least for this year because while borders are closed that doesn’t mean people aren’t buying,” said Um Kyung-a, an airline analyst at Shinyoung Securities Co. in Seoul. “That trend is likely to continue as cargo capacity remains limited.” Under normal circumstances, about 60% of air cargo globally is flown in the belly hold of passenger flights. With hundreds of those jets parked in deserts waiting out the pandemic, airfreight costs have spiraled: rates to North America from Hong Kong are up almost 70% from early January. In the U.S., United Airlines recently operated its 5,000th cargo-only flight (the busiest air cargo routes are between Asia and North America.) The carrier’s revenue from cargo jumped more than 36% in the second quarter to $402 million. American Airlines, meanwhile, has relaunched cargo-only services after a 35-year hiatus. In September, it expects to operate more than 1,000 cargo-only wide-body flights, primarily Boeing Co. 777s and 787s, to 32 destinations in Latin America, Europe and Asia. In Asia, Singapore Airlines’ budget long-haul arm Scoot last month removed the passenger seats from one of its Airbus SE A320s to free up more space, while Korean Air is also converting planes, and Asiana eked out quarterly profits after flying jets loaded with technology components to sate consumer demand for at-home gadgets. Emirates, the world’s fourth-biggest cargo carrier after Federal Express, Qatar Airways and UPS, said it “reacted very quickly,” scaling up its cargo network to around 50 destinations by early April, 75 by mid-May and 100 by the start of July.
A robot built by tech company Telexistence (or TX), named Model-T, is now stocking shelves at a FamilyMart convenience store in Japan. For this trial use, the alien-looking robot is controlled by an operator in a remote location. As the first step, said the company, TX will start remotely operating the restocking of PET plastic beverage bottles from the backyard storage area of the store, which makes up a relatively large portion of the workload in the store. Going forward, FamilyMart and TX will continue to expand the items to be handled by the robot to other product categories, such as rice balls, sandwiches and bento boxes, and aim to deploy the Model-T in up to 20 stores franchised by TX by 2022. In the meantime, TX will continue aiming to introduce Model-T to a broader franchise network and eventually cover all FamilyMart stores. “By introducing Model-T into stores,” said the firm, “FamilyMart store staff will be able to work in multiple stores from a remote location, which will help solve challenges around labor shortage and help create new job opportunities. It will also lead to the reduction of human-to-human contact to help prevent the spread of COVID-19.”