The Brand Move Roundup – March 17, 2020
We’re tracking the notable brand moves & highlighting the companies who are tackling this challenge successfully.
The coronavirus pandemic continues to change the way we shop, work, socialize, travel and much more. It’s a fast-moving situation, but we’ve pulled together another of our regular, up-to-date snapshots of how brands are responding to the crisis. We hope this is informative and helpful – please circulate it to anybody you think might find it of use.
Manufacturing & Retail
Alibaba co-founder, billionaire Jack Ma, has promised to donate one million face masks and 500,000 testing kits to the US. The first shipment took off from Shanghai on Monday. He has already sent supplies to five other countries. “Drawing from my own country’s experience, speedy and accurate testing and adequate personal protective equipment for medical professionals are most effective in preventing the spread of the virus,” he said in a statement. “We hope that our donation can help Americans fight against the pandemic!” China is the world’s biggest supplier of face masks. As the coronavirus crisis in China ramped up in January, the country cut face mask exports to the rest of the world while buying up most of the world’s supply.
Several supermarkets including Stop & Shop in the US and the UK’s Iceland are opening earlier to serve older customers, and German-based retailer Aldi has just donated £250,000 to charity AgeUK.
UK-based greetings card and stationery retailer Paperchase is refusing to accept cash payments due to infection worries. If this policy spreads, New York City’s recent decision to ban cash-free stores may have to be rethought.
Luxury goods conglomerate LVMH has announced that its perfume and cosmetics production facilities will switch to making hand sanitizer, to be distributed free to French authorities and health organizations. The facilities usually make upmarket products for LVMH’s luxury brands such as Christian Dior and Givenchy.
Pernod Ricard’s Swedish vodka brand Absolut has offered to supply Swedish authorities with high-proof neutral alcohol for use in hand sanitizer.
Research firm Gartner has just released a report on brands’ reaction to the virus in China. Unsurprisingly, time spent online shot up by 20%, and brands reacted to that in a variety of ways.
- Estée Lauder’s Weibo hashtag “We Can Win This Fight”, associated with the brand’s celebrity video messages, has been viewed more than 61 million times and has generated 328,000 discussions.
- Louis Vuitton’s physical stores were closed in the lead-up to Valentine’s Day, so the brand launched an online pop-up store within the WeChat app, with live chat for pre-sale consultations and promotions shared via store associates online. Online sales were double those of Valentine’s Day 2019.
- Activewear brands have been quick to promote in-home exercise content at a time when usage of the short video app Douyin (known as TikTok in the West) has seen usage as much as double. Nike began posting workouts to the platform, and its account has amassed 346,000 followers and more than 2 million likes.
- Transparency proved important too; household cleaning brand Dettol took to its Weibo account to detail how it was handing the spike in demand.
- Reactivity is also vital: When the dog of a beauty influencer began trending on Weibo after appearing in a livestream, beauty brand Perfect Diary used his sudden celebrity to launch a “Dog Eyeshadow” pallet; 16,000 pieces sold out in 10 seconds.
However, Gartner analyst Danielle Bailey warned that what is appropriate in China might not work as well in the West. “China has a much higher tolerance for sales messaging than the West, and a business-as-usual strategy approach is not advisable for Western markets,” she said. “Brand-building should be prioritized in this period. During a crisis, timing is critical. Determining the appropriate cadence and striking the right balance between commercial and branding messaging will be key.”
Amazon has announced that it is hiring an extra 100,000 employees in the US to cope with unprecedented demand for deliveries. It will also raise pay by $2 an hour. Earlier this month, Amazon relaxed its attendance policy for warehouse workers, allowing them to take unlimited unpaid time off through the month of March and launched a $25 million relief fund. The “Amazon Relief Fund” will allow employees to apply for grants that are equal to or up to two weeks of pay if they’re diagnosed with coronavirus.
Apple has closed all of its stores outside China until March 27. That’s more than 450 sites. However, employees will continue to be paid during the outage. Outdoor clothing brand Patagonia has already implemented store closures, and Starbucks are said to be considering it after a case of the virus at one of their sites in Seattle.
The UK government has put out an open call for businesses including Ford, Honda and Rolls-Royce to help produce medical ventilators. However, it is not immediately clear how a manufacturer of jet engines or cars could turn to producing specialist medical equipment, which international parts would be needed or what certification would be required. One option could be to adopt defense industry rules which can be used to order certain factories to follow a design to produce a required product quickly.
Mercedes has been hit by a wildcat strike at its Vitoria plant in Spain’s Basque Country. After a case of coronavirus was confirmed at the plant, the firm asked its 5,000 workers there to continue working. However, they refused, forcing the closure of the factory.
Chinese-owned computing company Lenovo pitched in quickly to help with the initial Wuhan outbreak, donating all of the IT equipment for the Wuhan Pneumonia Prevention and Control Headquarters, a temporary hospital constructed seemingly overnight. Lenovo is now working with Intel to provide the data analytics and computing needed by researchers from the Beijing Genomics Institute (one of the world’s largest genomics organizations) to crack the new coronavirus’s genome in a race for a cure. Knowing the disruption that was coming, the company early on strengthened its VPN capacity globally to support employees who would be working remotely.
Global cloud computing company SAP has responded to the crisis by opening up free access to its Ariba Discovery supply chain solution and Tripit, its travel itinerary manager. Other could-based connectivity providers such as Google and Microsoft are offering free trials of their enterprise collaboration tools.
Pinterest is redirecting anyone who searches coronavirus to a dedicated page in collaboration with the WHO, while Google has set up a separate search module for verified coronavirus information. Apple, meanwhile, has changed the rules of its App Store to ensure that any virus-related apps can only come from approved health bodies.
Human resources software provider Workday is offering employees a bonus worth two weeks’ pay. Workday said it hopes the pay can “help alleviate some of the pressures” brought on by school closures and other changes, and said it would also create a relief fund “to help employees who may need additional support and have significant hardships that go above and beyond.” The company will also expand benefits like paid sick leave for employees infected with COVID-19 and Care.com coverage for back-up childcare. It’s also giving employees one year of access to the meditation app, Headspace.
Online commerce facilitator Shopify is offering its 5,000 employees a one-off $1,000 to set up a home workspace, while requiring them all to work remotely.
Healthcare & Fitness
The growing telehealth industry has, for obvious reasons, seen a huge bump in uptake. Doctor On Demand has reported a 15-20 per cent increase in virtual visits; Austin, Texas-based startup Wheel, which vets and trains clinicians for other telemedicine firms, has seen what it describes as “a remarkable increase” both in demand for visits and from doctors wanting to join the network.
Home fitness is booming, with some interesting results. Peloton, who have shifted from static bicycles and treadmills to all-round fitness training, is offering free 90-day trials of its app, which allows users access to yoga, strength training, stretching and other classes whether they own one of the company’s treadmills and bicycles or not. Nintendo’s Ring Fit Adventure game, which retails at $79.99, is selling on some sites, particularly in China, for up to $250, and is out of stock in many outlets. The fitness-training game contains physical controller accessories so can’t just be downloaded, and the manufacture of those has been hit by factory closures.
Travel & Tourism
This sector has been particularly hard-hit, with airlines, travel companies and cruise lines among the worst affected by both the global pandemic’s travel bans and the stock price crash. Virgin Atlantic has just announced that it is to cut 80 per cent of flights by March 26th and is asking staff to take eight weeks’ unpaid leave during the next three months, which has sparked a social media backlash against its billionaire founder Richard Branson. The Virgin Group’s chairman has meanwhile asked the UK government to provide £7.5bn of state support to the aviation industry. British Airways and American Airlines also plan to cut capacity by around 75 per cent, and Irish-based budget airline Ryanair has cancelled 80 per cent of flights until May.
Many hotel chains are now offering travelers free cancellations – but as with many businesses, their policies are evolving on a minute-by-minute basis. Hyatt, Hilton, Marriott and Intercontinental, among others, are waiving cancellation fees for bookings up to the end of April. One snag, though – if the booking was made through a third party, as so many are, it may not be eligible for the program. Expedia has so far offered free cancellations or changes in certain circumstances but their call centers are reportedly overwhelmed.
European travel giant Tui is suspending the “vast majority” of its operations, including package holidays, cruises and hotel operations and applying for state aid.
Sports & Media
While Formula 1’s Australian Grand Prix was cancelled at the last minute, a hurriedly-arranged online event proved surprisingly successful. The All Star Esports Battle featured real-life F1 drivers, plus endurance, IndyCar and Formula E stars, battling against professional esports contestants. Ferrari and McLaren both have professional esports teams, with the former winning last year’s F1 esports championship. The event attracted more than half a million viewers – 90 per cent more than any previous esports racing event.
Legendary and long-running motorcycle race the Isle of Man TT has also announced the cancellation of 2020’s event. This will be a major blow to the small island, which estimates that the event brings a £28m boost to the local economy. The event has been run since 1907.
The TV and film industry is starting to cancel filming, which won’t be good for workers in an industry which relies heavily on freelance talent. The BBC has just announced the postponement of several headline TV series, while Disney has paused its film productions of Batman and The Little Mermaid. More will undoubtedly follow.
Disney did bring a little cheer to families stuck at home, however, by releasing Frozen 2 three months ahead of schedule on its Disney Plus streaming channel. The move, according to new Disney CEO Bob Chapek, is about “surprising families with some fun and joy during this challenging period.”
Film studio NBCUniversal, hit hard by the lack of cinema audiences, has started streaming current movie releases via Apple, Sky, Comcast and Amazon, pricing them at a premium $19.99 for a 48-hour rental. The crisis “could serve as a catalyst for long-delayed change,” noted Variety’s Andrew Wallenstein. That includes the prospect of premium video on demand – that is, making movies available earlier to watch at home, for an elevated fee that would help offset lost theatrical revenues.
One of the more interesting media pivots of the last few years has been the global Time Out Group’s move from publishing increasingly unprofitable print city guides to running hip restaurant-based food markets, now operating five worldwide. Unfortunately, they’ve just announced that all five are to close for an unspecified period. Not good news for a brave operation.
19-year-old NBA star Zion Williamson has pledged to pay the salaries of all workers at New Orleans’ Smoothie King Center arena for the next 30 days. “These are the folks who make our games possible, creating the perfect environment for our fans and everyone involved in the organization,” he wrote on Instagram. ”My mother has always set an example for me about being respectful for others and being grateful for what we have.” Other NBA players and team owners have also pledged amounts in the hundreds and thousands of dollars to support laid-off workers.