The Brand Move Roundup – April 28, 2020
We’re tracking the notable brand moves & highlighting the companies who are tackling this challenge successfully.
We started this series of brand updates on March 12, but the reaction has been so positive, and the crisis so fast-moving, that we’re going to move to a continuously updated rolling news format from now until it’s all over (hopefully soon). Keep checking back here for the latest updates on how brands are dealing with coronavirus.
French luxury brand Hermès’ Guangzhou flagship store reportedly achieved $2.7 million in sales when it reopened this weekend. This is believed to be the biggest daily figure for a single boutique in China and offers hope to luxury brands and retailers of what economic recovery may look like in the coming months. VIP shoppers documented their extravagant purchases across multiple social media platforms, including Weibo and Xiaohongshu. Guangzhou is the capital of Guangdong province, China’s most affluent region. This position makes it an interesting testing ground for how consumer behavior for high-end customers will change when stay-at-home orders lift. “This reopening affirms the house’s commitment to Southern China and marks a new chapter for the Parisian house in Guangzhou, where it has been present since 2004,” Hermès said in a statement. The sales figure has been said to be due to “revenge buying” – a phrase first coined in the 1980s to describe the pent up demand for foreign products that had been denied to China’s citizens when the nation was closed off to the outside world. However, the term has more recently been used across Chinese social media as a way to describe how ordinary citizens were dreaming of treating themselves once quarantine was lifted, as well as by those expressing disdain at unnecessary spending as the economy struggled. French brands LVMH and L’Oreal said earlier this month that a recovery could start soon after the coronavirus caused sales to plunge in the first quarter, as revenue in China is already bouncing back. L’Oreal Chief Executive Officer Jean-Paul Agon said that sales in China – the world’s biggest market for luxury goods – turned positive in March and were on track for a gain of 5% to 10% in April.
LVMH, the owner of Louis Vuitton and Dior, flagged a rapid acceleration in mainland China in April as shoppers clamored to make purchases delayed by lockdowns. Sales in mainland China turned positive in April for Gucci owner Kering too, buoyed by the repatriation of tourist spending and pent-up consumer demand.
The gaming industry has seen a massive spike in business – the industry had its biggest March in over 10 years; sales of game consoles, games, accessories and game cards topped $1.6 billion, according to The NPD Group’s monthly report. “Gaming right now, globally, is having a moment,” commented Microsoft Xbox head Phil Spencer. “Gaming is a social and community connection for many people, and as physical distancing is requiring that people are physically apart, the social connections and community connections that the games industry brings to people are expanding. We track what we call ‘new to Xbox customers,’ – people that we’re seeing for the first time, and we’re seeing a big flood of new people come into gaming.”
In recent weeks, online grocery delivery service Instacart has turned profitable for the first time ever, thanks to a massive sales increase. Instacart sold about $700 million worth of groceries per week in the first two weeks of April, up 450% on sales in December. The eight-year-old company is said to have lost a total of $300 million last year.
Airbnb has announced a new Enhanced Cleaning Initiative, which includes the first overarching standardized protocol for cleaning and sanitization in the home sharing industry. The company says it is informed by the US Centers for Disease Control and Prevention (CDC) published standards; leading experts such as Dr. Vivek Murthy, former Surgeon General of the United States; and companies in the hospitality and medical hygiene sector, such as Ecolab, a global leader in cleaning and hygiene technologies and services. In May, they will launch the new Cleaning Protocol, with enhanced procedures and guidance on how to clean every room in a home; guests will be able to identify and book accommodations included in this program soon after hosts enroll. The Protocol will include specific information on COVID-19 prevention, such as the use of personal protective equipment, like masks and gloves for hosts or their cleaners, as well as disinfectants that are approved by regulatory authorities. A CDC recommended 24 hour wait period before entering is also required, as a precaution to address the possibility of particles that may remain airborne for a few hours. If hosts are unable to commit to the Cleaning Protocol, they can opt into a new feature called Booking Buffer, to create a vacancy period between stays. Hosts can commit to keeping their home empty for a set period in between stays, with no activity other than cleaning. Reservations will be automatically blocked during that time frame, currently set at 72 hours.
News from US network providers: After promising 60 days without data caps and overage fees for all customers, Comcast has decided to extend the data-cap waiver until at least June 30. Comcast announced the data-cap waiver on March 13, saying the waiver would last until May 13 to help customers deal with the pandemic. Comcast now says it will extend the data-cap waiver and other pandemic-related changes “through June 30 to help ensure students can finish out the school year from home and remain connected to the Internet during the COVID-19 crisis.” Also extended to June 30 is Comcast’s promise not to disconnect Internet, mobile, or home phone service and to waive late fees if customers “contact us and let us know that they can’t pay their bills during this period.” Verizon has also extended a pledge to keep customers connected through June 30. “This means we will neither terminate service nor charge late fees to our postpaid wireless, residential, and small business customers that notify us of their inability to pay their bills due to disruptions caused by the coronavirus pandemic,” Verizon said. Customers must contact Verizon to avoid losing service if they can’t pay their bills. Verizon also said last week that it’s giving wireless customers an extra 15GB of data in May. AT&T has announced it will continue to waive overage charges for postpaid wireless customers until June 30, but didn’t say whether it will extend the cap-waiver for home Internet service. Like Verizon, AT&T has extended its no-disconnection pledge until June 30. More than 700 providers have signed the FCC’s “Keep Americans Connected” pledge, which includes not terminating service to customers who cannot pay because of the pandemic, waiving late fees for customers affected by the pandemic, and opening Wi-Fi hotspots to the public.
CVS Health and UPS‘s Flight Forward drone service are joining forces to fly prescription drugs to residents of a Florida retirement community. In the initial stages of the pilot program, slated for early May, the drone will land merchandise at a designated pickup location near the facility. A UPS vehicle will then make the pickup and complete the last stage of the delivery to the customer’s residence. All deliveries will be sourced from a CVS store close to the retirement community – the flight distance will be under half a mile. The community, The Villages near the city of Orlando, is home to over 135,000 residents. According to UPS, The Villages is the largest retirement community in the US. In a press release, UPS said that if successful, the program could widen to include two other CVS stores in the area. UPS Flight Forward was formally established in June 2019 and UPS and CVS have been conducting drone delivery pilot programs since late last year.
Heinz has announced an initiative to send $2,000 checks to 500 of America’s diners, which are struggling in the wake of the Covid-19 outbreak. To determine which small restaurants will receive a share of the $1 million fund, the brand is asking people to go to heinzfordiners.com and nominate their favorite neighborhood eating spot. “Heinz has proudly stood on diners’ tables for decades,” said Dalia Adler, brand building lead at Heinz. “So now, at a time when every little bit counts, we’re proud to be supporting them.”
Several brands have been taking advantage of the rise of Zoom video conference calls. DoorDash, Behr and Pandora have all debuted backgrounds for the popular app, while Burger King’s “Home of the Billboards” campaign encourages fans to download one of the billboard images from Burger King’s Twitter account, use it as a Zoom background during your virtual meetings, upload a photo on Twitter and tag the brand. The brand will then directly message you with a free sandwich code to be redeemed on Burger King’s app. The brand has been particularly active in promotion; Burger King France released the “recipes” for the Whopper, Steakhouse, Big Fish and Big King sandwiches. They also self-censored ads to tease fans about the reopening of drive-thrus in Belgian locations for Burger King Belgium, and handed out free Whoppers to students who showed off their smarts on social media for Burger King Global. Other Covid-19-related campaigns included a promotion offering free post-lockdown birthday parties – complete with food, cake, gifts, invitations and decorations – to 500 kids whose parents uploaded a photo of their birthday cakes to social media, tagging Burger King. Within 24 hours, all the parties had been claimed, with more than 2,000 people participating. After such a strong response, the burger chain expanded the promotion to 100 more winners this week. “Our priority during the crisis has always been to make ourselves useful through simple and concrete actions,” said Burger King France CMO Alexandre Simon. The singular goal of the campaign, he said, is “to show our attachment to families.”