The Brand Move Roundup – June 8, 2020
We’re tracking the notable brand moves & highlighting the companies who are tackling this challenge successfully.
Fifteen weeks ago, when the gravity of the situation became clear, we started daily reporting on how brands were dealing with the COVID-19 crisis. What’s now becoming clear is that the current climate is one of near-perpetual disruption. So we made the decision to keep on telling the stories of inspiring brand leadership and strategy amid this latest crisis in an anxious world. Our goal remains the same: to provide an up-to-the-minute source of information, inspiration and insight on brand moves as they happen.
Nike Chief Executive John Donahoe has sent a memo to employees regarding the protests that have been sparked by the death of George Floyd, saying the sneaker retailer must fix its own business. “While we strive to help shape a better society, our most important priority is to get our own house in order,” the letter reads. “Nike needs to be better than society as a whole. … While we have made some progress over the past couple of years, we have a long way to go,” he said about Nike’s diversity and inclusion efforts. Donahoe said employees have made this need for progress at the company “loud and clear” to him over the past two weeks. The company is also committing $40 million over four years to support black communities, he said, which will be spearheaded by Craig Williams, the president of the Jordan brand.
Meanwhile, Michael Jordan and his Jordan brand company will donate $100 million to social organizations “dedicated to ensuring racial equality” the company announced. In a joint statement, the basketball Hall of Famer said the funding would also assist organizations that assist with “social justice and greater access to education” over the next 10 years. “The Jordan Brand is us, the Black Community,” the statement said. “Until the ingrained racism that allows our country’s institutions to fail is completely eradicated, we will remain committed to protecting and improving the lives of Black people.” Los Angeles Clippers owner and former Microsoft CEO Steve Ballmer has also called for CEOs to assist in helping the underprivileged access better economic opportunities. “There’s so many things going on, and I think it’s up to our CEO community to be a part of lifting that up,” he said.
Chinese grocery delivery company Dada has become a listed company in New York. The Walmart-invested company went public on the Nasdaq Friday, with a valuation of $3.5 billion. Founder and CEO Philip Kuai played down the impact of U.S.-China tensions as temporary and struck a confident tone in the long-term prospects of Dada’s business, which has benefited from the coronavirus outbreak. Government stay-home orders increased demand for delivery in many countries, and one habit consumers developed that many analysts say is likely to stay is shopping for groceries online. During the first three months of the year, Dada said active customers for on-demand retail delivery increased to 11.9 million — up from 7.1 million a year ago, while the average order size rose more than 50% to 149.5 yuan ($21). Dada’s technology platform connects major supermarket chains in China with more than 630,000 part-time delivery people, according to the company. Customers can place orders through an app.
Amazon shares have climbed more than 30% this year, but some online retailers are faring even better. Shares of Wayfair, the online furniture and home goods seller, have doubled in price in 2020. Etsy, a platform that specializes in handmade products, said its marketplace grew 100% in April, and its stock has gained more than 90%. “One big driver of the strong growth in April was fabric face masks,” Etsy CEO Joshua Silverman said. Chewy, an online company for pet products, has jumped about 75% this year, while US shares for Chinese e-commerce giant JD.com have rallied about 60%.
Spanish soccer league La Liga will restart on June 11, Spain’s National Sports Council (CSD) has confirmed, three months after the coronavirus pandemic forced its suspension. The announcement comes after Spain’s government authorized the return of competitive sport in the country beginning June 8. Matches will be played behind closed doors, following a strict safety protocol as prepared by La Liga and approved by the Ministry of Health. However, authorities have not formally ruled out the possibility of some fans attending early next season, subject to the evolution of the pandemic. There will be matches every day for over a month to enable the season to be finished by July 19. Games will be played on Monday evenings, with the majority kicking off between 7.30 p.m. and 10 p.m. to avoid the highest midday temperatures. A number of issues – notably how long players will be kept isolated in training camps, away from their families ahead of competitive matches – have taken time to resolve, and as some players and coaches claimed the pace of La Liga’s plan for a return to competitive football makes injuries more likely, teams will get at least 72 hours’ rest between matches.
Virgin Voyages, Richard Branson’s cruise line first announced in 2016, is due to set sail this October with its first ship, Scarlet Lady. The cruise line wants to attract nontraditional cruisers – the ship has a tattoo parlor onboard and hosts a drag queen brunch. Superstar Dj and producer Mark Ronson will be in the DJ booth, and guests can expect to “realign their chakras” at yoga classes. It’s adults only too. “They don’t care if they’re turning off other groups like older, experienced cruisers. They want this to be hyperfocused on new customers,” said Rebecca Hamilton, professor of marketing at Georgetown University’s McDonough School of Business. “They are targeting experimentalist millennials who have money to spend.” Instead of launching in April as planned, due to Covid-19, Scarlet Lady will set sail from Miami for the Caribbean in October. A second ship, Valiant Lady, is expected to launch in Europe in 2021 and sail the Mediterranean. The cruise ship industry became the first corporate victim of Covid-19 in the United States, after two Princess Cruises ships (owned by Carnival Corp.) became hot spots for outbreaks. In March, the Centers for Disease Control and Prevention released a No Sail Order until July 24. Carnival has already announced a “phase-in” approach to its return, set for August.
Wired UK magazine is forecasting revenue growth of up to 10% this year, despite the coronavirus (Covid-19) crisis, as the Condé Nast brand has seen a “huge appetite” from readers and advertisers during the pandemic. Greg Williams, who became editor in 2017 after seven years as deputy, has helped reposition Wired from being perceived as a magazine about gadgets to “competing with Bloomberg, The Economist, the Financial Times and the Washington Post”. Wired was on the coronavirus story early in January, Williams said, leading them to shuffle editorial budgets away from some areas to double down on science, politics and business – the sections they predicted people would want to read more about as the crisis developed. The Wired UK website’s digital audience has since “exploded”, Williams said, with traffic tripling year-on-year in March. One story about life after lockdown in Wuhan, China received 1.8m views on Apple News alone. “What we’re seeing is that if you do quality journalism, if you do have authority, which I think we have in this space, and there is integrity and quality to what you’re doing, then fortunately there is a big audience for that,” Williams said.
With an economic slump forecast, Apple is said to be preparing to allow customers to buy many of its products, including iPads, Macs and AirPods, in monthly installments via its Apple Card credit card. The Cupertino, California-based technology giant is planning to roll out the service in the coming weeks. The offering will let customers buy a product through Apple and split up the cost over several months with interest-free payments. The company will offer a 12-month interest-free payment plan for iPads, Macs, the Apple Pencil and iPad keyboards, as well as the Mac XDR Display monitor, and six months with no interest for AirPods, Apple TV, and HomePod. The payments will be managed through the Apple Card section in the Wallet app on the iPhone and charges will be added to a customer’s monthly Apple Card bill. Apple started a similar program for the iPhone last year, offering 24 months interest-free. The program is similar to those by carriers selling phones and other products, offering consumers another avenue to purchase these items with monthly payments. The service is also designed to spur enrollment for the Apple Card, a joint effort with Goldman Sachs, and boost sales of Apple products by letting users split up the cost over time.
One of the major winners from lockdown has been food delivery, and Grubhub is now fielding interest from at least two European food delivery companies, as antitrust concerns have affected the chances of an Uber acquisition. Netherlands-based Just Eat Takeaway.com and German company Delivery Hero have apparently expressed interest in merging with Grubhub. The company generates most of its revenue from the U.S., serving more than 1,600 cities, but is also operational in London. A deal with a European-based company would likely carry far lower regulatory risk than merging with Uber, which would combine two of the four largest U.S. food delivery services. DoorDash and Postmates round out the top four.
In line with other major CPG manufacturers, J.M. Smucker has benefited from the surge in consumer demand for packaged food following the outbreak of Covid-19. On Thursday, the company behind Folgers coffee and Jif peanut butter reported that net sales climbed to $2.1 billion for the quarter ending April 30, a 10% increase compared to the same period last year. Smucker’s U.S. retail coffee segment grew 11% to $581.6 million, while its consumer foods division increased 22% to $480.5 million. “Consumers turned to trusted products to stock their kitchens as stay-at-home orders were implemented across North America,” said Mark Smucker, president and CEO of the J.M. Smucker Company. The wave in fresh demand has brought with it a number of new customers, who have either never tried one of Smucker’s brands before or are getting reacquainted after a long break.
Throughout the quarter, more than 1 million new households purchased Smucker’s line of Folgers, Dunkin’ or Café Bustelo coffee brands, with 75% of those households buying Folgers for the first time in the past 12 months, Smucker noted. Overall, the company’s household penetration increased nearly 10% amid the pandemic, according to Geoff Tanner, Smucker’s chief marketing and commercial officer. Tanner said that the rise in people grabbing its products off of store shelves is “a potential game changer for us and our business, and we’re going to take advantage of that.” To maintain its current momentum, Smucker’s plans to continue focusing building up its biggest brands and developing its ecommerce strategy. “When the crisis hit, the two opportunities that really emerged for our business were the return to mainstream brands and the growth of online,” said Tanner. On the latter, the company has directed more marketing dollars toward ecommerce and click and collect channels, as more consumers are going online to buy groceries. That includes advertising on platforms where people shop, optimizing content and ensuring that its brands appear on the first page of search results. In the past three months, Smucker’s pure-play ecommerce sales grew by 66%. Overall, the company’s ecommerce business doubled its expected growth rate, according to Tanner.
In the wake of the novel coronavirus the great American road trip is getting a luxury makeover. The latest itineraries from outfitter Black Tomato, called Take the Open Road, are created in partnership with Auberge Resorts Collection and Mercedes-Benz. Travelers living within 100 miles of the car brand’s New York, Los Angeles, San Francisco, or Atlanta flagships can request complimentary home delivery and pickup of vehicles that are pre-programmed with destination-specific playlists and stocked with picnic baskets. Five-night trips start at nearly $5,000 per person, though such add-ons as two nights at a fully-serviced pop-up glamping site in Arches National Park in Utah can bring the price tag up to $18,875 per person. In addition to overnights at Auberge properties, including Hotel Jerome in Aspen, Colo., and Calistoga Ranch in Napa Valley, Calif., the itineraries also include a private charter of an America’s Cup antique motor boat and bespoke heli-hiking adventures. Black Tomato co-founder Tom Marchant’s company ordinarily focuses on money-no-object voyages to places like Rwanda and Japan. Last year, domestic U.S. trips made up only 15% of Black Tomato’s business, but the combination of scarce summer flights, wariness of taking to the skies, and extensive travel restrictions abroad are forcing change. Marchant does, however, see a silver lining: “We often find ourselves guilty of looking past incredible experiences that lay conveniently in our backyard.” It’s comparable to the new itineraries from Abercrombie & Kent, whose road trips from L.A. to the Southwest and from Chicago to the West also have drivers and private guides. “Not all national parks have five- or even four-star hotels,” says A&K USA Managing Director Marty Behr of the current go-to destinations. “We’ve taken the extra steps to find high-end accommodations with separate [socially distant] buildings and in-room dining options.” In the event of sudden outbreaks, he adds, his travelers have immediate access to Medivac transportation, telemedicine consults, flexible cancellation policies, and alternate routes.