The Brand Move Roundup – July 21, 2020
We’re tracking the notable brand moves & highlighting the companies who are tackling this challenge successfully.
Four months 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 the latest crises 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.
eBay and PayPal‘s five-year operating agreement has just ended, and the online marketplace is eyeing billions in new potential revenue by managing its payments in-house. eBay acquired PayPal in 2002 and spun it off in 2015. While the two companies have since operated separately, from eBay’s perspective, not much changed. PayPal processed all of eBay’s payments until 2018, when eBay started testing a small portion of its payments in-house, with processing partner Adyen. But now, eBay will fully roll out the payments platform it’s been building for years, which it says could unlock as much as $2 billion in revenue and $500 million in operating profit in 2022. eBay’s total revenue in 2019 was over $10 billion. Using payments data, eBay will also explore other financial products, like loans for its merchants. “Payments is so foundational to a commerce experience,” Alyssa Cutright, VP of global payments at eBay, said. “By having control of that, it gives us so much more flexibility in how we continue to enrich the buying and seller experience,” she added. Meanwhile, eBay has agreed to sell its online classifieds business to Norway’s Adevinta for $9.2 billion, ending one of the largest auctions of the year. Under the deal, eBay will get $2.5 billion of cash and 540 million shares in the Norwegian firm. eBay reported strong results in its more recent quarter thanks to a boost from Covid-spooked consumers shopping online, but the classified business suffered because the pandemic forced the shuttering of thousands of car dealerships. The company’s classifieds business includes separate online marketplaces such as Kijiji, which is used in Canada and Italy, and Gumtree, which is popular in the U.K., Australia and South Africa. It also owns Bilbasen, a Danish online vehicle marketplace, and British car search website Motors.co.uk. They’ll be added to Adevinta’s portfolio, which includes shopping app Shpock, vacation reservation site Locasun and job hunting platform InfoJobs. eBay said in February it was in active talks with multiple parties about a potential deal for its classifieds business. In November it sold StubHub, an online marketplace for concert and sporting event tickets, to Switzerland-based rival Viagogo for $4 billion.
Soon after NFL players began a social media campaign to pressure the league over coronavirus safety, and just days before training camps start, the NFL and its players have reached agreement on football’s most important new rules: pandemic protocols. The deal orders daily testing for the league’s thousands of players, coaches and staffers at the start of camp, and technologically advanced contact tracing when the virus is detected. And in a win for players and a concession for team owners, there will be no preseason games. The planned hundreds of thousands of tests, over the course of the potential season, are expected to cost around $75 million, but the NFL has powerful incentives to play, including revenue from the TV networks that now rely on it to connect audiences with advertisers.
In the UK, interest in buying used cars has jumped in recent weeks as people look for alternatives to public transport following government pandemic warnings, according to online marketplaces. The coronavirus pandemic has caused an exodus from public transport in the UK, with signs of people looking for other means of getting around, including scooters, mopeds and bikes, as well as cheaper cars. Auto Trader, an online car marketplace, said traffic on its website and apps was up by 29% in June compared with the same time last year, with 64m visits. The number of leads it sent to sellers was up 90% year on year for the month. Motorway.co.uk, another used car marketplace, said it had enjoyed record sales of as much as £1.6m a day since it restarted sales with socially distanced collections in early May, almost a third higher than its previous peak just before the UK’s lockdown. The increase in used sales is a rare bright spot for British vehicle retailers after new car sales fell by 97% at the height of the lockdown in April. The industry hopes the desire to avoid public transport will help to sustain demand for cars, with particularly strong demand in recent weeks for smaller, cheaper used cars worth less than £5,000. The National Franchised Dealers Association (NFDA), the UK car dealer body, found that 55% of members surveyed had increased sales of used cars online in the month to 2 July, compared with only a quarter who had sold more new cars through their websites. “As fears around the pandemic grew, more and more people wanted to transact online,” said Tom Leathes, the chief executive of Motorway.co.uk. “What we see across the whole industry is that the used car market is really buoyant.” He added that his company had seen many professional dealers who buy from its individual sellers keen to snap up secondhand cars because of low supply. Leathes said he expected the pandemic to accelerate the gradual shift online in car sales, echoing a common belief across the industry, which has been more resistant to the shift to the web than many other retail sectors.
Fast-casual restaurant operator Chipotle is turning to product innovation to win over reluctant customers, investing in new food and beverage offerings. “Innovation is a hallmark,” said Chris Brandt, the company’s CMO. “We found out from suppliers that we are one of the few people still doing innovation.” The chain has announced it will begin serving new non-GMO and certified organic lemonades, aguas frescas and tea from farmer-founded Tractor Beverage Co. on July 21. The company will donate 5% of its profits from the beverages to causes that support farmers. Late last year the brand announced a redesign of its restaurants aimed at supporting its to-go business, already sizable at about $1 billion back in December. The company had already begun installing mobile order pick-up shelves and tech-enabled assembly lines for food preparation and aimed to add features such as walk-up windows and better placement of digital pick-up areas to help locations fill orders more efficiently and customers to pick them up more quickly. “Digital really helped our presence. [We had] food that traveled well,” Brandt said, noting that the company had already partnered with DoorDash, then added Uber Eats. Digital growth is also responsible for accelerating the company’s loyalty program, Brandt noted.
Work dress codes have radically altered during the pandemic. According to a poll from market research group NPD, only 10% of people get dressed for working from home at the start of the day and then change into comfortable clothes later. With virtual video conferencing as the only contact with our colleagues, one item of clothing that has become essential is the so-called “Zoom shirt”. According to Urban Dictionary this is the “shirt or blouse that’s kept on the back of your desk chair to quickly be presentable for video conferences”. A recent poll by LinkedIn found that 42% of camera-ready home workers owned one. “It allows you to retain an image of professionalism on camera without having to get kitted out in full office attire, when you’re sitting at your kitchen table all day,” says Rupert Wesson, director at Debrett’s. “Dressing in a formal manner helps you look and feel more polished. It conveys respect to others. A study actually found that employees were more productive when casual dress was permitted. The ‘Zoom shirt’ supports this idea.” The pandemic has shifted people’s ideas about what to wear, with a focus on simplicity and pared down wardrobes. “Outfit of the day” culture is no longer relevant in this new normal. “I think it’s safe to say that dress codes have been gradually relaxing for some time now,” says Charlie Teasdale, style director at Esquire magazine. “The recent benchmark seems to be the shifting attitude of financial institutions which have all got rid of suits and ties for most employees,” he says. Last year Goldman Sachs relaxed their dress code asking staff to exercise “good judgement” in what they wore, while a 2018 poll found that only one in 10 people still wore suits to work.
UK parcel delivery firm Hermes is creating more than 10,000 jobs as it gears up to cope with the continuing shift to home shopping during the coronavirus pandemic. The company says it wants 9,000 more couriers, and will also hire 1,500 full-time staff, including some roles at its head office in Yorkshire as well as warehouse workers, managers and supervisors. It currently employs 4,515 staff and 20,000 couriers. Hermes has poured £30m into expanding its operations this year, including buying vans and opening depots, as home shopping surged during the high street lockdown. High demand for delivery services is expected to extend into the second half of the year, with the volume of parcels being handled by Hermes set to almost double to 3.5m a day during Black Friday and the run-up to Christmas – the busiest trading period. Martijn de Lange, chief executive of Hermes UK, said: “The pandemic has expedited the already phenomenal growth of online shopping and we see no sign of this changing. As a result, it is important that we have the right infrastructure and people in place to support this. This is good news for the many people who have sadly had their income affected and we are pleased to be able to support the UK economy with so many jobs at this time.”