The Brand Move Roundup – July 28, 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.
Retailer Target is to make holiday deals available early and will not open on Thanksgiving Day in attempts to prevent crowds. The coronavirus pandemic has pushed retailers to reevaluate Black Friday and the holiday season, which is traditionally retailers’ busiest time. As a way to help cut down on crowds at its stores, Target will begin offering its holiday deals online and in stores starting in October. Target joins Walmart in staying closed on Thanksgiving Day. “The investments we’ve made in our business and our incredible team have enabled us to move with flexibility and speed to meet guests’ changing needs during this global pandemic,” said Target CEO Brian Cornell. “This year more than ever, a joyful holiday will be inseparable from a safe one, and we’re continuing to adjust our plans to deliver ease, value and the joy of the season.” The retailer also will expand its same-day pickup and delivery, making 20,000 more products available for Drive Up, order pickup and Shipt delivery.
Google is asking employees to continue working from home until summer 2021. It has now pushed its return-to-office date back to July 2021 for nearly all of its 200,000 employees. Google had initially planned to have employees return to work on July 6, 2020. But after the coronavirus began surging again in California – although mainly in southern California rather than the San Francisco Bay Area, where Google is based – the company opted to push back its reopening date until September 2020. Now it appears employees will continue working from home for another year.
Tourist spending in Europe was down about 99% in April and May compared to last year, as measured by value-added tax (VAT) refunds processed by Planet Payment. VAT is levied on consumption of goods and services in Europe; non-EU travelers are eligible to have the tax refunded on goods they take home with them, which is what agencies such as Planet specialize in facilitating, giving it a clear view of how much tourists are buying. In June, when peak season is typically getting underway, tourist spending was still 98% below its level last year based on Planet’s data. A number of retailers are feeling the effects, among them high-street fashion chains, luxury boutiques, watch and jewelry shops, and department stores such as France’s Printemps and Selfridges in the UK, says Vinod Paul, Planet’s head of business and market intelligence. Luxury in particular is heavily reliant on traveling shoppers. “It’s around about half of our business,” Julie Brown, the company’s CFO, said about Burberry’s sales to tourists. “We found significant drops in the tourist business in Europe in the order of 90%.” LVMH, recognized as one of the most resilient groups in luxury, said that the drop in tourism to Europe had put pressure on its business there too. Other luxury players are likely to report steep declines from declines in tourism. Chinese shoppers are especially high spenders; they’re the world’s top buyers of luxury goods, and some 66% to 70% of their spending takes place outside China. Roughly a quarter of that happens in Europe, financial firm UBS said, in part because luxury merchandise there can be much cheaper than at home. Planet data cited by UBS found Chinese tourist spending fell 98.8% in June versus 2019.
Luxury brand Burberry has released its third video game, this time to promote the luxury fashion brand’s TB monogram summer collection. “B Surf” is a multiplayer game that lets players dress up their characters in the brand’s outfits before grabbing a surfboard and challenging friends to a race around a track. Burberry is offering daily prizes to gamers, including a limited-edition TB surfboard and branded bucket hats. Players can also unlock digital rewards such as an augmented reality n-game character and face filter. Burberry’s in-house development team created “B Surf” as its first multiplayer game. Gamers can find “B Surf” on Burberry’s website, luxury shopping site Farfetch and messaging app WeChat. Burberry’s release of another video game indicates that the fashion brand has been pleased with the response to its first two games as it looks to drive awareness for the TB monogram pattern that was first introduced in 2018 and has been, in part, responsible for a resurgence for the brand. “B Surf” follows Burberry’s October release of “B Bounce,” a video game has been played by 2 million people in more than 40 countries, according to the company. Burberry followed “B Bounce” with an extension called “Ratberry” in January. Unlike those single-player games, “B Surf” has a multiplayer mode that urges people to share the experience with their friends. This is the latest example of how luxury brands are embracing digital technology, often with a mobile push. The list includes Gucci, which is active on Snapchat, and Louis Vuitton, which also has a video game. Gaming has become a more popular pastime worldwide, especially among people who have been forced to stay at home during the coronavirus pandemic. The number of people who play video games is forecast to exceed 3 billion by 2023, up from about 2.69 billion currently, according to Newzoo research data. By the end of this year, 2.5 billion people will play video games on mobile devices, making them the most popular gaming platform by far.
The UK government has unveiled plans to introduce a ban on junk food advertising across TV and online prior to the 9pm watershed in the UK. It is also debating whether to outlaw adverts for high fat, salt and sugar (HFSS) products online altogether. The measures are part of a £10m Public Health England campaign called ‘Better Health’, aimed at getting people fitter after four months of lockdown. Research published by Cancer Research UK in 2019 suggests almost half of all food adverts (47.6%) shown on channels ITV, Channel 4, Channel 5 and Sky One were for HFSS products. That rises to almost 60% between 6pm and 9pm – the peak viewing period for children. Estimates are the proposals could cost British broadcasters more than £200m in lost revenue. It is thought ITV alone could lose £100m in income, while the loss to Channel 4 would lose in the region of £40m. Industry body the Institute of Practitioners in Advertising says it is “deeply disappointed” by the government’s new obesity strategy. IPA director general Paul Bainsfair says the proposals disregard the government’s own evidence and “punish the very businesses that have been helping the country get through the Covid-19 crisis, including food manufacturers, retailers and commercial broadcasters”. He argues the new measures fail to acknowledge the UK’s “highly respected self-regulatory system”, which imposes “tough rules” on the advertising of HFSS products across all media. “The proposals come at the worst possible time for the advertising sector and for industry. The government should be supporting businesses which have been reeling from the Covid-19 crisis, not banning them from advertising their products,” Bainsfair adds. “Advertising fuels the economy and should be used as a key enabler in getting the country’s economy back on its feet. Ad bans will do the opposite.”
A month ago, Panera Bread began offering a free MyPanera+Coffee subscription through Labor Day for anyone who signed up for the service on the fast casual chain’s app. The promotion, which began June 22 to remind customers about the subscription service, is all part of the bakery’s plan to incorporate a recurring revenue model similar to Netflix, according to chief brand and concept officer Eduardo Luz. The subscription includes unlimited hot and iced coffee as well as hot tea and typically costs $8.99 per month, but that fee was waived this summer. So far, more than 800,000 people have opted into the subscription as of the week ended July 18. “Our hypothesis is that recurring revenue based on subscription makes a lot of sense,” Luz said. “I believe part of our future is going to involve recurring revenue or subscription-based revenue, which is new to the restaurant world. [This is Panera’s] first attempt to go in that direction.” It’s an opportune moment for the shift, as the Covid-19 crisis has disrupted lives, and the coffee subscription helps to either reestablish or establish Panera as part of people’s daily routines even if they’re now working from home, according to Luz. Early morning coffee runs before people clocked in as the office have been replaced by trips later in the morning, perhaps around the first Zoom call of the day. Some customers are just picking up their coffee and leaving, he said. “But a lot of people are showing up for coffee are also buying something.” Coffee is just the first of several subscriptions the company is cooking up, Luz revealed. They’re something the consumer doesn’t have to think about; it’s just there for them. For Panera, it’s a steady stream of income. “You just turn on Netflix and it’s there. And what’s our version of that? What kind of services or categories would be of interest? Coffee [is] such a penetrated category with high usage,” he pointed out.