The Brand Move Roundup – March 12, 2020
We’re tracking the notable brand moves & highlighting the companies who are tackling this challenge successfully
In a fast-moving global crisis such as the current coronavirus outbreak, brands have an important role to play. Staying true to their ambition creates a perception of integrity. Reputations can be made by activating brand purpose during a crisis – and just as quickly lost by perceived opportunism. Moves that create value for communities, customers and employees are both bold and smart. Bold, because they may come at a short term cost to profit or margin. A tough call – but consider the cost of a damaged reputation.
Here is a set of topical snapshots of how some notable brands are tackling this challenge successfully.
Pharmacy, Health & Beauty
US Pharmacy and health chain CVS have waived fees for home delivery of prescription medications so that patients can avoid coming to the pharmacy for refills or new prescriptions. In addition to all COVID-19 diagnostic testing and all telemedicine visits being available with no co-pay, Aetna, a CVS Health company, now offer 90-day maintenance medication prescriptions for insured and Medicare members. Aetna will also waive early refill limits on 30-day prescription maintenance medications for all members administered through CVS Caremark.
British ethical beauty retailer Lush is encouraging people to wash their hands for free in its stores, in a bid to help stop the spread of the coronavirus. The UK government has flagged hand washing as an effective way to stop the coronavirus and other illnesses spreading. Lush is badging the offer as a public service via posters displayed in store windows. “The simplest thing you can do to not get a virus is to regularly wash your hands,” said Lush’s chief executive, Mark Constantine. “So we’re saying people can come in off the street and wash their hands in our place. We’ve got loads of soap and plenty of hot water. If people just get into the habit of washing their hands properly, it will make a dramatic difference to public health.”
“NYS Clean” is New York State’s response to hand sanitizer shortages throughout the state and price gouging online in light of the coronavirus outbreak. The product is made up of 75 per cent alcohol – 5 per cent more ethanol than Purell– and the bottle is cheaper than similar brand-name products on New York shelves. “NYS Clean” is probably so budget-friendly due to being manufactured by prison inmates via Corcraft, the Division of Correctional Industries’ brand.
Despite an ongoing and not entirely successful battle to tackle fake news and misleading posts about the virus, Facebook has attempted to take at least some moral high ground by giving the World Health Organization free ads on its platform, and offering to continue paying hourly workers if they can’t work remotely – a promise matched by several other tech firms. It has also canceled several major events and closed its Seattle office after a contractor there tested positive.
WhatsApp has launched a collaboration with Singapore’s minister of health that allows people to get updates on coronavirus via text. (The country has also been dealing with virus-related misinformation on the platform, including about supposed deaths in Singapore that actually haven’t happened.) The partnership started last month, and a WhatsApp spokesperson said hundreds of thousands of people in Singapore have so far signed up for the service. Now, WhatsApp is in talks with health ministries in 15 other countries, and the spokesperson said the company expects to launch additional partnerships as early as this week. WhatsApp has even created in-app stickers meant to reinforce good hygiene.
Cloudflare is offering its Cloudflare for Teams, a suite of security tools, to small businesses affected by the coronavirus free for six months. It’s also helped launch an industry effort, called OpenforBusiness.org, to support small companies. Other remote conferencing solutions such as Zoom, Google Hangouts and Webex are also benefiting from the widespread move towards employees working from home; several are now offering free or reduced deals.
Apple has been sending care packages to employees quarantined in Wenzhou and Hubei. The packages contain food, sanitisers and face masks, according to a post on Chinese social media site Weibo, and include an iPad to “facilitate children’s online learning or help pass the time during the prolonged stay at home”, as stated by a letter from Apple enclosed in each parcel. The letter also acknowledges the mental strain employees may be suffering due to their protracted isolation by offering (presumably remote) counselling services while China’s lockdown continues. Meanwhile, Apple Inc. Chief Executive Officer Tim Cook has offered employees at most of its global offices the ability to work from home and called the coronavirus outbreak an “unprecedented event” and a “challenging moment.” Cook told employees at several global offices to “please feel free to work remotely if your job allows”. Beyond encouraging work from home, Cook said Apple is “making a major effort to reduce human density and ensure those teams that are on-site can do their work safely and with peace of mind.”
Microsoft co-founder Bill Gates and Tesla CEO Elon Musk have shown a marked difference in opinion on the virus. “In the past week, COVID-19 has started to behave a lot like the once-in-a-century pathogen we’ve been worried about,” wrote Gates on his blog. “I hope it’s not that bad, but we should assume that it will be until we know otherwise.” Meanwhile Musk tweeted curtly: “The coronavirus panic is dumb”. While Musk’s often divisive views don’t seem to impact the image of his brands Tesla and SpaceX, it’s a stark contrast.
Film, TV & Streaming
Chinese film distributor Huanxi has decided to release its much-anticipated comedy tentpole movie Lost in Russia online for free. Lost in Russia, directed by and starring comedy superstar Xu Zheng, was widely expected to be one of the big winners of China’s 2020 New Year box office, which, prior to the coronavirus outbreak, had been forecast to generate as much as $1 billion in ticket sales over the coming week. Huanxi told the anxious Chinese populace to “stay safely at home and watch Lost in Russia with your mom.” Aside from the obvious promotional impact, and public health benefits, Huanxi’s move has an interesting business logic. Underlying the plan is a surprise new deal with internet powerhouse ByteDance, the company behind China’s wildly popular Toutiao and Douyin services and international social media phenomenon TikTok.
Meanwhile, John Stankey, AT&T’s chief operating officer and president, this week acknowledged his TV business could see a boost. “Maybe if a few more people are going to be staying home, they might find more utility in watching TV for a period of time here that might help us in the short term,” Stankey said. AT&T is launching its HBO Max streaming service in May.
In China, Nike Training Club partnered with Douyin, the Chinese version of TikTok, to stage a live-streamed workout event for those who can’t access gyms or workout facilities. The event encouraged people to keep active and focus on their health during the crisis, by providing them with workout routines designed to strengthen their muscles, and in turn, their immune system.
Hospitality & Grocery
Starbucks, unusually in the hospitality sector, offers paid sick leave for its employees. Many companies, however, don’t. But another chain, Darden Restaurants, has said it is now providing paid sick leave for hourly workers across all of its chains, which include Olive Garden and Longhorn Steakhouse. Employees will accrue one hour of sick leave for every 30 worked, and the pay rate will be based on the worker’s 13-week average. The company said it has been working on the policy for a while, but sped up the process due to the outbreak.
Meanwhile grocery chain Trader Joe’s is allowing sick workers to get reimbursed for their time off, in an effort to fight the coronavirus outbreak. The retailer is encouraging employees who have symptoms or do not feel well to stay home until they have been symptom-free for at least 24 hours.
Delivery & ride-hailing
There has been widespread concern about the lack of sick pay for “gig economy” workers for such brands as Uber Eats and Grubhub, raising the spectre of infected workers cooking, packaging and delivering food because they can’t afford to take unpaid leave.
However, US ride-hailing and food delivery companies including DoorDash and Instacart are apparently “in discussions” to compensate drivers and delivery personnel affected by the novel coronavirus. Ubersaid on Saturday it will offer compensation to drivers and delivery people diagnosed with the coronavirus or placed in quarantine for up to 14 days, and a Lyft spokeswoman said the company has decided to provide funds to drivers infected or quarantined by a public health authority.
Airlines & Travel
Many airlines are now offering waivers or refunds for travellers wishing to change or cancel flights – but terms and conditions are often restrictive and usually exclude flights purchased before coronavirus concerns surfaced in late February or early March. There have also been environmental concerns over “ghost flights” – empty planes flown purely to keep valuable airport slots open thanks to aviation regulations. However, the European Commission seems likely to relax these rules shortly.
British budget airline EasyJet, which has cancelled a number of flights to Italy, has put employees on unpaid leave, halted promotions and recruitment and paused non-mandatory training programs. Emirates, too, has asked staff to take up to a month of unpaid leave.
Qantas, however, has reduced its international flying capacity by a quarter for the next six months and chief executive, Alan Joyce – Australia’s highest paid executive, who took home nearly $24m in 2018 – will take no salary this financial year. Annual management bonuses have also been scrapped, and the chairman and board will take no, or significantly reduced, fees.
With two virus outbreaks on cruise ships hitting the headlines, that industry has been badly hit – but Carnival Cruise Line is trying to fight back by offering guests that don’t reschedule their trips shipboard credits valued at $100 per cabin on three- and four-day cruises, $150 per cabin on five-day cruises and $200 per cabin for cruises set for six days (or longer). Carnival is also allowing guests scheduled on trips between March 9 and 31 to move their bookings up to three days before their departure date.
Trip.com, China’s largest online travel platform, is feeling so much pain from the coronavirus outbreak that CEO Jane Sun and chairman James Liang will stop taking salaries to help the company cope with losses. Trip owns and operates Ctrip and Skyscanner.
Luxury & Fashion
While fashion shows have been cancelled and much of the largely Milan-based industry is in lockdown, international brands across the luxury sector have been giving money to charities and local Chinese governments in a bid to battle the coronavirus – with more than $2.88bn already donated by businesses around the globe. Luxury conglomerate LVMH contributed 16m yuan ($2.3m) to the Chinese Red Cross Foundation to help ease the medical supplies shortage in Wuhan, while French luxury group Kering donated 7.5m yuan ($1.08m) to assist the Hubei Red Cross Foundation’s efforts in tackling the virus.
Beauty brands are also stepping up to support the cause, with L’Oréal, Estée Lauder and Shiseido all providing funds for boosting dwindling supplies – such as masks, goggles and protective clothing. Also playing a significant part in donations are jewellery brands, including Austrian crystal giant Swarovski and Hong Kong-based Chow Tai Fook.
Big Brands vs Price-Gouging
The Consumer Brands Association, which represents brands and companies including Colgate-Palmolive, Coca-Cola, General Mills and Clorox, has written to US Attorney General William Barr urging him to take action on sellers taking advantage of the coronavirus outbreak. The letter comes as Amazon, Walmart and other e-commerce companies have struggled to curb third-party sellers overcharging for products that have spiked in demand amid the spread of the coronavirus. “If price gouging continues over the coming months, more and more Americans will become unwilling and/or unable to pay excessive prices for these products,” wrote Bryan Zumwalt, executive vice president of public affairs for the Consumer Brands Association. “This will decrease the likelihood that individuals will take recommended and necessary preventative actions.”
Amazon has said that it has removed hundreds of thousands of “high-priced offers” and suspended thousands of sellers who have engaged in price gouging on its marketplace.
Tackling Fake Claims
The US Food and Drug Administration said on Monday that it had warned seven companies to stop selling products that claim to cure or prevent the coronavirus, saying such products were a threat to public health because they might prompt consumers to stop or delay appropriate medical treatment. It was the first time that the agency, along with the Federal Trade Commission, had issued warning letters for unapproved products related to the coronavirus, which causes the illness COVID-19. The companies that received the warnings were Vital Silver; Quinessence Aromatherapy; GuruNanda; Xephyr (N-Ergetics); Vivify Holistic Clinic; Herbal Amy; and The Jim Bakker Show, a joint statement said. The products cited in the letters were teas, essential oils, tinctures and colloidal silver.