Brand Moves for Thursday September 17

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In early March we began reporting daily on how brands were dealing with Covid-19. But it’s become clear that the current climate is one of near-perpetual disruption, so we decided to keep on telling the stories of inspiring brand leadership and strategy amid the latest crises in an anxious world. Our goal is to provide an up-to-the-minute source of information, inspiration and insight on brand moves as they happen.

US retail sales rose 0.6% last month, the fourth consecutive month of growth, the U.S. Commerce Department said Wednesday, but lower than the 0.9% increase in July. It’s also below the 1.1% increase analysts expected. Much of last month’s growth came from spending at restaurants and bars, which are just starting to let people in to eat and drink. Sales rose 4.7% at those places, but are still down 15.4% for the year. Overall retail sales have been recovering since they plunged in the spring as stores and malls were ordered closed to help prevent the spread of the coronavirus. A number of those retailers, some of them part of the U.S. retail landscape for more than a century, have failed. Century 21 said last week it’s shutting down all 13 of its stores for good after nearly six decades in business. Lord & Taylor, which has been around for nearly 200 years, is also going out of business. Several others major retailers have sought bankruptcy protection, including J.C. Penney, Brooks Brothers and J.Crew. Clothing sales, however, rose nearly 3% in August after a 20% decline in the last year. Retailers that had already pivoted to accommodate a shift to online shopping, like Target and Walmart, have thrived. Sales at Amazon.com have soared. Online sales, however, were flat last month, according to the Commerce Department, after soaring 22% in the past year. People also spent less at supermarkets and sporting goods stores in August, after shoppers rushed to them this year to stock up on food and exercise equipment for their quarantines. Many Americans are working from home or taking classes online instead of going to school. Sales at electronic stores rose 0.8% as people bought up computers and laptops. And at furniture stores, sales rose 2.1%. Ikea said last week that demand for desks, chairs and filing cabinets has been so high that it’s been sold out of numerous items and is working to restock them.

UK supermarket Tesco is to join forces with food sharing app and social enterprise Olio in a drive to stop edible surplus food from going to waste and help feed more people in crisis in the local community. Thousands of people regularly give away food and other household items to their neighbours for free through Olio, but this is its first national partnership with a major supermarket chain. Tesco is rolling out the scheme to all 2,700 branches of its UK branches, enlisting the help of Olio’s 8,000-plus local volunteers who will visit Tesco stores to collect surplus food nearing its sell-by date. The food is taken back to their homes, with the items immediately uploaded on to the Olio app, ready to be re-distributed free to households and community groups. Pick-up is then arranged via private messaging within the app, from an agreed, contact-free collection point. It follows a successful six-month trial, held earlier this year, at 250 Tesco stores which had the most surplus food, including fresh fruit and vegetables, and bakery items. That led to 36 tonnes of food being redistributed, with half of all food listings added to the app requested in less than one hour. Globally, a third of all food produced is wasted, and in the UK, households account for half of all waste – binning more than £15bn of edible food and costing families £730 per annum. Supermarkets have also been criticised for wasting food in their supply chains that could be diverted to food banks, amid record demand as a result of Covid-19.

Just one month after the Big Ten football conference opted to postpone its fall sports seasons, including college football, due to Covid-19, it has reversed course and will begin playing football games starting next month. This morning, the Big Ten Council of Presidents and Chancellors said in a statement that it voted unanimously to resume the football season, beginning the weekend of Oct. 23-24. The about-face will boost the fall TV inventory, restoring additional GRPs to marketers in an upended fourth quarter. It will also provide a big lift to Fox Sports, which broadcasts Big Ten football games and had been left with several major holes in its schedule as a result of the postponement. The Big Ten – which includes Ohio State, Penn State, Michigan, Michigan State and Nebraska– said it will require student athletes, coaches, trainers and other individuals who are on the field for all practices and games to undergo daily antigen testing, which will begin by Sept. 30. On Aug. 11, the Big Ten and fellow Power 5 conference Pac-12 postponed its seasons as a result of the pandemic, a decision that left nearly $1.7 billion in overall college football ad revenue hanging in the balance. In an open letter a week later, commissioner Warren said the decision to postpone the fall sports “will not be revisited.” But that changed as the other conferences went ahead with their college football seasons, and public pressure increased on the Big Ten to resume playing.

Burger King is rolling out specially designed Whopper wrappers that prominently list the ingredients inside: beef, tomatoes, mayo, lettuce, ketchup, pickles and a bun. The limited-time packaging will roll out today. The move is designed to show that Burger King’s signature sandwich now contains no colors, no flavors and no preservatives from artificial sources and taps into the growing trend for transparency around ingredients. Burger King wants to make more of its “real food” and “high-quality ingredients” and said it had made “substantial changes” to its menu, including removing around 8,500 tons of artificial ingredients globally. In the U.S, it added, 5% of Burger King’s permanent food menu is now free of colors, flavors, and preservatives from artificial sources, and the brand is striving to achieve 100% by the beginning of 2021.

UK department store retailer John Lewis is working on plans for a massive reduction in the size of its London flagship store, converting entire floors into offices. The staff-owned department store has applied for planning permission to switch up to three floors of its landmark Oxford Street store – which currently house children’s ranges, electrical goods, kitchen and bathroom departments as well as dining areas – into office space for rent. The site on one of Europe’s most high-profile shopping thoroughfares has been of totemic importance to the retailer, at one point accounting for 10% of the department store chain’s revenues. Even before the pandemic spurred the trend for online shopping, department stores have faced particular difficulties as their large sites with long leases have been slow to adapt to changing shopping habits. John Lewis’s rivals Debenhams, House of Fraser and Beales have all gone into administration. Beales closed completely before at least one site relaunched under new owners, while Debenhams and House of Fraser have shut numerous stores. The coronavirus outbreak has put further pressure on city centres, particularly London, as the shift to working from home and disappearance of day-trippers and tourists has left formerly busy areas quiet. Data last month from the New West End Company, which represents 600 businesses across Oxford Street, Bond Street, Regent Street and Mayfair, showed that footfall in the West End was still 63% down on 2019 levels. One in 10 Londoners are employed in the West End area, and without a boost to consumer confidence, the capital’s premier shopping area is facing job losses of 50,000 and lost annual sales of more than £5bn, the NWEC has warned.

Facebook is hiring a Director, Remote Work to run the HR side of its shift to off-site working practices. The candidate, according to Facebook’s job ad, is expected to “lead our strategy and partner with an extensive group of cross-functional partners to make this shift to the way we design our organizations and grow our people. The Director of Remote Work will be a strategic thinker who understands distributed and virtual teams, an outstanding relationship builder, and a change agent. Our ideal candidate is someone who can collaboratively build on, and evolve our remote workforce strategy with a passion and proven acumen for experience design, process excellence and change management.” Among the list of tasks the successful candidate will be expected to handle are to “develop and govern Facebook’s long-term, global remote workforce strategy and approach to flexibility, lead highly cross-functional team of leaders responsible for helping Facebook transition to remote work, and drive a company-wide shift toward remote-first ways of working.”

Corporations are taking a slice of the money they would have spent on elaborate live events and diverting it into the humble mailer – a package that gets sent to influential people to court favor online and offline. The 2020 gift box goes beyond pre-pandemic corporate swag and attempts to shrink what would have been a multimillion-dollar live experience into an easily delivered package – one that will ideally elicit an “unboxing” performance on social media. “It’s a safe and friendly way to really give someone an experience that they wouldn’t be able to have in person right now,” said Alex Diamond, director of consumer marketing at HBO, part of AT&T’s WarnerMedia division. “Events-in-a-box” remained popular even as companies began holding live launch events in virtual form. Wireless provider Virgin Media in July sent a group of its customers “Big Night In” boxes when the British Academy Television Awards’ in-person ceremony was canceled and a virtual event was held. Software company Adobe sent the finalists of its Experience Maker Awards a package filled with confetti, Champagne, flutes and balloons after the real-life ceremony was canceled. Los Angeles-based influencer agency RQ Media Group senior account director Katy Wellhousen said more time and strategic thinking goes into making them than the influencer kits she would mail before the pandemic. “[Covid-19] has made me change the way I look at sending gifts,” she said. “Before, I didn’t find it quite as sexy as doing a live event. But now, seeing it as an experience at home rather than just a box in the mail has made it a lot more exciting for me.”

The Volkswagen Group is on the verge of offloading niche supercar brand Bugatti to Croatian electromobility powerhouse Rimac Automobili. Bugatti – the luxury brand best known for today’s 16-cylinder hypercars and its pre-WWII automotive masterpieces – will likely be transferred to Rimac via Porsche, in exchange for a bigger share in Europe’s answer to Tesla. In 2018, Porsche acquired a ten per cent share in Rimac Automobili. In 2019, they bought another 5.5 per cent. By doing so, Porsche is in good company: other investors include Hyundai, Jaguar, Koenigsegg and Magna. Earlier this year, founder Mate Rimac counted 15 car companies using its tech know-how. The company details key strengths such as the configuration of highly efficient battery packs, the development of bespoke e-motors, innovations in terms of driver assistance, connectivity and infotainment as well as systems integration and control. Rimac may be dubbed Europe’s Tesla, but while Elon Musk’s firm has churned out more than 600,000 Model 3 and Y cars in the last three years, the Croatians have made but a handful of electric hypercars. Rimac isn’t yet publicly traded, with the founder holding a 51 per cent majority interest. But there is an enormous buzz around the company – the last funding round pegged its value north of £500m. The biggest secondary shareholders are Porsche, the Camel Group (a Chinese battery producer) and a Chinese investor. While the true value of Rimac is yet to be determined by an IPO, Bugatti is probably worth €500m in today’s depressed market. But perhaps there is no need for any money to flow at all in the deal. In an ideal world, Porsche would swap the hypercar-maker lock, stock and barrel for a bigger share of the Rimac action. How big? The target is 49 per cent, which could be a tough nut to crack, but the Germans are keen on accessing as much know-how and brain power as they possibly can.

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