Week: June 15th -19th 

by Interbrand

Several weeks ago, when the gravity of the situation became clear, Interbrand started regular 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 the brand consulting firm made the decision to keep on telling the stories of inspiring brand leadership and strategy amid the latest crises in an anxious world. Interbrand’s goal remains the same: to provide an up-to-the-minute source of information, inspiration and insight on brand moves as they happen.

Fashion & Retail

Inditex, the owner of popular clothing retailer Zara, will close as many as 1,200 stores around the world as the clothing retailer tries to boost online sales during the Covid-19 pandemic. However, Inditex said that “headcount will remain stable”, with staff offered roles in other jobs such as dispatching online purchases.

Inditex said it would “absorb” between 1,000 and 1,200 mainly smaller stores, with losses concentrated among older shops from brands other than Zara. The Spanish company’s other brands include Bershka, Pull & Bear and Massimo Dutti. Closures are expected to be concentrated in Asia and Europe. The total store count will fall from 7,412 to between 6,700 and 6,900 after the reorganization, which will also include the opening of 450 new shops. Inditex said it would accelerate its push to sell more clothes online as it seeks to fend off the challenge of high street competitors such as H&M and the Uniqlo owner, Fast Retailing, and newer online-only rivals including Asos and Boohoo which have prospered during lockdown. Under Inditex’s new plan online sales will account for more than 25% of the total by 2022, compared with 14% in its 2019 financial year.

Larger stores will act as distribution hubs for online sales. Inditex, controlled by its founder, Amancio Ortega, plans to spend €1bn on its online offering by 2022 and a further €1.7bn in stores to allow them to integrate better with websites for faster deliveries and real-time tracking of products.

Furniture rental subscription service Fernish has seen home office furniture rentals at the company more than triple year-over-year as many Americans continue to work from home. A service like Fernish may make a lot of sense for people that began working from home on a temporary basis because furniture rental contracts can be structured to be as short as three months with an option to swap items in and out and to add new things along the way, as well as to renew at the end of the period.

“That flexibility is helpful to people,” said Michael Barlow, CEO and co-founder. The company has continued to see overall growth throughout the pandemic, he said, which is a snapshot of how the home furnishing retail landscape continues to evolve during the Covid-19 crisis. Home improvement has experienced a lift in sales overall, with consumers not only spending more time at home, but also increasingly viewing their home as a sanctuary. Home Depot, Lowe’s and Ace Hardware all reported sales increases for their most recent quarter, for example.

“People spending more time in the comfort of their homes is likely to persist – whether that be working, recharging or entertaining,” Fernish said in a statement. Fernish also noted it has seen a 90% increase in the rental of accessories and decor, as customers refresh their spaces, as well as a 75% spike in rugs, throws, pillows and tabletop accessories such as vases and bowls, and a 40% jump in lamps to create mood lighting.

Travel & Hospitality

Airbnb has made changes to its homepage and app in an effort to get people out in their own metaphorical backyards. The “Go Near” campaign will appear on its own homepage and app and is to be followed up with a social media and email campaign to promote domestic travel and the platform’s own online experiences.

It was partially inspired by a survey commissioned by the brand that showed that nearly half of its U.S. respondents said they’d prefer to stay within a day’s drive for their first trip after lockdown restrictions lift. Airbnb also said it had seen bookings grow between the end of May and the beginning of June YOY. During the same period, from May 17 to June 6, nights booked for a family – bookings including at least one child or infant – were up 55% year-over-year.

Domestic spots were among the top trending destinations, which include Big Bear Lake, Calif., Miramar Beach and Panama City Beach, Fla., and the Great Smoky Mountains. Airbnb wasn’t alone in sharing some internal insights this week as travel recommendation and booking site Tripadvisor released its own findings from a months-long study examining traveler sentiment during the pandemic. Tripadvisor’s results mirrored Airbnb’s, showing that consumers are most comfortable traveling closer to home and to rural and beach destinations.

In a move to shore up support among frequent customers, British Airways has written to travelers belonging to its loyalty scheme to offer them an extra year’s membership. Members have been given an extra 12 months in recognition of their “loyalty and support.” In addition, the airline has cut the number of “tier points” required to reach or retain the premium grades of membership by a quarter. Executive Club members have been told: “We all love to hear some good news every now and then. And so today, we wanted to tell you something that we hope will make you smile. As the world prepares to fly once more, we know there is still a long road ahead, and we wanted you to know that we’ll be right there with you every step of the journey.”

Oddbird, a Swedish alcohol-free wine brand, has created a temporary restaurant called Nowhere within the expansive Häringe nature reserve – taking the concept of socially distanced dining to a whole new level. It has created six unique table settings scattered around in beautiful locations, free from contact with other guests. The six place settings have been designed by Danish interior design duo The Norrmans using recycled furniture and material, while the menu has been created by chefs Linn Söderström and Marion Ringborg of restaurant Garba in Stockholm. Oddbird’s wines will be served alongside each meal, for those lucky enough to get their hands on a reservation (and be living in Sweden) when bookings open.

Starbucks is accelerating plans to convert its shops’ layout to favor of pickup. The coffee shop chain announced last week it will “increase convenience-led formats” in the U.S., including both drive-thru and curbside pickup options, over the next 18 month. As part of this, it is closing 400 North America locations, while adding a total of 300 net new stores in 2020.

This will also apply to the growing number of Starbucks Pickup locations, with all locations being integrated with the app. For decades, the brand positioned itself as a venue for working and socializing, but now, many of its shops’ seating area designs makes complying with social distancing guidelines difficult.

While Starbucks began experimenting with pickup-only locations over a year ago, it’s now positioning them as facilitators of “on the go experiences.” This includes further increasing its Uber Eats delivery availability, along with the physical renovation of some store layouts. The remodeling will feature the addition of a dedicated counter for mobile orders at stores with high volume, which is expected to ease crowding among customer and courier pickups.

Starbucks’s investment in mobile orders and its digital rewards program was already paying off pre-pandemic. In February, Starbucks confirmed that its Mobile Order & Pay program first introduced in 2015 has seen an increase in customer adoption. In the first quarter of this year, Starbucks mobile orders accounted for approximately 17% of transactions in the U.S., according to its earnings – up 16% year-over-year, reaching 18.9 million active U.S. members. It also noted that during peak hours, about 5,400 stores had been seeing over 20% of transactions come in via mobile order. The new Pickup locations go a step further than those that already integrate digital order pickups. Not only will the retrofitted stores not allow seating, but customers will only be able to purchase items by placing orders through the Starbucks or Uber Eats app.

European food delivery service Just Eat Takeaway has agreed to buy US-based app Grubhub for $7.3bn (£5.8bn) in a deal that would create the world’s largest food delivery service outside China. There has been a surge in demand in the food delivery market during the pandemic, as government shutdowns prevented restaurants from serving diners at their premises.

The tie-up will give the Netherlands-based Just Eat Takeaway access to the lucrative food delivery market in the US, with the combined business able to serve customers in 25 countries. Along with the US, these include some of the world’s most profitable food delivery markets – the UK, Netherlands and Belgium. Jitse Groen, chief executive and founder of Just Eat Takeway described himself and Grubhub boss, Matt Maloney, as “the two remaining food delivery veterans in the sector”, adding that they started their businesses on different continents at the turn of the century. “Both of us have a firm belief that only businesses with high-quality and profitable growth will sustain in our sector,” Groen said. Just Eat Takeaway and Grubhub together processed 593m orders in 2019 and have more than 70 million active customers globally.


A new Twitter test feature aiming to “promote informed discussion” will nudge users to read content before they retweet. The company describes the test as a step to help people be more aware of what they’re sharing in a broader effort to inspire “healthier conversations” on the platform. The feature will only appear for some U.S.-based Android users for now.

In May, Twitter began testing a prompt that warns users they’re about to tweet a potentially harmful reply, based on the platform’s algorithms recognizing content that looks like stuff often reported as harmful. Facebook tried out a similar test feature last year and reported that its results showed promise. The idea is that giving users a chance to make different choices rather than forcing them to do so could help reshape some of the unproductive or actively harmful strains of behavior. In the case of the new Twitter test feature, that means nudging them to slow down and read the content of the link they’re about to share.

Finance, Business & Charity

The Ford Foundation, founded by automaker Henry Ford’s son during the Great Depression, is borrowing $1 billion as it joins with some of the nation’s most venerable charities to help smaller nonprofits survive an economic slump due to the COVID-19 pandemic.

The organization says it will be the first nonprofit foundation in history to borrow through the sale of labeled social bonds – securities earmarked for funding of projects with a tangible societal benefit such as clean drinking water, healthcare or affordable housing – in the taxable American corporate bond market. “The nonprofit sector will be fundamentally upended and diminished by the economic fallout from Covid-19,” said foundation president Darren Walker, whose organization is teaming with the Doris Duke Charitable Foundation, the MacArthur Foundation, the W.K. Kellogg Foundation, and the Andrew W. Mellon Foundation to boost their collective grants by $1.7 billion beyond normal levels over the next two years.

“The story here is really a story of something that doesn’t happen enough in philanthropy and that is collaboration, real collaboration,” said Walker. “I have been so inspired by my colleagues who joined and together crafted a strategy that ensured we would significantly increase our payouts in whatever mechanism, through whatever vehicle worked for us and our boards.” The grants from the organizations will support nonprofits that are “advancing the fight against inequality at a time when communities who are most vulnerable have been hit hardest by the pandemic,” the Ford Foundation added. Social justice advocates say COVID-19 and the economic downturn it caused have highlighted existing racial and economic disparities in American society, with data showing minorities more susceptible to illness and death.

Unilever has pledged to invest €1bn (£900m) over the next decade in environmental projects that will improve the “health of the planet”. Alan Jope, Unilever’s chief executive, said that while the world was rightly focused on the devastating coronavirus outbreak and serious issues of inequality raised by the Black Lives Matter protests, the climate emergency should not be overlooked.

“We can’t let ourselves forget that the climate crisis is still a threat to all of us,” he said. The consumer goods giant, which owns more than 400 brands including Marmite, Dove, Comfort and Sure, said that in response to the “scale and urgency of the climate crisis”, it was also setting a target of net-zero emissions from all its products by 2039. Unilever said its €1bn “Climate & Nature Fund” would be used to fund projects ranging from landscape restoration and carbon capture to wildlife protection and water preservation. Jope has warned that the company would sell off brands that could not meet its own sustainability targets. It was no longer enough for consumer goods companies to sell washing powders that made shirts whiter or shampoos that make hair shinier, because consumers wanted brands that had a “purpose” too, he said.

Sports & Fitness

As people have had to bring their exercise routines home with them due to Covid-19, fitness businesses like Crunch Fitness, Orangetheory Fitness and SoulCycle have pivoted their businesses online – but other platforms have had a distinct advantage in the stay-at-home shift. Online exercise platform Obé Fitness, brainchild of co-founders and co-chief executives Mark Mullett and Ashley Mills, was well-positioned to weather the ongoing Covid-19 pandemic, but even Obé has had to adapt.

Pre-pandemic, Obé’s user base was largely made up of women 25-54. While that still remains its largest segment, Mills said that in the wake of Covid-19, the demographic of its subscribers has gotten much more diverse. More men have joined the platform, and the age range has broadened as well, with month-over-month growth at 70% in March and April.

Obé is producing content in front of its paywall specifically for new audiences, such as children and seniors. Knowing that stress levels are increasing, Obé has also incorporated guided meditation videos, a first for the platform. Obé has also rolled out new partnerships, like one with HBO Max, called “Week of So Much More.” It will celebrate the streaming platform’s launch with classes inspired by its shows, such as Sex and the City and Sesame Street.

Meanwhile, the founder and CEO of CrossFit is stepping down after a tweet about George Floyd sparked a social media backlash and a wave of affiliated gyms cut ties with the company. Reebok also dropped its affiliation with CrossFit. Founder Greg Glassman apologized for tweets that sparked online outrage by connecting Floyd and the coronavirus pandemic. He said he had made a mistake and should have been more sensitive, but denied being racist. “On Saturday I created a rift in the CrossFit community and unintentionally hurt many of its members,” Glassman said. “I cannot let my behavior stand in the way of HQ’s or affiliates’ missions.”

To read the full report, please download here.

To access daily Brand Moves, please visit www.brandchannel.com.