Week: May 11th – 15th

by Interbrand

The latest of Interbrand’s regular round-ups of brands’ responses to the global COVID-19 pandemic


Uber is in talks to lead a $170 million financing in scooter rental firm Lime, whose business has dropped sharply amid the coronavirus pandemic. The potential deal would value Lime on paper at $510 million, after the proposed cash infusion, a 79% drop from its previous valuation.

Uber already owns a minority stake in Lime, but the deal would significantly increase its share. As part of the proposed deal, Uber would transfer to Lime the bike and scooter business that the ride-hailing company purchased in 2018, called Jump. Uber would get the option to buy Lime between 2022 and 2024 at a specific price, and in the meantime Uber would feature Lime scooters more prominently in the Uber app.

Twitter usage spiked to 166 million daily users in the first quarter of 2020, as more people flocked to the site to keep up with news on the coronavirus pandemic. The usage growth is the largest Twitter has ever reported year-over-year, up from 134 million during this same quarter last year (and up from 152 million daily users at the end of 2019). But the growth wasn’t enough to offset the sudden advertising decline caused by the pandemic; from March 11th on, Twitter saw a 27 percent drop in year-over-year ad revenue.

This led to Twitter missing out on $20 million to $80 million that it had initially expected to bring in by the end of the month, and the company ultimately posted its first loss since 2017. User growth is headed in the right direction, but it seems unlikely at this point that Twitter can hit its advertising targets. Twitter now says it’s accelerating its work on advertising products, including one that lets companies promote mobile app downloads directly inside the Twitter feed.

Homeware brand Olivia’s has launched a consultancy service that’s now taking applicants for interior designers to help Animal Crossing: New Horizons players perfect the look and feel of their in-game homes. Budding and professional interior designers are being offered upwards of £40 an hour to provide this much needed service, and it’ll be available to players worldwide.

The consultant will visit your virtual island to discuss design ideas and desired styles, then attempt to find practical solutions in real-time. Consultants can also supply a mock-up of different design styles for you to use in future if you ever fancy redecorating. “At Olivia’s we love sharing our passion for luxury living and design expertise with our customers, whatever their plans.”, said Nick Moutter, founder of Olivia’s. “So we thought why not set up a service where this advice can be provided in a virtual world? Especially one like Animal Crossing where players take a lot of pride in their game surroundings”.

Apple’s now all-virtual World Wide Developers’ Conference will kick off on June 22. Apple is promising a “completely new online experience,” much of which looks likely to be happening inside the Apple Developer app itself; the only other element so far publicised is a young developers’ competition.

Travel & hospitality

Restaurant franchise operator Yum China is betting that Chinese consumers will still choose to dine-in in the aftermath of the coronavirus crisis and plans to open more Pizza Hut/KFC outlets in China’s smaller cities in the coming months. Joey Wat, CEO of the fast food giant, said that while the virus had driven up the takeaway rate at its businesses, it continues to see expansion opportunities especially in fourth- and fifth-tier cities where there are less Western dining options and fewer competitors. “If you want to have Western food, or a cup of fresh ground coffee, where can you go? Even the hotels don’t have it. KFC is the only choice,” Wat said. “We will continue to be committed to the China market and we are here to stay for long,” she said.

Yum China said last month that it plans to open up to 850 new stores in China this year, having already opened 179 in the first quarter. In reopening its restaurants, especially for dine-in, Yum China has made the wearing of masks and temperature checks mandatory at its outlets. Wat said the virus had helped drive takeway demand for Pizza Hut, which only accounted for 5% of the chain’s orders prior to the epidemic. Pizza Hut’s takeaway rate has so far increased to 13% and “may triple to 15% within this year,” she said. “So we are seeing some positive things come out of it.”

Airbnb bookings have risen in a number of European countries. Brian Chesky, Airbnb’s chief executive, highlighted a surge in domestic bookings in Denmark and the Netherlands. “The recovery is better than what we had forecast even two weeks ago. Is it a temporary recovery? Is it a permanent recovery? Nobody knows,” Chesky said. It has not been enough to alleviate a financial crisis at lossmaking Airbnb, which said on Tuesday it was cutting 25 per cent of its workforce; the company now expects its global 2020 revenue to be half of the $4.8bn it took in last year.

But the company said that by the end of April the number of bookings by Danish users planning stays in their own country was at around 90 per cent of April 2019 levels, while in the Netherlands domestic bookings were approaching 80 per cent of last year. Norway, Sweden, Switzerland and Austria also saw some improvement in the number of domestic bookings. “People fundamentally are still going to want to travel, but I don’t think travel will look like it used to – I think it will be permanently altered,” said Chesky. The company is taking encouragement from Chinese Airbnb, where users made twice as many bookings in April as in March as the country continued to reopen. About 60 per cent of bookings were to places within 200 miles of where guests lived.

Though electric scooter hire companies Lime and Bird are still inactive, Spin, the scooter company owned by Ford, restarted service in some cities yesterday. It’s offering free rides to healthcare workers, cleaning scooters more often, and hoping that now is a good moment to win some market share. “We’ve taken this slow and steadier path towards growth,” Spin co-founder Euwyn Poon said. “I think we’re kind of poised to be one of the leaders, if not the leader in growing this and scaling this as a true solution.” Spin hasn’t had to do layoffs, largely because Ford’s willing to play a long game with scooters. In that way, Poon said, “we’re very unique in this space, actually.” Spin did shut down service in 60 of its 70 markets, but Poon said that with staff still on board and scooters in warehouses ready to go, getting things back up to speed won’t take much time at all.

Founded in 2011 by Logan Plant, son of Led Zeppelin frontman Robert, London-based brewery Beavertown has slowly grown to be a major player in craft beer. Heineken bought a minority stake in 2018, injecting £40m into the company. However 85% of its sales come from pumps in now-shut pubs, bars and restaurants. Social distancing measures were introduced just as the brewer prepared for the launch of a new low-alcohol variety called Nanobot. Pre-lockdown, Plant had forged distribution deals with supermarket Sainsbury’s and pub chain Fuller’s. But the brand executed a swift pivot to DTC; it had a small website that pre-Covid-19 was doing £1000 in sales on a good month.

Beavertown invested in the team and infrastructure, increasing the number of staff working online from two to eight and changing its production plans to only manufacture cans. Online sales slowly improved but on the day of Nanobot’s launch, the website achieved £25,000 in 24 hours. “It’s now the second biggest turnover for business for us. It’s grown 1000% which is crazy,” said Plant. The firm, he said, had “always dreamed of creating a really good DTC model” and he is now talking about developing some kind of subscription model or a craft beer club to offer something different for its community of drinkers.

“There’s a lot of different things. We feel we’re more than just a beer so how can we transcend that? Direct-to-consumer is the future.” Beavertown has already created a ‘Beavertown Session’ every Friday at 4pm where people can tune in to different experiences, such as an art class with the brand’s creative director, beer yoga, a live tasting with Plant or a music performance.

Media & Sports

Disney has canceled its glitzy live season showcase preview in favor of streaming-video presentations tailored to each of the industry’s biggest media-buying shop. “These are a little more customized and intimate,” said Rita Ferro, president of Disney Advertising Sales, “but will retain some of the hallmarks of a bigger show, such as celebrities who will give shout-outs to agency executives in each audience. Participants will be able to access “bonus content” they can examine on-demand after the presentation is complete.

Disney is offering a new twist on a scaled-back version of what is usually TV’s biggest week of promotion; every May, big U.S. media companies book venues like Radio City Music Hall and Carnegie Hall in an effort to woo billions of dollars from advertisers. However, Disney will emphasize its recent ability to pivot to current conditions. 

Concert promoter Live Nation is giving investors a glimpse into the future with sales of tickets to see country-rock singer Travis McCready in what will be the industry’s first socially distanced concert. Live Nation is implementing a number of guidelines to comply with local restrictions including limiting the number of available seats so fans remain at least six feet apart during the show. At the McCready show “fan pods” will consist of anywhere between two and 12 seats, cutting the allowed attendance down to 20% of normal capacity.

Attendees will need to wear masks and have their temperature checked at entry points. Fog sprayers will be used to sanitize the venue, bathrooms will be limited to ten people at a time, and soap and paper towel dispensers will be touchless. As for the concession stand, food and beverages will be prepackaged or have lids, Live Nation-owned Ticketmaster said.

With travel grounded, media organizations have noted that their audiences still want to read about new experiences and destinations. These publications are seeing the same kind of traffic uptick around travel that publishers have noticed amid Covid-19. A piece from Travel + Leisure, for example, spotlighting museums that readers could tour virtually, racked up over 4 million visits and over 1.2 million video views in less than a week, the publisher said.

Since its initial publication, the piece has generated over 7 million visits. The New York Times, also aware of how readers’ content preferences were changing, has also provided more service journalism for readers. In print, the publisher renamed its travel section At Home, providing coverage around an at-home lifestyle. Online, it tweaked its popular franchise 52 Places to Go to include all the virtual ways readers could visit those destinations.

Retail & Manufacturing

Tesla’s new Model 3 was the biggest-selling car in the UK last month, aided by its online-order-anddistanced- delivery sales strategy, as Elon Musk’s electric car company continued to deliver to customers despite the lockdown. Some 658 Model 3s were registered – 15% of all car sales in April, with almost three quarters of those bought by private buyers. Jaguar’s electric I-Pace was in second place.

However, UK new car registrations fell by 97.3% in April, compared to a year ago, with just 4,321 new cars sold – down from 161,000 a year ago. The decline was the steepest since the 1940s, and is in line with similar falls across Europe, with France 88.8% down and the Italian market falling 97.5% in April.

Chinese e-commerce giant Alibaba has launched a new luxury platform targeting younger consumers that also aims to help high-end brands shed excess inventory built up during the global lockdown. Most labels have been enjoying a recovery in sales in China since March, but the pandemic has disrupted supply chains and warehouse planning across the globe, leaving fashion groups with vast amounts of unsold goods.

Alibaba said it was piloting the new Luxury Soho platform to run alongside its Tmall Luxury Pavilion flagship site. “Brands are now sitting on a worldwide abundance of stock and are also needing to find ways to reach new consumers,” said Christina Fontana, head of Tmall Fashion and Luxury in Europe. She said the platform would help high-end houses reach newer consumers such as those from China’s lower-tier cities or so-called Gen Z shoppers, young clients up to the age of 25 who are just entering the world of luxury and are expected to become increasingly important for the sector. “With Luxury Soho, brands can now move selected products and collections onto an online outlet store and bring them in front of a specific audience,” she said.

General Motors has said it is planning to resume production at the majority of its North American plants on May 18 as it prepares operations amid the coronavirus pandemic. “Considerable planning is under way to restart operations in North America,” the automaker said. “Based on conversations and collaboration with unions and government officials, GM is targeting to restart the majority of manufacturing operations on May 18 in the U.S. and Canada under extensive safety measures.” Fiat Chrysler Automobiles has also announced plans to resume production at most U.S. plants the week of May 18.

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