Jaguar Land Rover, Debenhams, Asda: Everything that matters this morning

Good morning and welcome to Marketing Week’s round-up of the news that matters in the marketing world today.

Debenhams chairman and CEO ousted by Mike Ashley

Debenhams’s chairman Sir Ian Cheshire and chief executive Sergio Bucher have been voted off the board.

While the board has agreed to keep Bucher as CEO, Cheshire will be replaced by director Terry Duddy in the interim after retail tycoon Mike Ashley used Sports Direct’s 29.7% share in Debenhams to oppose Cheshire.

On Cheshire’s eviction, Debenhams says: “Given the decision of two major shareholders who voted against his re-election to the board, Sir Ian has concluded it is no longer possible for him to remain Chairman of Debenhams.”

And commenting on Bucher, it says: “The board is mindful of its responsibilities to all shareholders and has full confidence in Sergio and in the management’s plan to reshape the business. As a result, the board and Sergio have agreed that he should continue as CEO of Debenhams, reporting to the board.”

Debenhams reported a 3% drop in sales over Christmas and issued three profit warnings in 2018. Its share price is down from 36p a year ago to 4.8p today.

Marketing roles to be cut as Jaguar axes thousands of jobs

Jaguar Land Rover (JLR) is cutting up to 5,000 global job roles in an effort to save £2.5bn, with UK marketing, management and administrative roles set to be hardest hit.

Chief executive Ralf Speth says JLR is “taking decisive action to help deliver long-term growth in the face of multiple geopolitical and regulatory disruptions as well as technology challenges facing the automotive industry”.

JLR, which employs 44,000 people in the UK, is beginning a voluntary redundancy programme that it says will “create a leaner, more resilient organisation with a flatter management structure”.

Des Quinn, a national officer at the UK’s biggest union Unite, says Britain’s car workers have been “caught in the crosshairs of the Government’s botched handling of Brexit, mounting economic uncertainty and ministers’ demonisation of diesel, which along with the threat of a no-deal Brexit, is damaging consumer confidence.”

Falling sales in China have also been cited as a contributing factor.

Asda gender pay gap improves

Asda reduced its median gender pay gap in 2018 to 7.6% – 1.3 percentage points lower than in 2017 and 10.3 points below the national average of 17.9% for full- and part-time workers.

According to the report, filed to government, the mean pay difference between all relevant men and women employed by Asda is 12.4% – down 0.1 points on 2017 and 4.7 points lower than the national average of 17.1%.

86% of Asda colleagues work in hourly paid roles in stores that have set hourly rates of pay, resulting in a median gender pay gap of 0%.

While 74% of junior roles are occupied by women, just 35% of Asda’s senior team are female.

“Rates of pay and access to benefits and opportunities are the same at Asda, regardless of gender,” says Asda’s senior vice president of people, Hayley Tatum.

“While our gender pay gap is better than the national average and we have seen the figures improve this year, we recognise that, like many businesses, we still have challenges when it comes to female representation in more senior roles – and that is something we’re committed to addressing.”

New radio campaign tackles Brexit’s potential impact on UK marketing spend

A new campaign from Radiocentre sets out to tackle the knock-on effect Brexit may have on UK advertising budgets.

The ads, created by Radioville and featuring actor Oliver Maltman (who recently starred as Michael Gove in the Channel 4 drama Brexit: The Uncivil War), urge listeners to re-evaluate their media mix and informs them that radio can help their squeezed budgets go further.

Maltman lends his voice as the enthusiastic but misguided boss attempting to navigate his team through the choppy waters of financial uncertainty including introducing some absurd ideas to save money on the marketing budget.

In one ad, the team meet their new colleague Gary – a pigeon who will now be handling all their direct mail.

The ads then propose a more sensible alternative: re-evaluating the media mix can make marketing budgets stretch further when economic times are tough by incorporating more efficient media such as radio to boost overall campaign effectiveness.

“We know that in uncertain times the marketing budget is often the first thing to come under scrutiny,” says Lucy Barrett, client director at Radiocentre.

“We also know from past experience that brands who continue to invest during difficult times come out the other side in much better shape than those that don’t. However with these ads we are demonstrating to advertisers that by using radio, there is a way to reach mass audiences in a really cost effective way.”

Alibaba-backed cycle hire company pulls out of London

Ofo, the Alibaba-backed Chinese cycle hire company known for its yellow bikes that can be left in the street, is pulling out of London amid bankruptcy woes.

The firm had removed the smartphone-activated bikes from south London in October, with just a handful left on the app in north and central London this morning.

At its peak, Ofo had 6,000 bikes across several UK cities including London, Oxford, Cambridge, Norwich and Sheffield. Of the 14 local authorities it was operating in, it has now withdrawn from seven.

It is understood that all UK staff, which had reduced significantly from 60 to just a few, have been made redundant.

Thursday, 10 January

Debenhams sales slump at Christmas as discounting bites

Struggling department store chain Debenhams reported a sales drop over the crucial Christmas shopping period as a “volatile” environment hit performance.

Sales for the 18 weeks to 5 January were down 5.7% on a like-for-like basis, while total transactions were down 3.6% despite a 4.6% increase in digital sales. Debenhams says there is growing evidence customers are seeking out promotions, meaning it had to reinstate some tactical promotional activity in order to be competitive, which will lead to a decline in profits in the first half.

Sergio Bucher, Debenhams CEO, says: “In order to ensure that Debenhams has a sustainable and profitable future we need a strong customer proposition, a strengthened balance sheet and a reshaped store portfolio. We have a robust plan to deliver this and while there is much work still to do, the performance of our Redesigned stores over peak, and continued outperformance in digital, reinforce our view that we are taking the right steps to protect the future of the business.”

Debenhams results come as John Lewis issues a profit warning and says it is considering axing its staff bonus this year. The Partnership, which includes John Lewis and Waitrose, says profits will be “substantially lower this year” as sales growth slowed amid weak consumer demand, although gross sales were up 1.4% year on year, including a 0.3% rise at Waitrose.

Marks & Spencer has also struggled, with total sales down 2.2%, while Halfords has issued a profit warning.

Christmas retail sales growth hits lowest level for 10 years

The retail sector saw its worst December performance in 10 years in 2018 as consumers chose “not to splash out” over the festive period and amid structural changes in the industry.

Total sales were flat, compared to an increase of 1.4% in December 2017, according to figures from the British Retail Consortium (BRC). That was the lowest growth since April and well below the three-month and 12-month averages of 0.5% and 1.2% respectively. On a like-for-like basis, UK retail sales decreased 0.7% year on year, compared to 0.6% growth a year before.

For the whole of 2018, total sales were up 1.2%, comprised of a 3.1% rise in food sales but a 0.3% decline in non-food. And for the three months to the end of December, non-food sales decreased 1.2% in total while food sales were up 0.6%.

“Squeezed consumers chose not to splash out this Christmas with retail sales growth stalling for the first time in 28 months. The worst December performance in 10 years means a challenging start to 2019 for retailers, with business rates set to rise once again this year and the threat of a no-deal Brexit looming larger than ever,” says BRC CEO Helen Dickinson.

British Airways criticised over ad that ‘glamourises’ gambling

British Airways has been accused by MPs and campaigners of “glamourising” gambling after a new TV ad showed a couple easily winning money on slot machines while on holiday.

The spot, for British Airways Holidays, shows a couple returning to their hotel room via what looks like a hotel casino after going for a swim in the pool. “We had a bit of spare change so we put it in the slot machines … and won a couple of dollars. So we put it back in and the next thing we knew we’d won $493. Luckiest dip ever,” they go on to say.

However, the ad has elicited a number of complaints to the Advertising Standards Authority on the grounds that it might promote gambling and portray gambling in a “glamorous or frivolous way”. Those complaints are now being assessed to decide whether to launch an investigation into if the ad campaign is irresponsible and should be banned.

A British Airways Holidays spokesperson tells the Guardian: “This advert is one of a series that has been broadcast by us over the last three years, promoting a range of special memories that millions of British Airways Holidays’ customers experience when they travel with us every year.

“The advert was cleared with the industry body, Clearcast, ensuring it is appropriate for broadcast.”

Ad industry urges publishers globally to improve online ad standards

The Coalition for Better Ads is expanding its standards for desktop and mobile globally as it looks to improve the online ad experience for consumers worldwide.

The move comes after research by the coalition involving more than 66,000 consumers found strong alignment of consumer preferences for the most- and least-preferred ad experiences. Yet while many industry participants in North America and Europe have incorporated its standards, take-up has been slower in the rest of the world.

“Consumers worldwide have sent a clear message to the online ad industry about the ad formats that disrupt their experience online,” says Stephan Loerke, CEO of the World Federation of Advertisers. “Successful brands will respond to consumers by taking steps to avoid these ad experiences in their marketing plans.”

So far, 70 publishers across 27 countries have certified compliance with the coalition’s standards. The coalition is made up of 50 members representing leading global advertisers including the likes of Procter & Gamble and Unilever, as well as ad agencies, publishers and tech companies.

Wednesday, 9 January

Apple brings iTunes to Samsung TVs as it seeks new revenue

Apple is expanding to one of its biggest rivals by giving owners of Samsung TVs direct access to iTunes content.

Samsung will include an iTunes app in its smart TVs that will allow people to watch movies and TV shows they’ve already bought on iTunes or buy new ones.

The unusual pairing will even let people use Samsung’s Bixby voice assistant to play iTunes content. Samsung smart TV’s will also run Apple’s AirPlay 2, which lets users play videos, music and photos from iPhones and other Apple devices on speakers and TVs.

Apple has long prided itself on the tightly controlled world of apps available on its devices in order to encourage users to only buy its products.

The news follows an unexpected profit warning from Apple last week that resulted in a 7.5% decline in the company’s shares.

However, this isn’t the first time Apple has broadened its services beyond its own products, announcing in November that Apple Music could be listened to on Amazon Echo devices.

The service is expected to launch in the US in the next few months, expanding rapidly to more than 100 countries, according to the tech news site The Information.

Ted Baker Christmas sales unaffected by scandal

Fashion retailer Ted Baker saw sales rise during the Christmas trading period despite the ‘hugging’ scandal with its CEO in December.

Sales for the five-week period from 2 December rose 12.2% year on year and 10.5% on a constant currency basis. Ecommerce sales were up 18.7% and represented 25.7% of total retail sales.

Ted Baker said gross margins remained in line with expectations “against a backdrop of increased promotional activity”.

Acting chief executive Lindsay Page says: “The Ted Baker brand has delivered a good performance across both our stores and ecommerce business despite the continuing challenging external trading conditions across our markets.”

In early December, the company’s CEO and founder Ray Kelvin took a voluntary leave of absence after allegations about his conduct were investigated, notably his practice of regularly hugging colleagues.

Boohoo criticised for selling real fur as fake

Boohoo and Zacharia Jewellers have been criticised by the ad regulator after promoting items made from real fur as fake or “faux”.

In two separate rulings, the Advertising Standards Authority said a product listing for a pompom jumper on Boohoo.com and for a pompom headband sold on Amazon by Zacharia had broken the ad rules. Both incidents were spotted by animal welfare charity Human Society International (HSI), which tested the products for real fur as part of its investigation into occurrences of real fur being sold as fake.

Both Boohoo and Zacharia have since removed the items from sale, with Boohoo launching an internal investigation and questioning its supplier.

“We have a strong commitment against the sale of real fur in any of our products. We have robust policies and procedures in place to ensure that we are able to adhere to this,” says Boohoo. “Following the inquiry by HSI the item has been removed from sale. We continue to investigate the matter internally and with the supplier in question, as a matter of priority.”

Energy firm ceases trading after ban

Energy supplier Economy Energy has collapsed after its recent ban on new customers. The failed supplier was banned by Ofgem on Friday (4 January) from taking on new accounts, demanding one-off payments from existing customers or increasing their direct debits due to a high number of complaints.

The company had attracted 1,303 complaints, according to Ofgrem, which included disputed account balances, the firm’s failure to issue refunds and concerns over billing delays.

Economy Energy had recently posted a message on its website saying that after “recent speculation and circulating misinformation” it had “no intention of closing our doors”.

The supply to customers will continue, any credit they have will be protected, and a new supplier will take on their accounts. Ofgem said a new supplier would be appointed as soon as possible.

UN refugee agency launches fitness app campaign

The UN refugee agency has launched a new campaign that wants to get individuals to run, walk or ride two billion kilometres, collectively, over the course of 2019, in solidarity with refugees,

‘Step with refugees’ encourages individuals in 27 countries to track their kilometres via their fitness apps and sync with the campaign’s dedicated website as a way of showing support for the plight of refugees forced to flee their homelands. Runners will also be encouraged to fundraise and, when signing up, will be sent an email inviting them to create their own fundraising page.

Christian Schaake, head of private sector partnerships at UNHCR, says: “We wanted to tap into positive feelings of solidarity by uniting millions of people all over the world in a visible global campaign that both celebrates the resilience and strength of refugees and achieves a common goal to protect them as they reach safety.”

The campaign will be supported by celebrity participants with actor and UNHCR Goodwill Ambassador, Ben Stiller, voicing the launch video.

Disneyland Paris takes more emotional marketing strategy with new ad that shows ‘when magic gets real’

Disneyland Paris has released an ad that follows the adventure of a wild duckling that has already sparked an outpouring on social media.

The ad, produced by French agency BETC, centres around a duckling who idolises Donald Duck when they discover him in a Disney magazine. However, when winter arrives it is forced to migrate and leave its beloved magazine behind. Luckily, the duck and his family end up at Disneyland, where he finally gets to meet his hero in real life.

The film launches across European markets and has already been praised by a number of publications and on Twitter for its original storytelling.

Tuesday 8 January

HSBC sparks backlash for ad claiming UK ‘is not an island’

HSBC has been criticised for a series of outdoor and digital ads that claim the UK “is not an island”.

People have taken to social media to react, with many claiming the ads are anti-Brexit – something the brand denies.

One user questions whether HSBC risks “alienating a large number of potential customers” while another says “we are an island actually, full of villages and towns your bank deserted; of cleaners you underpaid; and of money laundering and other laws you bent. Brexit etc was a response to the economy you helped decimate”. Others, however, have called the ad “brave”.

An HSBC UK spokesperson told the BBC: “With the ‘We are not an island’ poster we are reinforcing our strong belief that the things that make us quintessentially British are the things that make us inescapably international.”

Amazon crowned world’s biggest company for the first time

Amazon became the world’s most valuable public company for the first time last night, taking the crown from Microsoft.

When trading closed on the New York stock exchange, Amazon’s market capitalisation was $797bn, overtaking Microsoft which closed on $784bn.

Amazon, which was launched 25 years ago by Jeff Bezos, is now the world’s largest online retailer, and it also owns the biggest cloud computing business in Amazon Web Services.

Samsung warns of profit drop as it faces ‘difficult conditions’

Samsung Electronics expects to post a 29% drop in operating profit for the last three months of 2018, marking its first quarterly profit decline for two years as demand for smartphones and memory chips stalls.

The company expects operating earnings to be 10.8trn Korean won (£7.6bn) for the quarter, down from 15.2trn Korean won the previous year.

Revenue is forecast to decline 11% to 59trn Korean won (£41bn).

In a statement, Samsung said it expects earnings to “remain subdued” in the first quarter of 2019 due to “difficult conditions for the memory business”.

Apple last week also indicated sales have been slowing, blaming economic weakness in China and indicating challenges ahead for the tech industry.

Fast fashion takes a hit as Missguided’s losses widen

Women’s fashion retailer Missguided has blamed an “extremely challenging” year for a pre-tax loss of £46m for the 12 months to 1 April 2018, according to accounts newly filed with Companies House.

Despite seeing a sales boost in the summer thanks to its partnership with hit TV show Love Island, the brand’s losses have deepened compared to the previous year when it recorded a loss of £1.6m.

The company started out as a pure-play digital retailer but now has four physical stores. However, it admits these outlets are too large and cost more to run than they bring in, according to the BBC.

Missguided also blamed its worsening financial situation on “premature” investment in extra management. The brand’s chief customer officer Kenyatte Nelson exited the retailer after just eight months in the role, with CEO Nitin Passi reportedly telling staff that his departure was part of the brand’s strategy to simplify the business and regain control, according to reports from Drapers in November.

In its strategic report for the period, Missguided said: “The year has been an extremely challenging one from which the brand emerges stronger. During the year, in order to support and enable future growth, a fresh tier of management was introduced to the business. We now believe that this development was premature, materially increasing the cost base and diluting the influence of our founder [Passi].”

Mastercard simplifies logo for ‘digital age’

Mastercard has dropped its name from its logo, leaving the interlocking red and yellow circles to stand alone on cards, at physical and digital retail locations and on sponsorship, as it looks to simplify its brand image.

“Reinvention in the digital age calls for modern simplicity,” says Raja Rajamannar, chief marketing and communication officer at Mastercard. “With more than 80% of people spontaneously recognising the Mastercard symbol without the word ‘Mastercard,’ we felt ready to take this next step in our brand evolution. We are proud of our rich brand heritage and are excited to see the iconic circles standing on their own.”

The brand first introduced the logo more than 50 years ago to symbolise its promise of connecting people to ‘priceless’ opportunities – its longstanding strapline.

Monday, 7 January

Morrisons slashes prices on 900 products as Aldi reports ‘record Christmas’

Morrisons is to slash the prices of more than 900 products to help it keep pace with rivals Aldi and Lidl.

According to the Guardian, the supermarket intends to defend its market share by cutting an average 20% off “store cupboard favourites” such as tinned tomatoes, cereal and ready meals.

Marketing director Andy Atkinson says Morrisons has listened to customers, whose budgets are stretched in January, and would strive to cut “every penny” on the essentials to help them feed their families.

The news comes as rival Aldi reveals it made almost £1bn in sales during December, recording its best ever UK Christmas trading period. According to BBC reports, the week of 17 December was the busiest ever for Aldi’s UK business, with sales up 10% on the previous year.

During the month customers bought 17 million bottles of wine, champagne and prosecco.

In contrast, Morrisons is expected to post a 0.5% rise in retail sales when it announces its results tomorrow. Sainsbury’s will update its Christmas trading results on Wednesday and Tesco on Thursday.

Selfridges defies retail gloom with 8% sales hike

Selfridges has defied the gloom on the struggling UK high street as sales at the premium department store rose by 8% year on year in the 24 days leading up to Christmas.

According to reports in The Times, sales also increased by 8% in the week to Christmas, with Selfridges’ flagship Oxford Street store attracting a 10% uplift in sales during the 24 days to Christmas.

The retailer’s ‘Selfridges Rocks Christmas’ campaign inspired by famous rock’n’roll stars, which featured in-store entertainment such as live singers and exclusive products, is thought to have attracted more consumers to store.

Selfridges operates four stores in London, Birmingham, Manchester and the Trafford Centre, and sells online to 130 countries worldwide. For the fifth year running the retailer posted record results, reporting in October that sales for the year ending 3 February 2018 had increased by 11.5% to £1.75bn and operating profit had risen to a record £181m.

The retailer also continues to invest in its physical stores, last year unveiling the £300m refurbishment of its Oxford Street site, including a new look beauty and accessories hall.

L’Oréal launches first wearable to measure skin pH

L’Oréal has unveiled its first wearable sensor to measure skin pH levels and create customised skincare routines based on the individual make-up of the user’s skin.

Launched at the Consumer Electronics Show in Las Vegas, My Skin Track pH was co-developed by the L’Oréal Technology Incubator, wearable sensor specialist Epicore Biosystems and L’Oréal skincare brand La Roche-Posay.

The wearable measures individual skin pH levels using microfluidic technology, which captures trace amounts of sweat from skin pores through a network of micro-channels, providing an accurate pH reading within 15 minutes.

The wearer places the sensor on their inner arm, leaving it in place for 5-15 minutes until the centre two dots take on colour. Next the user opens the My Skin Track pH app and photographs the sensor.

The app reads the pH measurement, as well as the wearer’s local sweat loss, which is the rate of perspiration on the skin’s surface. The app then provides an assessment of skin health and a customised La Roche-Posay product recommendation to care for the skin and balance the pH.

Healthy skin pH exists within the slightly acidic range between 4.5 and 5.5, however when the pH balance is compromised it can cause dryness, eczema and dermatitis.

The My Skin Track pH wearable and app will initially be introduced in 2019 through La Roche-Posay dermatologists in the US, with the ultimate goal of launching a direct-to-consumer product.

Ryanair claims title of UK’s ‘worst short-haul airline’

Ryanair has been named the UK’s least-liked short-haul airline for the sixth year running in a Which? survey of passengers.

The airline ranked bottom of the 19 carriers flying from the UK, with customers reportedly disappointed by its boarding processes, seat comfort, food and drink offering, and cabin environment.

Some 70% of the passengers surveyed chose Ryanair as the airline they would never fly with again in the future. Ryanair was criticised in 2018 for cancelling flights due to strike action and then refusing to compensate customers.

A Ryanair spokesperson told the BBC that the airline’s success was not reflected by the analysis, describing it as an “unrepresentative survey of just 8,000 people” that did not take into account the fact its passenger numbers had grown by 80% over the past six years.

Guernsey-based Aurigny Air Service topped the Which? list, followed by Swiss Airlines, Jet2, Norwegian and Dutch carrier KLM. Easyjet came in at 11th, beating British Airways at 15th on food and drink, customer service and value for money. However, both airlines scored low ratings for their level of seat comfort.

Marks & Spencer poaches Asda insight boss

Marks & Spencer has appointed former Asda vice president of insight, pricing and digital CRM, Andrew Mann, as its new head of insight and customer loyalty. Mann will work alongside Jeremy Pee, who took on the role of chief digital and data officer at the high street retailer in December.

Prior to his role at Asda, Mann served as Co-op customer director for food and group customer data director, as well as director of insight and loyalty at Sainsbury’s and Tesco Clubcard director.

Before moving into the supermarket sector Mann held a number of high profile marketing roles including head of brand communications and internet at BT, global brand director at Coca-Cola and marketing director for Cadbury Schweppes Beverages, where he started out on a graduate scheme in 1987.