BrewDog, Apple, Argos: 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.

By Marketing Week Reporters 11 Nov 2019 7:45 am

BrewDog launches mini hotels

BrewDog is launching city centre mini-hotels as it looks to expand into hospitality.

The Independent Scottish craft brewer is launching the first BrewDog Kennels in its home city of Aberdeen with prices starting at £75.

Guests will be treated to a welcome beer at check-in, and all the rooms will feature a beer fridge in the shower.

BrewDog co-founder James Watt says: “Aberdeen is an incredible place for craft beer so we have upped the ante with our own take on accommodation. To paraphrase the song; you can check out but you may never want to leave.”

Unsurprisingly, given the brands name, the kennels will also all be dog friendly with dog beds and treats available upon request.

The brand already have a larger hotel in the US which it opened last year. The DogHouse sits on a 42-acre complex in Columbus, Ohio and boasts a beer production facility, a brewpub and a beer museum, promising visitors it’s “the happiest place on earth”.

Watt adds: “We firmly believe that where you stay in a new city should be your home from home, so have brought the spirit of our DogHouse Hotel and its reverence for great beer to a new series of mini-hotels.”

Beyond Scotland, further openings are expected in Paris, Manchester, Berlin and London.

Apple launches health research app

Apple is rolling out a new health research app that allows iPhone and Apple Watch users to participate in scientific studies.

Users can participate in three studies, including a Women’s Health Study that involves tracking womens’ menstrual health.

Those who wish to participate can do so by downloading Apple’s ‘Research’ app in its App Store. Participants using Apple Watches or an iPhone can contribute data around movement, heart rate and noise levels, captured during everyday activities, from taking a walk to attending a concert.

Users can also control the type of data they wish to share with each study. Those studies could, in turn, generate outcomes that Apple would then use to build new products.

Google’s owner, Alphabet Inc, sought to buy Fitbit last month for $2.1 billion noting it wanted to invest more in digital health.

Chilango latest victim of casual dining crunch

Chilango is set to become the latest victim of the ‘casual dining crunch’ with the revelation that it is talks with restructuring experts.

The UK-based Mexican eater is in discussions with auditing company RSM regarding business options, including administration or a company voluntary arrangement.

Chilango, which has 12 outlets in the UK, told the Guardian it “has engaged RSM to assist on working on long-term planning, options and strategy.”

The restaurant raised millions of pounds this year from small investors with its “buritto bond” scheme which saw it borrow money from the public.

It used the ‘mini bond scheme’ in 2014 and October last year, raising £5.8 million with individuals promising a fixed interest rate when the bond matures.

Chilango also offered a “black card” entitling larger investors who spent at least £10,000 to a free burrito every week for the lifetime of the bond.

The brand’s parent company Mucho Mas made a £1.4m loss in the year to March 2018 and a losses of £3.19m the previous year.

The casual dining sector has been suffering in recent years with a number of high profile bankruptcies, including most recently Pizza Express, as a result of increasing rents and less consumer spending.

Labour promises free broadband for all

Labour is promising to give every home and business in the UK free full-fibre broadband by 2030, if it wins the general election.

The party says it will nationalise part of BT to deliver the policy and introduce a tax on tech giants to help pay for it.

In a speech due to be delivered in Lancaster on Friday, Jeremy Corbyn will outline his proposals to create a new British broadband public service.

However, tech companies are arguing it will hinder competition and innovation.

Julian David, the chief executive of TechUK, which represents many UK tech firms, says: “These proposals would be a disaster for the telecoms sector and the customers that it serves. Renationalisation would immediately halt the investment being driven not just by BT but the growing number of new and innovative companies that compete with BT.”

Argos recalls own brand baby gates

Argos is recalling its baby gates over safety fears after its Cuggl gates were found to fail durability tests and to have some unsafe features.

Argos created the Cuggl brand in 2017, selling cots, pushchairs and highchairs as well as safety gates.

However, this week the brand noted that some gates’ automatic closure feature did not always work and that some gaps between metal bars were too wide, “which may result in a child getting trapped”.

Argos also says some of the gates could break “under high impact”, such as regular banging or kicking.

Argos adds: “Please be assured that no other safety gate is affected by this issue. We apologise for any inconvenience caused.”

Thursday, 14November

Disney+ gets more than 10 million sign-ups on first day

Disney claims its new streaming service Disney+ has met with “extraordinary consumer demand”, attracting more than 10 million sign-ups on its first day of launch.

The service, which launched in the US, Canada and the Netherlands on Tuesday was impacted by technical glitches on launch day which the company says was caused by higher-than-expected demand. It is not clear how many of the 10 million paid for the service rather than signing up via a free promotion.

Disney costs $7 per month and features more than 500 films and 7,500 TV episodes. The company wants to reach between 60 million and 90 million Disney+ subscribers globally by 2024.

Elsewhere in streaming, Netflix has signed a deal with Nickelodeon to produce original animated content based on Nickelodeon’s library in a move seen as a challenge to Disney+.

McDonald’s launches trials to cut plastic waste

McDonald’s is launching a programme across Europe that aims to remove and minimise the amount of plastic it uses, and improve the recyclability of its packaging.

The plan will McDonald’s remove the plastic lids from McFlurries across Europe and rollout new fibre-based lids for cold drinks in France. There will also be trials across markets of alternatives to the plastic McFlurry spoon, a redesigned paper straw and toy take-back schemes.

The move is part of McDonald’s global ‘Better M’ platform, which aims to make the company more environmentally friendly. In Europe, this involves testing in selected restaurants and using feedback from customers to inform which options are scaled up or adapted.

Currently, 78% of packaging used by McDonald’s is made from fibre globally, rising to 88% in Europe. Removing the lids from McFlurry will remove 1,200 tonnes of plastic a year alone.

McDonald’s vice-president of global sustainability Keith Kenny says: “We care about lessening our impact on the environment and know our customers do too. That’s why we’re finding new and innovative ways to reduce our use of packaging, switch to more sustainable materials and help our customers to reuse and recycle, too.

“The trials we are conducting across Europe are vital in helping us get first-hand feedback from customers on solutions that help them to be conscious consumers, without compromising on quality and the McDonald’s experience they love. Better M is a powerful platform to allow us to work with our customers and choose the right solutions to scale up across Europe.”

Nike pulls back from Amazon as it focuses on its own digital channels

Nike is pulling its clothes and shoes from sale on Amazon as it ups its focus on selling directly to consumers. The company had been selling goods through Amazon since 2017 as part of a pilot scheme.

However, the company now says it wants to create more “direct, personal relationships” with customers.

“As part of Nike’s focus on elevating consumer experiences through more direct, personal relationships, we have made the decision to complete our current pilot with Amazon Retail,” says the company.

“We will continue to invest in strong, distinctive partnerships for Nike with other retailers and platforms to seamlessly serve our consumers globally.”

Nike’s ecommerce revenues are experiencing strong growth and were up 35% in its last fiscal year. It wants online sales to account for a third of its business by 2023 and recently appointed former eBay boss John Donahoe as CEO, a signal of its intentions in ecommerce.

Heineken adds Euros to its football sponsorship portfolio

Heineken has signed a sponsorship deal with UEFA to add the Euro 2020 competition to its portfolio, as well as signing up to sponsor the Champions League for another three years.

The deal means Heineken will be a partner of the two biggest competitions in both club and country football in Europe. It includes exclusive pouring rights at stadiums, fan zones and fall villages during the tournaments, LED pitch boarding exposure, digital rights, man of the match presentations and ticket giveaways.

Heineken will also run global TV and digital campaigns using its ambassador Thierry Henry.

“Heineken has enjoyed an unrivalled relationship with football fans through our sponsorship of the UEFA Champions League,” says Heineken global sponsorship director Hans Erik Tuijt.

“UEFA EURO 2020 will enable Heineken to create even more engaging experiences for fans across Europe and around the world. This partnership complements our other unique global platforms: Rugby World Cup, Formula One, and James Bond.”

Google makes move into banking in deal with Citi

Google plans to start offering bank accounts in a move aimed at taking on both traditional banks and fintech upstarts such as Monzo and Starling.

Codenamed Cache, Google’s digital bank accounts will be launched next year in the US through a deal with Citi. It will initially offer digital current accounts.

Tech giants including Facebook and Apple are increasingly trying to move into the financial sector. Facebook is attempting to get its digital currency Libra off the ground, while Apple has worked with Goldman Sachs to launch a credit card.

However, both attempts have been beset by issues. Apple was criticised for sexism as its card appeared to give men higher borrowing restrictions than women, while many traditional finance companies have pulled out of Libra.

Google’s Caesar Sengupta told the Wall Street Journal: “Our approach is going to be to partner deeply with banks and the financial system. It may be the slightly longer path, but it’s more sustainable.”

Wednesday, 13 November

ITV enjoys strong quarter thanks to rugby and Love Island

ITV is claiming that England’s defeat to South Africa was the most watched television programme of the year, with viewing figures of 12.8 million.

The average audience for last Saturday’s final in Japan was 8.9 million. And, with Love Island also boasting strong viewing figures on both sides of the Atlantic, advertising revenue has gone up 1% in the third quarter.

The news comes a day after it was announced that advertising revenues fell by 3% to £1.5bn in the nine months to 30 September.

Shares in the broadcaster have gone up by 30% over the past three months and rose a further 3% on Tuesday, with an earnings forecast for the year upgraded by 3.3% as analysts reacted to the latest viewing figures.

“On-screen and online viewing performed well with highlights including four of the five highest rating new dramas so far this year and the Rugby World Cup which saw a peak audience of 12.8 million viewers during the final,” said CEO Carolyn McCall.

However, a BBC journalist has disputed ITV’s World Cup viewing claim, tweeting that the corporation’s New Year coverage peaked at 13.3 million.

The BBC News’ entertainment correspondent Lizo Mzimba wrote: “Actually ITV are mistaken. Rugby peak isn’t most watched TV moment of 2019 so far.

“It got 12.8 million, which is beaten by the New Year Celebrations on BBC One which peaked between 00.05 and 00.10 on 1 Jan with 13.3 million, making that most watched TV moment of 2019 so far.”

More woes for Nissan as profits plunge

Japanese carmaker Nissan has announced a near 70% drop in profits over the last quarter, to 59bn yen (£400m).

The company duly revised its profit forecast for the fiscal year ending March 2020, cutting it by 35% to 110bn yen (£784m).

The news caps a tumultuous year for the brand, one that has seen it rocked by internal management controversies and the worldwide downturn in car sales.

Former chairman Carlos Ghosn is facing charges of financial wrongdoing and breach of trust after allegations that he authorised payments of over £23m to a business partner based in Oman.

Ghosn continues to protest his innocence, while Nissan CEO Hiroto Saikawa stepped down in September following reports that he had been overpaid after manipulating his stock appreciation rights.

Starting in December, Saikawa’s successor, Makoto Uchida, now faces the challenge of repairing Nissan’s rocky relations with French manufacturer Renault, which owns 43% of the Japanese company.

Renault directors have been unimpressed with Nissan’s approach to the global market, particularly a reluctance to develop model designs to make them more attractive in the US, where sport utility vehicles reign supreme.

Molson Coors looks to up its premium positioning with Albert appointment

Karen Albert has been appointed premium brand director at brewer Molson Coors.

Albert, who was previously director of brand marketing and director of insights and strategy at Asahi UK and SABMiller, joins from snack company Popchips where she served as head of brand. She will lead a newly formed premium marketing unit.

The London-based Premium Hub will focus on Molson Coors’ widening portfolio of brands such as Pravha and Pip & Wild, which were added to the group earlier this year. Albert will work alongside three assistant brand managers and a recently recruited digital executive.

Marketing director at Molson Coors UK and Ireland, Jim Shearer, welcomes the new addition to the team: “Not only is she a highly skilled marketer, she’s passionate about building brands that have lasting impact and touch people’s everyday lives.

“She has an amazing portfolio of experience, so we have no doubt that she will bring a fresh take and great ideas to the table.”

Albert is looking forward to working on the company’s premium category. “From Aspall, Rekorderlig or Pravha, each brand comes with an amazing background and story to tell,” she says.

“If we can harness these unique stories and tell them brilliantly in a consistent way, people will continue to enjoy these brands for years to come. I’m very excited to get back into the industry and drive forward Molson Coors’ premium portfolio with the talented team in London.”

Philip Almond joins Cancer Research UK

Cancer Research UK has appointed Philip Almond as its executive director of fundraising and marketing.

Almond arrives at the charity following a six-year stint as CMO at the BBC, where he founded BBC Creative, the corporation’s in-house agency, and 17 years at Diageo, where he was global brand director and CMO for a various food and drink brands.

Starting in December, Almond will oversee the Cancer Research UK brand, marketing and mass fundraising teams.

“Fundraising underpins everything the charity achieves, and it will be a huge privilege to head up one of the most successful teams in the sector,” says Almond.

“The charity is very close to my heart, and I’m looking forward to working with so many inspiring people who are equally passionate about the cause.”

Almond replaces Ed Aspel, who joined the charity in 2012 and is now taking a career break.

John Lewis Partnership breaking down language barriers

The John Lewis Partnership has announced a scheme to help customers at Waitrose & Partners and John Lewis stores speak the same language.

Multilingual staff will wear badges letting people know what language they speak, with French, Spanish, Polish, Hindi, Punjab and sign language among 20 options – with more to follow depending on demand.

“The UK is made up of a wealth of different languages and cultures and we want to celebrate that diversity by offering an even more tailored level of customer service,” says head of product services at the John Lewis Partnership, Katie Papakonstantinou.

“We want everyone to feel at home in our shops and this is a great way to ensure that those who speak a different language feel even more welcome in our shops.”

The initiative will be launched in 10 Waitrose and seven John Lewis stores this month, before a wider roll-out in the near future.

Tuesday 11 November

Burger King partners with Unilever on launch of Rebel Whopper

Burger King is rolling out a plant-based version of its Whopper burger across 25 European countries, using meat-free patties made by Unilever.

In its first deal with a major restaurant chain, Unilever-owned The Vegetarian Butcher will supply patties for the Rebel Whopper to more than 2,500 locations, in what is Burger King’s largest European product launch to date.

The fast-food chain first tested the Rebel Whopper in Sweden over the summer, working with Dutch meat-free manufacturer Vivera BV, although that contract will now be transferred to Unilever.

It is reported that the Rebel Whopper will cost around the same as a beef Whopper, whereas in North America Burger King’s Impossible Whopper made by Impossible Foods, is priced around $1 more. In the US, the fast-food chain plans to trial the use of Impossible meat-free patties in its Whopper Jr. burgers and signature hamburgers across 180 restaurants.

Speaking in October, Jose Cil, CEO of Burger King’s parent company Restaurant Brands, said the Impossible Whopper had become one of the most successful product launches in Burger King’s history.

ITV ad revenues slide 3% amid ‘uncertain’ economic environment

ITV’s advertising revenues fell by 3% to £1.5bn in the nine months to 30 September, although online revenue rose by 23% during the period. Total advertising revenue is forecast to be down around 2% for the full year.

Group total revenues dropped 2% to £2.2bn, while the revenue generated by ITV Studios rose by just 1% to £1.1bn during the nine-month period.

Chief executive Carolyn McCall says ITV is making good progress in executing its strategy despite the “uncertain economic environment”, speaking just a day after the broadcaster launched the debut ad campaign for BritBox, its streaming service joint venture with the BBC.

McCall pointed to BritBox’s new distribution and marketing deal with BT and EE, as well as the partnership with Channel 4 that will see the broadcaster’s content streaming on BritBox from early next year. The chief executive confirmed ITV’s programmatic advertising platform, Planet V, is on track to roll out to media agencies during the first quarter of 2020.

ITV has also reached its target of 30 million registered users on ITV Hub two years ahead of schedule.

“We remain very focused on building a digitally-led media and entertainment company to create a stronger, more diversified and structurally sound business,” McCall adds.

Amazon to open supermarket under new grocery brand

Amazon is to launch a new supermarket brand in the US next year separate from its Whole Foods business.

The supermarket, pitched as “Amazon’s first grocery store”, is set to open in LA in 2020 and will have traditional tills, unlike the till-less Amazon Go convenience stores. The new store will operate separately to the Whole Foods Market chain of high-end organic food stores, which Amazon acquired two years ago for $13.7bn (£12.4bn).

In March, The Wall Street Journal reported that Amazon planned to open dozens of grocery stores in US cities under its own branding. The LA store is the first confirmed supermarket of this supposed wider roll-out.

Amazon currently operates 18 Amazon Go stores in the US and more than 500 Whole Foods stores across North America and the UK.

Formula One pledges to become carbon neutral by 2030

Formula One is committing to become carbon neutral by 2030 as it looks to appeal to new sponsors and younger fans.

The motor racing competition will start by reducing its emissions by between 20% and 50% over the next 10 years. By 2021, all petrol used in Formula One will have to contain biofuel content of at least 10%. There are also plans to change the race calendar to ensure the teams fly less between races and move to “100% renewably powered offices, facilities and factories”.

Liberty Media, which bought the franchise in 2016 for $8bn (£7.3bn), confirmed that Formula One would make all its events “sustainable” by 2025 by eliminating single-use plastics and ensuring all waste is reused, recycled or composted.

The move towards carbon neutrality is seen as a clear pitch to sponsors, as Formula One has been losing ground to electric car racing competition Formula E.

The Financial Times (FT) reports that Formula One’s pro forma financial results for the year to 31 December 2018 show revenues from racetracks, broadcasting contracts and sponsorship deals were $1.49bn (£1.35bn), flat compared to the previous year.

By contrast, over the past year Formula E has attracted a variety of new sponsors including electricals group Bosch, beer giant Heineken and champagne brand Moët & Chandon.

Speaking to the FT, Formula One’s chairman and chief executive, Chase Carey, described carbon neutrality as a good thing for the business “because our partners care about it.”

Tesco removes Mel B advert following Spice Girls complaint

Tesco has pulled an advert featuring an image of Mel B after the Spice Girl complained on social media.

The bus stop advert, which had shown the popstar performing at the Brit Awards in 1997, was used to promote Tesco’s new Clubcard Plus loyalty scheme.

It featured the line ‘Stop right now. You get 10% off two big shops a month for £7.99’ – a play on words from the Spice Girls’ song Stop.

However, Mel B appeared to take umbrage at the use of her image and posted a photo of the ad on Instagram with the comment: “Can the CEO OF TESCO DAVE LEWIS PLEASE CONTACT ME URGENTLY. Thank you.”

In response, Tesco removed the image from the campaign. A spokesperson says: “Here at Tesco we are really big fans of Mel B and were excited to feature her photo in our campaign.

“We had authorisation to use this image, but we’re sorry Mel B is unhappy so we’ve stopped using it.”

As part of its 100th anniversary celebrations this year, Tesco has been using iconic cultural images from previous decades in its marketing campaigns.

Over a third of businesses only in the early stages of digital transformation

Some 43% of businesses are only in the first stages of digital transformation, according to new research from the World Federation of Advertisers (WFA).

Some 10% of the more than 20 multinational companies surveyed have developed a digital transformation strategy they are yet to put into action, while 5% are still in the initial planning phase and 14% have it “on the agenda” for 2019.

By contrast, 19% said the digital transformation process was highly advanced and just 9.5% claimed the process was complete.

The WFA research found that where digital exists as a standalone function, delivering integrated campaigns is much harder and therefore a “key goal for transformation” should be to move to a fully integrated structure as early as possible.

Ten of the companies surveyed report relying on a separate team for digital marcoms, with just seven saying digital expertise was “already woven into all teams”.

“Digital roles within many organisations should have been made redundant by now and while they will remain a necessity for some, the goal for the majority should be moving to integration of these skills,” says WFA CEO, Stephan Loerke.

According to the survey, 42% of businesses regularly work in cross-functional teams, while 30% work in “self-organising agile teams” using stages and sprints to deliver projects, and 50% have agency staff embedded in their teams.

Some 76% of respondents cited leadership as the “most important” factor in delivering success. This was followed by organisational design (53%), individual team member skills (47%) and smart ways of working (41%).

Monday 11 November

Gambling firms criticised over VIP programmes

Gambling firms have been criticised for a practice that sees them offering VIP schemes to customers who lose significant sums of money, raising concerns over the industry’s commitment to promoting safer gambling.

VIP schemes have been cited in a number of cases in which gambling addicts were offered free gifts as they racked up losses. But analysis of jobs websites by The Guardian suggests firms have no plans to rein in loyalty schemes and are in instead hiring specialist staff to develop the programmes.

For example, Gala Bingo’s online business is advertising for a ‘VIP executive’ to increase revenues from its VIP player base. Another ad for Foxy Bingo says VIP managers should be able to “identify triggers” to boost revenue and spot players who “have the potential” to become a VIP.

Both ads say staff should adhere to the responsible gambling guidelines, while GVC, which owns the two brands, says all VIP members are subject to advanced checks and staff are giving extra training.

However, Carolyn Harris, who chairs the cross-party group of MPs pushing for tighter curbs on gambling, says: “These adverts are yet a further demonstration of the industry paying lip service to safer gambling measures. The Gambling Commission must undertake an urgent review of the operation of VIP accounts and the inducements which gambling companies use to entice customers to gamble.”

EasyJet plots package holiday launch

EasyJet is planning to launch its own package holiday business as it looks to step into a gap in the market created by the demise of Thomas Cook.

A report in The Times says easyJet will reveals plans for its holiday business next week, ahead of the crucial January booking period. It will see the airline rework its existing services into a package holiday subsidiary.

The move is the latest by CEO Johan Lundgren, who took on the top role nearly two years ago, as he looks to turn easyJet into a travel company, rather than simply an airline. Holidays, he believes will become a “super-ancillary” revenue generator at a time when its business is struggling for growth.

EasyJet is expected to report a 3% year-on-year drop in annual pre-tax profits when it reveals its latest results next week.

Apple investigated over ‘sexist’ credit card

Regulators in the US have opened an investigation into Apple after claims its credit card offered different credits limits to men and women.

The card, which is run by Goldman Sachs, has been criticised for using an algorithm that appears to set credit limits that bay be biased against women.

The move comes after tech entrepreneur David Heinemeier Hansson complained his credit limit was 20 times’ his wife’s despite his wife having a better credit score. Apple co-founder Steve Wozniak said he had the same issue despite the fact he and his wife have no separate bank accounts or assets.

New York’s Department of Financial Services has contacted Goldman Sachs over the claims, which would violate New York law whether they are intentional or not.

In response, Goldman Sachs told Bloomberg: “Our credit decisions are based on a customer’s creditworthiness and not on factors like gender, race, age, sexual orientation or any other basis prohibited by law.”

Wet weather hits high street sales

Wet and wintry weather put many shoppers off making trips to the high street and shopping centres in October, according to monthly data from the British Retail Consortium and Springboard.

In the four weeks to 26 October, UK footfall declined by 3.2% year on year, a steeper decline than September and the three- and 12-month averages.

The fall was particularly notable on the high street, where footfall was down 4.9% year on years. In retail parks, footfall declined for the first time in five months by 0.5%, while the number of people visiting shopping centres was down 2.4%.

BRC CEO Helen Dickinson says: “High streets were hit hardest in October, with the wet and wintery weather putting off many consumers from venturing out to the shops. Weak consumer demand and Brexit uncertainty have both impacted sales in recent months, and this could be further affected by the imminent election campaigning.

“Nonetheless, retailers will be hoping for footfall to pick up as they enter the all-important Golden Quarter.”

Airlines under pressure over ‘fuel tankering’

British Airways has said it will review its practice of making aircraft carry tonnes of excess fuel – a move that saves it money by avoiding filling up at destination airports but increases CO2 emissions.

Willie Walsh, CEO of BA’s parents company IAG, admitted using fuel tankering was “maybe the wrong thing to do”. Critics have said the practice calls into questions airlines’ commitment to reducing their impact on the environment.

The details on BA and fuel tankering were uncovered in an investigation by BBC Panorama. IAG has previously tried to improve perceptions of its environmental impact with a commitment to become the first net zero carbon emissions airline by 2050.

However, the BBC has seen documents that show a recent BA flight to Italy carried nearly three tonnes of extra fuel, resulting in an additional 600kg of CO2 being admitted but offering the airline a cost saving of just £40.