EasyJet, Manchester United, Burberry: 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.

CMA receives 27,000 complaints on holiday refunds

More than 60,000 consumers have complained to the Competition and Markets Authority (CMA) about companies treating them unfairly during coronavirus with package holidays dominating the complaints.

The majority of complaints since mid-April related to cancellations and refunds as customers struggle to recover cash for cancelled flights, holidays and weddings.

Holidays and airlines accounted for 27,000 of the 60,000 issues reported to the watchdog between March 10 and May 17.

As a result the CMA’S Covid-19 Taskforce has added package holidays to its list. The taskforce had initially focused on holiday accommodation, weddings, events and nurseries, but holidays will now be included.

In a statement it said: “The CMA has launched a programme of work to investigate whether companies are breaking the law. Three sectors were initially prioritised: holiday accommodation, weddings and events and nurseries. The CMA has opened cases in respect of certain companies in these sectors and further details will be announced in due course.

Clarks to cut 900 office jobs in restructure

Clarks is cutting 900 office jobs worldwide as it tries to create a leaner business.

The shoe company said it had to make “some difficult decisions” to re-energise the business, which has seen sales fall over the past year. The company posted a £84.4m loss last year as sales dropped.

The cuts will be spread out over the next 18 months with the brand adding that it was part of a wider plan to turn around the firm.

It’s chief executive, Giorgio Presca, says:”There are exciting opportunities ahead for our business, and we are having to make some difficult decisions to get there. We thank all affected staff for their contribution to our business and they leave their roles with our heartfelt respect and support.”

Clarks, which cut 170 jobs last year, employs 13,000 people globally.

Clarks shut all of its stores in the UK and Ireland during the coronavirus lockdown. It has already opened stores in countries including China as restrictions have been lifted, it added.

EasyJet to resume flights next month with strict face mask rule

EasyJet is planning to resume a small number of flights next month with strict safety protocols for passengers and crew, including ensuring everyone aboard wears face masks.

The budget airline is planning to operate domestic flights within the UK and France from 15 June with the only international service being Gatwick to Nice initially.

The UK airports to see the limited domestic services return will be Bristol, Birmingham, Gatwick, Liverpool, Newcastle,
Edinburgh, Glasgow, Inverness and Belfast.

Manchester United announces losses as it warns COVID-19 fallout could last for years

The Premier League will suffer an economic fallout from the coronavirus pandemic for “years to come”, according to Manchester United, with clubs facing a broadcasting bill of at least £20m even if the season is completed.

The Premier League club saw a 19% slump in overall revenue to £123.7m this quarter, which saw it see a a pre-tax loss of £28.55m between 1 January and 31 March, compared with a £11.117m pre-tax profit in the same period last year.

Lost broadcasting income after the Premier League shutdown in March was the main factor, while matchday takings also slid.

Executive vice chairman Ed Woodward says: “Our third-quarter results published today reflect a partial impact that the pandemic has had on the club, while clearly the greater impact will be in the current quarter and likely beyond.”

Burberry’s sales fall 27%

Burberry said the luxury industry could take some time to recover from the COVID-19 pandemic as it reported a 27% drop in sales.

The company said given the uncertain outlook it had pulled its final dividend and would review future payouts at the end of its 2021 financial year. The brand has currently seen 60% of its retail stores closed.

The brand’s CEO, Marco Gobbetti, says: “Prior to Covid-19, we were delivering strong momentum across our brand and product, with sales ahead of our expectations. Since then, the global health emergency has had a profound impact on the world,

Thursday,22 May

Kellogg’s pulls Joe Wicks YouTube ads amid growing criticism

The Advertising Standards Authority has criticised Kellogg’s for advertising its Pringles snack products on Joe Wicks’ Body Coach YouTube channel.

Now both Action on Salt & Sugar and Children’s Food Campaign are calling on all food and drink companies to refrain from advertising any food or drink high in fat, salt or sugar (HFSS) before 9pm across all media platforms during the COVID-19 pandemic.

The two groups want the ban to remain in place until the government is able to resume its previously planned work to introduce a 9pm TV and online watershed on junk food advertising, as part of current Childhood Obesity Plan measures.

Under current government rules, Kellogg’s (like other food and drink brands) is not allowed to promote its “less healthy” products on children’s TV, or any media channel, with an audience of more than 25% under-16s.

Barbara Crowther, Children’s Food Campaign spokesperson Barbara Crowther said: “Placing this ad directly before Joe’s hugely popular children’s daily PE class is a total betrayal of his work, and highly insensitive, irresponsible marketing.

Children don’t need more salt, more saturated fat, more sugar, more excess calories being pushed to them during a pandemic; or indeed at any time.

“Children are even more of a captive audience during this lockdown, and we are hugely concerned they are still being subjected to unhealthy food advertising like this.

The food industry and Government’s focus should be on building up people’s health and resilience; not undermining it.

“The Advertising Standards Authority also has an important role to play in enforcing the rules, yet they have allowed Kellogg’s, a known repeat offender, to just ‘settle out of court’.”

Amazon Games Studio announces first entry into gaming market

Amazon has entered the gaming market with its own in-house production, Crucible.

Free to play, it was created by the Amazon Games Studio and is described as a cross between Overwatch, Gears of War and League of Legends.

With the likes of Fortnite now boasting 350 million registered users, Amazon has long been keen to establish itself in the highly lucrative, but also highly competitive, gaming market.

“We want to make games that resonate with a very large audience of players,” Amazon Games vice president Mike Frazzini told the BBC.

“We’re pleased with the feedback on early play-tests, but ultimately we don’t know how good it is until it gets out there.”

Amazon is hoping that their game will stand out thanks to its various social dynamics, allowing users to interact more with fellow players.

“This is the starting line not isn’t the finish line,” said Frazzini.

“We’re trying to earn respect from players.”

UK supermarkets increase promotions under coronavirus

Retail insights firm Edge by Ascential analysis has found that promotional levels in UK supermarkets rose by as much as 76% over the past week.

As well as being the highest promoter, online grocer Ocado also trebled the number of multi-buys on offer in the week ending 17th May, a significant move that shows that maintaining stock levels appears to be less of a concern to the retailer now.

Both Waitrose (44%) and Tesco (15%) also increased promotional levels in the past week.

The analysis also found that stocks at Morrisons, Sainsbury’s, Tesco and Waitrose all increased.

Frozen dough and pastry remained the most out of stock category during the seven-day period, despite an increase in availability by 5.6%. T

This was followed by dry pasta (-0.2%) and toilet roll (2.1%).

Facial tissues (10%) had the biggest increase in stock levels in the past week, led by Waitrose, which increased its levels by 33.3%

Edge by Ascential insight manager Chris Elliott said: “As the UK lockdown eases, so have the concerns of British consumers, who are less focussed on stockpiling grocery items.

“This has now given many UK supermarkets the confidence to increase their promotional levels. It is also leading them to focus on other areas of their business, such as expansion plans with delivery partners, such as M&S and Aldi’s recent partnership with Deliveroo, Sainsbury’s expansion with Chop Chop and Morrisons’ growing partnership with Amazon Prime Now.

“This follows the surge in demand for online grocery shopping, which retailers are evidently investing in, and we expect that the convenience of online grocery shopping is still set to increase even after the lockdown is over.”

CIM hails next generation of marketers as most digi-literate yet

A report published by the published today by the Chartered Institute of Marketing (CIM) and training body Target Internet sees a dramatic improvement in digital skills among new entrants to the industry.

The report focuses on a number of themes, including the rapid increase in junior marketers’ digital skills and how many are now entering the workplace with the same level of skills as more senior colleagues.

It also looks at the decline in digital skills of people in marketing manager and head of marketing roles and a fall in skills in some of the most complex areas, including SEO and Usability.

The results come from a benchmarking test of digital marketing skills of almost 9,000 marketing professionals, carried out by Target Internet in 2018 and repeated in 2020.

The test requires professional marketers to complete a series of tasks aimed at testing their knowledge in 12 areas of marketing, with a particular focus on digital.

The most striking improvement in skills since 2018 has been among interns, suggesting that the newest generation of marketers are entering the marketplace far more highly skilled than their recent predecessors.

Chartered Institute of Marketing director of marketing Gemma Butler said: “The results reveal the pace of technology has showed no signs of slowing down and the marketing profession continues to evolve in the range of skills required to be effective.

“Many organisations have changed marketing structures or staffing requirements to meet market demands.

Technical roles such as PPC and SEO have been moved in-house, reducing both the cost and reliance on outsourcing, whilst ensuring those who carry out these roles are truly experts in their field.”

Moonpig campaign supports Mental Health Awareness Week

Online greetings card company Moonpig has launched a campaign for Mental Health Awareness Week encouraging people to “say the things that matter”.

And there’s an exclusive postcard range, designed by Chloe Allum which will be given away free via the brand’s app to help people reach out to loved ones.

In a series of four 30-second videos a camera slowly zooms in on what appear to be simple notes on postcards.

As the camera gets closer, the words fade to reveal the ‘hidden message’, something which the sender wanted to say but found difficult to express.

“They say a face can tell a thousand stories, but when we can’t see our loved ones in person it’s much harder to know what is going on with them, let alone in their heads,” said Moonpig head of cards Sarah-Jane Porter.

“Many of us have grown quite used to video calls by now, but expressing how you feel can sometimes be difficult.

“This is why we wanted to help people feel more comfortable to express the things that matter, and reach out to each other during Mental Health Awareness Week with 5,000 free postcards for five days on the Moonpig app.”

Wednesday, 20 May

M&S cuts marketing spend by £50m as it braces for Covid-19 damage

Marks & Spencer (M&S) is to cut its marketing spend on clothing and home by £50m this year as it looks to reduce “non-essential spending” amid the Covid-19 crisis.

In a bid to save £500m during the full year 2020/21, M&S has also frozen pay levels and recruitment, saving approximately £40m, while technology costs will be down £40m.

M&S expects revenue from its UK clothing and home operations to plummet by 70% in the four months to July, with only a gradual return to original budgeted levels by February 2021, creating a £1.5bn hole in annual revenue. The company also anticipates a decline of 20% in UK food revenue during the same period, impacting annual revenue by £400m.

In a statement, M&S says the onset of the lockdown had a “dramatic” impact on the business. During the first week of March alone, UK clothing and home sales fell by 6.2% and then by 26.9% the week after. At their lowest point, clothing sales dropped to 16% of their level a year ago.

“Without the resilience of the combined food and clothing business model, and extraordinary loyalty of colleagues, the impact on the business would have been even more profound,” says M&S.

The results for the year to 28 March also make tough reading, as profit before tax fell by 20.2% to £67.2m compared to the same period in 2019, hit by £212.8m for costs and stock write downs caused by the pandemic. Group revenue during the period fell by 1.9% to £10.2bn, as clothing revenue declined 6.2% on a like-for-like basis. This was offset by a 1.9% like-for-like increase in revenue in the food business.

M&S CEO Steve Rowe says last year’s results reflect a year of “substantial progress and change”, including the retailer’s 50% acquisition of Ocado Retail, which will start delivering M&S food on 1 September. However, Rowe recognised that this progress feels like “ancient history” given the trauma of Covid-19.

“While some customer habits will return to normal others have changed forever, the trend towards digital has been accelerated, and changes to the shape of the high street brought forward,” he notes.

“Most importantly working habits have been transformed and we have discovered we can work in a faster, leaner, more effective way. I am determined to act now to capture this and deliver a renewed, more agile business in a world that will never be the same again.”

Facebook ramps up ecommerce strategy with launch of in-app ‘Shops’

Facebook is rolling out a new way for businesses to sell via Facebook and Instagram amid the Covid-19 pandemic.

The Facebook Shops tool allows businesses to set up a single online store across Facebook and Instagram for free. The brand chooses which products it wants to feature from its catalogue and then customises the look and feel of their shop with a cover image and accent colours.

Consumers can access Facebook Shops on a business’ Facebook Page or Instagram profile, or discover them through stories or ads. They can browse the full collection, save products they are interested in and place an order either via the business’ website or in the app if the business has enabled checkout in the US.

Using Facebook Shops, consumers will be able to message a business through WhatsApp, Facebook Messenger or Instagram Direct to ask questions, get support and track deliveries. Going forward, Facebook says it will be possible to make purchases within a chat in WhatsApp, Facebook Messenger or Instagram Direct.

US customers will be able to buy products via Instagram Explore using Instagram Shop. Users will be able to browse brands, filter by categories such as beauty and home, and purchase in one place. Later in 2020 there are also plans to add a new shop tab to the navigation bar.

Going forward, brands will be able to tag products from their Facebook Shop or catalogue before going live on Instagram, and those products will be shown at the bottom of the video, enabling shoppers to tap to purchase.

In addition, the social media giant is exploring ways to connect loyalty programmes with different brands to consumers’ Facebook accounts, enabling them to keep track of their points and rewards.

Johnson & Johnson to stop selling baby powder in the US amid legal battles

Johnson & Johnson is to stop sell baby powder in the US and Canada following years of lawsuits concerning the safety of the talc-based product.

The company has faced thousands of lawsuits alleging that its baby powder causes cancer, a claim the team has consistently denied. Johnson & Johnson is currently facing more than 16,000 consumer lawsuits alleging the talc in its products is contaminated with asbestos, which is known to cause cancer.

In particular, the firm is appealing a 2018 order to pay $4.7bn (£3.6bn) in damages to 22 women who claim the talc caused them to develop ovarian cancer.

Sales of baby powder, which make up approximately 0.5% of the company’s US consumer health business, will wind down over the coming months. The company admits that sales of the product have declined in the US and Canada due to “changes in consumer habits and fuelled by misinformation around the safety of the product”.

Johnson & Johnson also confirmed it is reassessing its consumer product portfolio as a result of the coronavirus pandemic.

Asda trials ‘virtual queuing’ as it focuses on ‘feeding the nation’

Asda is trialling “virtual queuing” in a bid to find longer term solutions to support social distancing across its stores.

The trial, which is taking place at the supermarket’s store in Middleton, Leeds, allows customers to log into the queue remotely and wait in their car to enter the store. The new measures come as Asda reports that two-thirds of customers are still concerned about safety in supermarkets amid the Covid-19 pandemic.

The supermarket has also extended the capacity of its Food Box delivery service for vulnerable customers to 10,000 boxes per day and is offering regular home delivery slots to over 150,000 people who are without a support network. In addition, Asda has expanded its delivery slots from 450,000 a week to more than 725,000.

Alongside these measures, the supermarket has recruited 22,000 temporary workers to support in its efforts to “feed the nation”.

“While safety is still a major focus for customers, three quarters tell us they are also increasingly concerned about the price of groceries and are looking for value – and we can reassure them that Asda will meet their needs on both,” says Asda CEO Roger Burnley.

“However long Covid-19 is with us, we will continue to offer great value to customers, as well as investing in doing the right things to protect our customers, our colleagues and our communities – and fulfil our vital role in feeding the nation.”

The supermarket reports like-for-like sales, excluding petrol, increased by 3.5% from 1 January to 31 March, compared to the same period in 2019.

Asda experienced a surge in demand for delivery, with its website receiving more than 3,500 visits a minute during the week commencing 18 March, while there was a “significant decline in demand” for non-essential items, such as fashion, fuel and general merchandise. The retailer’s smaller stores benefitted from the early weeks of lockdown, as customers preferred to shop locally.

EasyJet confirms 9 million customers hit by hack

EasyJet has admitted that 9 million customers were impacted by a “highly sophisticated cyber-attack” the airline first became aware of in January.

Email addresses and travel details were stolen, and 2,208 customers had their credit card details “accessed”. The credit card details accessed include the three digital CVV security code on the back of the card. The customers whose email addresses have been stolen are being warned about potential phishing attacks and should be wary of any communications coming from EasyJet or EasyJet Holidays.

The airline has committed to inform all customers affected by 26 May.

Responding to why it has taken so long to go public with the hack, EasyJet told the BBC: “This was a highly sophisticated attacker. It took time to understand the scope of the attack and to identify who had been impacted.

“We could only inform people once the investigation had progressed enough that we were able to identify whether any individuals have been affected, then who had been impacted and what information had been accessed.”

The airline also told the BBC that hackers were likely targeting “company intellectual property”, rather than information that could be used in identity theft.

Tuesday, 19 May

Aldi to launch grocery service with Deliveroo

Aldi is trialling grocery delivery for the first time in the UK as it adapts to changing consumer habits during Covid-19.

The discount supermarket chain is testing a partnership with Deliveroo in Nottingham, before extending the trial to seven other stores in the East Midlands next month.

The move will allow customers to order from more than 150 Aldi products through the Deliveroo app. Products will be picked and packed by Aldi workers in stores before being delivered by Deliveroo’s network of riders.

The trial will initially offer a range of essential items, such as bread, milk and fresh produce.

Aldi’s UK and Ireland CEO, Giles Hurley, says: “This is a new and exciting venture for Aldi and we will be constantly reviewing how we can best serve our customers and continue to provide them with the high quality products they are used to in store.”

No further details have been revealed as to when the service will be rolled out nationwide.

Ovo Energy slashes jobs in digital push

UK energy firm Ovo Energy is to slash thousands of jobs in a digital push accelerated by the coronavirus pandemic.

The move comes just four months after Ovo bought the retail division of energy and broadband supplier SSE for £500m – where the 2,600 job cuts will take place.

Ovo’s chief executive Stephen Fitzpatrick says the company is facing “a new reality” due to Covid-19 which is accelerating its integration plans, including a drive for digital and zero carbon future.

He explains: “We are seeing a rapid increase in customers using digital channels and once customers start to engage differently they do not go back. As a result, we are expecting a permanent reduction in demand for some roles, while other field-based roles are also heavily affected.”

Ovo faces accusations of backtracking on a promise not to cut jobs at the time of the takeover. Ovo said it had initially expected the merging of the two companies to take a number of years.

It will close offices in Glasgow, Selkirk and Reading, with job cuts also expected in Perth, Cumbernauld and Cardiff.

Comparethemarket launches music initiative with Take That reunion

Comparethemarket is hosting a virtual reunion of Take That with former member Robbie Williams as it launches a music platform.

Meerkat Music will see the 90s boy band perform together for the first time since December 2018 in a streamed online show. Comparethemarket’s meerkat mascot Aleksandr will take centre stage on YouTube and Facebook Live to present the show, which kicks off on Friday 29 May at 8pm.

The new Meerkat Music initiative will offer customers content and music performances throughout the coming months.

Comparethemarket’s head of rewards, Julie Daniels, says: “We’ve been rewarding our customers with entertainment through Meerkat Meals and Meerkat Movies for a number of years – and music has been on our radar for a while. Kicking off with Take That, the line-up of headline artists who will perform on the Meerkat Music platform this summer will help lift the nation’s spirits at an incredibly challenging time.”

Camelot launches campaign to thank National Lottery players for supporting £600m crisis relief package

The National Lottery is thanking people who play its games as it looks to highlight the projects that it supports.

The campaign, created by adam&eveDDB, will feature five projects that have benefited from existing National Lottery funding or from the repurposed £600m Covid-19 crisis relief package.

Each selfie-style clip provides an insight into the work these projects have carried out to support people affected by coronavirus – from food banks for the vulnerable, to help for people with disabilities and homemade pies for NHS staff. The TV ad ends with a chorus of ‘thank yous’ from a host of different projects around the UK to thank National Lottery players for helping to make them possible.

Camelot CMO Keith Moor says: “There’s tremendous work going on every day all across the UK, and we’re providing a glimpse of all of these efforts with this campaign – by showcasing projects that are receiving support from existing National Lottery funding and the repurposed £600m Covid-19 funding.”

The campaign will run across TV, social media and radio, which is tailored to each region of the UK to highlight specific projects in each area.

Marks & Spencer cafes to reopen for takeaway

Marks & Spencer is to reopen 49 of its cafes across the UK from Thursday (21 May).

It has taken the decision to reopen for takeaway customers after operating social distancing and putting extra hygiene measures in its stores. Safety measures being introduced including perspex screens at tills and promises of “rigorous guidance for colleagues” and “extensive signage for customers so they can pick up their coffee safely”.

The retailer joins other chains reopening for takeaway customers including Pret a Manger and Caffe Nero.

Marks & Spencer cafes have been closed since 18 March, five days before the UK lockdown began.

Monday 18 MayFacebook buys gif startup Giphy

Facebook has bought animated graphic startup Giphy and will integrate it into Instagram, as well as its other apps, as it looks to better understand how people are expressing themselves on social media.

Details of the deal have not been disclosed but Axios has valued the deal at around $400m (£330m). Giphy is used by a number of social networking sites including Twitter and Snapchat, although Facebook apps account for 50% of its traffic, and Instagram half of that.

Facebook says Giphy will still be available to third-party apps, although questions have been raised over whether its competitors would want to use it after the acquisition.

“Giphy makes everyday conversations more entertaining, and so we plan to further integrate their GIF library into Instagram and our other apps so that people can find just the right way to express themselves,” says Instagram’s vice-president of products Vishal Shah in a blog post. “Together, we can make it easier for anyone to create and share their work with the world.”

Ryanair forecasts ‘difficult’ year as passenger numbers set to halve

Ryanair is expecting the coming year to be “difficult” as it forecasts passenger numbers will halve in response to the coronavirus pandemic and subsequent travel restrictions.

The airline’s full-year results to the end of March show revenues were up 10% year on year to €8.49bn while profit increased by 13% to €1bn. However, it carried out just 1% of expected flights in its first quarter and only expects a partial return in Q2.

Ryanair is foreseeing up to 3,000 – 15% of its workforce – job losses, while others will have to take pay cuts and unpaid leave. However, over the longer term Ryanair sees opportunities from its model and a changed competitive landscape.

“As we look beyond the next year, there will be significant opportunities for Ryanair’s low-cost growth model as competitors shrink, fail or are acquired by government bailed-out carriers,” says the company.

MoneySuperMarket brings in new CEO in Just Eat’s Peter Duffy

MoneySuperMarket is bringing in Just Eat CEO Peter Duffy as its new boss from 1 September. He replaces Mark Lewis, who resigned earlier this year.

Duffy has been CEO of Just Eat for 18 months, prior to which he was chief customer officer. Before joining Just Eat, he was chief commercial officer at EasyJet and has previously worked in marketing at companies including Audi and Barclays.

“I’m thrilled to be joining MoneySuperMarket Group, a company I have always admired,” says Duffy. “We are here to save customers money, and with people facing so much uncertainty at the moment, this has never been more important. I’m really looking forward to working with the team on their exciting plans to bring more savings to more people.”

Google cracks down on battery-draining ads in Chrome

Google is to start blocking ads that use up too many resources to serve up in its Chrome browser.

The change means ads that drain battery life or use up excessive network data will not be shown. Google has warned advertisers they have until the end of August to fix any poorly programmed ads or risk them being blocked.

“To save our users’ batteries and data plans, and provide them with a good experience on the web, Chrome will limit the resources that a display ad can use before the user interacts with the ad,” says Chrome product manager Marshall Vale.

Users will see a message informed them the ad used too many resources to show by navigating them to an error page. The ban applies to ads that use more than 4MB of network data or 15 seconds of CPU in a 30-second period, or 60 seconds of total CPU use.

Retail footfall plummets amid lockdown

Retail footfall plummeted by a record 84.7% year on year in the four weeks to 2 May as the impact of the lockdown was felt across the industry, according to data from the British Retail Consortium (BRC) and ShopperTrak.

Footfall on high streets declined by 81.8%, while shopping centre footfall was down 87.8%. Retail parks performed slightly better, with footfall down 62.4% as the higher proportion of supermarkets sheltered them from the most severe impacts of the lockdown.

The BRC’s CEO Helen Dickinson says: “With lower footfall likely to continue, along with a corresponding fall in sales, and with demand likely to remain low, many retailers will not return to normal trading for some time, even when they are allowed to reopen.

“We will see an acceleration of many trends seen prior to the coronavirus pandemic – lower footfall as many consumers choose to browse digitally, and a corresponding rise in online sales. These changes are requiring retailers to adapt quickly so that the industry can meet the needs of modern consumers and deal with the challenges the pandemic is presenting. Ultimately, the very nature of many retail jobs will change, with impressive customer service and the effective use of technology becomes even more vital.”