Boohoo, BA, MoneySuperMarket: 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.
Boohoo on track to make £1bn in sales as young consumers flock to the site
Boohoo is on track to generate more than £1bn in sales for the first time as young consumers flocked to its website to get their hands on its cheap fashion.
The fast-fashion retailer made an unscheduled announcement that its sales would be higher than expected despite a difficult summer trading period for most retailers, which have been hit by weakening consumer confidence and a cooler summer than last year. It is also beating out its main online rival, Asos, which as warned on profits after a serious of IT problems.
Boohoo says full-year sales will now increase by between 33% and 38%, compared with previous guidance of between 25% and 30%. Its profit margin remains the same, at around 10%. The company generated around £856.9m in revenues last year, up 50% year on year.
Its latest guidance suggest 2019 revenues could be as high as £1.18bn.
READ MORE: Boohoo boosts full-year guidance as sales soar (£)
BA faces biggest ever pilot strike
British Airways’s brand is facing yet another challenge as the airline prepares for what could be the biggest strike in its history.
Up to 90% of the airline’s pilots are expected to strike, leading to the expected cancellation of nearly 1,600 flights affecting up to 290,000 customers due to fly on Monday (9 September) and Tuesday (10 September).
The move comes after the airline and union leaders failed to reach a deal over pay, with BA calling pilots’ demands “cynical”. Pilots want a bigger share of profits; their union has rejected a pay deal worth an extra 11.5% over three years that unions representing other staff have accepted.
BA made £2bn last year but says this new demand would cost £50m over the next three years on top of the above-inflation pay rise already offered. Strikes are also planned for 27 September.
The strikes could not come at a worse time for BA, which is already trying to recover from a number of setbacks this year. Despite a major ad campaign and celebrations to mark its centenary year, perceptions of the brand are falling.
YouGov BrandIndex shows its overall index score (which includes metrics such as value, quality and reputation) has fallen by a statistically significant 6.9 points over the past seven months.
MoneySuperMarket turns attention to energy market in new campaign
MoneySuperMarket is turning its attention to the energy market in a marketing campaign that highlights its new energy monitoring proposition.
The 30-second TV spot, created by Engine, shows wild bears becoming tame after they use MoneySuperMarket’s ‘Get Money Calm’ features. Rather than chasing a man through the forest, they are seen floating on a sun lounger across a lake.
Energy monitor aims to help people better track energy deals by alerting them when a deal becomes available that offers them a requested level of savings. The ad will first air on TV on Saturday (7 September), and run across outdoor, radio, CRM, social media and editorial content.
Lloyd Page, marketing director at MoneySuperMarket, says: “Energy Monitor is the latest in a line of new products and services that delivers on our brand promise of ‘Get Money Calm’. Whether you’re on our website or our app, it takes just a few minutes to sign up and then we’ll do all the hard work of finding you a better energy deal, so you can relax.
“It’s all part of our ongoing commitment to giving our customers clever ways to save a lot, by doing very little.”
TripAdvisor under fire over fake five-star reviews
TripAdvisor has been called out by consumer watchdog Which? for “failing to stop a flood” of fake and suspicious five-star reviews appearing on the ratings of some of its best ranked hotels.
Which? analysed almost 250,000 reviews for the top 10 ranked hotels in 10 popular destinations, finding that one in seven had “blatant hallmarks” of fake reviews while still more raised serious concerns. The watchdog reported 15 of the worst cases to TripAdvisor, which admitted that 14 had already been warned about fake positive reviews in the last year – with six being penalised for breaking guidelines and two given a ‘red badge’ warning.
However, Which? questioned why this has not been made clear to travellers and highlighted that suspicious activity continues to appear. TripAdvisor has now taken down hundreds of reviews, including more than 730 five-star reviews for a hotel in Jordan.
Which? Travel’s Naomi Leach, says: “TripAdvisor’s failure to stop fake reviews and take strong action against hotels that abuse the system risks misleading millions of travellers and potentially ruining their holidays.
“Sites like TripAdvisor must do more to ensure the information on their platforms is reliable and if they continue to fall short, they should be compelled to make changes so holidaymakers are no longer at risk of being duped by a flood of fake reviews.”
Beefeater expands flavoured gin range to tap into consumer trend
Beefeater is expanding its range of flavoured gin, adding a third variant – blackberry – as it taps into the trend for flavoured and coloured gins.
According to the company, purple gins are “gathering huge momentum” and are the third-fastest growing flavoured gin in the UK. Data from Nielsen found that 44% of consumer typically order a berry-flavoured cocktail when out, while 25p of every £1 spent on gin in the off-trade was on flavoured gin.
Louise Ryan, managing director at Beefeater owner Pernod Ricard’s The Gin Hub, comments: “We’re delighted to be introducing Beefeater Blackberry to a new generation of gin drinkers who are eager to explore this thriving category. The UK market is one of the biggest gin markets in the world and Beefeater grew 275% in the UK off-trade last year.
“We’ve been blown away by the success of both Beefeater Pink Strawberry and Beefeater Blood Orange, with almost 150,000 cases sold across both flavours in the UK last year. That’s 10 times the previous year, showing consumer appetite for new and exciting visual serves continues to grow.”
The gin’s recipe is based on an archived infusion recipe by founder James Borrough.
Thursday, 5 September
ASA urges influencers to “be upfront” to protect social media trust
The Advertising Standards Authority (ASA) is urging influencers and brands to be transparent with social media ads arguing that those who don’t will “erode trust in the wider and legitimate influencer community”.
The warning comes alongside a new report from the regulator into what kind of labels help people understand when influencer posts are paid.
Over the last 18 months, the ASA has conducted a comprehensive review – including research with the public and a broad look at existing academic literature – into how and what kinds of labels and other factors help people understand when social media posts by influencers are advertising.
The research indicated members of the public can find it hard to identify when an influencer is advertising a product or service and that the post has to be “obviously identifiable” as an ad in order to first be noticed and then understood.
The ASA’s chief executive, Guy Parker, says: “The research tells us that all of us can find it hard to identify when an influencer is advertising, so it’s crucial that ads are labelled clearly. Our message to influencers and brands couldn’t be clearer: be upfront with followers, for example by using #ad.”
Along with the Competition and Markets Authority (CMA), the ASA already has strict guidelines around how influencer content should be flagged – covering both posts that have been sponsored and those that contain products that have been gifted.
Samsung to launch its foldable phone
Samsung’s first foldable phone will go on sale tomorrow (6 September) after problems with the device delayed its initial release.
DJ Koh, president and CEO of the IT & mobile communications division at Samsung Electronics, says: “Consumers have responded positively to larger screens, and the Galaxy Fold’s revolutionary form factor offers a bigger, more immersive screen without sacrificing portability. This is what we call innovation of new mobile experience in action.”
The Galaxy Fold, which folds up into a smartphone shape allowing for a bigger screen, will be launched in South Korea followed by select countries including including France, Germany, Singapore, UK and US.
Samsung has been rushing to launch the folding smartphone before its rivals and unveiled the handset in February before being forced to continue working on it after reports it broke after a few days use.
Dunelm defies high street downturn thanks to social media
Dunelm is defying a high street downturn reporting a successful year helped by social media.
The retailer has reported total revenue of £1.1bn for the year to 29 June 2019, up from £1.05bn in the prior 12 months.The company’s pre-tax profits also surged 35.2% from £93.1m to £125.9m over the same period. Plus sales rose by 4.8% to £1.1 billion.
Dunelm’s chief executive, Nick Wilkinson says the boost in sales was partly because of Instagram. “You can often see someone’s room in the background of their selfie so people are now giving their spaces extra attention.”
Wilkinson points to the the success or products such as it bamboo bath rack, which sold out the day after it was seen on popular influencer Mrs Hinch’s Instagram. Although the company did not pay her to feature its products on her social media account, the retailer capitalised on the surprise promotion launching a section of its website dedicated to “Mrs Hinch-inspired” products.
£ READ MORE: Mrs Hinch helping Dunelm clean up with homeware sales
Lucozade Sport celebrates community sports champions
Lucuozade Sport is celebrating amateur athletes by creating a ‘Mover’s List’ that recognises “the people who get other people moving”.
Released in partnership with The Independent, the list recognises 50 individuals whose volunteering, charity work or dedication to sport and exercise inspires local communities to move more.
Hannah Norbury, marketing Ddiector at Lucozade Sport, says: “The Movers List celebrates the unsung heroes and heroines who are selfless in their commitments to helping communities move more. Our research has unearthed an incredibly diverse list of movers across different sports, exercise and fitness activities, that are all united with a passion to get people active and help others discover the benefits and joy of movement.”
The list was compiled by Lucozade Sport and judged by sports experts and stars including heavyweight boxer Anthony Joshua and England Lioness footballer Nikita Parris. The list features a 35-year-old reformed gang member who organises community BMX rides and a 75-year-old IronGran triathlete who set up fitness classes for those aged over-65.
The Independent will publish the list on its website and feature interviews from people on the list. Lucozade Sport will also promote The Movers List on its own media channels and support it through the release of a limited edition book, PR, advertising, social media influencers, sport ambassadors and paid social.
Currys PC World partners with Amazon to sell Amazon Fire TV’s
Currys PC World will sell the first television with built-in Amazon Fire TV technology in the UK. The TV’s are built by manufacturer JVC but will be powered by Amazon’s smart TV software and will be on sale exclusively in the UK in Currys PC World and on Amazon from mid October.
The JVC Fire TV Edition includes streaming services, apps and can be linked to Amazon Echo to provide a hands-free option.
Category director for consumer electronics at Dixons Carphone, Dean Kramer says: “As the demand for built-in smart technology continues to soar, we are excited to bring the first TV with built-in Fire TV technology to the UK.”
The new TV is the latest way for Amazon to up its streaming capabilities in a competitive market. Jorrit Van der Meulen, vice-president of Amazon devices international, says it is excited about the partnership noting “Dixons Carphone is a trusted brand that customers rely on”.
Amazon has previously announced Fire TV Edition televisions made by Toshiba for the US market.
Wednesday, 4 September
Amazon accused of underpaying corporation tax
Amazon has been accused of underpaying corporation tax in the UK again despite tripling the payment from its British division to £14m.
Amazon UK Services, which houses the firm’s warehouse and logistics operation and employs two-thirds of is 27,500-plus UK workforce, paid £4.7m in 2017, so its contribution has risen by nearly £10m for the year to December 2018.
Sales rose 18% to £2.3bn and pretax profit by 4% to £75.4m for the division, according to the group’s annual filing at Companies House, which accounts for more than a quarter of its UK sales.
But Amazon does not reveal profits or corporation tax payments for its UK operation as a whole, including its retail operation as well as warehouses and logistics, which means it is hard to tell how much it paid overall. The group’s total sales hit £10.9bn last year, according to its annual report.
Richard Murphy, professor of practice in international political economy at City, University of London told the Guardian he would expect Amazon to pay at least £100m in corporation tax alone at its UK business.
“There is clearly an underpayment to explain,” he said.
Amazon issued a statement suggesting it has paid £220m in direct taxes across its entire UK business last year, including employer’s national insurance, business rates, corporation tax and stamp duty, but it did not break this figure down further.
READ MORE: Amazon accused of handing over ‘diddly-squat’ in corporation tax
Lego bets big on bricks and mortar with 160 new stores planned
Danish toy maker Lego plans to open 160 new stores, 40% more than in 2018, as it looks to build a “strong foundation from which to grow in the long term”.
The move comes despite a fall in profits, which grew 5% in the first half of the year to 14.8bn kroner (£1.8bn).
Lego currently has around 500 stores, with new store investment focused particularly on China and India as it looks to expand aggressively in these territories.
CEO Niels Christiansen says: “We’re making upfront investments to create a strong foundation from which to grow in the long term.”
Lego is now the world’s biggest toy maker, overtaking American rivals Hasbro and Mattel.
READ MORE: Lego builds on its retail empire with 160 new stores
M&S risks demotion from FTSE 100
Marks & Spencer (M&S) is expected to be relegated from the FTSE 100 today as it continues to struggle, with shares down 40% this year.
If that happens it will be the first time the retail giant has failed to be in the index, which ranks the UK’s largest listed companies by market value, since it was launched in 1984.
When markets closed yesterday M&S had a market value of £3.6bn, less than half what it was worth in November 2015.
The index is reshuffled four times a year, with M&S on the brink of demotion to the FTSE 250 for some time. It is now almost certain to be demoted after the London market closes this afternoon, according to investors. If relegated, the change will take effect on 23 September.
READ MORE: M&S set to drop out of FTSE 100
Ariana Grande hits Forever 21 with a lawsuit for using her name without consent
Struggling retailer Forever 21 is being sued by singer Ariana Grande, who is asking for $10m (£8.3m) in damages for using her name to promote products.
She claims the retailer used as many a 30 “unauthorised” images and video, and hired a model with an “uncanny” likeness to her, which could have fooled people into thinking she had endorsed the brand.
Grande had been in talks with Forever 21 about a joint marketing campaign in 2018, but these talks broke down because “the amounts that Forever 21 offered to pay for the right to use Ms Grande’s name and likeness were insufficient for an artist of her stature”.
Forever 21 declined to comment on the specifics of the lawsuit but says it is hopeful the two parties will find a “mutually agreeable resolution and can continue to work together in the future”.
Reports last week suggest the struggling US retailer is preparing for a potential bankruptcy filing.
READ MORE: Ariana Grande says Forever 21 ‘stole’ name in lawsuit
Teletext Holidays reports customer calls breach to ICO
Teletext Holidays left the recorded calls of 200,000 customers, some of which reportedly contained partial credit card details, exposed on a cloud server for three years, according to an investigation by The Verdict.
The brand’s owner, Truly Travel, has now reported the breach to the Information Commissioner’s Office (ICO).
The audio files, which were recorded between April and August 2016, were stored on Amazon Web Services.
Truly Travel told the BBC: “Our booking procedure does not allow agents to take card numbers over the phone. Customers are asked to punch their card details into a secure automated system. If a customer attempts to give their card information verbally, they are stopped by the agent.”
But The Verdict says it could hear partial credit card numbers in the recordings it analysed.
Truly Travel says it “immediately secured the files in question” once the issue was brought to its attention and has contacted the Information Commissioner’s Office.
READ MORE: Teletext Holidays exposed customer calls
Tuesday, 3 September
Asda trials re-loved clothes shop
Asda is trialling a re-loved clothes shop at ones of its UK stores, as consumer demand for sustainable alternatives continues to grow.
For four weeks, the re-loved pop-up shop at the supermarket giant’s Milton Keynes store will feature donated second-hand clothes from various brands as Asda looks to boost its environmental credentials.
The move is spearheaded by Asda’s fashion brand, George, which is looking to improve the impact of its clothes and operations. According to the business, it has a zero-tolerance policy toward the incineration of clothing waste.
That means its surplus products are donated to be repurposed or recycled by a number of different charities. Asda also has clothing recycling points at about 500 stores.
Melanie Wilson, senior director of sustainable sourcing at George, says Brits throw away far too many clothes
“At George, we’re committed to doing the right thing by our customers and the planet by improving the sustainability of our products, making sure they are built to last – including our 100 day satisfaction guarantee – and ensuring that any surplus stock we have is repurposed or recycled,” she explains.
“By trialling our Re-Loved pop-up shop we hope to help create another route for unwanted clothes to find a new home and encourage people to think again about throwing away that top or those jeans they no longer love.”
All proceeds from the re-loved shop will go to Asda’s Tickled Pink campaign, which supports Breast Cancer Care and Breast Cancer Now.
August retail sales flatline
Retail sales struggled once again in August, as economic and political uncertainty prompted consumers to tighten their wallets.
Total retail sales flatlined in August, while UK retail sales dropped by 0.5% on a like-for-like basis, when they had grown 0.2% in August 2018, according to figures from the British Retail Consortium (BRC).
During the three months to August, in-store sales of non-food items declined 3% on a total like-for-like basis, worse than the 12-month average decline of 2.6%. Food sales also decreased but only by 0.3% and they actually increased 0.5% on a total basis. However, this is below the 12-month total average growth of 1.7%.
Additionally, online sales of non-food products grew 2.2% in August, against a growth of 7.5% year on year. While the three and 12-month growths were 3.4% and 4.3% respectively.
Lastly, the non-food online penetration rate increased from 28% in August 2018 to 29.5% last month.
“Greater economic and political uncertainty has driven down consumer demand. While the summer weather gave a small boost to food sales, this was cancelled out by a drop in non-food sales,” says Helen Dickinson, chief executive at BRC.
“Summer discounting and poor footfall have hit in-store sales particularly hard. If the Government wants to avoid seeing further store closures and job losses on the UK high street, they must take action.”
Deliveroo signs multi-year partnership with the FA
Deliveroo has inked a deal with the FA that will see the food delivery company become an official partner of the FA Cup as well as a sponsor of England teams.
As part of the partnership, Deliveroo will become England’s maiden sleeve sponsor. The company’s logo will be worn on the training kit of all senior sides across men’s and women’s football, starting with the squad for the upcoming UEFA EURO 2020 qualifiers.
Deliveroo will also partner with the Emirates FA Cup, with marketing plans to be rolled out during the 2019/20 season.
Mark Bullingham, FA CEO, says it’s fitting that Deliveroo has jumped on board at a time when “the England teams are going from strength to strength and The Emirates FA Cup is reaching a larger audience than ever before”.
Will Shu, Deliveroo’s founder and CEO, adds: “Both the men’s and women’s teams are doing incredible things and we’re proud to be playing a part in their success. The Emirates FA Cup is a global phenomenon and as a business that is expanding across the world we can’t wait to see what we can achieve together.”
Google launches B2B campaign aimed at marketers
Google has launched a new B2B campaign designed to promote the value of search as an advertising platform due to its significance to consumers.
The ‘Find What Matters’ campaign, created alongside 72andSunny Amsterdam, aims to emphasise the distinctive audiences and moments search can reach.
Google says the spot speaks to the value and relevance of search to consumers, indicating that people use Google Search with the intention of finding what matters to them, when it matters.
Gemma Howley, search lead at Google UK and Ireland, says: “Search is the first digital utility – an incredible tool that allows people to cut through a noisy and cluttered world and find what they are looking for, wherever they are.
“We know that even fleeting exposure to an alternative brand can disrupt purchase decisions. This makes Search an incredibly powerful tool and we want to celebrate it in ‘Find What Matters’. In an uncertain world full of questions, it’s important to remember the value of providing an answer.”
The campaign will run for two months across social, display, search, out of home and print media.
Kinder celebrates the little things in new campaign
Kinder is celebrating the little things in its new campaign titled ‘A little, a lot’.
The TV spot, which will appear during The Great British Bake Off on Channel 4 this evening (3 September), tells the story of a little boy who is obsessed with dinosaurs and is set on wearing his favourite dinosaur costume everywhere – including to school, swimming lessons and to a wedding.
His parents refuse before suggesting that he can wear the costume to the museum and offering him a Kinder chocolate bar. The narrative says: “Sometimes you have to say no, so when you say yes it means a lot.”
This concept will underpin the confectionary company’s activations globally. It is designed to tell the brand’s belief that the little moments mean a lot to children in regard to their happiness and development.
Scott Perry, marketing director at Kinder, says the company’s research found parents often feel as though they aren’t doing enough for their kids, when actually little shared moments of joy mean a lot to children.
“Kinder Chocolate has been made in the same high-quality little portions since 1968, meaning our products have long been something parents can say ‘yes’ to at treat time. Responsible treating is in our DNA and we’re excited to launch our new TV advert, which depicts scenarios that parents will undoubtedly be familiar with,” he adds.
The ‘A Little, a lot’ advert aims to reach five million households with children and will be supported by a £3.3m investment.
Monday, 2 September
Government rolls out ‘Get Ready for Brexit’ campaign
The Government is rolling out its largest ever public information campaign designed to get the public and businesses ready for Brexit.
Launched yesterday (1 September) across television, social media, outdoor and online, the campaign will give advice on preparations for leaving the EU on 31 October. According to Downing Street, the campaign is expected to cost the taxpayer £100m.
The Government is targeting UK citizens intending to travel to Europe and all exporters to the EU, as well as specific groups such as the equine industry and legal professions.
The ‘Get Ready for Brexit’ slogan was first seen on a large-scale billboard next to the John Lewis store at the Westfield shopping centre in Stratford, east London.
The campaign will be accompanied by targeted roadshows and events encouraging people to visit the gov.uk website and use the new checker tool, which explains how to get ready for Brexit quickly. The resource will also include ‘how to’ videos and step-by-step guides.
Chancellor of the Duchy of Lancaster, Michael Gove, described an orderly Brexit as “not only a matter of national importance, but a shared responsibility”.
The roll-out of the campaign comes as Government research suggests that only 50% of the population think it’s likely the UK will leave the EU on 31 October, 42% of small-to-medium sized businesses are unsure of how they can get ready and just 31% of the British public have looked for information on how to prepare for Brexit.
Philip Green planning to ‘break up Arcadia’
Philip Green is reportedly preparing to break up Arcadia, in a move that would separate his brands with a view to their future sale.
According to the Sunday Times, the break up of the fashion empire – which spans Topshop, Topman, Miss Selfridge, Dorothy Perkins, Burton, Evans, Wallis and Outfit – is being led by group chief executive Ian Grabiner.
Arcadia escaped administration in June after creditors approved a CVA agreement, resulting in the closure of 50 stores and 1,000 job losses. The pensions regulator approved the plan after Green’s wife Tina agreed to pay £100m into the pensions scheme over three years, alongside a £285m contribution in property assets and cash payments from the company.
Speaking to Sky News at the time the CVA was approved, Grabiner said that he believed the business was on a “much firmer footing”, adding that he was confident about the future of Arcadia to provide the “very best multi-channel experience” and “inspire a renewed loyalty” to its brands.
READ MORE: Philip Green prepares to break up his Arcadia Group – Sunday Times
Oxfam branches out with first charity superstore
Oxfam is to open its first superstore aimed at changing perceptions that charity shopping is outdated.
Opening on 7 September in an industrial unit near Oxford, the superstore is 12 times the size of an average Oxfam store and will employ 20-plus staff and volunteers.
As well as showcasing clothing and eco-friendly products from the ‘Sourced by Oxfam’ range, including Fairtrade chocolate and bamboo coffee cups, the superstore features the charity’s first on-site cafe, which will serve a changing menu of “world foods”. The cafe will be at the centre of a new community space, which will host free events and talks.
Speaking to the Guardian, Oxfam’s trading director Andrew Horton said the aim of the superstore was to create a “fun ‘destination’ shopping experience.”
He added: “Customers will be able to shop ethically, but we want this new store to have the wow factor. We want people to linger, to chat over coffee. We have a 10-year lease on this unit and if it is successful we will roll it out in other locations.”
READ MORE: Oxfam targets ‘wow factor’ with its first charity superstore
M&S tackles microplastics with glitter-free Christmas cards
M&S has removed glitter from its entire Christmas celebration range this year as part of efforts to reduce the impact of microplastics on the environment.
The new initiative covers the retailer’s greeting cards, wrapping paper, tags, gift bags, calendars and crackers, with all designs that previously featured glitter now widely recyclable.
The move represents the first step towards M&S’s commitment of ensuring its entire year-round range of cards and gift-wrapping products will be 100% glitter-free by the end of 2020.
Elsewhere this Christmas, the retailer has removed glitter from its Christmas gifting range of flowers and plants, as well as from single-use packaging for food products.
As part of its broader plastic reduction plan, M&S states that it has already removed 1,000 tonnes of plastic packaging from across its business and is working to ensure all its packaging is widely recyclable by 2022.
“We know reducing single-use plastics is as important to our customers as it is to our business, so removing glitter from our cards and wrap range will make it easier for them to celebrate Christmas in a more sustainable way,” says Paul Willgoss, director of food technology at M&S.
“This is a step in the right direction as we continue working on our plans to completely remove glitter from the range next year.”
Freixenet makes UK TV advertising debut
Sparkling wine brand Freixenet has made its TV advertising debut in the UK by sponsoring the new series of Don’t Tell The Bride on E4.
The sponsorship began during the first episode of the new series last night (1 September) and will run for 10 weeks. The family-owned brand says the sponsorship deal has an estimated media value of £400,000 and would reach 1.64 million people.
The idents, which feature falling confetti to fit with the wedding theme, showcase Freixenet’s hero and core sparkling range including Cordo Negro Cava, Prosecco and Italian Sparkling Rosé. TV and radio presenter Zoe Hardman provides the voiceover.
“The sponsorship allows us to display the full product range and build our brand awareness amongst an engaged target audience within a relevant environment,” explains Samantha Cross, brand manager at Freixenet.
“Our aim is to showcase each product within the Freixenet range and how our sparkling wines can be enjoyed from the sofa, to a wedding reception.”