Deliveroo, Amazon, Peloton: 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.

customer experience deliveroo

Deliveroo’s losses up a third before pandemic recovery

Deliveroo recorded a £317.7m loss in 2019, up a third on the previous year, as it struggled with competition and regulatory scrutiny.

However, the pandemic boosted it to profitability, with the brand saying it became profitable on an operating basis in the second and third quarters. Its revenues increased by 62% over the year to £771.8m.

The delivery firm says it is now profitable in 11 of the 12 markets it operates, but did not name which region was still making a loss.

Deliveroo took out a £198m loan to help cover its 2019 losses as an investigation by UK competition authorities into Amazon’s planned investment of $575m squeezed its finances. Deliveroo says the loan was “extinguished” following the Competition and Markets Authority approved the Amazon deal in August.

READ MORE: Deliveroo’s losses soared before its pandemic recovery

Investors look to cash in on startups acquiring brands on Amazon

Startup businesses including Thrasio, SellerX and Heroes have been acquiring proven sellers on Amazon’s marketplace in the hope of becoming the next Unilever or Proctor & Gamble. And investors have taken note, injecting nearly $1bn into these companies.

Seven startups in the US and Europe have raised a combined $950m during 2020 to buy small brands on Amazon, according to the Financial Times.

Many of these brands including SellerX and Razor in Berlin, Heroes in London and Heyday in San Francisco didn’t even exist at the beginning of the year.

Independent merchants on Amazon are expected to make more than $200bn of sales this year, with tens of thousands of them making more than $1m a year in revenue, according to industry experts.

READ MORE: Investors pour $1bn into buying up small merchants on Amazon

Peloton looks to accelerate growth with $420m acquisition

Connected home fitness brand Peloton is set to acquire fitness equipment maker Precor for $420m as it looks to capitalise on the growth it has experienced during the pandemic.

With the acquisition, Peloton plans to establish US manufacturing sites, boost research and development capabilities and accelerate its penetration of the commercial market.

The brand saw its global membership more than double to 3.1 million in the summer as gym closures caused demand for at-home workouts to increase.

But the sudden surge put a strain on Peloton’s supply chain, even after opening of an additional factory in Taiwan, causing it to delay and downsize new product launches.

Peloton’s president William Lynch says: “By combining our talented and committed R&D and supply chain teams with the incredibly capable Precor team and their decades of experience, we believe we will be able to lead the global connected fitness market in both innovation and scale.”

READ MORE: Peloton will pay $420 million to acquire fitness equipment maker Precor

TUI launches campaign after ‘adapting everything’

tui / holiday

TUI has launched a campaign talking up the benefits of an overseas holiday as it looks to reassure consumers it has adapted its approach in response to Covid and will support customers in the run up to their trip and beyond.

‘Nothing compares to a real holiday’ comes off the back of “extensive” customer research into people’s shifting travel habits in response to the pandemic, with the travel firm stating it has “fundamentally had to rethink” how it supports customers.

TUI has increased flexibility and now offers Covid cover and standards guaranteed, with the promise it will refund consumers if the holiday is unable to go ahead.

TUI’s CMO Katie McAlister says: “As a business we have fundamentally had to rethink how we do support our customers… We know it’s important to strongly communicate reassurance messages for customers, demonstrating there is no better time to book a holiday.

She says the business has evolved in response to changing customer needs, which has been complex and meant it’s had to be “extremely agile and often reactive with our marketing”.

“We were the first tour operator to offer Covid cover; we know that people have responded well to this with seven in 10 people more likely to book if it’s offered, and we know that 89% of our customers are motivated by free changes, so it’s important we continue to get that message out as people look to book their future holidays.”

The ad will first air on TV on Boxing Day and will be supported by content on TUI’s owned channels, video on demand, radio, digital audio, online and social.

Activewear brand in court for making anti-Covid claims

Australian activewear brand Laura Jane is facing legal action after claiming its clothes could stop the spread of Covid-19.

Adverts on its website and in stores claimed its clothes had been sprayed with an “anti-virus” substance called LJ Shield and featured the line ‘Cure for the spread of Covid-19? Lorna Jane thinks so”.

The Australian Competition and Consumer Commission (ACCC) said it was particularly concerning the claims were made at a time when a second wave was feared in the country, and has launched federal court action against the brand for allegedly making false and misleading claims.

Lorna Jane told the BBC it had been assisting the ACCC with its investigation and was “extremely disappointed” about the legal action.

A spokeswoman for the brand added: “We are not saying LJ Shield will stop you coming into contact with bacteria, we are saying LJ Shield is an added protection like hand sanitiser but for the clothes you wear.”

READ MORE: Lorna Jane: Activewear brand in court for ‘anti-virus’ claims

Monday, 21 December

ShoppingSocialDistance

Retail sector faces ‘severe’ consequences due to Tier 4

Britain’s retail sector is warning of “severe” consequences from its sudden closure due to new Tier 4 restrictions.

The British Retail Consortium (BRC) says thousands more jobs could be at risk now that all non-essential shops are closed in the lead up to Christmas day.

The group criticised the government’s “stop-start approach” as “deeply unhelpful” and joined other groups in calling for an extension of a business rates holiday to help struggling firms.

BRC chief executive Helen Dickinson says the Tier 4 announcement, which affects London and much of the South East, was “hugely regrettable” after retailers had invested hundreds of millions making their premises Covid-secure.

She says: “This decision comes only two weeks after the end of the last national lockdown and right in the middle of peak trading, which so many are depending on to power their recovery.

Faced with this news – and the prospect of losing £2bn per week in sales for the third time this year – many businesses will be in serious difficulty and many thousands of jobs could be at risk.”

READ MORE: ‘Stop-start’ Covid rules cost shops £2bn a week, says industry

On the Beach pays tribute to ‘some year’ in untraditional Christmas ad

On the Beach is paying tribute to a difficult year in its latest campaign.

The UK travel company’s untraditional Christmas ad sees Iggy Pop narrate some of the hardships that the UK has been through in 2020 thanks to Covid-19.

The ad, created by Uncommon Creative Studio, sees people running on the beach as Iggy Pop notes how “working from home became sleeping at work” and drew attention to the disturbed life events that have occurred with many weddings cancelled and graduations postponed.

He says: “We got angry, we got sad, we cried. But we picked ourselves up and we started again, knowing that the sun is always shining somewhere.”

It ends with the star saying “Remember everything is better on the beach and it’s ready when you are”.

On the Beach’s brand marketing director, Steve Seddon, says: “Our previous ‘Everything’s Better On the Beach’ campaign saw the biggest ever growth in brand awareness for On the Beach.

“We wanted to build on that with this ad and stay true to the brand, while being reflective and mindful of the year we’ve had – balanced with optimism for the year ahead. Capturing the thoughts, feelings and emotions of our customers was also really important to us; the scripting in the film delivers that brilliantly.”

The campaign goes live on 25 December across TV, online and social until the end of February 2021. It will also feature a media partnership with Amazon Prime over the next few months.

Coca-Cola give fans chance to win Premier League title this Christmas

Coca-Cola is offering Premier League fans the chance to win the Premier League trophy in a new campaign.

#SockSkillsChallenge sees the soft drinks company giving away prizes in the lead up to Christmas including the chance to have the Premier League trophy in one consumer’s home for a day.

The Christmas challenge, part of Coca-Cola’s Make Your Home The Home End campaign, will be led by Coca-Cola ambassadors Marcus Rashford, Harry Kane and Alex Oxlade-Chamberlain who will all be attempting to showcase their skills to kick off the challenge.

Coca-Cola will also be giving away a range of Christmas gifts – from flat screen TVs to signed merchandise. All fans have to do is post a video on Instagram or Twitter of them attempting the most creative footballing sock skills tagging the brand.

Coca-Cola Great’s Britain senior brand manager, Oliver Bridge, says: “The holidays are well and truly coming for Premier League fans this Christmas with a full fixture list of Premier League games, and hopefully our giveaway will make Christmas that little bit extra special for some fans.”

The #SockSkillsChallenge will open for entries on 18 December and close on 26 December.

Marks & Spencer raises funds for children’s hospices

Marks & Spencer is raising money for seriously ill children this Christmas, as part of a partnership with charity Together for Short Lives.

M&S is teaming up with 12 of the UK’s best-loved comedians to create ‘The World’s Funniest Crackers’ the sale of which will go towards £100,000 to support 54 children’s hospices in the UK. The 12 celebrities including Dawn French and Omid Djalili have each donated jokes to the crackers that cost £15 for 12.

It’s also encouraging consumers to post their own cracker joke on social media using #GiveLaughLove and bring a smile to a family’s face by donating £5 or more via text.

Together for Short Lives CEO Andy Fletcher says: “2020 has been a year like no other – and for families caring for a child with a life-limiting or life-threatening condition those underlying feelings of fear and isolation that we’ve all experienced have really been amplified. They’re fighting to keep their child protected and safe and they simply can’t do it alone. That’s why children’s hospices are such a lifeline. Up and down the country they have been going above and beyond to care for these seriously ill children and help make memories to treasure for years to come.”

PG Tips helps to reduce loneliness at Christmas

PG Tips is launching a community Christmas initiative to help reduce the impact of loneliness across the UK this Christmas.

The initiative is the result of a partnership with its charity partner, Re-engage, and will see the tea brand providing an online list of small and tangible ways to support someone with loneliness this Christmas.

The small acts of kindness include sharing handmade cards with someone that might be feeling lonely to making time to call older relatives and friends or inviting a neighbour to wrap up warm and take a socially distanced festive stroll.

The public can get involved by searching for and registering their own ‘acts of kindness’ within their local communities on the Re-engage Community Christmas directory.

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