Fortnum & Mason, Dyson, Metro Bank: 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.

Fortnum & Mason experiences seventh year of growth

London department store Fortnum & Mason has enjoyed double-digit growth for the seventh year running, with profits up by 26% and sales rising by 12% over the 12 months to 14 July 2019.

Like-for-like sales at the flagship store in London’s Piccadilly showed a 6% increase and online sales increased by 13% on the previous year. Sales at the St Pancras International station site rose by 15%, while continued growth overseas saw sales increase by 16% in Hong Kong, where a new store opened in April, and 28% in Japan.

“We are very pleased to report another year of strong growth across our business, particularly within the context of the significant challenges facing the retail sector,” says Fortnum’s CEO Ewan Venters.

“Our reputation for delighting our customers around the world with the finest products and exceptional service drives us all to keep innovating and searching for the best partners and suppliers.”

Online sales set to reach a record $4.4bn during Thanksgiving

The day before this year’s much-hyped Black Friday, shoppers in the US celebrated Thanksgiving by spending $4.4bn (£3.4bn), with nearly half of their purchases made on smartphones.

It’s the first time that online sales have surpassed $4bn (£3bn) in the country. That’s despite Facebook and Instagram suffering untimely outages for a chunk of the big American holiday.

Mobile technology made up 46.4% of all online sales at 5pm Eastern Time Thursday, up from 33.5% last year and 29.1% In 2017.

Adobe Analytics predicts Black Friday online sales in the US will grow 20.5% this year to $7.5bn (£5.8) and Cyber Monday sales will grow 19.1%, reaching $9.4bn (£7.2).

Dyson’s new global HQ to open in Singapore

British design and manufacturing firm Dyson will open its new global head offices in the historic St James Power Station in Singapore.

Founded by inventor Sir James Dyson, the company, best known for its vacuum cleaners, said earlier this year it would move its operations outside the UK and into Asia.

Dyson CEO Jim Rowan describes the new location as a “hive for our research and development endeavours” and says that “the historic St James Power Station will be a most inspiring backdrop for Dyson’s people.”

The power station became a listed national monument in 2009 and, among other things, was once home to a nightclub.

Most of the company’s products are manufactured in Asia and Dyson has a long-established presence in Singapore.

However, James Dyson, a prominent Brexit supporter, faced criticism after revealing plans to leave the UK.

Myers joins Metro Bank in newly created role

Metro Bank has appointed Jessica Myers as its new brand and marketing director.

Myers arrives after a five-year stint as head of brand management at RBS and, before that, the Commonwealth Bank of Australia, in Sydney, where she oversaw brand management and advertising.

As part of the newly-created role, Myers will be responsible for developing and driving forward the Metro Bank brand and marketing strategy, alongside its customer communications.

Myers says she is looking forward to the challenge of the new role: “I’m impressed with how the bank has established its personality within the sector. In my new role, I’m looking forward to helping evolve the brand as Metro Bank continues to win more customers and shake-up the UK banking scene.”

The bank has recently begun working with the creative agency Mr President and media agency Goodstuff on developing the bank’s brand strategy.

Diageo launches an AI whisky selector

Diageo’s new AI Whisky Selector aims to help people discover their favourite single malt scotch whisky using artificial intelligence to analyse personal preferences.

What’s Your Whisky can be used via any internet-connected device, and asks users a series of questions (“how often do you eat bananas?”, “how do you feel about chillies?”) to get to know their taste buds.

A variety of sweet, fruity, spicy and smoky flavours found in single malt whiskies are referenced to create individual ‘flavour prints’, which in turn are used to recommend a single malt that most closely matches the user’s taste.

Diageo’s principle scientist, research and development Dr Adeline Koay says: “We are using our extensive consumer knowledge, whisky expertise gathered over hundreds of years and cutting-edge AI to help consumers discover, explore and enjoy Scotch in new and exciting ways.”

The launch follows last year’s Diageo scotch whisky tasting experience that used voice technology to inspire consumers to try different varieties of the drink.

Thursday, 28November

Twitter halts plan to remove inactive accounts

Twitter has halted plans to remove inactive accounts amid concerns over what it will do with the accounts of those who have died.

In an attempt to “clarify the confusion”, Twitter has made changes to its plans. It will now not be removing any inactive accounts until it creates a way to memorialise accounts. This is a change in approach given the social network sent emails on Tuesday warning that if an account had been inactive for more than six months it could be removed if users fail to log in by 11 December.

“We’ve heard you on the impact that this would have on the accounts of the deceased. This was a miss on our part,” the company says in a tweet. “We will not be removing any inactive accounts until we create a new way for people to memorialise accounts.”

Twitter has also clarified it is focusing the account removal on the EU due to GDPR regulations.

M&S raids Arcadia for new head of brand creative

Marks & Spencer has hired Arcadia Group’s creative director, Anthony Cassidy, as its new head of brand creative as the retailer continues attempts to turn around its clothing business.

Cassidy will join in the spring and report into M&S’s director of clothing and home marketing Nathan Ansell. The retailer has had brand strategy consultant Clare Dobbie in the role on a temporary basis for a year but is now making a permanent addition to the team.

Cassidy has been creative director at Arcadia, which owns brands including Top Shop and Miss Selfridge, for three years. He has worked both brand and agency side, including at comms agency Portas and EMAP.

The appointment marks the latest addition to the retailer’s clothing and home team as it looks to return the business to growth. M&S last week hired a new clothing and home managing director, poaching Richard Price from F&F, Tesco’s clothing brand.

Elsewhere, UKTV’s chief commercial officer Simon Michaelides has taken up a new role as chief marketing and innovation officer. The newly created role replaces the CMO role vacated by Zoe Clapp earlier this week.

Michaelides will report to UKTV CEO Marcus Arthur and lead on marketing, consumer communications, social and online, media, creative and innovation, as well as content and product funding.

RBS launches digital bank Bó to take on Monzo

Royal Bank of Scotland has launched its digital bank, Bó , as it looks to take on digital rivals such as Monzo and Revolut and attract more online customers.

Bó is a digital, cloud-based bank that is now available via an app on Apple and Google. In a move that apes cards from Monzo, Bó will offer a bright yellow card to users.

Digital-only banks are expected to triple their sales in the next few years and have attracted around 5 million new customers in the first half of 2019. However, most have struggled to turn popularity into profit.

Bó CEO Mark Bailie says: “We are launching Bó to help people build the habits and routines that will allow them to do money better day-by-day and week after week so they can fund their lives and lifestyles in a more sustainable way.

“With Bó we have an opportunity to help address a genuine societal need and to be a positive force in our customers’ lives. Our aim is to transform the nation’s attitudes and behaviour around money and I’m hugely excited to see what we can achieve.”

Supermarkets accused of not doing enough to tackle plastic waste

Supermarkets have been accused of adding to, rather than reducing, their plastic waste in part due to a huge rise in sales of bags for life.

Research from the Environmental Investigation Agency (EIA) and Greenpeace found that UK supermarkets put an estimated 903,000 tonnes of plastic packaging into market in 2018, an increase of 17,000 tonnes compared to 2017. Seven out of 10 supermarkets increased plastic waste, with just Waitrose, Tesco and Sainsbury’s achieving a reduction, although these were “marginal”.

This increase is in part caused by a 26% rise in sales of ‘bags for life’ to 1.5 billion. While they cost more than normal plastic bags, they contain far more plastic by weight. The report recommends increasing their cost to at least 70p.

Train operator introduces new brand on west coast line

The new intercity west coast rail franchise operated by FirstGroup and Trenitalia will be branded as Avanti West Coast.

Avanti is Italian for ‘Forward!’ and aims to reflect a mission to deliver an innovative railway service that is “ready for today and fit for the future,” according to the operators. The logo includes a bright orange triangle that aims to show the extent of the 400- mile route that serves cities from London to Birmingham, Liverpool and Glasgow.

It will take over operation of the west coast line from Virgin on 8 December. First Group and Trenitalia have committed to invest in the routes, including refurbished trains, simplified fares and refreshing stations.

First Rail managing director Steve Montgomery says: “Today marks the start of a new era in high-speed rail services – one that will generate national prosperity and pride. Avanti West Coast enshrines the type of forward-thinking operation we intend to run, that’s ready for today and fit for the future.

“We are committed to our customers and over the next few years, we will work with our industry and local partners not only to invest in, and improve, rail services on the route, but also to attract more people to rail and connect communities across the country.”

Wednesday, 27 November

Twitter to delete dormant accounts

Twitter will delete accounts that have been inactive for more than six months unless users log in before an 11 December deadline.

The cull is the first time Twitter has taken the decision to remove inactive accounts on such a large scale, which it says will improve credibility

A spokesperson for Twitter says: “As part of our commitment to serve the public conversation, we’re working to clean up inactive accounts to present more accurate, credible information people can trust across Twitter.”

Another key reason for the cull is users who do not login are unable to agree to Twitter’s updated privacy policies. The first batch of deleted accounts will involve those registered outside the US. The cull will include those who have died unless someone with that person’s account details is able to login.

In the future, the company says it will also look at accounts where people have logged in but don’t “do anything” on the platform.

Twitter adds: “Part of this effort is encouraging people to actively login and use Twitter when they register an account, as stated in our inactive accounts policy.”

The mass deletion will not affect Twitter’s reported user numbers, as the firm bases its usage level only on users who login at least once a day. According to its latest earnings report, Twitter has 145 million “monetisable” daily active users (users who come into contact with Twitter’s advertising on a daily basis).

Britvic profit loses fizz

Britvic’s profit after tax has dropped more than 30% to £80.9m after adjustments including writing down French assets.

The Robinsons and Tango maker said earnings fell 21.7% to £130m in the year to 29 September. However, it did note a strong performance in Great Britain.

Britvic’s chief executive officer, Simon Litherland, says: “In 2019 we have increased revenue, adjusted margin and EBIT, as well as significantly improving free cashflow generation. Our commercial execution, innovation agenda and revenue management continue to deliver results.

“Our transformational business capability programme is now complete – and importantly forms a key part of our broader commitment to building a more flexible and sustainable business model going forward.”

Adjusted operating earnings rose 4.4% to £214.1m, helped by sales of Britvic’s low sugar and fruit-based beverages.

Virgin Trains senior team moves to First Group

The boss of Virgin Trains is moving to First Group ahead of the latter’s takeover of the west coast main line in December.

Phil Whittingham, the managing director of Virgin Trains since 2013, has been with Virgin since 1999 and will become managing director of First’s West Coast Partnership rail service on 8 December.

The senior team will keep running the line, which connects London to Birmingham, Manchester and Glasgow – an unusual move as usually only driver and other front-line employees move over.

First confirmed that all of the existing senior management team at Virgin Trains including a host of directors in charge of people, commercial, information technology, and corporate affairs as well as existing interim appointments – including acting customer experience and operations directors – will take their roles to the new organisation,

The West Coast Partnership was awarded to First Group and Italian rail operator Trenitalia in August despite Virgin’s public concerns.

Virgin, with partner Stagecoach, had been disqualified from bidding after a row over pensions liabilities and is still pursuing legal action over the decision.

Discounting brings down retail prices

UK shop prices fell for the sixth month running, figures show, as retailers rely on discounts to boost spending.

Shop prices were down 0.5% year on year in November, following a 0.4% fall in October, according to The British Retail Consortium (BRC). Month over month, prices were flat following a 0.1% decrease in October.

Food prices were up 1.4% year on year, slowing from the 1.6% increase posted in October, while the cost of non-food items fell 1.6%, versus a 1.5% fall in October.

The BRC notes that shops are using even deeper price cuts to encourage shoppers and offset the uncertainty caused by the general election and Brexit.

BRC CEO Helen Dickinson says: “The economic and political uncertainty has weakened demand for non-essential items.”

Nielsen head of retailer and business insight Mike Watkins adds that although shops needed to keep prices low to combat “fragile consumer confidence”, they should keep an eye on already squeezed profits.

“With Black Friday discounts and promotions already giving shoppers further savings, any new pricing initiatives to drive demand in the final weeks up to Christmas will need to be balanced to protect margins,” he says.

Barclays inks three-year deal with Women in Football

Barclays is the new lead sponsor of Women in Football (WiF), the professional network for women working in the football industry.

The bank – which is also the title sponsor of the FA Women’s Super League – has had a long-standing partnership with WiF, but has now signed a new three-year deal to expand that relationship.

The partnership, which starts immediately, will run until October 2022 and will see Barclays help the network to grow its reach, expand its leadership course and help to deliver it across the country.

The brand says it will help to upskill, empower and connect more women working in and around football, beginning with its first course in Manchester in February 2020. Further courses will be held in “major centres of football employment” around the country.

Barclays head of group sponsorship Tom Corbett says: “Together with our long-term partnership with the Premier League, this all helps us deliver on our ambition to create opportunities with football.”

Women in Football CEO Jane Purdon adds: “Barclays’ support enables us to further extend our programme of expert knowledge-sharing and provision of opportunities via courses and roadshows across the UK.

“They have made an unprecedented commitment to football as a whole – men’s and women’s – and we are delighted to have this opportunity to work with them for the next three years.”

Tuesday 26 November

Facebook launches market research tool that pays users to take part

Facebook has introduced a market research tool that rewards users with money for participating in surveys, tasks and research.

Intended to gain insights on how to improve Facebook, Instagram, WhatsApp, Portal and Oculus, the Facebook Viewpoint app allows users to set up an account that invites them to join a programme.

Facebook users are asked to share their name, email address, country of residence, date of birth and gender. They may also be required to share additional information, such as their location, to qualify for individual programmes.

Users are told what information will be collected, how it will be used and how many points they will receive for taking part. Every time a user hits the points necessary to trigger a financial reward, payment is sent directly to their PayPal account.

The social media giant insists it will not sell user data to third parties, publicly share the user’s Facebook Viewpoints activity on Facebook or on other accounts they are linked to without permission, and participation can end at any time.

The first survey rolling out is focused on wellbeing and will be used to help Facebook build products aimed at limiting “the negative impacts of social media”. It offers a reward of $5 (£3.88) for taking part.

Facebook Viewpoints is currently only open to people aged 18 and over in the US who have a Facebook account, although the company intends to expand to other countries next year.

Asos appoints first chief growth officer

Asos has appointed its first chief growth officer. Robert Birge, who joins the fast-fashion retailer on 3 December, will head up the 170-strong marketing department and the customer care team, which includes more than 1,200 people.

Birge previously served as CMO at online pharmacy Blink Health, CMO of online travel agency Kayak, global CMO at sports management group IMG and managing director at TBWA/Chiat/Day in New York.

Reporting directly to chief executive Nick Beighton, Birge will be responsible for driving profitable growth and integrating marketing with strategic planning, analytics and customer experience. Asos is still on the lookout for executives to head up product, HR and strategy.

“Robert’s proven track record in delivering high impact marketing programmes for fast-growing ecommerce businesses means he is an ideal appointment for this new role,” says Beighton.

“And, with more than half of our revenue coming from international markets, his global experience will help fuel our ability to take advantage of the growth opportunities ahead of us.”

In recent months there have been changes in the Asos marketing team, with global marketing director Yale Varty departing in July to become CMO at Hostelworld.

Sports Direct seeks rebrand to Frasers Group

Sports Direct plans to rebrand itself as the Frasers Group to reflect its wider “elevation strategy” and shift perceptions away from sportswear.

The company says: “The choice of the new brand reflects the elevation strategy encompassing the group as a whole and is therefore a fitting reflection for the company in the future.”

While the group name will change, the Sports Direct chain of shops will not be rebranded.

Shareholders will vote on the rebrand at the company’s next general meeting on 16 December. While 75% of votes cast are required to change the name, Sports Direct founder Mike Ashley owns 65% of the shares.

The name change reflects a move away from the core business, making an explicit connection to the department store House of Fraser, which Sports Direct bought for £90m last year. Over the past 18 months the business, which is valued at £1.8bn, has acquired Evans Cycles, Sofa.com and Game Digital.

In May, the company suggested it would use the Frasers name to rebrand some existing House of Fraser stores into a luxury mini-chain selling expensive labels, although by July Ashley was calling the situation at House of Fraser “nothing short of terminal”.

Netflix secures control of first cinema

Netflix has signed an extended lease agreement for New York’s iconic Paris Theater and will use the cinema to screen some of its showpiece films.

The single-screen theatre closed in August but was temporarily reopened by Netflix for a limited run of its new film Marriage Story.

Now the streaming giant has said the Paris Theater “will be kept open and become a home for special Netflix events, screenings and theatrical releases”.

The deal is a significant step for the company as it looks to attract prestige filmmakers and run more theatrical releases before films are hosted on the streaming platform.

The streaming giant’s new crime drama The Irishman, directed by Martin Scorsese, has been on a limited theatrical run for several weeks before it becomes available for streaming tomorrow (27 November).

According to reports, Netflix is also in talks to acquire the Egyptian Theatre on Hollywood Boulevard in Los Angeles.

Ted Sarandos, chief content officer at Netflix, says: “After 71 years, the Paris Theater has an enduring legacy, and remains the destination for a one-of-a kind movie-going experience. We are incredibly proud to preserve this historic New York institution so it can continue to be a cinematic home for film lovers.”

Just 5% of Black Friday deals are genuine

Just 5% of all Black Friday deals are genuine according to new research by Which?.

An analysis of 83 products during the six months before and after Black Friday 2018 found that almost all the items were cheaper, or available for the same price, at other times of the year. Just four of the products were cheaper on Black Friday than at other times of the year.

Six in 10 were found to be cheaper on at least one day in the six months prior to Black Friday, while 74% were cheaper after.

John Lewis, for example, was found to have offered a De’Longhi coffee machine for £399 on Black Friday, which was then discounted to £368 on at least 35 occasions in the following six months.

Meanwhile, Amazon sold its second-generation Echo smart speaker with 39% off on Black Friday when it had been cheaper on at least 13 occasions previously.

Which? does not, however, believe that retailers are breaking the law. The issue is that consumers are being confused by the offers.

“We have repeatedly shown that ‘deals’ touted by retailers on Black Friday are not as good as they seem,” explains Which? head of home products and services, Natalie Hitchins.

“Time-limited sales can be a good opportunity to bag a bargain, but don’t fall for the pressure tactics around Black Friday. Our investigation indicates that this popular shopping event is all hype and there are few genuine discounts.”

Monday 25 November

Gap’s Old Navy brand to switch to brand building after admitting to short termism

Gap says it will spend more on long term activity for its Old Navy brand after seeing sales dip 4% in its last fiscal quarter.

Speaking to analysts following its third quarter sales results, CFO Teri List-Stoll, admitted it has focused too much of its spend on short-term tactics.

She told analysts: “Regarding marketing, we had frankly become too heavily dependent on messaging around discounting, as opposed to bigger picture brand messaging focus on product and value that we know resonates with the Old Navy consumer.

“For Q4, we recalibrated our messaging to focus on product stories, highlighting some of our big design ideas for holiday, such as plaids, puffers and Jingle Jammies combined with compelling price points and commercial plans, which is more reflective of Old Navy’s winning value equation.”

Old Navy has also “strategically increased” marketing spend on new partnerships and campaigns, including a Christmas TV campaign starring Broadway star Neil Patrick Harris and a partnership with Netflix on its first animated family holiday movie, Klaus.

Sales for the group, which also includes the Gap master brand and Banana Republic, were also down 4% in the period.

Gap is the latest brand to admit it has overspent on short term tactics. Adidas recently acknowledged it had focused on performance marketing at the expense of brand building.

LVMH buys Tiffany’s for $16bn

Luxury group LVMH is acquiring luxury jeweller Tiffany for $16.2bn (£12.6bn) in what is the biggest ever deal in the luxury market.

The owner of brands incuding Louis Vuitton, Christian Dior and Dom Perignon will pay $135 a share for Tiffany’s, 37% above its current share price. Founded in 1837, Tiffany has more than 300 stores globally and the move will give LVMH a much bigger profile in jewellery and open it up to the US market.

LVMH CEO Bernard Arnault says: “We are delighted to have the opportunity to welcome Tiffany, a company with an unparalleled heritage and unique position in the global jewellery world, to the LVMH family. We have an immense respect and admiration for Tiffany and intend to develop this jewel with the same dedication and commitment that we have applied to each and every one of our Maisons.

“We will be proud to have Tiffany sit alongside our iconic brands and look forward to ensuring that Tiffany continues to thrive for centuries to come.”

Tiffany CEO Alessandro Bogliolo adds: “Tiffany has been focused on executing on our key strategic priorities to drive sustainable long-term growth. This transaction, which occurs at a time of internal transformation for our legendary brand, will provide further support, resources and momentum for those priorities as we evolve towards becoming The Next Generation Luxury Jeweler.

“As part of the LVMH group, Tiffany will reach new heights, capitalising on its remarkable internal expertise, unparalleled craftsmanship and strong cultural values.”

The deal is expected to close in the middle of 2020, subject to approval from shareholders and regulators.

WeWork brings in former Publicis boss as interim CMO

Beleagured office workspace company WeWork has overhauled its management team, bringing in former Publicis boss Maurice Levy as interim chief marketing and communications officer as it looks to put a stop to its recent decline.

Levy is widely credited with transforming Publicis from an agency group focused on France to a global player and the third largest ad company by revenue. He stepped down from Publicis in 2017 but remains on its advisory board.

WeWork faces an uphill battle to turn around its brand image after a series of crises including the departure of its co-founder and CEO Adam Neuman amid questions over its business model, laying off 2,400 (or 19%) of staff and the cancellation of its IPO.

Levy is one of three new people to join the company’s board, with WeWork also hiring a new chief people officer and chief product and experience officer. The appointments come as WeWork executive chairman Marcelo Claure definied his key strategies for a turnaround, saying the company most profitability and generate positive free cash flow.

That strategy includes a focus on customer experience and its core business, as well as on finding ways to expand “smartly and profitably” by better monetising its current spaces.

M&S raids Tesco for new clothing boss

Marks & Spencer has hired a senior Tesco executive to take charge of its clothing and home business as part of its latest attempt to turnaround its performance.

Richard Price, currently CEO of Tesco’s clothing brand F&F, will take on the role of managing director of clothing and home. He has worked at M&S before, spending seven years with the retailer latterly as menswear director before leaving in 2012.

M&S CEO Steve Rowe says: “Richard’s career spans some of the UK’s top clothing brands and he has a proven track record of delivering growth through stylish, great value product. We are building a team of world class talent in clothing and home and, with Richard coming on board, I am confident that the speed and scale of the transformation of the business will accelerate.”

Price is the latest exec tasked with turning around M&S’s clothing business. His predecessor, Jill McDonald, lasted barely two years in the role and was sacked for failing to buy enough stock to meet demand for a range promoted by TV presenter Holly Willoughby.

Price is a more obvious choice to lead the business, having worked in fashion at M&S, Tesco and BHS.

Price adds: “Marks & Spencer clothing and home is a great business that still has strong brand affection and huge potential. I left the business because I felt it was drifting in the wrong direction but now feel we have a real chance to make it special again. The new team has already started to improve product and value and I am looking forward to working with them.”

Price will join next year.

Uber could be banned from London

Uber could be on the verge of a ban in London amid speculation that Transport for London (TfL) may not renew its licence.

The ride-hailing app’s licence runs out tomorrow (26 November) after it was only granted a two-month probationary extension due to its failure to do enough to improve passenger safety.

Sources at Uber told City AM the company is “confident” it will get a licence extension. However, TfL sources told Sky News it is considering a ban and that there is “zero chance” of it being granted a long-term licence.

“TfL is considering Uber’s application and no decision has been made,” says a TfL spokeswoman.

Uber has made changes to improve passenger safety, including more stringent driver and licence checks, more driving change and new accident and discrimination reporting systems. However, TfL is thought to want these checks to go further, with Wired suggesting biometric checks could be part of its licence requirements.