Waitrose, EasyJet, Amazon: Everything that matters this morning

Good morning and welcome to Marketing Week’s round-up of the news that matters in the marketing world today.

By Marketing Week Reporters 29 Jul 2019 7:45 am

Waitrose extends ‘Unpacked’ plastic trial after positive response

Waitrose is extending its ‘Unpacked’ trial to cut down on plastic use after seeing an “overwhelming” positive response at its store in Oxford.

The original trial included taking more than 200 products out of packaging to test how customers might be prepared to shop differently to reduce plastic waste. More than 7,000 customers have now provided feedback, giving the supermarket confidence that rolling out the concept will be successful elsewhere.

Three more shops in Cheltenham, Abingdon and Wallingford will be refurbished to include the Unpacked format and branded as Waitrose Unpacked to maximise awareness. They will offer a dedicated refillable zone for products including dried goods, coffee, wine and beer; there will also be a range of fruit and vegetables without plastic packaging.

A couple of tests will not be included, however, after Waitrose found they were unpopular. These include its Veg Kitchen concept, where staff prepared loose vegetables, and borrow-a-box – with shoppers preferring to bring their own containers.

Waitrose’s head of CSR, Tor Harris, says: “The reaction to Waitrose Unpacked has been incredible with the invaluable feedback from thousands of customers giving us the confidence that they are prepared to change how they shop with us.

“We are keen to take the Unpacked concept forward and these additional tests will help us achieve this as well as understand if its commercial viability. Through working with our customers and suppliers we will continue to learn and develop ideas which have the potential to be rolled out more widely.”

EasyJet extends its image search app

EasyJet is launching its Look&Book image search app on Android having seen customers match almost 30,000 photos to destinations since it launched on Apple devices in October.

The app aims to make it easier for travellers to go from inspiration to booking, allowing them to take a photo of a place they see online and share it in the app. Image recognition technology then locates the nearest airport and shows relevant flights.

The Android version, created by VCCP in partnership with Travelport Digital, is set to launch in the UK, France, Italy, Germany and Switzerland.

EasyJet launches ’emotional’ campaign as it looks to be known for more than value

Daniel Young, head of digital experience at EasyJet, says: “We are so excited that the Look&Book app is now available for Android users as well as iOS across Europe. Now everyone has the chance to further explore Europe with ease, with a tool which opens up new destinations and adventures for all.”

Amazon turns off Dash ordering buttons

Amazon is turning off the Dash buttons that allowed customers to order specific products with the press of a button, admitting they never really took off among consumers.

Dash buttons launched four years ago, with each one linked to a particular product from a brand. Their aim was to make it easier for customers to order household items when stocks ran low, with brands including Tide, Lysol and Red Bull bringing out their own buttons.

They were launched in the UK in 2016, with Procter & Gamble and Nestlé among the companies offering one-click shopping.

However, Amazon said in February it would be ceasing sales but would continue to support those in use. It is now turning off that support, although customers can still create virtual buttons on Amazon’s website and place orders through its Alexa voice assistant.

“Amazon is constantly evaluating our product and service offerings to best serve customers,” says an Amazon spokeswoman in a statement given to Business Insider. “Since sales of Dash Button devices ceased earlier this year, we have seen continued growth of other shopping options to meet customer needs.”

The Bank of England cuts UK growth forecasts

The Bank of England has cut its UK growth forecasts for the next two years, warning that a no-deal Brexit will hit the economy and cause a further drop in the value of the pound.

The Bank has left interest rates unchanged at 0.75% as global growth weakens and amid ongoing trade tensions between the US and China. It has also dropped its projection for UK economic growth this year to 1.3%. It had previously predicted growth of 1.5%.

It has also cut its forecast for 2020 to 1.3%, down from 1.6% previously.

Both forecasts are based on the assumption that the UK will leave the EU with a deal. If there is a no-deal Brexit, it expects growth to be much slower and the Bank’s governor Mark Carney warns the UK will be “smaller, weaker and poorer” if that happens.

“In the event of a no-deal, no transition Brexit, sterling would likely fall, the risk premiums on UK assets would rise and volatility would spike higher,” he says.

RBS profits rocket but it warns on economic uncertainty

The Royal Bank of Scotland saw profits soar to £1.3bn in its second quarter but is warning of a hit to profitability in 2020 amid difficult economic conditions.

Profit before tax soared from £96m last year to £1.3bn for the three months ending June. Operating profit before tax was up to £1.7bn, boosted by its £700m disposal of its stake in Saudi bank Alawwal.

However, the bank warns that it is unlikely to hit its targets in 2020. The bank is still part owned by the government, which took a stake during the financial crisis in 2008.

The results come after Barclays yesterday saw profits rise 82% to £3bn. However, it too has warned on growth next year amid uncertainty over Brexit, saying it will focus on cutting costs in the second half.

Thursday, 1 August

Spotify apologises for missing subscriber targets

Spotify founder and chief executive Daniel Ek has apologised after the streaming service missed it subscriber forecast, assuring investors the company would “make up lost ground before year-end”.

The music streaming giant added 8 million new paid subscribers during the second quarter of 2019, up 31% year-on-year, taking its total to 108 million subscribers. However, this number was 500,000 fewer than previously forecast and the missed target caused Spotify’s shares to fall by 5%.

Ek described the shortfall in paid subscribers as “execution related, rather than softness in the business”. The average revenue generated per user was €4.86 (£4.44) during the second quarter, down less than 1% year-on-year.

Subscriber revenue, which still makes up 90% of Spotify’s overall revenue, hit €1.5m (£1.4m), up 31% year-on-year. By comparison ad supported revenue grew by 34% year-on-year to €165m (£151m), which the company described as a “meaningful acceleration” from growth in the first quarter.

Within the ad supported business, US audio continued to be Spotify’s fastest growing product for the third consecutive quarter, up 38% year-on-year, while Asia remained its fastest growing region.

Programmatic and ad studio revenue grew by 71% during the second quarter and now account for approximately 30% of total ad supported revenue. Spotify’s programmatic revenue growth in the US exceeded 50% during the period.

Having experienced increased demand for podcast advertising, the streaming giant now intends to build a new tech stack to enable the same targeting, measurement and reporting capabilities as it offers for its core ad supported products.

McDonald’s trials takeaway-only store

McDonald’s is trialling its first UK takeaway-only store on Fleet Street in London.

Designed to take on the grab-and-go market, the ‘McDonald’s to Go’ store is smaller than one of the chain’s standard size restaurants as it has no seating. Instead there are compact self-order screens offering a reduced menu and a counter to collect your food.

The fast-food chain plans to offer favourites such as chicken nuggets, the Big Mac and Big Flavour Wraps, alongside a selection of prepared salads. The Fleet Street branch also features new branding on takeaway bags, as well as a new staff uniform.

Described as the first new format since McDonald’s introduced drive-thru to the UK almost 30 years ago, the company plans to trial a number of flexible formats that could look “very different” to the Fleet Street branch, depending on the needs of the local customer base.

“It’s an exciting, but challenging time to be in the restaurant sector. Changing tastes, new technology and more competition mean we need to continue to focus on investing in what matters most to our customers,” says Henry Trickey, senior vice president of development and IT for McDonald’s UK and Ireland.

“We know that ‘one size doesn’t fit all’ and that’s exactly why we are launching McDonald’s to Go – to allow us to trial different formats in different locations, depending on customer needs.”

Trickey added that McDonald’s remains “absolutely committed” to its existing formats on the high street, drive thru, McDelivery and the My McDonald’s App.

P&G head of digital media departs for Snap

Proctor & Gamble’s (P&G) head of digital media and global partnerships, Craig Stimmel, is leaving the FMCG giant to join social platform Snap as head of brand partnerships.

Business Insider reports that Stimmel, who managed P&G’s digital business with the likes of Facebook, Google and Snap across all brand categories, will launch a new team within Snap focused on getting Fortune 500 companies to spend more on Snapchat.

During his time at P&G Stimmel worked to bring creative and media closer together, helping lead media planning for the company’s cross-agency media buying and planning initiative, Woven. He also coordinated a shift within the business to bring more media buying in-house and gather first-party data. P&G now boasts more than 1 billion consumer profiles worldwide.

Commercial radio hits record audience

Commercial radio hit a record audience of 36.1 million during the second quarter of 2019, according to the latest RAJAR (Radio Joint Audience Research) figures.

The share of hours claimed by commercial radio rose 2.3% year-on-year from 45.7% to 48%, while the average weekly hours increased to 13.5, up from 13.1 during the same period in 2018.

The share of listening on connected devices – online and via apps – grew by 34.4% year-on-year, from 9.3% to 12.5%. The digital share of all radio listening rose to 56%, compared to 50.2% in the second quarter of last year.

The statistics show that 48.8 million adults, or 89% of the UK adult population aged 15 and over, listened to the radio each week in the second quarter of 2019. Some 36 million adults, or two thirds of the adult population, listen to radio via a digitally enabled platform (DAB, DTV, online or app) each week.

Furthermore, 27.5% of all adults claim to listen to live radio via a smartphone or tablet at least once a month. Some 26% of adults claim to own a voice activated speaker like a Google Home or Amazon Echo, 94% of whom have used it to listen to live radio.

M&S rolls out discounts to food customers with reusable containers

Marks & Spencer (M&S) plans to offer customers a 25p discount off each meal sold at its food-to-go Market Place counters if they bring their own reusable containers.

Market Place counters, which serve hot and cold lunch-to-go options, are available at 23 M&S stores across the UK and are currently used by 70,000 people each week. Since April 2018 M&S has also offered a 25p discount on hot drinks served in reusable coffee cups.

“Food-to-go is a growing market; so finding solutions in this space is an important part of our wider plan,” says Paul Willgoss, M&S director of food technology.

“Our Market Place containers are already widely recyclable, but we want to go a step further with the introduction of an incentive to encourage customers to switch to reusable containers.”

The measure is part of the retailer’s wider push to reduce the use of single-use plastic and ensure all its packaging is widely recyclable by 2022. M&S has already removed 1,000 tonnes of plastic packaging from across its business and has committed to cut all black plastic from its food products by the end of next year.

Wednesday, 31 July

Channel 4 unveils new eccentric British Bake Off ad

Channel 4 has unveiled its new “feel-good” campaign designed to promote the tenth series of The Great British Bake Off which will air on the network later this year.

The colourful and eccentric spot is set against the backdrop of the The Beatles’ ‘All Together Now’ and pays homage to the notion that baking can unite people. It shows Brits flocking to supermarket aisles to clear the shelves of baking ingredients, triggering a rise in the stock market.

It also features cameos from Sesame Street’s the Cookie Monster.

Chris Wood, acting head of the network’s creative arm, 4Creative, says traditionally the broadcaster has used its Bake Off launch film to celebrate the nation’s love of baking but this year decided to shift the focus to the people behind the bakes.

“[We’re] giving a voice to the diverse and passionate bakers of Britain, a nation blessed with a legacy of rich regional baking traditions, culinary creativity and a universal willingness to give it a go,” he explains.

The trailer aired last night (30 July) and will be supported by press cover wraps, posters, radio spot ads and social media activity which will go live nearer to the show’s transmission later this summer.

The ninth series of Bake Off, which aired last year, was the biggest title on Channel 4, increasing audience share across all audiences particularly 16-34 viewers with a viewership of 8.9 million on average.

Sony to launch UK’s first free-to-air movie network

Sony Pictures Television is set to launch the UK’s first free-to-air movie network as it looks to rebrand its existing entertainment networks in Britain to form one cohesive Sony-branded portfolio.

Sony Movies, Sony Movies Action, Sony Movies Classic and the seasonal pop-up channel Sony Movies Christmas will form the Sony Movies network. Additionally, the Sony-owned entertainment channel True Entertainment will be relaunched as Sony Channel.

The network will launch on 10 September with flagship channel Sony Movies offering an array of Hollywood classics, while incorporating segments such as themed Showtime Sundays and Friday Night Film Club.

Sony Movies Action will feature the likes of The Missionary Man and The Hunt for Eagle One and Bullet while Sony Movies Classic, which debuts in January 2020, will utilise the Sony Pictures’ and Columbia Pictures movie libraries.

Plus, a seasonal pop-up channel Sony Movies Christmas will be launching in September offering daily festive titles.

As part of the move, True Entertainment will also be relaunched as Sony Channel and will showcase pictures from sitcoms to popular game shows.

All channels will be available on Freeview, Freesat, Sky and Virgin Media.

Sales at Apple rise, but iPhone revenue dips

Despite a dip in iPhone sales Apple still managed to report a sales rise of 1% (£44.3bn) for the third quarter likely thanks to higher revenues in services such as its software store and music.

Revenue is also up thanks to the success of Apples wearables, home and accessories category which includes Apple Watch and Air Pods.

While sales climbed the company’s net profit dropped 13% to $10bn with the tech giant associating part of the decline to falling sales to China, down 4% to $9.16bn, following a drop of 22% in the second quarter.

The BBC reports that for first time since 2012, iPhone sales represent less than half of company’s overall sales with iPhone sales down $741m year on year.

Apple predicts sales of between $61bn and $64bn for the final three months of its financial year. However, the results still trumped Wall Street estimates and shares gained 3.5% to $216.10 in after-hours trading.

On top of this, the number of people paying Apple for any type of subscription has jumped by 55% during the last year to 420 million. And that is only anticipated to climb with the launch of its subscription TV service, Apple TV+.

Snapchat rolls out first major global ad campaign

Snapchat has rolled out its maiden global ad campaign, designed to celebrate “real friends”.

Snapchat says the campaign titled ‘Real Friends’ will roll out across key markets such as the US, Europe, Australia and India, and was produced by its internal team led by its recently appointed CMO Kenny Mitchell who joined the social media app in April after stints at McDonald’s and Gatorade.

The campaign features testimonials from 70 Snapchatters from across 12 countries who claim to maintain close ties through the messaging app.

Currently, Snapchat has already placed billaboards across New York City featuring quotes from famous people talking about friendship. The ad campaign will also run across other digital properties and music streaming services, as well as broadcast and print outlets.

This marks Snapchat’s first global paid-media campaign but the company has not disclosed how much money it’s putting into marketing.

Meanwhile, Snapchat is coming off its best quarter of user growth since 2016, welcoming an additional 13 million daily active users in the second quarter.

Shop price inflation remains steady in July

Shop price inflation remained relatively steady in July, dropping by just 0.1% and marketing the second month of deflation since October last year.

This is also below the 12 and six-month average increases of 0.3% and 0.4% respectively.

Meanwhile, food inflation eased slightly to 1.7% in July from 1.8% in June. And fresh food inflation also slowed to 1.2% from 1.4% in June.

According to the British Retail Consortium, during July, the fresh food category was faced with a mix of inflationary pressures. For instance, meat was the only deflationary element of the category, with prices falling for a third consecutive month, as global price developments are feeding through into final consumer prices.

Additionally, ambient food inflation accelerated to 2.4% in July up from 2.3% in June and non-food prices fell by 1.2%, the same decrease experienced in June

Similar to last month, July’s headline inflation figure was driven by the sharp decline in non-food prices. Inflation eased in three of the seven non-food categories.

Helen Dickinson, the chief executive at the BRC, says: “Many consumers will be pleased to see the price of non-food products continuing to fall at a steady rate, underlining the stiff competition between retailers that is driving down prices. Furthermore, food price inflation eased slightly, in part due to the fall in global food prices.”

“While we expect food inflation to remain steady over the next few months as retailers work hard to keep prices low, this will depend on whether the UK can navigate an agreement with the EU to ensure frictionless tariff-free trade continues after October 31st,” she adds.

Tuesday, 30 July

Uber cuts 400 marketers globally

Uber has cut its global marketing team by a third, laying off around 400 people, as the business tries to cut costs and streamline operations following its IPO in May.

The cuts were announced internally yesterday, according to the New York Times, with marketers in multiple offices around the world affected.

Prior to the cuts, Uber had a global marketing team of more than 1,200 people, and an overall employee base of 25,000 people.

Uber has declined to comment.

The marketing team will now have a more centralised structure, according to an internal email viewed by TechCrunch.

The reorganised marketing team will be lead by vice-president of performance marketing, Mike Strickman, who joined from TripAdvisor a month ago, and another soon-to-be-hired head of global marketing.

Strickman will manage performance marketing, CRM and analytics, while the global marketing lead will oversee product marketing, brand, Uber Eats, B2B, research, planning and creative.

Heineken blames ‘lousy’ weather as profits miss forecast

Heineken has missed profit forecasts, blaming “lousy” weather in parts of Europe and the rising cost of aluminium, which is used in its packaging.

The Amsterdam-based brewer saw a 0.3% rise in operating profit to €1.78bn for the first half of the year, excluding exceptional items. This was well below the €1.91bn expected by analysts, the equivalent of a 6.6% boost.

As a result, Heineken’s shares dropped 6% to around €97, its lowest point in eight years, after closing at a record high of €103 on Friday.

“The weather in parts of Europe has been a bit lousy, particularly in Spain, which is a big market for us,” says Heineken’s CEO Jean-François van Boxmeer.

The company expects to perform better during the second half of the year, with van Boxmeer suggesting “the peak of the price hikes [are] behind us”.

Amazon takes on Kimberly-Clark with launch of AmazonCommercial

Amazon has quietly launched a private label line of products such as toilet paper and paper towels for use in offices that will compete with brands including Kimberly-Clark.

The ecommerce giant launched AmazonCommercial under the radar in June and currently only sells a few products under the name, which are available to buy in bulk. These include extra-large rolls of toilet paper, large packs of paper towels and crates of tissues.

Amazon already offers consumer products of this type through its AmazonBasics and Solimo brands, but the launch of AmazonCommercial shows its intent to target the business market too.

Amazon describes the new venture as “a line of professional-grade products created with business customers in mind”.

Dave and CALM launch comedy festival ad break takeover

UKTV channel Dave is partnering with male suicide awareness charity Campaign Against Living Miserably (CALM) for an ad break takeover to showcase its ‘Comedy Festival in an Ad Break’.

During the four-minute slot, 17 comedians including Lou Sanders, Alex Horne and Phil Wang, will share anecdotes about friendship to celebrate International Friendship Day, as part of Dave and CALM’s ‘Be the mate you’d want’ campaign.

The partnership is designed to encourage and support male friendship to help tackle male depression and suicide, highlighting that small gestures from a friend can be a lifeline for someone going through a tough time.

Dave’s head of marketing Cherie Cunningham, says: “This placement allows us to showcase a comedy festival takeover, giving the comedians space to get into the nuances of why friendship is so important, and providing us with an opportunity to encourage the audience to reach out to a friend who might need support. I hope this campaign makes people ask themselves, ‘what can I do today, to help make a friend’s day that little bit better?’

The ad break takeover will air during Taskmaster this evening at 9.12pm.

Sports Direct reveals £605m tax bill for House of Fraser

Mike Ashley’s Sports Direct has revealed a £605m unpaid tax bill for House of Fraser, which is bought out of administration last August, causing its share price to plummet by as much as 27% yesterday morning.

The business had originally been scheduled to release the earnings report two weeks ago, and repeatedly delayed releasing the results on Friday, finally doing so after the markets had closed. The report shows problems stemming from the acquisition, including a tax bill from Belgian authorities.

Overall, Sports Direct’s earnings fell 6% in the year to 28 April, generating underlying earnings before tax of £287.8m for the period. Excluding House of Fraser, underlying earnings increased by 10.9% to £339.4m.

The company says: “If we had the gift of hindsight, we might have made a different decision in August 2018.”

Sports Direct’s shares recovered somewhat throughout the day yesterday, but closed around 7% down.

Monday, 29 July

Just Eat considering Dutch takeover

Just Eat has confirmed it is in merger talks with Dutch takeaway company Takeaway.com.

In a statement in response to press speculation, its board says: “The Board confirms that Just Eat is in discussions regarding a possible combination of Just Eat with Takeaway.com.

“There can be no certainty as to whether any transaction will take place or the terms on which any combination may be agreed.”

If it goes ahead, Just Eat and Takeaway.com would have a combined market value of around £9bn – bigger than rivals Uber Eats and Deliveroo.

Just Eat’s share price took a hit when Amazon announced a £575m investment in Deliveroo, which has since been blocked by the competition watchdog.

Cat Rock, which has a 1.7% share in Just Eat as well as a stake in Takeaway.com, has reportedly been pushing for a merger of the two.

Just Eat says a further announcement will be made in due course.

Ryanair profits slump

Ryanair’s profits have fallen 21% to £219m, which it has blamed on lower fares and higher fuel and staff costs.

Revenue rose 11% to £2bn, however, while a 6% decline in average fare helped to boost traffic by 11% to 42 million guests.

Alongside Germany, the UK was the weakest market where concerns around Brexit have weighed negatively on consumer confidence and spending.

Ryanair is expecting its full year profit for 2020 to remain broadly flat in a range of £675 to £855m. However, it says this guidance will be heavily dependent on close-in Q2 fares, H2 prices, the absence of security events and no negative Brexit developments in the second half of 2019.

Primark pushes for rent cuts

Primark is the latest retailer to push landlords for rent reductions on shops up for contract renewal, something a number of its competitors have done amid growing pressure from online shopping.

According to the Sunday Times, the fast-fashion retailer is looking for rent reductions of up to 30%, however it is not yet clear how many of its 189 stores will secure cost cuts.

“As leases come to an end, we seek new agreements that reflect the prevailing market rental rate for the property and its circumstances,” a spokesperson says. “In the current market, those rates are often lower than past rates.

“Like any responsible retailer, we have a duty to our shareholders to maintain a competitive cost base, and we seek to maintain good relationships with our landlords.”

Pantene launches Power of Grey campaign

Pantene has launched a campaign to encourage women and men to embrace and celebrate their natural grey hair.

The Power of Grey campaign, created with Grey London, Publicis Media and Ketchum London, is part of the Procter & Gamble-owned brand’s new ‘Power of Hair’ ethos, which aims to help consumers accept their hair in any which way they choose to wear it.

The billboard series launched at Westfield London featuring unbranded imagery of grey-haired models of varying ages, coupled with negative perceptions of grey hair including: ‘grey hair says – cover me up’, ‘grey hair says – you’ve let yourself go’ and ‘grey hair says: you’re invisible’.

The following day it revealed Pantene as the brand behind the message, with the declaration ‘we say different’.

“Historically grey hair hasn’t featured as prominently in beauty advertising which has left a significant number of women not seeing some “like me”. We want to change that,” says Katharine Newby Grant, Northern Europe marketing director for P&G.

“It’s part of a broader commitment at P&G on the everyday stances we take through our reach and voice in advertising to promote and encourage diversity. People prefer what’s familiar, so deliberately including people of various races, backgrounds, sexual preferences in advertising creates greater familiarity. Over time, it makes images of diversity the norm, not the exception. This latest campaign is just one example of how we’re taking these everyday stances across our brands, every day.”

Southampton FC and Kingfisher ink Premier League deal

Southampton Football Club and Indian beer brand Kingfisher have signed a multi-year global deal, marking Kingfisher’s first ever partnership in the Premier League.

As the official beer partner, Kingfisher will provide the match day beer at St Mary’s Stadium for supporters, as well as launching a special Southampton FC signature ale which will be available on draught at all home games.

Southampton and Kingfisher will also look to bring the Premier League to India through a range of content and a selection of unique experiences.

“Like ourselves, Kingfisher possesses a long, established history, while also priding itself on innovation and its ability to think differently, and these shared values mean we have a partnership that is built on incredibly strong foundations,” says David Thomas, commercial director at Southampton FC.

“Kingfisher is a world-renowned brand, and we are excited about being able to help them further grow their reputation both here and around the world, as well as working with them to provide a new gateway for the Southampton name in India.”

Shekhar Ramamurthy, managing director of Kingfisher’s parent company United Breweries, adds: “This is a hugely exciting partnership for the Kingfisher brand and we look forward to engaging with Southampton fans across the globe.

“India’s growing interest in the English Premier League is unquestionable and we are thrilled to be partnering with this dynamic club in the world’s best football league”.