COVID-19 Crisis: Prioritizing Sustainability Amid A Global Pandemic
Happy Earth Day, and happy Wednesday! Yes, it’s Wednesday — and don’t worry, we can’t keep track of the days either. But, some good news for all you sports fans, the fact that today is Wednesday means tomorrow is Thursday and the start of the first-ever virtual NFL draft. And because you’ve been living without new sports content for quite some time, we’ll give you a pass on being a bit slow to respond for the next three days.
Now onto the briefing.
Monday was 4/20, and the unofficial “holiday” followed in the footsteps of all recent celebrations — by going virtual. Several cannabis-related brands, including Willie’s Reserve, Weedmaps, and even Ben and Jerry’s, turned their traditionally live events into virtual experiences by streaming live concerts and entertainment that support the decriminalization of marijuana and COVID-19 relief funds.
In other philanthropic news, Verizon is partnering with Twitter’s Live Brand Studio to launch #PayItForwardLive, an eight-week livestream series featuring performances by the world’s top artists and entertainers. The livestream will raise money for small businesses affected by COVID-19. Verizon has already donated $2.5M and has pledged to donate $10 for every tweet in support of local businesses, up to another additional $2.5M.
Dentsu Aegis released an interesting study this week, categorizing current consumer sentiment into five stages, mirroring those of grief, in order to understand where and how brands can best support consumers today. According to the survey, as consumers transition from “initial shock” in the subsequent two stages (i.e., coming to grips and living a new normal), they are seeking less distraction and support from brands, and more definitive action. Interestingly, Boomers want to see brands supporting their employees and donating to those in need while Millennials and Gen Zers reportedly want brands to provide them with ways to get involved.
Today is the 50th anniversary of Earth Day, and despite many event cancellations, there are still plenty of ways to celebrate Earth Day virtually this year. A few of the incredible events include Earth Day Live, Animation & Poetry for Our 50th Earth Day, and Earth Day Art Model 2020, among others.
While it may feel ironic to celebrate the earth amidst a global pandemic, now that consumers are safe at home, they’re able to see the drastic impact of human behavior on the environment — creating an even greater awareness of environmental issues, perhaps more than ever before. Even though concern for the environment has traditionally declined during periods of economic stress, searches for ‘sustainability’ have spiked by 142%, and searches for ‘sustainable living’ have increased 201% in the last 12 months, emphasizing the ever-growing importance of sustainability to consumers.
Now, let’s take a closer look at insights across key industry verticals:
Retailers of all sizes continue to face immense financial challenges amidst sustained store closures, and Neiman Marcus announced that it expects to file for bankruptcy this week. The luxury department store has fallen victim to the economic impact of the pandemic and is heavily in debt, with borrowings totaling $4.8B. Furthermore, the COVID-19 outbreak has left many retailers with piles of excess inventory and few attractive options to offload it.
Stores like TJ Maxx, for example, are implementing flash sales and out-of-season sales as a way to get rid of extra inventory in hopes of minimizing the negative financial impact on the brand. Yet, despite their efforts to continue generating revenue, industry experts predict that “this will be one of the biggest markdown seasons ever, and many brands will suffer” from it.
Despite an influx of bleak retail news, A Common Thread, the fashion rescue created by the CDFA and Vogue, represents a bright light for many struggling small businesses. The initiative has raised $4.1M for struggling small businesses, and in less than a month, received over 800 applications. Each applicant will ideally receive a grant of more than $100K by May.
As consumers across all age groups place more importance on sustainability than ever before, many retailers are pivoting marketing strategies to reflect their earth-friendly efforts. Nordstrom released its environmental goals and initiatives for 2025, including reducing single-use plastic by 50%, ensuring 15% of products are considered sustainable, donating $1M to support textile recycling innovation, and extending the life of 250 tons of clothing.
Vestiaire Collective, a luxury resale marketplace, announced the completion of a $64M investment round. Despite the current crisis, Vestiaire plans to continue transforming the fashion system and offering a smart, circular, and responsible alternative to throw-away fashion.
It seems that panic-buying has permeated the beauty space, with AOV increasing alongside sales for skin care products. According to Poshly, 51% of users said they planned to stock up on skincare products during the pandemic, placing it in third most purchased among categories. Criteo reported similar findings, with beauty sales stabilizing at over +250% MoM compared to the February average, with a large increase coming from new shoppers.
However, this initial stock-piling may decline over time, with 40% saying they would buy both fewer and cheaper products if their budgets were cut. Following the same trend, Mckinsey & Company reported consumer spending in skincare and makeup is expected to decrease 15-30% over the next two weeks.
And the longer this quarantine lasts, the longer consumers are going without a haircut. As a result, a lot of users are looking to tackle the daunting task themselves, and they are flocking to Pinterest for help. There was a 4x increase in ‘DIY men’s haircut’ and a 154% increase in ‘self hair cut.’ ‘Hairstyles’ was also one of the topics on Facebook and Instagram that experienced the largest YoY growth.
Additionally, as consumers can’t go to nail salons, more users are looking to remove their artificial nails themselves, with over a 2x increase in ‘remove dip powder nails at home’ on Pinterest. As a whole, Pinterest continues to carry clout with consumers, with 86% saying they made a purchase based on seeing a beauty or personal care pin on Pinterest.
Lastly, the beauty industry continues to try and support its community, most recently joining together to form Beauty United. Founded by BeautyCon founder and CEO Moj Mahdra, the initiative aims to support the frontline workers through the Frontline Responders Fund. Well known brands and leaders in the space, such as Gwyneth Paltrow from Goop, Huda and Mona Kattan from Huda Beauty, and Victoria Beckam from Victoria Beckham Beauty, are asking their followers to help raise $10M in addition to contributing personal beauty care products to healthcare workers.
The travel industry anticipates a prolonged return to air travel once existing travel restrictions are lifted due to faltering consumer confidence. Domestic air traffic is currently down 70% worldwide, and the IATA predicts that when restrictions are lifted, domestic and short-haul travel will pick up first, but very slowly, as demonstrated in China and Australia. According to an IATA commissioned survey, 40% of air travelers plan to wait at least six months before resuming their habitual flying, and 69% say they will do so only after their personal finances stabilize.
While airport executives still remain in crisis management mode, they’ve begun thinking about long term strategies for airport recovery once travel restrictions are lifted. One solution is increased airport automation throughout the entire passenger journey in order to minimize human contact as much as possible.
Accordingly, they’ll likely implement new touchless technologies, an advancement that was already in the works by many organizations, such as Amazon’s ‘Just Walk Out’ technology. Other automation tools that will likely be embraced across the world include identity verification systems with self-service machines, biometric checkpoints, and CT scanners.
This past Sunday, ESPN debuted its highly anticipated Michael Jordan documentary, “The Last Dance,” with only four sponsors slated for the entire series. Because ESPN has suffered an astounding 70% drop in ratings in the first week of April alone, the sports network resisted opening up more ad inventory for “The Last Dance.” Instead, it focused on four key sponsors, including State Farm, Facebook, and Reese’s, all of which will launch regular commercials and in-show integrations.
CNN has pledged to match 100% of any new digital ad investment through the end of April, which can then be used for social good messaging around COVID-19 or donated to other charities and organizations. CNN’s move follows the efforts of other TV companies that have waived fees and donated ad time to messaging around the coronavirus, including AMC Networks, which is offering creative services for free, and NBCUniversal, which has outlined efforts to become more of a consultant to marketers during the crisis.
Walmart is selling its streaming platform Vudu to Fandango, Comcast’s movie ticket vendor — marking it the third recent takeover of a streaming business by a media giant. Comcast’s acquisition follows in the footsteps of Fox Corp., which purchased the Tubi platform last month. With Fandango bringing on Vudu, Comcast is doubling down on streaming, as NBCUniversal recently launched Peacock, a streaming service available only to Comcast pay-TV customers.
Finally, Quibi, the mobile-first streaming platform that received 1.7M downloads in its first week, is reportedly already seeking out new content that can be produced remotely. The platform debuted with 50 original shows, but with most physical production on hold for the foreseeable future and without a library of licensed programming, it is now among the other TV networks and streaming platforms looking to produce shows during quarantine.
Another week, another dismal report on consumer confidence. According to Mckinsey & Company, between 30-50% of global consumers expect their household income to decrease over the next two weeks. Additionally, nearly six in ten Americans expect “widespread unemployment or depression” over the next five years, which is up 50% since February. Among those who have lost their job, only 35% think they will find a replacement in the next month. And for those who haven’t lost their job, 42% are still concerned about the possibility.
Interestingly enough, optimism and expected spend levels appear to be correlated. For example, China is actually one of the most optimistic countries, despite ending their nearly 50-year streak of a growing economy, and expects higher levels of spend compared to European countries. In the US, however, consumers are more optimistic, but they are still more reluctant to spend.
As a result of the staggering increase in unemployment, a retirement crisis may be on the rise. Americans who have lost their jobs won’t be contributing to their workplace investment accounts, let alone have extra money any time soon to contribute to retirement savings.
After the initial $350B package for small businesses ran dry, the Senate approved a supplemental $480B agreement to help small businesses, in addition to expanding virus testing across the country. $310B will go towards replenishing the emergency fund, Paycheck Protection Program, $60B will be allocated to the Small Business Administration’s disaster relief fund, $75B will be allocated to hospitals, and $25B will go towards testing. On the B2B marketing front, marketers are expecting a decline in their pipeline in Q2.
According to TOPO’s Coronavirus Impact survey, 72% of respondents expect at least a 20% decrease in their Q2 pipeline, while 30% expect a pipeline decrease of over 40%.
They also expect their budgets to be reduced or reallocated. B2B Marketing Zone surveyed over 450 B2B marketing professionals and found that while the majority expect a modest reduction in marketing budgets, 40% plan to reallocate unused live event dollars to other tactics. Top categories to reallocate budget include content creation, hosted webinars, and search marketing.
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Diving even deeper, tech marketers are better set up for success than non-tech marketers, being more likely to expect no change or potentially even an increase in budgets. Following the same trend, tech marketers are more likely to reallocate unused live event dollars to other programs, including investing in online events and paid social media in the weeks to come.
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