Nike, P&O, Renault: Everything that matters this morning
Nike regards revenue rise as vindication of DTC strategy
Nike's third quarter revenue rose by 5% to £10.9bn (GBP8.3bn), prompting the US sportswear giant to claim it has the "right playbook to navigate volatility". Sales in the Nike Direct division rose by 15% during the three months to 28 February, compared to the same period last year. Digital sales increased by 19%, led by 33% growth in North America.
The Nike mobile app was up more than 50% during the quarter, overtaking Nike.com on mobile as driving the highest share of digital demand. "Nike's strong results this quarter show that our consumer direct acceleration strategy is working, as we invest to achieve our growth opportunities," says president and CEO, John Donahoe. "Fuelled by deep consumer connections, compelling product innovation and an expanding digital advantage, we have the right playbook to navigate volatility and create value through our relentless drive to serve the future of sport."
Revenue for the Nike brand hit £10.3bn (GBP7.8bn), up 8% compared to the prior year, led by 13% growth in EMEA. Sales of Converse products fell 1% to £567m (GBP431m), with strong performance in North America and Europe partially offset by declines in Asia. The sportswear giant saw its "demand creation expense" rise by 20% to £854m (GBP648m), primarily due to the "normalisation of spend" against brand campaigns and continued investments in digital marketing to support "heightened digital demand".
During the third quarter RTFKT, the digital design studio acquired in December, released the first official Nike-branded NFT, which Donahoe describes as the company's first step into the world of digital product creation. CFO Matt Friend notes Nike's ability to serve consumers directly and digitally at scale, with demand continuing to "significantly exceed" available inventory supply. The business also points to the "steady normalisation" of footfall to its owned stores, with sales up 14%.
Wholesale revenues fell by 1% over the period, with growth in EMEA, Asia Pacific and Latin America offset by declines in North America and Greater China. Over the past four years, Nike has reduced its number of wholesale accounts worldwide by more than 50% to focus on its DTC strategy. "Our confidence as we look long term hasn't changed one bit," Donahoe adds. "We've been resolute in fuelling innovation and our brand is as strong as ever.
Nike's unique strengths continue to set the pace and keep us in the lead."
P&O allegedly paying new crew 'less than GBP2 an hour'Source: Shutterstock
P&O Ferries is allegedly paying agency workers, hired to replace the 800 employees sacked on mass last week, as little as GBP1.81 an hour. The Rail, Maritime and Transport union (RMT) claims the low pay - far below the national minimum wage of GBP8.91 per hour - is an example of "shocking exploitation" and "a betrayal" of the 800 workers sacked with immediate effect via video last week. While P&O told the BBC the figure is "inaccurate", the ferry giant was unwilling to say how much it is paying the agency workers.
As some of the ferry fleet is registered in Cyprus, the company is not required to pay the UK minimum wage. The government is reviewing its contracts with P&O Ferries, according to Transport Secretary Grant Shapps, who has asked the insolvency service to investigate whether the sackings are a matter for "criminal prosecution and unlimited fines". Shapps has also asked P&O to remove any British references from its ships, given British employees have been replaced with non-UK staff.
The fleet includes ships with names such as the Pride of Hull and Spirit of Britain. It is, however, alleged the government knew about the plan for the mass firings and did nothing to prevent it. The Shadow Transport Secretary Louise Haigh claims to have a copy of a government memo about P&O's sacking plans, which was reportedly also seen by No 10.
Yesterday Marketing Week revealed the health of the P&O Ferries brand has plummeted since news broke of the staff cull last week. According to YouGov's BrandIndex tool, P&O's overall index score - a measure of total brand health using an average of its impression, value, quality, reputation, satisfaction and recommend scores - fell 18 points from 14 to 20 March. The impact of the scandal on public opinion is stark.
Consumers are now considerably less likely to recommend P&O Ferries to a friend or colleague, with the company's recommend score tumbling by nearly 22 points from 14.6 to -7.1. : New P&O crew on less than GBP2 an hour, union claims
Renault and Nestle under fire for continuing Russian operations
French car marque Renault has resumed manufacturing in Moscow after suspending production last month amid logistical issues relating to the war in Ukraine. According to Reuters, Renault has restarted operations with the backing of the French government, its main shareholder.
The car brand employs 40,000 people in the country through its controlling stake in Russian carmaker Avtovaz. Last year Avtovaz sold close to 2,900 vehicles, making pre-tax profits of EUR186m (GBP156m) for Renault, equivalent to 12% of its earnings in 2021, the Guardian reports. The decision to resume manufacturing in Russia is out of step with Renault's rivals.
Volkswagen has suspended production at its Russian sites and Suzuki has paused car exports to Russia, while Toyota has halted all production in the country and Ford has suspended its Russian operations until further notice. Another brand under fire for maintaining a presence in Russia is Nestle. In a speech to Swiss protestors on Saturday, Ukrainian president Volodymyr Zelenskiy criticised Nestle for continuing to sell "essential" products such as baby food, cereals and pet foods in Russia.
Zelenskiy is said to have pointed out the difference between the company's slogan - 'good food, good life' - and its actions. Nestle has, however, defended its decision to remain in Russia, saying it would not profit from its operations in the country. The business claims to have "significantly scaled back" its presence, suspending all imports and exports apart from "essential products", while cutting investments and marketing spend.
The Financial Times reports six Nestle factories are still delivering product to Russian retailers. By contrast, one of the latest brands to pull out of Russia is Authentic Brands Group, owner of Reebok. As of Sunday the company had suspended all branded stores and ecommerce operations in the country in response to "Russia's unrelenting attacks on Ukraine and the escalating humanitarian crisis".
ASA ramps up crypto crackdown
The Advertising Standards Authority (ASA) is accelerating its crackdown on cryptocurrencies by issuing an enforcement notice to more than 50 companies. The notice warns cryptocurrencies the ASA will monitor their advertising for compliance and implement sanctions if improvements are not made. Deemed a "red alert" priority issue for the regulator, in December the ASA banned seven crypto ads for misleading consumers and being socially irresponsible.
The current guidance requires advertisers of crypto assets to state clearly in their communications that cryptocurrencies are unregulated in the UK and the value of investments are variable, meaning they can go down. The notice insists companies must not state or imply investment decisions are "trivial, simple, easy or suitable for anyone", nor must ads imply a sense of urgency to buy, create a fear of missing out, or suggest investments are 'low risk'. Working closely with the Financial Conduct Authority (FCA), the notice applies to ads for cryptocurrencies and crypto exchanges.
The notice also covers ads or promotions involving the transfer, sale or supply of cryptocurrencies targeted at UK consumers, or those targeted globally on behalf of UK-based advertisers. The ASA's compliance team will conduct follow-up monitoring and, if problem ads persist after 2 May, targeted enforcement action will be taken to "ensure a level playing field." This will include non-compliant advertisers being reported to the FCA. The regulator believes most consumers don't fully understand how cryptocurrencies work, how volatile they can be or that they are not regulated, posing a "real risk" people could lose money.
Given the explosion in popularity of cryptocurrencies in recent years, chief executive Guy Parker explains the ASA is concerned consumers might be "enticed by ads" into investing money they can't afford to lose, without understanding the risks. "Working alongside the FCA, we'll take strong action against any advertiser who fails to ensure that their ads are responsible," says Parker. FCA executive director, Sarah Pritchard says the organisation will work closely with the ASA to tackle unclear or misleading crypto advertising, adding: "People should be wary of any promotion promising high investment returns and do further research before investing, including through the FCA's InvestSmart website.
Those who invest in crypto assets should be prepared to lose all their money."
Platform launched to link brands with Ukrainian talent
A new platform has been developed allowing brands worldwide to link up with Ukrainian creative talent. The ?!??????? platform - e!Creative in English - has been launched to help businesses commission creative professionals in Ukraine, many of whom have lost their entire income due to the war. Launched by ElloWorks by Talenthouse, the platform is intended to simplify scoping, selection and collaboration with creatives.
Talenthouse will take no commission from the projects, with 100% of the fee going directly to the creatives. The ?!??????? team have already identified more than 1,000 Ukrainian creatives who qualify for the initiative. Brands and agencies can publish their brief for graphic design, print design, illustration, infographics, digital and social content on the platform.
They will then be matched with Ukrainian creatives and can select their top pick. Once the creative accepts the task, the work begins. Clients can interact and provide feedback on drafts via the platform and will receive the work by their preferred deadline.
Upon registration, creatives will be prompted to complete their profile, including examples of their work, before they can qualify to match for a job. The fee for the work is set automatically, according to the average market rates in Europe. Ukrainian creatives will be paid within seven days of submission.
The ?!??????? platform is being spearheaded by creative director at AdBakers Ukraine, Nadia Skrynnyk, former managing director at Scholz & Friends International Ingmar Janson and head of operations at Talenthouse, Liz von Loewen. "The war not only deprived us of our homes, it also took away the opportunity to feed ourselves and shook our confidence in the future," says Skrynnyk. "But creativity knows no bounds and the work of a top-class designer or copywriter will always be in demand.
We just need to establish new connections, open new doors. That is exactly what ?!???????/e!Creative platform does, and I hope it will become a lifebuoy for many creative specialists."Source: Shutterstock
Epic Games and Microsoft to donate Fortnite proceeds to Ukraine
For a two week period ending 3 April, Epic Games will be donating all proceeds from its Fortnite game to humanitarian organisations providing relief for people affected by the war in Ukraine. Microsoft's Xbox brand is joining the games company in the initiative, committing its own net proceeds from Fortnite sales on the Microsoft Store.
Players can therefore support these organisations, including Direct Relief and Unicef, by making in-game purchases with real-world money during the time period. The initiative coincides with a new season of the game, which is always a peak time for in-game purchases. Epic Games is the latest video game company to offer its support to Ukrainian people during the war with Russia in this way.
Riot Games recently ran a player fundraiser around in-game passes and customisable options in League of Legends, claiming to have raised more than £2m (GBP1.5m) as of 9 March.
Rishi Sunak promises government investigation into P&O Ferries amid backlash
Chancellor Rishi Sunak has called P&O Ferries' mass sacking of 800 staff without warning last week both "awful" and "wrong", as he confirmed to the BBC that the government is examining the legality of the company's actions. Speaking on the BBC's Sunday Morning programme, Sunak said P&O's actions had been "appalling in the way that they've treated their workers". However, a Sunday Times report this weekend revealed ministers may have known of the job cuts in advance.
A memo sent to ministers by a senior Whitehall official outlined the strategy before it took place. Meanwhile, PR experts have branded the move a "disaster" for P&O Ferries, labelling it a case study in how not to handle a challenging situation. "It's the worst example of how to treat employees I've seen in more than 30 years of doing crisis communications," said Stuart Bruce, who advises companies on their PR strategy, speaking to the BBC.
The British shipping company, which operates ferries from the UK to Ireland and Europe, fired 800 of its staff via video call last week. Staff were told it was their "final day of employment", as the company reportedly lined up coaches carrying replacement agency staff at Dover and Hull. Government transport minister Robert Courts condemned the "wholly unacceptable" move in the House of Commons shortly after the news broke.
The company transports around 15% of all freight cargo in and out of the UK and carried more than 10 million passengers a year pre-pandemic, but has suffered, like many transport companies, due to Covid-19. The BBC reports that parent company DP World asked the government for GBP150m in direct aid to safeguard 'vital supply routes and jobs', but the request was turned down as the company had already claimed for more than GBP15m in grants and furlough, and paid out GBP270m in dividends to shareholders. : P&O sackings were appalling, says Sunak
Hermes relaunches as Evri with first TV campaign
Parcel delivery company Hermes has relaunched its brand with an ad campaign unveiling its new name and identity, Evri. The brand campaign is the company's first on TV. Created by VCCP London, the multimillion pound campaign introduces a "total revamp" of the courier service.
A 30-second film, 'New Arrival', centres around the relationship delivery drivers build with their customers, to "inject emotion" into the delivery service category. The spot will debut during Gogglebox and Coronation Street and follows an expectant mother and her partner as they prepare for the birth of their child and beyond, ending on the tagline 'Evri delivery made for you'. Supporting activity will run across video-on-demand (VOD), online video, out-of-home (OOH), online display and social media for six months, to achieve "maximum awareness" across Evri's B2B and B2C customers.
Media has been planned and bought by MediaCom. Evri's new brand strategy, visual identity and logo was created by WPP creative company Superunion. The brand intends to appear "diverse and inclusive" with a more modern look, reflecting a new customer-centric business strategy powered by technology and "embedded" in community.
Evri says it is committed to "positive" customer experiences and sustainable innovation. "Through close consultation with customers, couriers, partners and employees about what is important to them, we have arrived at an innovative and exciting new brand to serve the needs of the UK," explains head of marketing Sarah Taylor-Jones. "We are thrilled to communicate this ground-breaking brand to the market as we embark on our mission to create responsible delivery experiences for everyone, everywhere."
Hermes UK claims to have tripled in size over the past five years to become a GBP1.5bn revenue business, delivering more than 700m parcels for 80% of the UK's top retailers.
Asda opens its biggest convenience store
Asda has opened its largest 'Asda On the Move' store yet, at 5,000 sq ft. Based on an EG Group forecourt in Retford, Nottinghamshire, the store offers 2,500 Asda own-brand and branded products, including its Extra Special premium range. EG Group's foodservice brands Leon and KFC will also have a presence in the store.
Customers can also access Asda's full range through click and collect, as well as collection and returns for its clothing range George and over 100 other brands. Asda now claims 32 On the Move sites, with further openings planned across EG Group's UK forecourts to bring the total to more than 300. EG Group's head of retail integration, Barry Westley, says this is Asda's "most ambitious" convenience store to data.
"There is a real opportunity to bring customers something different by combining our experience in foodservice and convenience retailing with a carefully curated range of Asda products and services," Westley says. "The complementary strengths of both EG Group and Asda enables us to make it even more convenient for motorists to access everything they need when they fill up with fuel." Head of Asda On the Move Oliver Silvester adds the opening marks "an important step" in the supermarket's commitment to "ensure customers have greater access to our extensive range of value products and services".
Skoda unveils first UK campaign for Fabia range in six years
Skoda's latest campaign puts its Fabia range back in the spotlight with its first UK ad since 2016, which highlights safety, entertainment, and comfort.
Created by Fallon London, the 'A lot goes into the all-new Skoda Fabia' campaign aims to "humanise" features of the car, using dancers with illuminated ribbons to represent LED headlights, for example, and cheeky crash test dummies to highlight its safety rating. The film is played over the famous Disney soundtrack 'The Magic Song', or 'Bibbidi-Bobbidi-Boo'. According to UK head of marketing Kirsten Stagg, this song was picked to evoke a "warm-feeling of nostalgia", while also a subtle nod towards the brand's successful Fabia cake advert from 2007.
"The Skoda Fabia has been part of the Skoda family for over 21 years and the new model has truly been designed with the driver in mind with technology and connectivity at their fingertips," Stagg adds. "The campaign showcases that Fabia for most people will be all the car they need, and of course the finished film has the playful tone that people have come to expect from our adverts." The campaign will run for three months initially across TV, social and digital in the UK.
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