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Brand Moves for Monday August 10


Twenty-four weeks ago, when the gravity of the situation became clear, we started daily reporting on how brands were dealing with the COVID-19 crisis. What’s now becoming clear is that the current climate is one of near-perpetual disruption. So we made the decision to keep on telling the stories of inspiring brand leadership and strategy amid the latest crises in an anxious world. Our goal remains the same: to provide an up-to-the-minute source of information, inspiration and insight on brand moves as they happen.

Vehicle sales rose for a fourth straight month in China, with an easing in the coronavirus pandemic allowing buyers to gradually return to showrooms. Sales of passenger cars such as sedans and SUVs, as well as commercial vehicles, increased 14.9% in July from a year earlier to 2.08 million units, the China Association of Automobile Manufacturers said. From January to July, vehicle sales declined by 12.7% to 12.3 million units. CAAM didn’t break out numbers for passenger cars or other vehicle types. Shoppers in the world’s largest car market are slowly resuming buying as the government eases restrictions, raising expectations that the auto slump currently in its third year may be nearing an end. Chinese car associations are set to report the final tally for July later this month, including figures specifically for passenger cars; while demand for sedans and SUVs has shown signs of rebound, commercial vehicles such as vans have so far benefited more from China’s economic recovery.

Uber rides dropped 75% in the latest quarter as rising Covid-19 infections foiled a nascent recovery in ridership. But the company’s food-delivery business has been a bright spot for the company during the pandemic, with people stuck at home. Bookings more than doubled year-over-year and increased 49% over the first quarter. “If restrictions continue or need to be reimposed, our delivery business will compensate,” Uber Chief Executive Dara Khosrowshahi said. The amount of rides taken during the pandemic depended heavily on location; ride bookings in Hong Kong and New Zealand, where the pandemic has eased, at times exceeded pre-Covid highs, Khosrowshahi said. While bookings in New York City more than doubled year over year, however, bookings were down as much as 85% in some U.S. locations.

Facebook has joined Microsoft in condemning Apple’s App Store policies. The social media company is launching its Facebook Gaming app for iOS – primarily an app used to watch streamers play video games – but has had to remove the app’s mini games feature to pass Apple’s strict App Store approval process. Facebook isn’t happy about the compromise. “Unfortunately, we had to remove gameplay functionality entirely in order to get Apple’s approval on the standalone Facebook Gaming app – meaning iOS users have an inferior experience to those using Android,” said Sheryl Sandberg, Facebook’s chief operating officer. “We’re staying focused on building communities for the more than 380 million people who play games on Facebook every month – whether Apple allows it in a standalone app or not.” Facebook says it has had the Facebook Gaming app rejected multiple times by Apple in recent months and has now been forced to give up and remove games entirely from the standalone app launching on iOS. The Facebook Gaming app is primarily used to watch streams of games, much like Twitch is used on both iOS and Android. But on Android, the app also includes a number of mini games from Facebook’s Instant Games platform. That’s what Apple won’t allow. Apple’s argument is that the company can’t individually review games offered on streaming services, but the company doesn’t seem to have the same issues with services like Netflix or YouTube that stream millions of videos, TV shows, and movies to Apple’s iOS devices that Apple can’t possibly review. Apple’s latest App Store excuse comes just months after the company was embroiled in a bitter battle over the new Hey email app. Apple eventually approved the app after the initial rejection drew widespread condemnation from lawmakers and developers. Apple is part of a number of US tech companies currently facing potential antitrust action. The EU has also opened up a formal antitrust investigation into Apple’s App Store and Apple Paypractices. With Microsoft and Facebook openly criticizing Apple, the company is bound to face even more questions over its App Store policies in the months ahead.

Amazon has had talks with Simon Property Group about converting some of its mall spaces into fulfillment centers. The conversations started before the coronavirus pandemic, and before the latest wave of bankruptcy filings by mall stalwarts like Lord & Taylor, JCPenney, and Nieman Marcus. It’s a stark example of how e-commerce is overtaking the traditional brick-and-mortar retail establishments that used to be at the center of the shopping mall experience. Simon is the biggest mall owner in the US, and looking to fill empty retail spaces, particularly those left behind by former anchor tenants like Sears and JCPenney. Having its fulfillment center warehouses closer to residential areas would help Amazon make deliveries more quickly. While the pandemic has slammed most retailers, Amazon reported in its second-quarter earnings results that it doubled its net profit year over year to $5.2 billion.

Minglr, an open-source project from MIT researchers, is a new app designed to enable spontaneous networking alongside video conferences. You log on, see a list of other logged-in people, and click their names to request to speak to them. They’ll see that you want to talk, and can hit a button to put you both in a video call. And when they tested it at a conference last month, 86% of users said they want future virtual conferences to include a similar tool. Part of the system’s potential, MIT professor Thomas Malone said, is that some things are easier to do virtually than in-person: pairing people up at random, for instance, or matching people based on their interests. Both of those features have been requested by users, and could be particularly helpful for shy people — a key focus for the team. The team decided not to charge for Minglr: “It would be very hard to compete with companies that already had a very serious video conferencing system,” Malone said. Instead they’ve made it open source, and are hoping that Zoom and Teams will implement it.

Now that sports have restarted after the COVID hiatus, Disney-owned ESPN Plus has decided to raise its price by 20%: Starting Aug. 12, the monthly price of a subscription for new customers will go up to $5.99 per month, versus the $4.99 that the streaming service launched with in April 2018. According to ESPN, existing monthly subscribers will continue to pay $4.99 monthly for at least the next 12 months — although that is subject to change. In addition, the one-year ESPN Plus subscription will remain $49.99 annually and the price of Disney’s three-way bundle — with Disney Plus, ESPN Plus and Hulu with ads — will remain unchanged at $12.99 per month. It’s the first price hike for ESPN Plus’ base monthly subscription since it launched more than two years ago, although starting in 2020 the service hiked the price of UFC’s pay-per-view events to $64.99 each (up from $59.99 previously). ESPN Plus had racked up 8.5 million paid subscribers as of June 27, gaining 600,000 in the most recent quarter and more than tripling year-over-year, with the relatively low price point a big draw.By raising the monthly price of ESPN Plus to $5.99, Disney is obviously looking to boost revenue. But the change also seems to be aimed at driving subscribers to lock into the one-year plan or opt for the ESPN Plus/Disney Plus/Hulu bundle. Disney likes the bundle and the one-year plans because it results in less customer churn.

CVS Health Corp.’s newly acquired health insurer, Aetna, helped it weather abrupt shifts in consumer behavior during the pandemic, resulting in better-than-expected second-quarter results and a boost in its full-year forecast. People have skipped doctor visits and postponed elective surgeries throughout the Covid-19 pandemic, sending Aetna’s medical benefit ratio down to 70.3% from 84% a year earlier. Revenue for the health-care benefits segment jumped 6% to $18.5 billion, CVS said. However, shelter-in-place restrictions kept people at home after the mad dash to stock up on toilet paper and prescriptions in the spring; same-store sales in the front of the store fell 4.5%, and the number of prescriptions filled decreased 1.1%. While Covid-19 has presented challenges to CVS, it has also created opportunities. The company has opened more than 1,800 drive-through test sites at its stores. About 40% of people being tested are not CVS customers, providing the company the chance to reach new people, CVS Chief Executive Officer Larry Merlo said. CVS anticipates it will administer 18 million flu shots this season, more than previous years, according to Merlo. Health officials are planning a bigger push than usual in hopes of preventing another crisis. The company is also in talks with the Trump administration about plans for administering a Covid-19 vaccine when one becomes available, Merlo said. Earlier this summer, CVS introduced a program called Return Ready to help employers and universities devise testing strategies, as well as other programs like contact tracing. Merlo said CVS has signed more than 40 clients and has more than 1,000 prospects. In its quarterly filing, CVS outlined several downsides it anticipates related to Covid-19, including less prescription drug use with people skipping visits to their doctors, fewer front-store sales amid shelter-in-place orders and higher unemployment and a decrease in commercial insurance members due to companies laying workers off or folding entirely, as well as an unwillingness of prospective clients to switch carriers. At the same time, CVS reported $27 million of uninsured store damage and inventory losses from “civil unrest” across the U.S. in the second quarter, which ended June 30. Demonstrations, most of which were peaceful, surged across the U.S. in May following the killing of George Floyd by police in Minneapolis. Some were accompanied by looting. CVS operates about 9,900 stores across the country.

Luxury jewelry brand Yvel, from Israel, is creating what they say is the world’s most expensive COVID-19 face mask. When it’s finished, the 18-karat white gold face covering will be encrusted with 3,600 white and black diamonds and can be fitted with the top-rated N99 filters. The jeweler says it was commissioned by a Chinese businessman living in the U.S. He’s paying $1.5 million dollars for the mask. Designer and owner at Yvel, Isaac Levy, says the man who requested the mask had three conditions. “The first one, it must be a N99 approved by the FDA and the European standards,” Levy said. “The second condition was that it will be delivered before Dec. 31 this year and the third condition, which was the easiest to fulfill, was that it will be the most expensive mask in the world.” The glitzed-up face mask may not be an entirely practical piece of protective equipment, however; it is expected to weigh over half a pound.


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