COVID-19 Marketing Recovery Best Practice - An R3 White Paper

COVID-19 MARKETING BEST PRACTICE Retail / Food & Beverage An R3 White Paper. April 2020

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Marketing Lessons from Companies Showing Signs of Recovery The extraordinary situation that the world is facing as the result of the coronavirus pandemic is challenging marketers in all industries across the globe. The requirements for social distancing has impacted daily operations, logistics, supply chains, and commerce on a scale the modern world has never experienced before.

Being the first country to mobilize against this pandemic, China is approximately three-months ahead of other nations who are only now grappling with measures needed to keep people safe.

Companies in China that have closed their doors are beginning to re-open for business and some are showing signs of early recovery.

The focus of this report is to highlight the marketing strategies that have served some companies in China well during this time, and help marketers globally think about the actions they need to take to expedite business recovery and create contingencies for the future.

DRIVING TRANSFORMATION FOR MARKETERS & THEIR AGENCIES

Though every country will have a different response to how they handle this situation politically, economically, and socially, and thus determine the unique trajectory for their economies, we have been actively tracking companies operating in China to better understand what they have done to prepare for the ‘New Normal,’ which we expect to include a heavy reliance on digital, social, and e-commerce, and continued restrictions on movement and travel.

Companies like Starbucks, YUM China, and Apple - who we feature in this report - have invested in strategies early on that put them in a better position to engage customers and continue business operations online. They have taken incisive decisions to be visible supporters of local community, and their commitment to protect the wellness of their employees and customers cannot be underestimated as contributors to future brand growth.

Times are challenging for all marketers across the globe and we hope this report will lend some support to current and future decision-making.

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The Current Landscape

Marketers Hardest Hit by COVID-19 In this report, we look at companies in two categories which have been hardest hit by COVID-19. Here are some estimates of how much the pandemic will be costing some of the most impacted industries in 2020*. Amounts are in USD.

$63 billion to $113 billion

$66 billion to $77 billion

Source: IATA, Mar 9

Source: Bain & Company, Mar 26

Source: Financial Times / National Federation of Retailers, Mar 30

AIRLINES

LUXURY

RETAIL

$3.5 billion

$225 billion

$24 billion

(US Only, 3-months)

(US only)

Source: American Hotel & Lodging Association, Mar 25

Source: National Restaurant Association, Mar 18

Source: CNBC/Tourism Economics, Mar 11

HOSPITALITY

RESTAURANTS

TOURISM

(US Only, each week)

$430 billion

(US Only, 3-months)

*As the situation is constantly evolving, dates have been provided for currency.

DRIVING TRANSFORMATION FOR MARKETERS & THEIR AGENCIES

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Shrinking Market Caps of BEACH Stocks Booking, Entertainment & Live Events, Airlines, Cruises & Casinos, Hotels & Resorts (BEACH) stocks have seen a decrease of more than $332 billion in value over the past month.

$80.8B $255.1B Feb 19, 2020

c

$51.0B

c

Marriott

$177.0B Mar 24, 2020

Marriott

$37.5B $17.8B

Las Vegas Sands

$52.8B $35.1B

Delta

$48.3B $25.7B

$16.3B $9.1B Source: Visual Capitalist

DRIVING TRANSFORMATION FOR MARKETERS & THEIR AGENCIES

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Media & Marketing Decisions MARKETING, NORTH AMERICA

57%

56%

41%

63%

Source: eConsultancy/Marketing Week 2,200 participants

Source: eConsultancy/Marketing Week 2,200 participants

Source: IAB US 400 participants

Source: IAB US 400 participants

70%

46%

33%

39%

Source: IAB US 400 participants

Source: IAB US 400 participants

Source: IAB US 400 participants

Source: IAB US 400 participants

of marketers say product or service launches are delayed or under review

of marketers say that marketing campaigns are delayed or under review

increase in cause-related marketing

of advertisers have increased mission-based marketing

MEDIA, NORTH AMERICA

of buyers have already adjusted or paused their planned ad spend

of buyers have adjusted their ad spend for the remainder of Q1 & Q2

DRIVING TRANSFORMATION FOR MARKETERS & THEIR AGENCIES

decrease in digital ad spend

of advertisers have decreased traditional media spend

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About R3 Return on Agencies

We help marketers find, pay and keep the best possible agency relationships – covering Creative, Media, PR, Digital, Social, Performance, Event, Promotions and CRM.

Our Reason for Being In a word, we are about transformation. R3 was set up in 2002 in response to an increasing need from marketers to enhance their return on marketing, media and agency investments, and to improve efficiency and effectiveness.

We take the lead on improving the Integration process through proprietary software and consulting.

We want to help CMOs make marketing accountable.

Our Background We’ve worked with more than one hundred companies on global, regional and local assignments to drive efficiency and effectiveness.

Driving Transformation for Marketers and Their Agencies

We have talent based in US, Asia Pacific and Europe and partners in LATAM and Africa.

Through global work for Samsung, Coca-Cola, Johnson & Johnson, Visa, Unilever and others, we have developed robust benchmarks and process targets for more than 70 countries.

What we do We are an independent transformation consultancy hired by CMOs to make their marketing more measurable and accountable to business impact.

CLIENTS We are retained by eight of the top twenty marketers – covering 60+ markets on six continents.

DRIVING TRANSFORMATION FOR MARKETERS & THEIR AGENCIES

Return on Media

We offer professional analysis of the media process, planning and buying with proprietary benchmarks and tools to set and measure performance.

We conduct financial audits to validate and benchmark transparency.

Return on Investment

Using a bespoke and proprietary methodology, we help benchmark and provide insights into how your digital strategies perform in your category and across categories. www.rthree.com