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Smart home devices, sports sponsorship & coffee shop opps

Smart home device ownership, sports marketing trends and coffee shop growth are all subjects of new reports issued in the UK, which The Advertist recommends further reading of, to ensure that your agency has its finger firmly on the pulse when it comes to its new business prospecting.

Smart home device ownership is on the rise, with significant growth seen in the security area…..New digital channels and marketing opportunities have leveled the playing field for brands in the area of sports sponsorship….Brexit continues to screw up the economy, causing a significant slow-down in coffee shop brands opening new stores…..

SMART HOME DEVICE OWNERSHIP

Firstly, Futuresource Consulting has launches a new report into smart home product ownership, which states that almost half the population living in the UK, USA, France and Germany now owns a smart home device, up from one-in-three a year ago.

The research, conducted on nearly 4,000 consumers, explores ownership, satisfaction, motivations, barriers and perceptions.

The majority of growth is being driven by smart speaker ownership and smart security products. Whereas smart speakers are an entry point into the smart category, smart security is far more prevalent among advanced users, who tend to skew towards a male, younger, higher income and urban profile.

“Smart devices have captured consumers’ hearts,” commented Jack Wetherill, Principal Consultant at Futuresource Consulting. “With 47 per cent of the population now owning at least one smart device, the technology is moving swiftly through the adoption curve. Our research shows the number one motivator for purchase is to make life easier.

“Other high-ranking responses include making a home more comfortable, increasing security, improving efficiency and enabling control of devices while outside the home. What’s more, over 90 per cent of device owners are either extremely satisfied or very satisfied with their purchases.”

The USA, UK and France have all seen strong uptake over the last year, while the German market has remained relatively stable. Smart security ownership has nearly doubled, driven predominantly by the US market, with security cameras and video doorbells the most popular products. Smart speakers have witnessed similar growth, though this is focused mainly in the UK. Listening to music is still the main function of smart speakers, followed by weather reports and checking for traffic updates.

Smart appliances are also beginning to take hold, with 30 per cent of people surveyed saying they own one. Ownership is highest in the USA, driven by purchases of smart coffee machines, air conditioners, microwaves and toasters. For those who don’t already own a smart appliance, they are more likely to wait until their existing appliance breaks before they replace it.

“The future is smart,” continued Wetherill. “With two out of every five people surveyed saying they want to control their home more wirelessly within the next year, there are exhilarating times ahead for the industry.”

Futuresource Consulting’s 86-page smart home consumer research report is the fifth consumer survey providing an insight into smart home devices and appliances. Small and major domestic appliances are covered, alongside lighting, climate control, speakers, and security and monitoring, as well as a range of other devices.

The report is supplied with a detailed excel workbook that contains many thousands of datapoints enabling clients to interrogate the data according to their particular interests. For further information, head to www.futuresource-consulting.com.

THE BIGGEST TRENDS AFFECTING MARKETING IN SPORTS

Once limited to a few big-name sponsorship deals, new channels have opened up opportunities for all sorts of sports marketing deals and there are now new and exciting opportunities for both brands and sports clubs to build deeper and more meaningful relationships with their audiences.

Women and Sports

This may surprise some, but a recent report from Nielsen Sports found that 84% of sports fans consider women’s sport to be more progressive and inspiring then men’s sports, which is driven by money. This means the public is incredibly receptive to women’s sports and this is a huge opportunity for marketing. Consumers want the brands that they go to, to represent equality, diversity, and inclusion as some of their top causes.

Brands are already aware of this trend. For example, Nike has included women’s sports front and centre in its ‘Dream Crazier’ campaign recently. This was narrated by Serena Williams and represents a call for women in sports to stand up to gender biases and stereotyping in sports. This was great for the conversation around creating a level playing field for women in sports.

Virtual and Augmented Reality

It’s still the early stages of virtual and augmented reality (VR and AR), but there are already instances of brands and clubs using platforms like Instagram or Snapchat to build an interactive or immersive experience for their global audiences, in and out of the stadium. There are benefits to this technology for advertisers and broadcasters as well as teams and brands.

Recently, there have been trials in technology to make the experience of TV viewers more personalised, specifically during football games. One notable example was in 2018 when the Football Association and ITV set up a test during a friendly between England and Costa Rica. As per Henry Dodds, a sports writer at WriteMyX and BritStudent, “some dynamic perimeter ads were set up around the pitch and streamed to different audiences depending on their location using something called Virtual Replacement Technology. It essentially allowed different viewers to see different advertisements.”

Social Media

Social channels continue to be a major factor for fanbase building and boosting brand opportunities for individual athletes and sports teams. Social channels such as Instagram and Twitter are great platforms to build and engage fanbases and communities. It’s also a prime advertising space, that can help develop a more human side of athletes and give fans virtually 24/7 access to their favoured sport or athlete.

Thanks to Instagram stories and live streams, athletes and teams can give their audience some exclusive or access behind the scenes to training sessions and more. This is a great opportunity to make fans feel more connected to their heroes.

Cause Marketing

There is a move in the sports industry for cause marketing, which involves personalities using their reach and authority to bring key issues to light. This includes sports legends speaking up about mental health issues and promoting related charities, especially in terms of men’s mental health. By showing powerful male athletes openly discussing feelings and the importance of supporting each other, there is a strong message about the need to move past traditional masculine stereotypes.

Todd Egans, a marketer at 1Day2Write and Next Coursework, explains that “brands should be exploring narratives to involve their target audiences that can make supporters feel closely linked and connected to the successes of their teams and clubs.”

ESports

Esports has grown enormously in the last few years, which hasn’t escaped sports teams. Because football teams, in particular, have a huge fanbase that plays video-games, these clubs have seen the benefit of eSports. For example, the Spanish football team Real Madrid has unveiled plans for a high-tech stadium that will include an arena for eSports. In 2018, the Tottenham Hotspurs football club was one of 20 Premier League teams that set up a fan competition which offered winners the chance to compete and represent their team in the ePremier League.

There is a ton of investment in eSports right now and all indications are that this will continue to be a trend that dominates sports marketing in years to come.

AND NOW FOR COFFEE..

Brexit uncertainty and tough high street trading have taken their toll on branded coffee shop openings, according to a new study.

The UK branded coffee shop market grew by just 70 outlets in 2019 to 8,222, an increase of 0.9% year-on-year, according to Project Café UK 2020, Allegra World Coffee Portal’s report on the UK café industry.

Twelve months ago, researchers reported that the market had grown 8.7% year-on-year.

The cost of property, labour and the impact of Brexit were cited as the top three challenges facing coffee shops, with 56% of industry leaders believing there was still plenty of growth potential for branded café chains in the UK.

Allegra expected reduced uncertainty on the UK’s future relationship with the European Union, alongside major merger & acquisition activity including Coca-Cola’s purchase of Costa Coffee and Causeway Capital’s rebuilding of the Patisserie Valerie brand, to bring increased investment and outlet growth in 2020.

“Following two years of tough trading, the UK coffee shop market has held up well against significant headwinds,” said Allegra Group CEO and founder Jeffrey Young.

“We expect outlet growth to regain momentum during the next two to three years and forecast better times ahead for those operators that can readily capitalise on the opportunities and adapt to the challenges in what will remain a highly competitive market.”

World Coffee Portal has forecast further transformation in the industry in 2020, with major brands launching new formats, including travel kiosks, drive-throughs and specialised sub-brands.

It expected the UK branded coffee shop market to top 9,400 outlets by the end of 2024, displaying a five-year CAGR of 2.7%.

Villa Plus launches social drive with agency appointment

Specialist European holidays company Villa Plus has appointed performance marketing agency Journey Further.

The agency will handle Villa Plus’s digital strategy across paid, organic and social channels following a competitive pitch.

Villa Plus offers villa holidays in destinations throughout Europe with over 1,700 properties and 6 resorts.

The firm previously used three separate agencies but has opted to consolidate its marketing activity with Journey Further.

It will be responsible for PPC, SEO, programmatic, paid social, digital strategy, and both digital and traditional PR.

Taking a data-driven approach, Journey Further will be utilising Villa Plus’s channels to maximise return on its investment on marketing spend.

Simon Lifford, head of sales and marketing at Villa Plus, said: “As a business, we need to push the boundaries of performance marketing, which we weren’t able to do before.

“Journey Further’s clarity at speed model plays directly into this, and with their data-driven approach consolidating all our marketing activity to one agency made sense.”

Dan Peden, strategy director at Journey Further, added: “We are extremely excited to be working with such a well known and respected company as Villa Plus.

“The travel industry has had a turbulent year, yet we recognise the ambitious growth targets Villa Plus has, both in the short and long term, and believe that by implementing a fully data-driven and integrated approach, we will be able to help them deliver such growth.”

Starling Bank aims to double customer numbers in 2020

Starling Bank has stated that its New Year’s resolution is to double its customer base to two million in 2020.

After focusing on the technology powering its services, the challenger bank is now investing heavily into its marketing and adopting a brand-led approach.

But with traditional banks getting more tech-savvy and increased competition from other fintech start-ups encroaching on its user base, it won't be an easy ride for the company as it endeavours to break-even this year.

Starling Bank - now the third biggest neobank - was established in 2014 by Anne Boden, offering mobile current accounts for business and personal users.

“We’re not a start-up anymore. We’re like a gangly teenager, in that we’re still learning but we have the energy of youth behind us,” said Rachael Pollard, Starling Bank's head of growth.

2019 was a pivotal year for the brand. It appointed its first-ever head of growth, reached one million customers and launched its first-ever UK-wide TV campaign. It was also voted the top bank for the second year running at the British Bank Awards.

“We’ve been very British about the way we position ourselves, and how much we shout out about what we do,” admitted Pollard. “We needed to take a more bombastic approach to let the UK know more about us.”

In an attempt to escape the London bubble and become nationally recognised, its first major investment into marketing resulted in a TV campaign to present Starling as a national bank for affluent, older customers. It worked. A midway campaign dip test reported that prompted brand awareness had jumped up to 38% from 22% across the country.

Hitting the ground running in 2020, Pollard said Starling Bank will continue to plough money into big brand marketing. Throughout January, which Pollard says is a “massive month” for the company, there will be a refreshed version of its October campaign.

Beyond that, it has another major through the line campaign in the works, with a planned release in the first quarter. “It will be different to the current creative, but a continuation of the theme,” she divulged.

This year, Pollard said that “travel will be a much bigger strategic campaign.” ‘Travel with no fees’ was a small campaign the team launched last year that targeted all the main airport terminals and train stations.

All of this is in aid of a big customer target the banks bosses have set. “We’re really gathering pace,” said Pollard. In 2019, the bank had doubled its 500,000 customer base by November. The key KPI for 2020 is to reach two million customers.

Despite the one million milestone, compared to other fintech players, Starling Bank still has a lot of catching up to do. Though while it trails behind Revolut’s eight million customers, and Monzo’s 3.3 million, Starling Bank feels it has the edge over competitors due to the kind of customers it’s attracting.

“If we were going for pure volume, it would be different. But we want two million higher-value customers, who are harder to reach and harder to acquire,” Pollard said.

While Monzo has positioned itself as the card for the young professional, Starling Bank has set its sights on the 25 to 44, more affluent, bracket. A smart move, given Monzo is now having to expand its client beyond the young millennials who are taking advantage of its £500 overdraft limit.

However, to assuage trepidation among consumers who are nervous about pivoting away from big, traditional banks is not an easy task, though Starling hopes its big brand-awareness campaigns will "convince people to download the app and give us a go."

Starling is also banking on the residual mistrust of banks leftover from the 2007-2008 banking crisis. “The older bracket is still burned by the banking crisis,” Pollard said. “We want to be a genuine alternative bank for those affected by the banking crisis,” Pollard said. Starling claims to be the only fintech that is fully-regulated and signed up to all the other codes of conduct, which she said is “really good for securing people’s money and giving them peace of mind.”

While fintech companies benefit from being digital-first, it is questionable how much longer their superior tech will set them apart from traditional banking.

With traditional banks ploughing budgets into digital in a bid to catch up with fintech disruption, Starling Bank needs to keep on its toes. NatWest has even launched a banking app called Bó, designed to compete with the start-ups.

“My hope and ambition for Starling is to disrupt an entire industry, for the better,” said Pollard. “In the future, I hope the word ‘fintech’ becomes redundant, and there are only banks.”

Pollard’s hopes for the future lies in the bank abilities to stay ahead in terms of tech capabilities and greater awareness in places outside of London.

She said that, unlike Monzo who had plans to release a metal card that was criticised for being ‘faddish,’ beyond scaling up its user base, through 2020 Starling hopes to run its own race though “new functionalities on the app. We’re constantly testing and trying to make our product better.”

William Hill surging to the front with latest financials

William Hill expect to better analyst estimates for 2019 after the group's trading statement forecast profits of £143-148 million despite increasing market regulation.

The increase in full-year adjusted operating profit was driven primarily by good sporting results at the end of last year.

Retail betting generated profit in excess of £70m despite the group closing 700 betting shops last year in the wake of the stakes cut on fixed-odds betting terminals.

The gaming division also performed ahead of expectations following the acquisition of online casino Mr Green last January.

The burgeoning US betting market was an area of strong growth for the group, who announced they now expect to break even in the territory having previously anticipated up to a £20m loss.

William Hill's share price sits at 184.9 pence, up 0.55p, following the announcement. The publication of the group's full financial results for 2019 is expected next month.

The betting industry continues to become an increasingly regulated sector in the UK, with online betting and advertising particular areas of concern for regulators.

Recently, the Gambling Commission announced the possibility of banning betting using credit cards and a crackdown on VIP customer schemes designed to foster relationships between bookmakers and high-volume bettors.

William Hill CEO Ulrik Bengtsson said: "The group has delivered a strong operating performance, ahead of our expectations and against a challenging regulatory backdrop.

"We made good progress on a number of fronts, including our retail business, online and in the US, enabling us to deliver on our long-term strategic ambitions. We look forward to building on these efforts in 2020 with a strong focus on customer, team and execution."

Elsewhere, William Hill announced the departure of chief financial officer Ruth Prior after her decision to enter the private equity sector.

Prior has been a senior figure at the group since 2017 and Bengtsson added: "I'm very appreciative of Ruth's support and professionalism since I took on the role as CEO.

"She has supported the business during what has been a period of unprecedented change for the sector and we would like to thank her for all she has done for William Hill."

Walkers spices up January with Wotsits NPD

Walkers is adding two new flavours to its Wotsits range – Flamin’ Hot and Sizzling Steak.

The launch will be supported by a marketing campaign, including in-store shopper marketing from February and TV and digital advertising from March.

Fernando Kahane, Walkers marketing director at brand owner PepsiCo, said: “Shoppers are expanding their repertoire within the savoury snacks category and actively seeking out flavours that pack a punch.

“Meat and spicy flavours, in particular, have experienced double-digit growth over the past year.”

Online sales surge reported for The Fragrance Shop

The Fragrance Shop has revealed a surge in online sales during Black Friday thanks to its click and collect offering.

In the seven weeks to January 4, sales were up 1.2%, with online revenues increasing by 17%.

The retailer said its click and collect orders jumped 40% and Black Friday was “increasingly popular”.

“Chanel and Dior performing very well and Sauvage maintaining its position as the favourite brand bought by Fragrance Shop customers over the holidays,” The Fragrance Shop said.

Meanwhile, sales for the full year to March 2019 were up 2.6% to £124.7 million, although underlying pre-tax profits were down 5.5% at £15.5 million compared with a year earlier.

The Fragrance Shop said it was a “robust performance in the face of kamikaze discounting at distressed retailers that made the market acutely competitive, rising wage costs and increasing rates bills”.

House of Fraser’s collapse last year took a toll on The Fragrance Shop, which saw its concessions closing after the department store chain was acquired by Mike Ashley’s Sports Direct.

However, The Fragrance Shop chief executive Sanjay Vadera said the retailer has not shut any stores in the past year.

“We’ve opened 15 stores over the last 18 months because it’s clear the winners in retail will be those that can successfully integrate their digital and physical businesses to look after a customer that wants to pick and mix between the two,” Vadera said.

Transferwise launches direct debit service for UK & Europe

TransferWise has announced the launch of its Direct Debit feature.

Now any TransferWise customer with a GBP and EUR account details will be able to set up direct debit payments in the UK or Europe without the need for a local bank account.

For anyone living or working abroad paying a recurring subscription like a gym membership, council tax or a phone or energy bill, managing payments between countries and currencies will now be easier, cheaper and more convenient than before.

The fintech states that the service will be free to set up with no subscription or extra charges. There will also be an auto currency which means if there isn’t enough money in one currency balance, the business will convert to the next cheapest currency automatically at the mid-market rate.

Lars Trunin, Head of UK Product at TransferWise, commented: “We’re on a mission to help people manage their money more conveniently and cheaply across borders, no matter where they live. That’s why we’re really excited to be able to bring the convenience of borderless direct debits to our global customers paying bills in the UK and EU.

“Direct debits have traditionally been a feature reserved for domestic banking with high street providers notoriously charging customers for refused payments or worse still issue payments through unauthorised overdrafts, resulting in high interest charges for customers.

“Now with the TransferWise account, international customers can benefit from the convenience of this local banking feature and if there’s not enough money for a payment, we’ll let you know you need to add to your balance, so you’ll never be caught out.”

Sales victory for wargames retailer Games Workshop

Games Workshop has hailed record sales and profits in its half-year report and was upbeat about its Christmas performance, as it continued to defy the challenges plaguing the retail sector.

For the six months to December 1, the miniature wargames retailer said its pre-tax profit rose 44% year-on-year to £58.6 million.

Half-year sales grew 19% to £148.4 million, while on a constant currency basis sales were up by 16% to £145.6 million.

Of its sales, Games Workshop said trade generated £76.1 million, up from £61.4 million last year, retail generated £45.3 million compared to £42.6 million while online sales came in at £24.2 million, up from £21.2 million.

The retailer, which has rebranded much of its store estate to Warhammer but still trades as Games Workshop online, added that sales for the rest of December were in line with the board’s expectations and that the business was “in great shape”.

The firm said “product innovation” was a key focus during the half-year period, as well as the opening of 12 new stores and a 48% surge in users of its community foums.

Games Workshop also announced a special dividend of 45p.

“Our business and the Warhammer hobby continue to be in great shape,” Games Workshop chief executive Kevin Roundtree said.

“We are pleased to once again report record sales and profit levels in the period.

“The global team have worked their socks off to deliver these great results. My thanks go out to them all.”

Klarna links up with indie retail brand Vend

Global payments provider Klarna has announced a new partnership with POS software company Vend.

The collaboration gives customers of boutique retailers more flexible payment options, levelling the playing field for small business to compete with enterprise retail and offer Klarna’s smooth and easy payments in-store across the United Kingdom.

Hailed as the cornerstone of the high street, independent retail is celebrated for ‘retailtainment’ and experiential concepts that continue to draw shoppers to stores. While workshops, local events and initiatives attract loyal customers, innovative use of retail technology is key to support the success and profitability of these small businesses. The use of new, innovative tech frees up time for staff to focus on their unique, winning formulas that ensure local high streets can thrive.

Vend’s collaboration with Klarna puts an enterprise tool in the hands of small business retailers, so that beloved curated ‘hard to find’ items stocked by independent retailers can now be sold using buy-now-pay-later flexibility in-store on Vend ePOS, and online.

Small businesses can create a flexible checkout experience that’s easy to set up. Connecting to any smartphone, customers will be able to pay with Klarna by scanning a QR code or using a payment link provided by SMS or email, before filling out their details and selecting a payment option. Klarna then makes a real-time decision made in just seconds and Vend’s ePOS system will automatically reconcile Klarna sales at the end of the day.

Vend chose to partner with Klarna due to the payment provider’s considerable global reach and their impressive roster of brands and retailers, including ASOS, Made.com, Boohoo, and Samsung. Klarna has recently expanded it’s in-store capabilities with the flagship launch of schuh in December 2019. The collaboration with Vend will ensure boutique retailers receive payments upfront, while customers can pay later in three equal instalments.

Luke Griffiths, UK General Manager at Klarna said, “One of the most exciting things about working in this space is the opportunity to partner with other fintech and payments services who are also seeking to revolutionise the shopping experience. Our partnership with Vend shows our commitment to supporting small businesses. Combining our flexible payments with Vend’s ePoS system offers a superior shopping experience for customers and retailers alike.

“As we grow as a business and redefine the way people pay, we’re excited to continue these partnerships and bring flexible payments to more shoppers and retailers globally.”

Travelport names its new Chief Operating Officer

Travelport has appointed John Elieson as its new chief operating officer.

Elieson will be based in Travelport's global headquarters in the UK, when he relocates later this year.

He was previously president and CEO of Radixx International, a company that provides passenger services system technology to the airline industry and was recently acquired by Sabre.

He has also enjoyed a 30-year career with Sabre and its former parent company American Airlines, including roles as the leader of global sales for Sabre Airline Solutions and Sabre Travel Network's leader of Global Accounts and Traveler Experience.

Travelport CEO Greg Webb said: "John has a consistent history of driving growth and building highly effective teams.

"He delivered transformational expansion of the Radixx business and I expect to see a similar impact at Travelport. He brings a wealth of industry and transactional experience to my leadership team and we look forward to welcoming him to Travelport."

Elieson said: "Travelport has ambitious plans for its future, so it's an exciting time to be joining the company. I look forward to working with Greg, the executive management team and my new colleagues as we work to make Travelport the technology partner of choice for the global travel industry."

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