THE CHEAT SHEET
NewFront Advertising: Who Will Buy?
- Condé Nast will make its big pitch to digital advertisers next week, trying to entice spending to its video channels in a grim market
- According to Bloomberg, high-end brands have slashed their ad budgets by between 30 and 80 percent in response to the pandemic
- Condé Nast is in a particularly delicate position; it’s both financially vulnerable and facing fire for its track record on race and inclusivity
Condé Nast’s annual NewFront presentation is a crucial moment for the publishing giant to bring in ad revenue for the year. Much like TV upfronts, the NewFronts allow media players to showcase new programmes, formats and advertising capabilities to brands and advertising agencies. As revenue from print advertising has dwindled, video revenue has taken on greater importance, and become a key focus for Condé Nast in recent years. That’s especially true this year, as publishers begin to feel the financial impact of Covid-19 and advertising budgets shrivel. Condé Nast will be pitching alongside digital streaming and social players, including Hulu and Snap.
Condé Nast is facing a double whammy as it seeks to navigate the tumultuous financial climate and mounting criticism of the company’s internal corporate culture. High-profile executives have had to resign as scandal swirled around the organisation. Earlier this month, speculation was rife that Anna Wintour would step down. The publisher has pushed back. Wintour remains a valuable asset. But how all this will affect advertisers' appetite for the company remains to be seen.
The Bottom Line: Condé Nast needs to sort out its internal cultural issues, but bringing in marketing dollars may prove a bigger existential crisis.
The Rise and Rise of Activewear
- Nike reports its results for the 2020 financial year on Thursday
- The sports giant has outperformed the market this year, as investors bet on the brand’s ability to weather the coronavirus crisis
- While consumers continue to hold back on purchasing dressier apparel, sales of activewear have held up much better.
For most of the fashion world, things look bleak. But activewear and loungewear have proven relatively resilient to the retail crisis brought on by Covid-19. While overall apparel sales fell 10 percent in the first four months of the year, sales of activewear only declined 2 percent, according to research firm NPD. Nike’s results on Thursday will provide more insight into how the overall market is doing.
Last month, Nike warned sales would fall in its fourth quarter because of Covid-19-related store closures. Adidas has said it expects sales to fall at least 40 percent in its second quarter, but also pointed to positive signs of a rebound in China. How the brands ultimately perform is not only down to their products. Adidas is also facing a public scandal over its handling of racial issues in the workplace. However, consumer demand for activewear remains comparatively strong.
The Bottom Line: The coronavirus pandemic has entrenched consumers’ already growing love of activewear, with the key players in the market looking well positioned for the future.
Stores Are Open For Business, Will the Shoppers Come?
- New York will begin the second phase of its economic reopening, allowing stores to have customers back inside for the first time since March
- Stores in the UK re-opened last week, with many attracting long lines and crowds on the first day of trading
- In countries where stores have been open for longer, sales have only gradually begun to return
Shops in fashion’s biggest capitals will be back in business next week as New York permits retailers to allow customers back in. But the shopping experience is quite different than before the coronavirus pandemic, with most countries establishing new measures to mitigate the risk that shoppers could spread the infection anew.
Though crowds gathered outside flagship stores for Primark and Nike when they reopened in the UK last week, few anticipate consumers will come flocking back. According to Reuters, foot traffic in English shopping centres was still down more than 50 percent in the first days of reopening compared to the same time a year earlier.
The Bottom Line: Reopening is not a return to normalcy and may leave companies in a more challenging position as costs ramp back up but sales remain sluggish.
Professional Exclusives You May Have Missed:
- The Logic Behind Givenchy's New Designer Appointment
- As Sies Marjan Closes, What Is to Blame? The Pandemic or the Fashion System?
- Chanel Sees Trouble Through 2021: What Happens Now?
- Following Mass Layoffs, Diane von Furstenberg Faces an Uncertain Future
- Fixing the Whitewashed Influencer Economy
- Asia’s Recovery Roadmap for Luxury
- How to Do Pride Marketing Right
- The Future of Suits
- Could the Pandemic Make Retail Better?
- Michael Kors Is the Latest Brand to Depart from the Fashion Calendar
- 6 Ways to Boost Sales During the 618 Shopping Festival
- Why This Black-Owned Beauty Brand Doesn’t Need Sephora
The Week Ahead wants to hear from you! Send tips, suggestions, complaints and compliments to firstname.lastname@example.org.
Was this BoF Professional email forwarded to you? Join BoF Professional to get access to the exclusive insight and analysis that keeps you ahead of the competition. Subscribe to BoF Professional here.