April 2020 Monthly News Roundup

We are pleased to share with you our roundup for April 2020. This month we highlight the rise in online gaming as digital 'third places', the use of media in more agile ways, and the continued effort to unite for social good. 

After over a month spent quarantined in our homes, the impact of the first two weeks of the crisis has subsided as companies in all industries pivoted their strategies and product launches to not only weather this challenging period, but also to prepare themselves for the changed landscape in which they must operate post pandemic. 

Within the public and private markets, activity continued to be much slower than usual. The crisis has  accelerated the struggles of department stores, with Neiman Marcus, JCPenny and Lord & Taylor all reported to be exploring bankruptcy. In perhaps the greatest retail casualty thus far, J.Crew filed for Chapter 11 bankruptcy. Prior to the pandemic, J.Crew had planned the IPO of its fast-growing brand Madewell  to raise capital and alleviate its heavy $1.6 billion debt load; however, the plan was suspended in light of the Coronavirus crisis. Apparel sales fell by 50% in the month of March and as consumer demand continues to stall, J. Crew may be only the first of several prominent brands that will be forced to close or restructure. 

Since businesses were forced to significantly cut back their operations in a very short period of time, M&A was minimal in April with the exception of the $7.6B merger between UK-based food delivery brand JustEat and the Netherlands’ Takeaway. The duo also picked up $756M in new funding. Notable investments this month included: India’s Reliance Jio Platforms ($5.7B), payment platform Stripe ($600M), Chinese entertainment platform Bilibili ($400M), telemedicine consultation app Tyto Care ($50M), digital whiteboard company Miro ($50M), behavioral health platform Sondermind ($27M), and kids sleep and mindfulness app Moshi ($12M).  

Digital Gaming Communities as the New 'Third Place'

Several weeks into quarantine, many have taken to online gaming as a means to not only entertain themselves, but to also find a place to interact with a community. As online gaming spikes, people are acknowledging that digital places are just as legitimate as the analog counterparts that they are used to. This month, the online game Fortnite launched Party Royale, a dedicated social space for hangouts and concerts. Over the course of five concerts, Fortnite and Party Royale were able to provide isolated players an event space in which to connect. In a record-breaking turn-out, 12.3 million participants came together to see the rapper, Travis Scott's performance. Fortnite is not alone in its push towards fostering digital communal spaces. BMW made a monumental shift in its global marketing budget to reflect the current rise in online gaming. In order to appeal to the next generation of consumers, BMW formed a partnership with five global gaming organizations - Cloud 9, Fnatic, FunPlus Phoenix, G2, and T1. As the digital first consumers gravitate towards platforms like Twitch and YouTube over traditional television, BMW anticipates that e-sports will become its biggest footprint and will eventually eclipse spending on sports marketing. As the Coronavirus pandemic cements the relevance of online gaming, multiple cloud service providers and telecommunications companies vie to tap into the multibillion-dollar opportunity by revealing plans to launch their own services. 

New Media Formats to Engage Consumers

While in quarantine at home, people have stayed both informed and entertained through a variety of media sources. As the mix of media platforms used by consumers evolves throughout this period, brands have modified their media mix, experimented with VR, and utilized video streaming to provide a heightened level of engagement and relevance. In early April, NBCUniversal launched NBCUniversal Checkout, a tool that allows readers of articles and viewers of videos to click a featured product, bring up listing from a partner merchant and complete the entire transaction without leaving the article or video. This push to embed commerce into the viewing experience supports the larger trend by the media industry to leverage the spike in video viewing and the demands for ease across platforms. NBCUniversal also entered the streaming wars with the launch of Peacock streaming service. Although the service is only available as a free preview to Comcast subscribers at the moment, the platform will officially launch in July to the broader audience. Another big launch this month was Quibi, the mobile only app offering shows that last 10 minutes or less. This no-commitment entertainment is built for on-the-go viewing, yet since the app launched in the midst of quarantine, many at home have chosen longer form media platforms, such as Netflix, Amazon Prime Video and Disney Plus over Quibi to help them escape the daily news. Until normalcy is restored, it will be difficult to see Quibi's true impact on consumers. In the art world, Hauser & Wirth gallery announced its first VR-based exhibition 'Beside Itself'. Under the gallery's newly launched research and innovation arm, ArtLab, Hauser & Wirth aimed to incorporate technology that would help reduce the amount of travel and transportation needed to experience exhibitions across their multiple global locations and engage art lovers during quarantine. Throughout this crisis, fitness brands have been most consistently successful by providing consumers with both engaging fitness content and functional products. In order to make home exercise enjoyable, technology and VR company, Within, introduced 'Supernatural', an in-home membership-based VR fitness service that combines workouts, guidance from coaches, music, and customizable landscapes. 

Continued Effort to Unite for Social Good 

Many companies have continued their efforts to innovate and contribute to aiding their communities. Fashion for the Front Lines, a task force focused on sourcing PPE for healthcare workers, launched a site to help companies find resources and navigate production. In hopes of preserving diversity and the next generation of young American designers, Vogue and the CFDA launched 'A Common Thread' , a fundraising project to provide support to those in the fashion industry who have been most affected. HeroX pooled all Coronavirus related challenges from crowdsourcing platforms into one site with the aim to connect innovators with opportunities to develop technologies and solutions during the crisis. In Hong Kong, New World Development worked with nonprofits to place 35 new vending machines throughout the city to allow residents to pick up sets of free face masks conveniently while also maintaining social distancing. 

If you don't already, follow us on Instagram @theretailsafari as we highlight some of our favorite brands and concepts and take you with us on our retail safaris in NYC and beyond. We wish everyone health and safety during these trying times.