Retail Industry

COVID-19 Communication Response

W E E K L Y U P D AT E
M AY 4 , 2 0 2 0

© 2020 Merkle. All Rights Reserved. Confidential

 ▪ Introduction
C O N T ENT S
▪ 5 Key Action Items for this week
▪ Weekly Updates
▪ Retail
▪ CPG
▪ Restaurants
▪ Background - Response Guidelines for Marketers

© 2020 Merkle. All Rights Reserved. Confidential 2

I N T RO DU CTI ON
C OVI D - 1 9 R E S P ONS E

As responsible marketers we need to rethink the purpose of our communications right now. Email is the one
communication platform that enters the same inbox where your subscribers or customers also get messages from their
friends and loved ones. Their inbox is now a part of their lifeline to the outside.

Communications (site, email, social, app) need to be reviewed through the lens of people who are at home and may be
looking for something to momentarily lift their spirits or to help get adjusted to their new normal. The things you need to
ask yourself when reviewing your upcoming campaign calendar include: Is our upcoming content & message relevant to a
person while at home? Does it help them through this difficult time? Assist in making life easier or more comfortable?

We need to show our authenticity as we are in all in a "shared experience." Many of your customers are now working
from the kitchen table or attempting to entertain their children. Part of the lens we recommend using for your
communications is to connect with the same feelings that you have; these may include isolation, a need for guidance or
even a feel-good moment. Use that empathy to inform your marketing.

We hope to help support you on this new challenge together.

Merkle retail response team

© 2020 Merkle. All Rights Reserved. Confidential
FIVE T HINGS YOU SHOULD DO T HIS WEEK
1 2
Deep Dive into
available data to
understand impact at a
county level
• Utilize available data
sources to deepen
intelligence
• Investigate factors
such as discretionary
spend and economic
resiliency
• Overlay 1P data for
deeper insights
4
3 4
Execute your Geo-
specific marketing
plan
• Implement re-opening
plans based on
state/local
government
guidelines
• Continue planning as
restrictions are lifted
and/or new rules put
in place
• Ensure clarity of
message to deliver a
positive customer
experience
5
Optimize your email Continue to be Initiate long-term
program based on transparent planning within the
recent insights crisis response team
• Measure what is/is not • Demonstrate how • Assess what worked
working from your your brand continues well in the current
Geo-marketing actions to support response crisis management
• Continue to optimize efforts, company process
action plans employees and local • Re-examine
• Consider open times, communities consumer journeys
CTAs, offers, Loyalty • Describe safety and triggers
Incentives, promotions measures being put • Start to develop
as well as featured in place as physical contingency plans to
product stores reopen prepare for potential
assortment/key items future restrictions
& categories
© 2020 Merkle. All Rights Reserved. Confidential 4
PLAN YOUR REBOUND
Un d e r s t a n d t h e I n s i g h t s i n t o t h e E c o n o mi c R e s i l i e n c e o f t h e US t h r o u g h
C O VI D - 1 9 M a r k e t I mp a c t D a s h b o a r d s

Which communities are ready to begin

spending? And what data do you need to steer
your business toward opportunity?
These are questions that every marketer is asking
and will need to answer to rebound from the
COVID-19 pandemic.

To inform your engagement and re-opening

strategy, we set out to uncover the status of
overall physical and economic health on the US
county-level, highlighting:
• Buying behaviors
• Discretionary spend across industries
• Liquid assets

*The Economic Resilience Index (ERI), developed by Merkle, is max liquidity of assets per capita against the % of cases of COVID-19 per county © 2020 Merkle. All Rights Reserved. Confidential 5
Key Considerations
C o n s u me r s a r e p a y i n g a t t e n t i o n t o w h a t y o u r B r a n d i s s a y i n g

Dentsu Aegis Network (Merkle’s parent)

surveyed customers on which best Attention Paid to Brands Right Now
applies to them with how closely they
are watching brands:

• 80% of consumers continue to pay

I am paying MORE attention to
close attention and scrutiny on
what brands are doing/saying
brands communication and actions. right now
34%

I am paying LESS attention to 46%

• Responses have not materially
what brands are doing/saying
changed since question was last right now
fielded on April 9-12.

I am paying the SAME amount of

attention as usual to what brands
are doing/saying right now 20%

Source: Dentsu Aegis Network – COVID-19 Tracker, part of the Taking the Pulse series. Online survey panels conducted April 24, 2020

© 2020 Merkle. All Rights Reserved. Confidential 6

I N D U ST RY I N S I G HT S: R E TAI L
R e c a p o f L a s t W e e k ’ s Tr e n d s

1 Retail Stores Plan for Opening

Americans may be reluctant to head to public places, even as
Retailers address protocols to keep employees and customers safe as they re-
open authorities allow doors to open to once again serve the public.
By specific locations, shopping centers and malls were the
Costco require all customers to wear masks top places consumers plan to avoid (45% ).
Macy’s plans to re-open some store locations on Monday May 4
Best Buy will start to reopen to customers with appointments for in-store
consultations
Simon plans to re-open 49 malls and outlets in May

2 Negative Sales and Outlook

Adidas projects a 40% decline in sales for the second quarter
S&P downgrades Macy's on worsening economic outlook
J. Crew Files for Bankruptcy

3 Pharmacies and Grocery Chains Expand Testing

.CVS, Walgreens, Walmart Inc. and Kroger Co. plan to expand COVID-19 drive-
through testing sites

© 2020 Merkle. All Rights Reserved. Confidential 7

I N D U ST RY I N S I G HT S: R E TAI L
Capturing and c onv erting the s pike in digital by increasing the level of interaction

Opt-in for Social followers to

Email & Text Channels
Expanded attention to consumer channel
propensity to incent buying behavior

NYX adds virtual product try on allowing the customer to find

their match, add to cart and checkout within Instagram

© 2020 Merkle. All Rights Reserved. Confidential

Source: attentive & eMarketer

I N D U ST RY I N S I G HT S: L O C AL B O U T I QU ES B AN D T O G E T HE R
Th e B e s t o f t h e P r e v i o u s W e e k : O f f e r i n g a n Ul t i ma t e Ho u r l y E x p e r i e n c e

More than half of surveyed U.S. consumers feel they are coming to grips or living a new normal due to pandemic. They are in a
wait and see mode, but anxious to move forward.

B R AN D S I N AC T I O N

SITUATION: In-store/service boutiques are closed

temporarily and reengaging with customers Landing page has
14 hourly prizes
ACTION: 17 local businesses collaborated to offer an (some combined)
hourly giveaway − “The Ultimate Day of Isolation”
IMPACT: Giveaway is recognizing consumers are living
a new normal and partaking in wellness/self-care habits

Name collection
+ email
+ zip

Short copy
+ strong image
+ links to each
of 17 business

Where most consumers are now Paintbox nail salon email touted giveaway with Culinista

Source: COVID-19 Tracker, part of the Taking the Pulse series by Dentsu Aegis Network. Online survey © 2020 Merkle. All Rights Reserved. Confidential 9
panels conducted March 27-29; April 3-4; April 9-12; April 17-18, April 24, 2020, respectively
I N D U ST RY I N S I G HT S: R E TAI L
The Be s t o f t he Pre v i o us W e e k : I de a s f o r DI Y a nd St a y i ng he a lt hy

Anthropologie has created a webpage where it

W H AT D O E S T H I S M E AN F O R R E T AI L ? teaches people how to make their own masks.

• Engaging customers with content and trusted advisors

to discuss topics
• Consumers want to see action from brands and how
they contribute to the response

Other Brands Highlights:

• Lowe's associates are using their DIY skills to help
frontline workers by making 26 I-V poles for a local
hospital and proving critical equipment.
Target shares "Thank You" cards for customers
• Neiman Marcus encourages people to start their to print, color and tape to their windows

day with self-care and has an online beauty

advisor to share her morning routine

As part of a Mother’s day

promotion, LOFT includes
DIY Mother’s day gifts to
complement a new outfit
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I N D U ST RY I N S I G HT S: R E TAI L
Th e B e s t o f t h e P r e v i o u s W e e k : E n g a g i n g w i t h C u s t o me r s

W H AT D O E S T H I S M E AN F O R R E T AI L ?
As TJMaxx prepares to open
• Engaging with customers on a two way conversation retail locations, they ask their
customers what they’re most
• Keeps Brand/Company top of mind, while letting your ready to shop for
customers know you’re thinking of them
• Builds anticipation for re-opening

Other Brands Highlights:

• Loft reinforces message “we can do this together”
and asks customers to tag someone who is helping
them get through this time.

Bloomingdale's engages with customers by

asking what their stay-at-home vibe is. The
retailer shares a list of products to select
from, for every mood.

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I N D U ST RY I N S I G HT S: R E TAI L
The Be s t o f t he Pre v i o us W e e k : I n-St o re Sa f e t y

W H AT D O E S T H I S M E AN F O R R E T AI L ?

• Customers want to know what retailers are doing to Anthropologie

communicates what
keep their customers safe while shopping for customers should expect
essentials when stores reopen

• An opportunity to address what safety precautions will

look like when non-essential stores start to open

Other Brands Highlights:

• Best Buy informs customers about precautions for
providing safe in-home services for deliveries,
installs and repairs.

Kroger provides a step

by step process for easy
pick-up and to ensure
safety guidelines for
social distancing are
adhered to.

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I N D U S T R Y U P D AT E S : C P G
R e c a p o f L a s t W e e k ’ s Tr e n d s

1 Consumer behavior during pandemic impacting sales and prices Spike in sales YOY from consumers shifting from out-home
to in-home dining & stockpiling on packaged goods.
Nestlé posts ‘best sales growth in five years’ due to stockpiling
Coffee prices spike as consumers hoard during virus outbreak
Dairy back in demand due to stay-at-home orders
PepsiCo adjusted earnings rise as consumers stock up, but company yanks outlook

2 New launches and other company news

Danone's venture arm invests $10M in plant-based Laird Superfood
Stephenson launches Liquid Soap 2020 to US and Canada personal care markets
General Mills launches ‘Manufacture to Donate’ program
Revlon secures $65M rescue loan

3 U.S food supply chains streamlining efficiencies

Coca-Cola reports border bottlenecks and touts localized supply chain to keep
products flowing
Half of food companies say coronavirus pandemic will make them stronger

13
Sources: CNBC.com | CosmeticsDesigns.com | FoodBev.com | FoodDive.com | FoodBusinessNews.net | WSJ.com © 2020 Merkle. All Rights Reserved. Confidential
I N D U S T R Y U P D AT E S : C P G
T h e B e s t o f t h e P r e v i o u s W e e k : Tr a n s p a r e n c y + P r o v i d i n g B o n u s C o n t e n t

W H AT D O E S T H I S M E AN F O R C P G ?

• Engaging customers with trusted advisors,

testimonials, and relevant content
Unilever brings
• Being transparent to customers to ease concerns and onboard a global
how your brand is contributing nutritionist for topics
on food, ingredients
and dining

Other Brands Highlights:

• L'Oréal and Grey Goose partner to produce hand
sanitizer
• Nestle’s "Always Open for You" initiative, helping
small independent businesses
• Mondelez and PepsiCo share Q1’20 performance,
reinforcing their companies remain strong

LovelySkin On #StopFoodWasteDay, Danone highlights their program - Family

email has good Health Study and includes a free cookbook that describes ways to use
customer the groceries available and save food.
testimonials
© 2020 Merkle. All Rights Reserved. Confidential 14
I N D U S T R Y U P D AT E S : C P G
Th e B e s t o f t h e P r e v i o u s W e e k : C P G S u p p o r t i n g He a l t h c a r e C o mmu n i t y

Nestle talks about partnering

with physicians and providing
specially developed medical
nutrition products to critically ill
patients with COVID - 19.
W H AT D O E S T H I S M E AN F O R C P G ?
• Consumers expect brands with vast resources to be
helping those in need especially healthcare workers
who are risking their lives on the front lines
• Consumers want to know how brands are caring for
their communities
• These actions are building mass brand equity that
consumers will remember for years to come

Unilever talks about Other Brands Highlights:

sending care packages to
the healthcare staff and • L'Oréal together with the French Government
mentions some of the obtain medical supplies from their network in China.
brands in the packages.
• P&G engages with customers by asking them how
they're practicing #SustainabilityAtHome,

© 2020 Merkle. All Rights Reserved. Confidential 15

I N D U ST RY I N S I G HT S: R E S TAU RANT S
R e c a p o f L a s t W e e k ’ s Tr e n d s

1 States restarting the restaurant industry U.S. Consumers miss dining and drinking out nearly twice as
much as other activities, but 42% plan to wait until it’s safe.
States begin easing dine-in restrictions for restaurants
California to reboot restaurant industry with new meal delivery program for seniors
Customers return as Texas city allows restaurants to reopen patios for service

2 Demand for restaurants plus groceries has businesses pivoting

Takeout sales outpacing delivery amid coronavirus
Pent-up consumer demand for restaurants remains strong
MealPal pivots business to offer grocery essentials, launching in New York

3 Phasing re-openings and franchises voicing frustrations

Starbucks plans to open 90% of U.S. stores by the beginning of June
Georgia restaurateurs push back against reopening
McDonald's franchisees are frustrated with chains coronavirus response

Sources: Future.ipsos.com| RestaurantDive.com| FoxNews.com | Restaurant.org | NationalRestaurantNews.com | © 2020 Merkle. All Rights Reserved. Confidential 16
eMarketer.com
I N D U ST RY I N S I G HT S: R E S TAU RANT S
C o n s u m e r S e n t i m e n t To w a r d s R e s u m i n g D i n i n g O u t A c t i v i t i e s

Consumers are split on leaving their homes, almost 86% are not H O W T O P I V O T Y O U R M AR K E T I N G S T R AT E G Y ?
leaving or feel some level of discomfort with dining out.
• Reassure consumers about the present state: While they feel
Comfort Level Currently Felt Leaving Home For The Following Reasons more positive, they are beginning to recognize that going back to
normal isn’t simply flipping a switch.
I don’t do this I do this but feel very uncomfortable I do this and feel somewhat uncomfortable I do this and feel fine
• Think and act locally for the most impact: Keep front of mind as
Where most consumers are now
Dining out 61% 12% 13% 14% U.S. economy reopens in some states, but not in others.
Attending religious services/events 61% 13% 12% 14% • Stop reacting to the crisis, instead start planning long-term:
Children's activities 55% 14% 14% 18%
Consumers are proceeding cautiously and will for some time. Brands
will need to rethink consumer journeys and understand friction points
Working at my office/place of work 50% 14% 18% 18% to reengagement.
Socializing 49% 16% 17% 17%
• Prepare for consumers hesitancy and build trust: More you can
Leisure activities 45% 17% 15% 23% go above and beyond to assure customers you are keeping a clean
How Consumers Feel About and safe environment. Ex. transparency around safety measures
Non-grocery shopping 39% 22% Leaving 20%
Home 19%
Uncomfortable Comfortable • Continue to assess and monitor frequency / tone of
Health/Medical-related appointments 38% 20% 23% 19%
communications: Time spent with media is reaching its threshold
Exercising 34% 13% 16% 37% and be cautious of communication-burnout.
Grocery shopping 15% 28% 48%
32% 52% 25%
• Demonstrate and share how supporting the crisis: Consumers
want to see action from brands and applaud those who contribute to
the response.

Source: COVID-19 Tracker, part of the Taking the Pulse series by Dentsu Aegis Network. Online survey panels © 2020 Merkle. All Rights Reserved. Confidential 17
conducted April 24, 2020
I N D U ST RY I N S I G HT S: R E S TAU RANT S
T h e B e s t o f t h e P r e v i o u s W e e k : P r e p a r e f o r H e s i t a n c y W h i l e B u i l d i n g Tr u s t

Starbucks informs customers to check Starbucks App daily

W H AT D O E S T H I S M E AN F O R R E S T AU R AN T S ?
to locate open stores near them.

• Communicating clearly to customers on where to find

re-opening information and outline layout expectations
for entering into location Ex. in app
• Engaging with your customers in their preferred
communication channel Ex. social media
• Leveraging video to assure customers you are
keeping a clean and safe environment

Sweetgreen shares a video of employees

using the best products and practices for
washing produce at every outlet. Plus, asks
customers if they want the company to do an
IG Live on how to wash produce at home.

© 2020 Merkle. All Rights Reserved. Confidential 18

I N D U ST RY I N S I G HT S: R E S TAU RANT S
Th e B e s t o f t h e P r e v i o u s W e e k : D e mo n s t r a t e S u p p o r t

W H AT D O E S T H I S M E AN F O R R E S T AU R AN T S ?

• Consumers want to see action from brands and

applaud those who contribute to the response
Subway shares stories of donating
sandwiches to the frontline workers • As delivery and takeout is evolving, especially for
and mentions how these experiences
keeps the company going.
states with restrictions, omnichannel strategies will be
just as important to staying in business.

Other Brands Highlights:

• Cracker Barrel adding 5,000 meals to their
"Healthcare Heroes“ giveback program
• Cracker Barrel and Seaforth’s "There's Comfort
Chili’s shares a message from a happy in Giving" program provides homestyle meals to
customer, who received a personalized healthcare workers for every $10 virtual gift card
note from the manager. The company
also thanks its employees for such purchased on website
gestures during the testing times.
• McDonald’s serving 4 million happy meals to the
healthcare frontline workers
• TGI Fridays delivering donated food to the
#FrontlineHeroes − paramedics/state police at
Nampa, Idaho
© 2020 Merkle. All Rights Reserved. Confidential 19
B AC K G R OUND
I N F O R MAT I O N

© 2020 Merkle. All Rights Reserved. Confidential 20

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C H A N G E S I N C O N S U ME R B E H AV I O R A R E I MPA C T I N G
B U S I N E S S E S N O W & A N D W I L L C R E AT E O P P O R T U N I T I E S

New Right Now Re-Launch New Normal

Short-term (30-90 days)) Medium-term (90-180 days) Long-term (180+ days )

Increase of time spent online, ordering & • Growth in Digital and ecommerce • Emergence of New Winners
delivering
• More comfort shopping online, even • Opportunity for online support, virtual • Continued growth of Digital
CONSUMER BEHAVIORS

in new categories tools, AR for purchases.

• Slow emergence of Brick & Mortar traffic
•

BUSINESS SHIFTS
OPPORTUNITIES
Manage Potential Inventory Shortages
Craving Connections • Altered media consumption habits
• Opportunity to build community
• Seek human connection and • Continued importance on brand value
guidance on a range of topics • Opportunity to build Brand Equity exchange
continues from how the crisis was
managed (treatment of employees and • Need to address inventory shortages
Empathetic
• Desire to help, and looking for support of COVID-19 efforts) • Aggressive proportionality to address
Brands to do the same. Want to • Opportunity to alter sales associate revenue shortfalls extending to luxury
thank essential workers & support brands
scripts/education tools
their communities
• Opportunity to Modify Brick and Mortar
New Fears Retail environment
• Fear of coming in close contact with • Improve Value Exchange as
others, fear of touching surfaces consumers expect to spend less, and
plan to put off major purchases
Economic Concerns
• Worried about finances and lower
consumer confidence
© 2020 Merkle. All Rights Reserved. Confidential 21
PLANNING FOR
ST ORE RE-
OPENINGS

© 2020 Merkle. All Rights Reserved. Confidential 22

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