UK Media & Consumer Market Update — May 6, 2020

UK Media & Consumer Market Update — May 6, 2020
6th May 2020 Zac van Manen

UK Media & Consumer Market Update — May 6, 2020

Accurate as of: 5 May 2020

Current UK status:

Visit www.gov.uk/coronavirus for all official information.

  • As of 9am on 4 May 2020, a total of 945,299 people have been tested for coronavirus (COVID-19), of which 190,584 were confirmed positive.
  • 28,734 patients in the UK who tested positive for COVID-19 have died.
  • The UK is now considered the worst affected country in Europe, exceeding the death toll of Italy.
  • The UK remains in the delay phase with lockdown restrictions preventing people from leaving their homes unless for essential work, supermarket shops and exercise.
  • On 7 May, the UK Government is required to give an update to the British public regarding any changes to lockdown restrictions. It is predicted the current measures will continue.
  • On 10 May, the UK Government is predicted to outline a phased approach to coming out of lockdown.
  • The restrictions continue to cause a collapse in commercial activity, fuelling concerns for the longer-term physical, mental and economic health of the country.

UK travel restrictions:

Visit www.gov.uk/government/organisations/foreign-commonwealth-office for all official information.

  • As countries respond to the COVID-19 pandemic, including travel and border restrictions, the FCO advises British nationals against all but essential international travel. Any country or area may restrict travel without notice.
  • Most flights in and out of the UK are cancelled. Airlines are cancelling flights approximately 7 days out from departure.
  • Brits abroad are strongly advised to return to the UK now, where and while there are still commercial routes available.
  • UK travellers are still banned from entering the US, as well as many other countries around the world.

Media commentary:

  • All travellers arriving in the UK could soon be made to download the new NHS contact tracing app to help prevent the spread of COVID-19 (Telegraph).
  • Airlines have reacted angrily to Government suggestions that the UK could implement a 14-day quarantine for anyone arriving in the country (BBC).
  • Virgin Atlantic has announced it is to cut more than 3,000 jobs in the UK and end its operation at Gatwick (BBC).
  • Heathrow’s third runway plans are said to be delayed by at least two years, as April passenger traffic dropped by 97%.
  • It is expected that health & safety will be a much higher priority moving forward in all aspects, especially travel. Air Lingus was under fire for not observing social distancing measures on its Belfast to London route (BBC).
  • The media predicts low airfares/prices in the short term, and higher airfares/prices in the long term.
  • Travel journalist Simon Calder predicts the UK and Ireland might form a ‘travel bubble’ which would permit travel between the two countries. Australia and New Zealand are looking into a similar format.
  • Media are still seeking destination/product news, health & safety measure updates, data stories and travel story ideas.
  • Travel content relating to natural landscapes, the outdoors, escapism, and getting active is increasingly sought, as following global lockdowns people believe that holidays incorporating the great outdoors will be popular.
  • General feedback from publications is that press trips are on hold, but they will look at trip invitations from September onwards. They may not be able to commit 100% just yet, however.

Consumer commentary:

  • Consumers in the UK are fearful the country is heading for a recession, with almost 90% expecting unemployment to rise as a result of the COVID-19 crisis (YouGov survey).
  • There are concerns across Europe that Chinese companies are looking to acquire or invest in distressed foreign assets during COVID-19 (Business Leader).
  • Trade talks between the UK and US began this week, with the UK government hoping that by eliminating tariffs and reducing other trade barriers with the US, the economy could rise between 0.07% and 0.16% over the next five years.
  • A survey by Ipsos MORI of 28,000 people revealed that Brits express more apprehension about easing the lockdown than any other major country. Some 71% of Brits also said they expect to feel nervous about leaving their homes when businesses reopen and restrictions on personal movement are lifted. This is likely to also affect confidence in travel.
  • It is predicted that domestic travel will bounce back first, followed by international travel. This is because should there be uncertainty regarding getting ‘stranded’ somewhere, people would rather be closer to home. Staycations and weekend trips will likely be popular.
  • Consumers are still frustrated at travel companies not offering refunds, however many do not have a full understanding of the consequences of providing refunds instead of vouchers. It is predicted a number of airlines and travel companies will go bust.

Social media:

  • Say what you will about Facebook but its Q1 report highlights a 10% increase YoY in monthly active users (MUAs) to 2.6 billion. Considering the social platform is banned in China (1.4 billion people) and only half the world has Internet access, just about everyone on Earth that could use Facebook is. Only 600 million friends to go.
  • Twitter’s also up 24% year-on-year for what they call monetizable Daily Active Usage but they are a bit worried about falling ad business. From early March, when COVID became a global pandemic, they watched as ad revenue dropped 23% year-over-year for the same period. However, they also flagged that ad engagement has increased 25%. So consumer-side demand has grown but advertising-side supply has slumped.
  • On the ad note, Facebook CPMs have crashed to ‘all time lows’, 36% lower than two years ago.
  • Research seems to suggest that social users, where they interact with brands, want a sense of normalcy — rather than endless reminders that everything’s weird. Where brands address the situation, users want them to support front-live workers, support vulnerable people, and provide reliable, accurate information.
  • One that’s skimmed through our updates so far, Pinterest has also flagged COVID-related growth in Q1. Up to 367 million monthly active users — for 9.55% quarter-on-quarter growth — the platform says that’ve seen searches increase for ‘practical solutions on how to educate and entertain the kids, how to clean during quarantine, what food to put in the pantry and how to make masks.’ Recently, they’ve started seeing people return to ‘more future-oriented interests such as vacation and event planning.’
  • While we at Rooster (or Zac, at least) don’t think that consumer behaviour will be as ‘forever changed’ as it seems while we have no other options, there’s no denying that the drive to ecommerce has been quickly accelerated. In the US, ecommerce has grown 108% year-on-year from February however average order value has decreased 31%. That said, ecommerce (again, in the US where some stores remain open) now accounts for 30% of all retail. In China, ecommerce is 37% of all retail. Just a reminder this is a huge opportunity for you if you have good products, a good supply chain, and the ability to deliver products online.

Confused about how best to communicate with your customers during this period? Get in touch.