COVID-19 Crisis: The Power of Purpose

PMG is providing near-daily observations on the economic implications of the COVID-19 outbreak. Today’s briefing is outlined below.

We hope you had a restful weekend and some time to recharge. 

This past week was filled with a lot of firsts — in fact, too many to count. More than 20% of Americans have now been instructed to stay in their homes as businesses deemed ‘nonessential’ close indefinitely throughout the country’s most populous regions. Australia announced a national shutdown, India enacted a countrywide curfew, and Europe is now the epicenter of the coronavirus outbreak with Italy and Spain seeing unfortunate spikes in confirmed cases.

The International Olympic Committee is considering postponing the Tokyo 2020 Games amid growing pressure from athletes and leaders as U.S. Senators struggle to reach a deal on the $1T+ stimulus package after a failed procedural vote in the Senate on Sunday night.

Last week, the Dow Jones Industrial Average dropped 17 percent, its worst single week since October 2008. (Of note, the stock market has lost 32% of its value in the past month.) And don’t forget the NYSE will be fully remote on Monday. New filings for unemployment benefits rose 30% last week and more are expected in the days ahead as more small businesses across the country close indefinitely as a result of the outbreak.

Many organizations including Macy’s and Airbus have withdrawn guidance as the outbreak continues to wreak havoc on business operations. Goldman Sachs estimated that the U.S. economy will shrink at an annualized 24% rate in the second quarter.

The top news over the weekend concerned the dire need for personal protective equipment and supplies for medical workers and patients across the world. #GetMePPE started late last week and stirred retailers and manufacturers into action, as brands both big and small stepped in with donations and began producing emergency supplies. The list of brands doing good is getting longer by the hour, but these efforts can be classified into a few categories.

Pledges to support medical professionals with free food and supplies. (Sweetgreen, Uber, Zara, Facebook)

Donations — both financial and product-based care packages — to small businesses and those most at-risk or on the front lines of the outbreak. (TV shows ‘Grey’s Anatomy’, ‘Chicago MD’, Walmart, Yelp, LinkedIn, Adobe)

Employee and community support, including relief funds, donations to local nonprofits and shelters, or assurances for employee financial support, paid sick leave and continued pay during the outbreak. (Artizia, Patagonia, Kendra Scott)

Manufacturing and supply chain reconfigurations to produce emergency medical supplies and personal protection equipment to be donated to authorities and hospitals for distribution. (LVMH, Christian Siriano, Tito’s, Ford, GM, and Tesla) 

PMG’s Tim Lardner recently spoke with AdExchanger on marketing through a global crisis, sharing that, “Brands can stay relevant by telling stories about what they’re doing to have a positive impact on their communities, their store associates and their customers,” Lardner said. “Some examples include why they’re being proactive about store closings in order to contribute to efforts to ‘flatten the curve,’ showing how the brand is supporting employees and their families and being a positive voice among a sea of chaos and confusion.”

Speaking about small brands, Parks Blackwell shared with Glossy, “Many brands have already evolved their message to focus on ways to help,” she said. “For years, we’ve talked about authenticity, and now more than ever, brands who find an authentic way to engage and provide relief to their customers will be able to leverage that goodwill in the long run. It is all about goodwill right now, and people will remember the brands that showed up, and the ones that didn’t.”