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The IADS is at a crossroads when it comes to helping its members, by at the same time addressing their most operational questions and coordinating the informational flow, but also helping them to address future challenges, by questioning their methodology and providing a different point of view.

This is the reason why the IADS invited Eugenie Rives to share her view on the management of innovation and transformation, as the Early Project Managing Director at  Project X, Alphabet’s “moonshot factory”. Before joining X, Eugenie led Operations for Google in France and Sub-Saharan Africa. Before Google, Eugenie worked for Alcatel in Mexico city, managing projects to connect cities and public infrastructure online.

Alphabet’s moonshot factory is the place where uncomfortably ambitious, world-changing ideas are developed. These early-stage moonshot teams are exploring radical new ways to solve some of the world’s biggest problems using breakthrough technology. She explained how a moonshot project works.

Introduction: Google Project X’s purpose

Google Project X was created 10 years ago by the Google founders, Larry Page and Sergey Brin, to develop the Google of the future. In that framework, Project X’s mission is to invent and launch “moonshot” technologies where world-changing ideas are developed to make the world a better place. Moonshot teams are exploring radical new ways to solve some of the world’s biggest problems that cannot be solved with conventional, incremental ways of thinking and behaving.

A moonshot is a project which sits at the intersection of the 3 following ingredients:

1. A huge problem affecting millions or billions of people,
2. A radical, sci-fi-sounding solution that may seem impossible today,
3. A technology breakthrough giving hope that the solution could be possible in the next 5-10 years.

Managing such projects requires a different thinking process as well as alternative management methods which could inspire retailers.

The “moonshot” factory: a few examples to understand Project X and its variety

Waymo, formerly Project X’s self-driving car project, is the perfect illustration of a “moonshot”. 1.4 million people dying each year in car accidents is a huge problem. LiDAR (machine learning and smart sensors emitting pulses of infrared light instead of radio waves) is a true breakthrough technology which will empower a radical solution: a self-driving car.

Tapestry is a “moonshot” for the electric grid that aims to speed the transition to a resilient, carbon-free electricity system. It develops new computational tools that will create a holistic and dynamic picture of the grid.

Intrinsic is a robotics software and AI “moonshot” working to unlock the creative and economic potential of industrial robotics for businesses, entrepreneurs and developers. The team is developing software tools designed to make industrial robots easier to use and more flexible so that more people can use them to make new products, businesses and services.

Using beams of light, Taara is working to bring high-speed, high-capacity and affordable internet access to the 4 billion unconnected and under-connected people around the world.

Tidal is developing new tools to protect the ocean while preserving its ability to support life and help feed humanity, sustainably. To that end, the team is working with ocean farmers to develop an underwater camera system and a set of machine perception tools.

How does Project X work?

Filtering ideas and building projects 

Teams at Google Project X don’t want to work respecting processes. As a result, there is only one process: filtering. Each potential “moonshot” starts with an idea. A rapid evaluation (a few weeks) of the very interest of the project is done and a small team is created to enter the project’s early stage phase (lasting a few months). If all goes well, it becomes an X project which will last several years. During that phase, the team evaluates the risks and possible applications of the project. The incubation phase lasts 1 to 2 years before ‘graduating’ to become a 100-people project.

There is an additional filter to decide which project to work on, considering there 2 types of projects:

•    The ones with 100% chance of helping 10 million people.

•    The others with 10% chance of helping 1 billion people: this is the kind of project Google Project X is focusing on.

Six principles relying on people and culture

Project X is a “moonshot” in and of itself. Its breakthrough idea isn’t technology: it’s the people, culture, values and practices that can make radical, purpose-driven creativity the path of least resistance. Breakthrough innovation happens when passionate teams of people have the audacity to challenge each other’s perspectives and aim for what seems impossible.

To that end, 6 work principles are applied at every step of the way. Some are counterintuitive to how projects are often managed in companies:

1. Aim for 10X, not 10%: the surprising truth is that it’s often easier to make something 10 times better than it is to make it 10% better. Applying this principle is also more exciting for people involved in the project and forces them to free themselves from existing assumptions, always questioning the status quo.
2. Work on the hardest things first, even if it can be seen as counterintuitive. If someone was asked to train a monkey to stand on a pedestal and recite Shakespeare, most people would start by building the pedestal, because it’s easier even though training the monkey is a crucial task. When taking “moonshots”, it’s almost always best to take on the hardest, most important part of the problem first, rather than waste time on relatively simple tasks that can be achieved later on. Working on the hardest thing first is basically the opposite of what companies usually do: look for the ‘low-hanging fruits’. At Project X, small wins are not considered fulfilling while overcoming significant challenges quickly is.
3. Make contact with the real world. The outside world will always teach things which cannot always be anticipated. The key is to get out and test in the field as early and often as possible. The real world quickly tells what doesn’t work and what can be improved.
4. Fall in love with the problem, not with the solution or not even with the technology. Technology is ‘just’ a tool, not the end game. The starting point for any new challenge should be to focus on the problem and seek to gain a deep understanding of it. That way, people can be more open to new approaches to find the best solution possible. This is a paradigm shift as people to run away from problems as fast as possible.
5. Build in diverse perspectives: innovation happens when creativity is fuelled by diverse teams, communities, cultures, and disciplines, challenging each other to spark even better ideas.
6. Embrace learning, not failure: people should be able to kill the project they are working on, hence killing their jobs. Society has conditioned us to see failure as shameful and best to be avoided at all costs. But taking “moonshots” isn’t possible without failing. So it is crucial to create a culture that makes it psychologically safe for people to fail and reframes each failure as an opportunity to learn. Celebrating such failures as much as successes and valuing each mistake for its lessons is the purpose of ‘Dia de Los Muertos’ events organized to celebrate the death of projects. It is also noted that failures are an intrinsic part of future innovations (what Google calls the “moonshot compost”: every innovation comes from an earlier project that had been stopped). In order to enable teams to be able to kill their projects in a reasonable manner, management is defining with them the bare minimum to be achieved and the no-return points, which are all reviewed at every management checkpoint.

What retail companies can learn: breaking predictability and a few rules

Sometimes counterintuitive, such principles can be interesting to companies in the midst of a transformation process. A lot of CEOs are coming to Project X to know more about the principles and how to apply them to their own teams. Innovation and transformation are not just a team’s problem, they are a company problem. Ikea is a fair example of a company transforming itself by hiring many talents coming from the tech world, bringing them together with the other teams, and empowering them with autonomy and trust. Executives should probably do it first, but the key idea is to have all employees on board to avoid a company working at 2 speeds: the ones innovating and the others. In that sense, CEOs are expected to lead by example as well as be ready to learn from “technical” people.

Innovation can be difficult to implement in companies where resources are limited. Project X’s point of view is that innovation should be a mindset. People and teams should innovate in their own jobs: this is not easy and requires a profound ability to change, but in the end, innovation doesn’t require that many resources.

Trying to break as many rules as possible, Google Project X asks employees to spend 20% of their time on any creative activities (from the doorman to the HR or the CFO). As a result, employees -not only do it- but come back to work with better ideas and feel empowered. It works, as Project X employees are eager to learn and want to make an impact. As a result, they truly use this time in stimulating activities.

When assembling a team, Project X makes sure each person’s background leads to a unique point of view or might mirror someone else’s. People who have wildly divergent paths can break each other’s routines and generate creative connections that aren't likely otherwise. People are encouraged to use ‘and’ instead of ‘but’: it encourages value and constructive feedback.

Finally, the performance management and the incentive scheme are quite different from the ones usually put in place in retail companies. Project X splits incentives as follows:

•    50% on ‘how’: team development, how people are helping others. Of course, it’s more difficult to manage as it’s more impalpable.

•    50% on the what, the result.

Conclusion: innovation is all about shifting perspectives

Being agile by shifting perspectives can be more powerful than being smart. Very often, people think that the answer to a difficult problem has to be complex or expensive. But simply looking at it from a different perspective could uncover simple and efficient answers: working on the hardest things first and spending more time understanding the problem rather than running away from it can make a difference.

As far as transformation is involved, whether it’s about digital or sustainability, it has to infuse the entire company and all the employees to bring actual innovation. Agility has become an important value and skill (even more since Covid): in its own way, Project X is an agile company, shifting paradigms to achieve true innovation.

Credits: IADS

What: A study made by MIT Sloan on how to optimize work-from-home productivity for all employees.

Why it is important: Work from Home is here to stay, and there will no real back to normal in the foreseeable future especially in industries which are struggling to recruit.

The pandemic has led to a rise in hybrid work models, with 57% of marketing leaders working remotely some of the time and 39% doing so all the time. Hybrid work can reduce attrition rates and maintain productivity, but it can also weaken company culture and hinder younger employees' integration. Remote work is here to stay due to its cost-efficiency and ability to help companies scale. To build a thriving hybrid work culture, organizations should:

1. Develop new mentoring and coaching models
2. Establish virtual communities of practice
3. Build digital social bonding time
4. Identify in-person opportunities
5. Create space and time for informal digital connections
6. Encourage digital lingering
7. Harness digital tools to build and reinforce culture
8. Encourage overperformance of social cues
9. Ensure equity among remote, hybrid, and in-person employees
10. Challenge in-group/out-group thinking
11. Foster initiative-taking among team members

These strategies can help organizations adapt to the changing work environment and maintain a strong company culture while leveraging the benefits of hybrid work.

Managing the cultural pitfalls of Hybrid work 

What: Coresight explores the most recent metrics related to American malls in order to understand the forces at play and where they do.

Why it is important: While, just like department stores, they were predicted to disappear at the heyday of the pandemic, it seems that they are currently reinventing themselves as Coresight even sees them as a key tactical tool for brands in order to reduce CAC and boost sales.

According to data from ICSC (formerly the International Council of Shopping Centers), malls accounted for 12.2% of gross leasable brick-and-mortar area in 2022. Malls punch above their weight in terms of the channel’s share of total retail sales: ICSC estimates that 14.1% of US total retail sales went through malls in 2022, up from 13.7% in 2021.

This suggests that malls have higher sales productivity in terms of gross leasable area than other retail formats such as open-air shopping centers (which account for 55.8% of total retail gross leasable area but saw 38.6% of total retail sales flow through the channel in the fourth quarter of 2022, according to data from ICSC). High sales productivity is especially true at top-tier malls, which offer a more affluent customer base and are located in desirable areas for retailers to maintain their brand image while attracting foot traffic—generating higher sales.

Retail sales at malls totaled $728.9 billion in 2021 and $818.7 billion in 2022, according to ICSC—representing an 11.2% year-over-year increase. Occupancy rate is also higher in 2022 than in the previous years and tends to revert to 2019 levels, especially in top tier malls.

Coresight identifies a number of factors supporting growth for malls, and their forthcoming full report discusses these in detail:

•    A multichannel presence can produce a halo effect for brands, boosting sales and reducing customer acquisition costs. A number of brands and retailers report that establishing an offline presence supports online sales growth in new stores’ catchment areas.

•    Collective brand synergy in physical retail can increase sales. Brand synergy is the idea that brands generate more value by being in close proximity to other high-value or sought-after brands, which brands leverage to identify new locations that are likely to be successful.

•    Top-tier mall operators have the financial resources to continually reinvest in and renovate malls to meet evolving demand for high-quality experiences.

•    Malls can drive sales and improve the customer experience through investment in omnichannel. Mall owners’ investments in building out omnichannel capabilities can enable a more convenient shopping experience for consumers.

The state of American malls 

What: A $1T has been spent over the last 5 years in digital commerce.

Why it is important:  While online penetration grows, retailer’s profits shrink, as the CAC and cost of serving customers is growing. This inefficiency in spending should be reversed for retailers to survive.

This Retail Viewpoint article discusses the challenges and potential solutions for digital-first retail.

The key points are:

1. Despite significant investment in digital commerce, retailers often see their profits shrink as online penetration grows. The cost of serving customers in a flexible and timely manner isn't balanced by sufficient topline growth.
2. Many retailers lack efficiency in their digital spend, leading to subpar results. There's a gap in the perception of digital capabilities between executives and line managers, indicating a need for better collaboration and alignment on digital strategies.
3. A lack of understanding of digital profit and the true costs and benefits of an omnichannel approach hampers decision-making. Only 48% of retail executives are measuring these elements accurately.
4. Retailers continue to increase digital spend without ensuring a positive return on investment (ROI). There's a tendency to prioritize short-term profits over long-term decisions, leading to recurring issues with digital efficiency.
5. The solution may lie in a digital-first retail (DFR) approach. Here, digital becomes the core of the business model, shifting focus from product to customer and conventional metrics to digital-first benchmarks.
6. DFR rests on four pillars:

o    Customer: Leveraging customer data to inform decisions and grow customer lifetime value.

o    Omnichannel journey: Creating a seamless, personalized experience across all platforms.

o    Product and promotion: Balancing the drive for online traffic and margin.

o    Network and fulfillment: Prioritizing free shipping over speed, and finding ways to reduce return rates and reverse logistics costs.

1. Implementing a digital-first operating model requires data-driven decision making, automation, and new KPIs that align with the digital-first focus.

In conclusion, if retailers don't adapt their business model towards a digital-first approach, they risk being part of the next wave of failed digital transformations.

Turning profit destruction into customer and shareholder value 

What: A rather critical article about DTC business explaining why such brands should consider more and more in the future joining forces with department stores.

Why it is important: While it argues about CAC for these businesses, it does not take into account the most difficult part of the equation, i.e. the price structure of such brands, which, for now, prevents from making healthy and profitable partnerships in most cases.

The article discusses the shifting dynamics of Direct-to-Consumer (DTC) brands from a golden age in 2010-2020 to a slowdown by 2023.

Economic recession and high marketing costs have made consumers reluctant to discover and invest in new, often pricier DTC brands. Additionally, DTC brands have failed to create a perceived value, leading consumers to favor cheaper brands.

These challenges, combined with logistical hurdles and a preference for upfront bulk purchases or automatic reorders, have driven DTC brands, once aiming to disrupt traditional retail, to seek partnerships with established retailers.

This approach offers DTC brands benefits like credibility, consistency, and physical presence, making it a potential survival strategy in challenging economic conditions.

DTC changes course and comes to department stores 

What:  Global travel is taking off again, however the destination mix is changing

Why it is important:  Some retailers might not be able to find back the pre-pandemic demand fueled by tourism.

The report indicates a solid demand for international travel for the peak season of June through August. International arrivals are expected to surpass 325 million for the first time since 2019, with growth in the mid-teens relative to the same period in 2022. Regions such as Asia Pacific, which were closed last year due to health regulations, have reopened. However, the report highlights that travelers may choose destinations with less restrictive entry requirements due to a growing backlog of unprocessed visa applications.

Through 2023, global travel has consistently risen, setting the stage for further gains during the summer season. Outbound travel from 63 out of the 113 countries monitored by the Visa International Travel Platform exceeded 2019 levels from January through April 2023. Compared to the previous year, this is a significant improvement where only 10 countries had reached this level of recovery. An additional 95 countries have achieved at least a 75% recovery rate, implying that most countries are nearing or have surpassed their 2019 levels.

However, the growth in global travel is being hindered by delays in issuing cross-border travel documents. Countries like Canada and the United States have been particularly affected by these delays, with applicants facing extended wait times. To overcome this challenge, some countries, such as Australia, have hired temporary staff to help clear backlogs.

The document-processing delays, while burdensome at the individual level, seem less impactful at a macro level. However, the visa backlog could have more long-term implications on foreign travel to the United States, especially with the growth of younger populations in countries where visas are required. These populations represent the next generation of outbound travel from key source markets. Due to visa complications, the emerging middle classes in countries like Brazil, India, and China might consider visiting other destinations that are more welcoming.

Travelers unable to obtain required entry credentials are turning to other destinations more open to their visits. The report indicates that Latin American and Caribbean travelers, who are currently subject to some of the longest visa processing delays, visited destinations that did not require visas in greater numbers in 2022. The example given is Cancun, which gained 100,000 more visitors from countries such as Colombia, Peru, Uruguay, Panama, Jamaica, and Costa Rica between 2019 and 2022. This was due to Mexico not requiring a visa for these countries, unlike the U.S., leading to Las Vegas losing a similar number of visitors.

May 23 Global Travel Insight 

What: There’s still hype surrounding the metaverse, and although no one knows how things will shape out, the metaverse is still happening and experts believe that companies need to develop a strategy.

Why it is important: Currently, large enterprises such as NVIDIA and Unity are investing heavily to lay the foundational infrastructure of the metaverse, while Roblox, Decentraland, and Sandbox are jockeying to be the preferred portal, and Web3 studios such as Touchcast and TerraZero are working with leading brands to expand their market share.

Companies and governments have a window of opportunity to build and experiment in these virtual worlds that will unlock new possibilities previously thought unimaginable. Soon enough, most of us will find ourselves operating within virtual worlds, designing digital twins, and providing services in expansive Web3 environments.

Experts believe that now is the time to discover the metaverse to harness its power to drive deeper connections, more effective collaboration, and enhanced personal productivity and fulfilment.

The Metaverse is still happening 

What: A report by In:China Monitor explores the current situation of Chinese tourism by giving an overview of new trends and interests as well as a broader reflection on the actions and projects put in place by European countries and an overview of how promotion in China has changed.

Why it is important: The return of Chines tourists has been eagerly awaited as China had the largest demographic of international travelers pre-Covid, with 155 million tourists spending over USD 250 billion globally in 2019.

Section 01: Is this the return of The Chinese Traveler? 

Restrictions on overseas travel were dropped in January of this year. Prior to 202O, Chinese tourism was the largest demographic of international travelers, with 155 million tourists spending over USD 250 billion globally.

International flights will resume gradually between this year and 2025 per China’s “14th fiver-year—plan” for civil aviation. The first phase will focus on the local market and the second phase will be a period of growth which will be aimed at restoring the international market and improving levels of openness.

Chinese tourists have traveled to nearby destinations first such as Thailand and Indonesia as prices are high for international flights and there are long delays getting visas.

Within a half hour of the news that travel restrictions would be eased, searches for popular cross-border destinations increased tenfold. The most popular destinations were: Singapore, South Korea, Hong Kong, Japan, Thailand, Macau

From mid-January, Chinese outbound travel has returned to 62% of pre-pandemic levels with approximately 250,000 Chinese people traveling out of China on a daily basis and around 7.5 million outbound travelers per month. There was a 117.8% increase in the number of Chinese people traveling overseas

During Chinese New Year, domestic airlines and major hotel chains reported sold out bookings, with hotel sales revenue increasing by around 20% compared to 2022. About 308 million trips were made in China and domestic revenue increased by 30%, reaching EUR 53.3 billion. While these numbers reflect short haul travel consumption, this was representative of the pent up demand to return to travelling.

Chinese travellers preferred to stay within Asia during Chinese New Year, with Hong Kong and Macau being the top destinations followed by Thailand and Singapore.

The top approved destinations for Chinese travellers were Switzerland, Thailand, the Maldives, Russia, New Zealand, and Singapore.

It is predicted that the first important wave of Chinese outbound travelers will happen in July and August, with the peak being in autumn during the Golden Week getaway.

Section 02: The New Chinese Tourist: Intarget New Survey Results

Intarget conducted a survey of wealthy Chinese travel enthusiasts and belong to the the Global Web Index socio-economic quintiles 1 and 2. The findings include what they look like, how they decide where to go, what they expect, and how they usually buy.

China has the second largest number of ultra-rich, with more than 32,000 people holding wealth that exceeds USD 50 million. Wealthy Chinese tourists are the largest in the world and Chinese tourism is still the largest source of international travellers.

In the post-Covid era, new profiles have emerged. Wealthy Chinese travelers describe themselves as career-focused, creative, fashion-conscious, and health-conscious. Additionally, 70% believe that in the next 6 months the country’s economy, the environment, and personal financial resources will improve.

Wealthy outbound travelers are enthusiastic about technology and rely heavily on their phones for their travel needs. They are family-focused and balance their careers and family life, sharing their love for travel with their families

Resorts, spas, staycations, and winter sports are among the top preferred vacation types of wealthy Chinese travelers which could be attributed to a renewed focus on wellness and quality time with loved ones. They also prioritize destinations that offer relaxation, cultural experiences, easy travel logistics, and good facilities for children among others.

Wealthy Chinese travelers are savvy consumers that research online to inform their purchasing decisions. They are willing to pay a premium for high quality products and services and are loyal to the brands they trust. They spend time looking for deals and trust online reviews.

Personalization is a key factor in attracting and retaining wealthy Chinese travelers.  This demographic expects brands to cater to their specific preferences and needs. Brands should offer exclusive services and understand their customers’ individual tastes to gain their loyalty.

A growing preference for travelling in small groups of family and friends and personalized tours have also grown in popularity.

Section 03: How to meet Chinese Tourists’ Expectations? 

According to experts across the globe, there are several ways to meet the expectations of Chinese tourists.

It is important to plan online in advance as Chinese tourists prefer to use multi-functional social media platforms and Online Travel Agencies (OTAs) during the travel planning process.They tend to favor an application that integrates social networking functions.

Wealthy Chinese travellers rely on online research and trust online reviews of products and services, so it is important to have high-quality products and services and to have positive online reviews.

It is also important to use mobile-friendly content that is designed for mobile use and aesthetically pleasing, including infographics and virtual hosts in videos.

Section 04: Navigating Chinese Digital Platforms for Travel

Chinese tourists’ discovery phase happens online: they get inspired by Chinese influencers, look for ideas on Douyin and XiaoHongShu, and then use WeChat and online travel agencies to plan and organize their trips. When looking for information, they look for videos and photos.

Some applications they may use include Ctrip, Fliggy APP, Meituan APP, XiaoHongShu, and Douyin.

Section 05: Most loved by Chinese tourists: In:China Monitor’s selection of case studies 

Case studies performed by In:China Monitor show destinations that are most loved by Chinese tourists.

Croatia was chosen because of its campaign to target Chinese tourists during the Beijing Olympics and their new interest in winter sports.

The Swiss Tourist Board partnered with Alibaba to create a virtual reality tour which earned more than 1.25 million viewers.

Sweden leveraged Chinese social media by live streaming the Northern Lights on WeChat’s video platform to engage and entertain users who couldn’t travel to Sweden.

Section 06: Quick wins on how to re-engage with Chinese travellers

Solo travel is booming and expected to be an important aspect of the Chinese travel industry for the foreseeable future.

Travelers are looking for immersive experiences in unexpected destinations. The new Chinese traveler is no longer limited to the traditional mass tourism in organized groups, they are increasingly interested in seeking immersive, original, and unique experiences.

The trend for outdoor activities has also led to a new concept of leisure and travel which combines comfort and nature in an innovative way such as glamping.

Bleisure (business and leisure) and Bluxury are becoming increasingly relevant concepts in the travel industry as wealthy Chinese tourists shift towards more personalized and tailored experiences.

It is important to incorporate storytelling and localization when catering toward Chinese tourists. Connections between the destination and collective Chinese values and beliefs should be drawn to help establish a closer relationship.

Chinese travelers enjoy deal hunting and often are more concerned with prices rather than experiences. Cheaper add-ons, discounts, free gifts, and seasonal offers such as discounts during Chinese New Year can be attractive to Chinese tourists.

Accepting Chinese credit cards and mobile online payments and being informative about the tax-refund processes can make shopping more appealing to Chinese customers. Chinese-speaking staff as well as high-quality translations of content, and displaying QR codes with extra information can help incoming Chinese travelers feel more welcome and allow companies to effectively communicate. Providing free Wi-Fi is also suggest so tourists can share their experiences, photos, and videos with family and friends.

By providing excellent customer service, catering for their needs, and making them feel welcome companies can create long lasting bonds that will encourage Chinese tourists to recommend their travel destinations to friends and family. It is important to stay connected on social media to build a loyal customer base that could attract more Chinese tourists. Online word of mouth is high effective and a great way to attract new customers as well as boost reputation in the Chinese market.

May 23 Global Travel Insight 

What: The furniture industry has shifted from generational pieces that were handmade and handed down from generation to generation to ‘fast furniture’ pieces that can be easily bought then disposed of.

Why it is important: “Fast furniture’ contributes to the 9 million tons of furniture tossed in landfills every year. This is why recommerce has now expanded into the furniture space.

For the upper-end furniture market, there are several players acting as market intermediaries and resellers. They cater to luxury, high-design brands, and vintage or collectible furnishings. Among them, are resellers 1stDibs, The RealReal Recollection, Etsy, and Chairish. Like other marketplaces, these players offer a forum for third-party resellers, antique or estate dealers, and the like. They have avid, but niche followings and offer both buyers and sellers attractive highly shoppable websites.

Kaiyo is a furniture retailer that is disrupting the furniture recommerce space as its mission is to keep as much furniture out of landfills and in people’s homes as possible. The company offers an easy process for customers to sell their unwanted furniture, with an "instant offer" system and white glove pickup and delivery in certain areas. After receiving the furniture, Kaiyo inspects, cleans, and posts the items on their user-friendly marketplace. The company has seen significant growth as it offers a complete solution for selling, buying, and delivering pre-owned furniture.

Even Ikea has refocused on sustainability and launched various circularity initiatives. One of the programs is a buy-back and resale pilot that has expanded to many different cities after an initial successful pilot in Philadelphia. Their programs allow Ikea customers to sell their gently used items and receive payment in the form of an Ikea refund card. Ikea has also started selling ‘gently used’ items through its ‘As-is Online’ program.

From Ikea to Kaiyo, furniture recommerce resets the table

What: In spite of the seemingly stable situation, Visa does not exclude a recession in Q4 in 2023.

Why it is important:  Impacts on consumption should be limited if this proved right, however this situation would not let room for additional crisis or issues as there would be no buffer to absorb them.

This Visa Business and Economic Insights report from May 2023 indicates a high likelihood of a mild economic recession starting in Q3 of 2023, based on leading indicators and their economic models. The downturn is expected to be initially triggered by a significant decline in business fixed investment (BFI), particularly in equipment purchases and less robust investments in structures and R&D, due to high interest rates and recent banking turmoil. Small businesses, heavily dependent on banks, are expected to face the largest investment reductions.

Consumer spending, impacted by high interest rates, is also projected to decrease; the report notes a shift from credit to debit card usage, indicating consumer caution. The GDP growth rate is anticipated to stay positive in Q2-2023, then decline at a 1.8% CAGR in Q3-2023, remaining largely flat in Q4 before recovery begins in 2024.

There are both upside and downside risks to this outlook. On the upside, the tight job market may prevent outright contraction and consumer spending may prove resilient, thanks to households' substantial excess savings. On the downside, persistent inflation could provoke further rate hikes by the Fed, potentially leading to tighter credit conditions and a deeper recession. A widespread global recession and the U.S. breaching its debt ceiling are also potential risks, both of which could significantly hamper U.S. economic growth.

Despite mixed signals, a mild recession in the US is still likely 

What: How to use design as an approach to fundamentally change the way products, services and organizations are developed.

Why it is important: In these times of needed differentiation, managing creativity in business requires new approaches, by addressing the why before the what.

Design thinking is a problem-solving approach that emphasizes empathy, experimentation, and iteration. It encourages people to consider the users' perspective when creating solutions. This user-centered design methodology is widely used in various fields including product design, service design, business strategy, and more.

The article explores how to create a design-driven company culture, but also explains the differences and specificities of Design to  Value (DTV), Design for Value and Growth (D4VG), design for sustainability, skinny design, and provides some real-world examples.

What is design thinking 

What: WRC partnered with Deloitte to release a sustainability report exploring exclusive research into how retailers are driving sustainability using the latest cloud-based technologies.

Why it is important: Overall sustainability is crucial for retailers to remain competitive and thrive in the long term and provides practical insights and strategies for retailers to drive sustainability while protecting their bottom line.

Sustainability is becoming increasingly important to consumers; therefore retailers must prioritize sustainability initiatives to remain competitive. There are many ways that retailers can drive sustainability:

-    Reducing waste

-    Improving supply chain transparency

-    Promoting ethical manufacturing processes

Such areas can be enhanced even more by digital technologies, such as data analytics and automation, as they can help retailers identify areas for improvement and implement sustainable practices more efficiently. These tools also allow retailers to leverage customer data to personalize sustainability efforts and increase customer engagement.

Collaboration with suppliers, industry organizations, and other stakeholders is also key to driving sustainability across the entire supply chain. While sustainability initiatives may initially increase costs, they can also lead to long-term cost savings and improved revenue through increased customer loyalty and brand reputation.

Purposeful retail: How to drive sustainability in retail while protecting margin

What: The cost to process $100 of returned merchandise is about $26.50 on average.

Why it is important: Returns are one of the biggest profit drains for online retailers. Fixing that has become a priority as inflation continues to crimp shoppers’ spending on everything from clothes to home décor.

Online retailers are making efforts to cut down return rates to increase profits as inflation continues to impact consumer spending. The shift to online shopping during the pandemic caused return rates to rise by about 14% in 2022 compared to 2019, largely due to customers buying multiple sizes of the same item for fit. Processing returns is expensive, costing on average $26.50 to handle $100 of returned merchandise, according to Narvar, a returns-management company.

Retailers are now attempting to reduce returns to save costs. Amazon shows items with high return rates to customers, while Dress the Population offers discounts to customers who promise not to return their purchases. Major retailers like Zara and H&M charge for mail-in returns, and 66% of retailers now charge for returns, up from 60% in the previous year.

However, a survey showed that 69% of consumers would stop shopping at retailers charging for returns, while 49% would pay more upfront for free returns. Retailers are also encouraging in-store returns and offering incentives for customers to keep unwanted goods. Some, like Dress the Population, offer significant discounts if customers agree to keep purchased items. This strategy has helped decrease the overall return rate by 7% and reduced the cost of returns by half for the company.

In addition to cutting down returns, retailers are also aiming to reduce customer acquisition costs, which have surged due to restrictions on online shopper tracking implemented by tech companies like Apple and Google. They are also trying to identify and manage heavy returners who account for a disproportionate amount of returns.

Retailers clamp down on returns 

What: Visa reports that US customers are increasingly concerned about the future, especially due to inflation and rising prices.

Why it is important:  The US boon for European retailers might not last much longer now that American customers start to feel the inflationary pinch. Their impatience to see Chinese customer is therefore growing.

In April, the Conference Board Consumer Confidence Index dropped to 101.3, with the future expectations component falling to 68.1, reflecting increased concerns over a potential recession and recent turmoil in the banking system.

The present situation component, however, increased by 2.2 points, indicating a strong view of current conditions. Consumers' median inflation expectations for the next 12 months remained elevated at 6.2%, but they expect prices to moderate.

Purchase intentions for homes, autos, major appliances, and vacations softened, suggesting that consumers may be cutting back in preparation for slower economic growth.

American consumers are increasingly pessimistic 

What: An article explaining how design-thinking can help companies thrives even during recessions.

Why it is important: Since we live in a VUCA world, new approaches to problem solving are needed, often coming out of the box.

The article discusses the significance of design thinking and how it can help organizations navigate through challenging times. The authors argue that design should join finance, strategy, and talent on the CEO’s agenda, and they outline five main areas where design can be instrumental:

1. Preserve cash flow: When budget cuts are necessary, companies are advised not to pause all product design and development. Instead, they should prioritize one or two products based on user and business impact, and allow for new user-centric digital marketing. An example provided is a bank that switched from pushing products to educating consumers on finance, which increased sales by 25%.
2. Elevate scenario planning in strategy: In the face of uncertainty, design can complement the analytical approach to scenario planning. By integrating user-centric insights, a broader range of possibilities can be considered. A building materials and products company, for instance, identified three 15-year trends that could shift significant value across the construction value chain by using this method.
3. Manage supply chain risk: Design can help mitigate supply chain disruptions by redesigning products based on user needs, removing difficult-to-source parts, and accommodating a wider range of parts. An example given is an industrial-equipment manufacturer that removed an underused sensor and introduced a better-designed dipstick, leading to more accurate oil readings.
4. Build agility and resilience: Design can help organizations pivot quickly and effectively in response to changes in the market. This is achieved by integrating customer insights into the design process, building more flexible design capabilities, and fostering a culture of experimentation and learning. However, the specifics of this point were not fully covered in the text available.
5. Energize and care for the team: During periods of uncertainty, it's important to maintain a positive and engaging work environment to keep employee morale high. Design thinking can help here, but the specifics of this point were also not fully covered.

The article emphasizes that these unique approaches to problem-solving, driven by design, can provide significant value and boost an organization’s resilience, particularly during challenging times.

Designing out of difficult times 

What: An assessment of 12 suppliers based on 28 criterion to help decisions-makers.

Why it is important:  53% of B2C marketing decision-makers plan to increase their spend on loyalty technology in 2023.

Forrester has conducted a research based on 28 criterion, in order to assess the pros and cons of 12 loyalty technology providers: Annex Cloud, Bond Brand Loyalty, Capillary Technologies, Comarch, Epsilon, Kobie, Mastercard, Merkle, Oracle, Punchh, Salesforce, and Tenerity. The report shows how each provider measures up and helps B2C marketing professionals select the right one for their needs.

When it comes to the three top contenders being Epsilon, Capillary Technologies, and Kobie:

1. Epsilon: Owned by the Publicis Groupe, Epsilon's loyalty solution is a part of their PeopleCloud platform. They focus on creating long-lasting emotional connections between brands and customers. Their platform is praised for its data management and preference management capabilities. They aim to optimize their platform further by focusing on AI and machine learning.
2. Capillary Technologies: Their offerings include a commerce solution, a customer data platform (CDP), and a loyalty platform. Their Loyalty+ platform stands out due to its robust functionality and AI-powered capabilities. They have plans to make tactical enhancements focusing on industry readiness, usability, and marketing planning.
3. Kobie: With a focus on driving both short-term customer engagement and long-term brand devotion, Kobie's vision is centered around building loyalty across the customer lifecycle. They offer strong services support and are planning to introduce more reward options and CDP integrations. Their platform excels in program structure and loyalty measurement capabilities.

When it comes to the strong performers in the realm of loyalty solution technologies, including Comarch, Oracle CrowdTwist, Tenerity, Salesforce, and Bond:

1. Comarch: After launching their SaaS loyalty offering, Comarch has invested significantly in platform improvements and its go-to-market strategy. Their focus is on community engagement, and their platform is known for advanced member profile management and fraud prevention. However, they lack strong metrics to track emotional loyalty and member engagement.
2. Oracle CrowdTwist: Oracle's loyalty platform, CrowdTwist, aims at delivering revenue-generating brand experiences. It has solid capabilities for setting up and managing loyalty programs and is known for loyalty marketing coordination and fraud management. However, it lacks flexibility in modularity and has limited self-service capabilities for clients.
3. Tenerity: Formerly known as cxLoyalty, Tenerity offers a modular approach that allows brands to purchase only the components they need. Their platform is adaptable and modern, with capabilities to manage and measure loyalty promotions, although they lack strong fraud management capabilities.
4. Salesforce: Salesforce launched a loyalty platform in early 2021 and focuses on helping marketers acquire and build lasting relationships with customers. Their platform is noted for its strong privacy capabilities, but it lags behind in rewards and benefits management and emotional loyalty measurement.
5. Bond: Bond provides a loyalty platform and services for North American brands, with plans to expand into EMEA. Their platform offers loyalty program management and optimization capabilities. However, their technology lags in scalability, and their vision and roadmap lack focus on some important areas.

Finally, when it comes to the contenders, Mastercard, Merkle, Annex Cloud, and Punchh :

1. Mastercard: Having acquired SessionM in 2019, Mastercard has improved its merchant loyalty capabilities. It offers sound data management and program optimization capabilities, particularly for brands operating in multiple geographies. However, it lags in areas such as content management, marketing coordination, and emotional loyalty measurement.
2. Merkle: As part of the dentsu agency network, Merkle offers a wide range of industry and marketing experience to its clients. Its LoyaltyPlus program provides robust member profiles and data management capabilities. Merkle excels in privacy thought leadership and emotional loyalty measurement, but it lacks proactive notifications of potential fraud and would benefit from an integration with a marketing resource management vendor.
3. Annex Cloud: Annex Cloud offers a Loyalty Experience Platform that provides solid program management and measurement capabilities. However, it is in a state of flux, rebuilding its strategy and product vision after a change in leadership. Although they've made a strategic hire in privacy, their capabilities in this area remain primarily compliance-focused.
4. Punchh: Acquired by restaurant tech company PAR in 2021, Punchh focuses on loyalty offerings for restaurants and quick-service restaurants (QSRs). Their platform serves the promotion-focused needs of these establishments and has strong loyalty marketing capabilities. However, it lags in areas such as member data management and experiential rewards support.

Forrester’s assessment of the top 12 loyaty tech solutions providers 

What: Coresight’s insights on ChatGPT and how to use it in retail.

Why it is important: The report suggests that everything needs to be built: several retailers are testing the tool and looking at where it could lead them, and Coresight advises others to see ChatGPT and its peers as a training field for now, but which needs to be explored urgently.

Coresight’s analysis shows that :

•    ChatGPT facilitates enhanced, automated content generation, with benefits for retail companies including increased productivity, improved personalization and marketing strategy testing and refinement. Many major brands and retailers—such as Coca-Cola, Carrefour, CVS and Kroger—are experimenting with ChatGPT to automate content generation, also enabling them to minimize labor and costs related to producing content.

•    Tech giants such as Alibaba, Baidu, Google, IBM and JD.com are launching ChatGPT alternatives to compete in the generative AI space. Brands should evaluate all options to identify which solution best suits their needs.

•    Platform vendors Google, Microsoft and Salesforce have taken an early lead in adding generative AI capabilities throughout their offerings to provide clients with improved customer service and enable brands and retailers to more easily integrate their enterprise systems, boosting business efficiency and productivity.

•    With its introduction making a splash, generative AI technology is in its early stages and continues to evolve rapidly, with the category benefiting from continuing healthy investment in AI generally

•    Brands and retailers should experiment with generative AI technology, but they must be cautious of the risks. There have been cases of inaccurate or misleading results, and several vendors are including a “human in the loop” to supervise and improve the output of generative AI models.

For Coresight, generative AI has huge growth potential in retail, as indicated by the rise of OpenAI’s ChatGPT and alternative platforms that can help brands, retailers and solution providers offer enhanced customer service and improve productivity. However, the technology requires human supervision at this early stage, rather than serving as a replacement for humans. They encourage business leaders to experiment with generative AI and explore its applications to realize business benefits while remaining aware of the risks of sharing their data. As the technology evolves, they expect to see even more sophisticated large language models and broader adoption across various industries.

ChatGPT and Generative AI: Five things retailers should know 

What: A piece all about nostalgia for the American malls.

Why it is important: Department stores can not rely only on concessions and have a short-term approach on profits, if they want to have a different destiny. Their ability to curate and select should remain at the core of their model.

The shopping mall, once a symbol of freedom and a way of life in the 1980s, is in its twilight years. There were around 2,500 malls in America during their peak, but that number has dwindled to 700 today and is expected to drop to just 250 within a decade.

Factors such as the internet, recessions, social media, Covid-19, and computer games have contributed to this decline. The demise of once-iconic department stores has also played a role.

The shopping mall's downfall signifies the loss of a shared space for people to escape their screens, and the phenomenon of "dead malls" has become a subject of fascination for those seeking the remnants of a bygone era.

The glory days of the American Mall 

What: The Robin Report advocates for investments in existing loyalty programmes in times of recession.

Why it is important: While the suggested actions might seem obvious, they represent nevertheless a useful reminder of the basic steps that should be taken.

As the U.S. economy faces potential recession, retail CFOs are focusing on cost-cutting measures. However, this article suggests that investing in loyalty programs and member marketing could be a strategic move. During a recession, consumer behavior changes, with a tendency towards budget channels, deep discounts, and less loyalty. Therefore, traditional marketing models may not be as effective.

Loyalty programs can offer significant benefits. According to Accenture, 90% of retailers have some form of loyalty or subscription program, which often includes rewards, exclusive benefits, and personalized offers. These programs not only encourage customers to shop more and spend more, but they also provide a valuable source of consumer data.

During a recession, retailers without a loyalty program may find it expensive to implement one. However, for those with existing programs, several strategies can help maximize their effectiveness:

1. Reallocate resources into loyalty and ensure cross-functional alignment.
2. Revisit program rewards and benefits, focusing on saving money and lowering risk for customers.
3. Streamline the program to remove friction and increase sign-ups.
4. Increase the visibility and frequency of loyalty messaging across all channels.
5. Train store staff to provide excellent service and promote the loyalty program.
6. Set up experimental tests to understand what works and what doesn't.

By focusing on loyalty programs during a recession, retailers can preserve their most valuable asset - their customers. This proactive approach can help businesses emerge stronger on the other side of an economic downturn.

6 recession-proof ways to uplift loyalty 

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Digital transformation remains a central topic of discussion for department stores. The IADS already dedicated its 2021 White Paper to the topic, trying to understand what was at stake and what was needed within department store companies to fully embrace the change. In order to bring a very down-to-earth angle to the conversation, the IADS invited Laurent Raoul to explain his views on digital transformation in heritage organisations in a new global context.

Laurent Raoul is the founder and managing consultant of XLc Consultancy Company, specializing in Supply Chain, Operating Models and Back Office IT systems dedicated to the Fashion Industry. He has run development or restructuring projects for brands belonging to main Fashion Groups in Europe or in the US, and for mass market and bridge brands or retailers.

Introduction: there is no such thing as “back to normal”

Retailers now live in a systemic world, which means that anything happening anywhere can have a worldwide impact. It is even estimated that a crisis is likely to happen every 12 to 18 months. As a result, retail operations are impacted by increasing chain reactions. ‘Heavy weather’ management becomes the norm, whether it’s to deal with natural disasters, financial crises, geopolitical uncertainties (if not wars) or the next pandemic.

In this troubled environment, past certainties fall short: it is no longer about being “big rather than small”, but about being “fast rather than slow”. Even though size will still matter, upcoming changes won’t be about the big companies eating the small ones, but about the fast companies overpowering the slow ones. To that end, they have to quickly change their methods in all aspects of the value chain and focus on raw data and back office operations, with extra attention put on IT management and knowledge.

Finance, planning, management, sales: it’s all about new agile methods

To manage companies’ transition and transformation, the most important words are resilience (obviously much-needed to mitigate crisis) and agility. While the word “agility” has become an overused blanket word, it still does mean something crucial for companies: the ability to go from situation A to B with both celerity (speed of transformation) and magnitude (depth of transformation).

The new finance: rolling budgets

In an unpredictable world, in which the coming year will probably not have much to do with the past year, is the usual yearly timeframe still important or even relevant for operative finance? Since Laurent Raoul discussed this matter with IADS member CEOs, the French newspaper Les Echos explained that the dogma of the budget completed at the end of the year to set the objectives for the following 4 quarters is over. Furthermore, it is increasingly considered that the usual budget management is becoming a growth inhibitor for companies.

Since Covid and even more so since the geopolitical and energy crisis, many companies have been calling for a more up-to-date and reliable forecast of their finances. Transforming management methods and tools is now a priority for many finance departments. Rolling budget tools develop as an answer: a few key indicators such as turnover, gross operating surplus, working capital requirements, etc… are updated each month or quarter. The method may vary as everyone has their own recipe and applies it totally or partially, generally keeping the annual budget exercise as a safety measure.

New ways of planning: the thinner, the more wrong

Should organisations better forecast or better react? As Eisenhower put it: “plans are useless, but planning is indispensable”. Nowadays in forecasting, it’s overall useless to go into details: the thinner and deeper they will go into details, the more wrong retailers will be. Still, forecasting remains very much relevant these days, but companies should not spend that much time and money on it in advance (no more planning quantities per SKU, store, and season) as situations are changing often and very quickly. Then a new concept emerges: “forcasgility”. It involves a better plan, better reactions and progressive engagement.

There are also 2 contradictory constraints to take into consideration, especially for finance teams. Procurement and production require early engagement to secure upstream supply, but distribution and retail increasingly engage as late as possible to better stick to sales. To tackle and anticipate the consequences of this contradiction, the supply chain should reverse. In short: we go from a front-to-back to a back-to-front system.

Velocity in transformation management

From a transformation perspective, unicorns’ work methods can inspire department store management teams. Such methods are making bureaucracy or heavy processes disappear from project and transformation management. New principles, work methods and tools should be promoted among teams.

The well-known ‘test & learn’ method is still relevant. Meetings should only be 4 people and never exceed 1 hour to ensure efficiency and decision-making. The ‘quick & dirty’ could even be used for some critical situations. KISS (Keep It Simple & Stupid), war rooms should also be considered. Also, POC (Proof of Concept), a demonstration of a product, service or solution in a sales context, could help show that the product can fulfil customer requirements and also provide a compelling business case for adoption.

Cross-channel operations 

The pre-tail (VICs, VIPs, influencers) is now a channel as much as a department store can be: B to C becomes a business in itself as B to B is. This means assortments and allocations have to be more precise and accurate than before, so working on arbitration is key. In that perspective, AI will be of some help to decide the most efficient product allocation, even more in case of product shortage.

Brands are also trying to build cross-category assortments, which is especially difficult as product categories work with different IT systems. Previously built in silos, operating models and IT systems tend to converge: it’s now visible in luxury brand collections with cross-category aesthetics, animations and market events, but also with seasonal and seasonless, short or long lifespan product cohabitation.

Raw data is the most important asset for the future

Back-office data for front operations

There are now countless CSR regulations to comply with. In France for instance, if retailers are not ready, fines will go up to €50,000. The level of information that should be provided will go up to tier 4 (at the animal level for wool for instance). The needed information for the front operations will come from the back-office supply chain data, using brands and retailers’ direct communication, partners, social media and apps, but also through governments and customs as well as coalitions and lobbies -up until the end consumers.

It’s a big change, as such information used to be kept in the back office. Strong agility and organisation in operations and IT will be required to bring data from back to front, in order to comply with the high number of rules and regulations. The fact that the product might be in licensing or sub-contracting won't make any difference when it comes to the data required. Of course, private labels will be considered the same way as national brands.

Regulation requirements and claims will be based on calculated KPIs such as the share of recycled and recyclable materials, main origin, etc… That is only the tip of the iceberg that we (consumers and retailers) see now. In fact, such information is rooted in the raw data: material scientific names, weight per unit, reference ID, batch ID, serial ID… All this data will have to be available, organized, and aggregated, to be available to consumers and regulators.

Which system for raw data?

From that perspective, an important question is to know in which system this raw data should be stored. For retailers, could it be in tier 1 and 2 internal applications such as their ERP? For brands, could it be in the internal applications such as PLM (Product Lifecycle Management) and the TMS (Transport Management System) for instance? Actually, none of them is able to aggregate all the countless information needed from the thread used in a piece of clothing to the garment’s overall carbon footprint. As third part upstream SaaS applications are already very much involved in retail companies, an aggregator is needed such as PIM (Product Information Management), data lakes or data hubs. It means the most critical information might be stored outside of the companies./nbsp]

Companies like Elementum (the provider of Apple, and considered as the potential successor to AWS) could become competitors for retailers and should be looked at. Elementum could lead the market upstream. In 2040, there might be a B2B equivalent to Uber, having no factory, and no physical business, but ruling all the business between brands and factories. Retailers could become a sort of taxi managed by Uber, with another company owning the most critical information needed to operate the business.

The importance of IT: people, knowledge and speed

A critical role in the digital transformation: the CIO

Companies are increasingly dependent on IT knowledge and IT teams. This is why the CIO position plays a pivotal and critical role in the transformation process. First of all, the CIO has to sit at the board and grasp what is going on. As a consequence, the CIO has to be a human being, which means he/she should be able to talk to the CEO and other stakeholders and make technical things clear to everyone. As a kind of teacher, he/she should give the appropriate wording and KPIs for the transformation project.

The KPIs assigned to the CIO should include speed, which is almost never taken into consideration, compared to cost or risk KPIs. The CIO also has to promote agile methods and avoid bureaucracy in IT: it is really toxic as IT sometimes ends up spending more time managing the process, rather than making sure the target is met.

In IT, the position and role given to consultants should be carefully considered. Even though they can help and provide important insights, consultants can be very dangerous if they manage architecture as it should be managed internally: it is too serious to be given to external companies.

The example of ERP implementation: speed and ‘state-of-the-art’, the double road map

A real-life case comes from companies looking for a new ERP system, like SAP, to transform their IT. SAP implementation is at least a 12 to 18 months project whereas speed is a key to success. But if speed is the only key, why would people work with SAP which is the slowest ERP? It might mean companies should pick the quicker solution rather than what is assumed to be the best one: it’s a paradigm shift.

In reality, retailers constantly need to adapt when it comes to digital transformation, which somehow forces them to invest in overpriced IT systems that they don't fully know how to use. It seems there is no alternative but there is an agile way to proceed with ERP implementation. Having a double road map works: this means running 2 projects at the same time. One team works in the short term with a first roadmap: it is not about being ‘quick & dirty’ here, or not even about quick wins, but it rather means quick solutions, first and second steps. In parallel, a second team is working on the medium and long term. Both teams are coordinated and discuss almost every day. The long-term team can use short-term quick solutions to help with the following steps of the project. Companies using this method have seen very good results.

Conclusion: agility in digital transformation is about speed

Laurent Raoul explained how digital transformation implies a paradigm shift in many ways. This shift involves new methods in all steps of the value chain: more flexible operative finance and planning, new management methods and cross-channel selling. At the time, the importance of data grows and is now necessary to front operations, only emphasizing the CIO’s critical role.

While agility has become an important value and skill (even more since Covid), speed is not taken into consideration enough when running digital transformation projects. Considering the inevitable crisis retailers and their teams will have to go through in the near future, and mandatory compliance with countless CSR regulations, speed might be the ultimate key to transforming a business and succeeding.

Credits: IADS (Christine Montard)

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The IADS invited Green Pea to address member CEOs. This exclusive covers the most important takeaways from the meeting.

As shown in the latest IADS White Paper on Sustainability and Department Stores, the topic of converging towards an environmentally and economically durable and sustainable model is extremely complicated. The more retailers dive into CSR and ESG commitments, the more complicated questions they have to face. In addition, the majority of IADS department stores do not have the luxury of starting from scratch to create a ‘green’ or ‘sustainable’ business from the ground up. They have to pivot their centuries-old organisations to be able to meet the standards of today’s regulations and expectations while keeping business-as-usual operations.

However, it is still possible to find inspiration from new business models. In order to provide IADS member CEOs another angle, the Association invited Francesco Farinetti, CEO of the Green Pea department store in Turin, Italy to present the first “Green retail park” in the world.  The department store has been constructed sustainably and considers the impact that its business has on its community as well as the earth. Farinetti, who has been CEO of Eataly prior to this experience, presented his company’s radical take on a retailer that puts sustainability at the core of the business.

Introduction: Green Pea- Challenging the retail business model

Green Pea department store was born from the same family that created Eataly. Eataly’s offer encompasses everything that people put in their bodies, while Green Pea focuses on what people use outside of the body from furniture to fashion. In other words, it aims to be the “Eataly of things” and provide a new set of options when it comes to how people consume and buy.

Consumers are paradoxically demanding more information from retailers regarding the impact of their consumption but not actively looking for it, which is why Green Pea focuses on products storytelling. It is common knowledge for instance that fashion contributes to pollution, contributing up to 10% of water consumption and 20% of CO2 emissions, but customers hardly read the labels, so they need to be nudged. Such stories need to clearly describe where goods come from, what they are composed of, and their impact.

Green Pea asks challenging questions: Should we stop consuming altogether? Or should we consume in a new way that respects the environment? The issue in the retail business is that as soon as a good is produced, there is an impact that must be measured. Not only are goods creating impacts, but retail real estate also has a lasting impact on the communities they serve. This is why Green Pea has created its own “Manifesto” in order to create a set of guidelines for itself and its partners to shop and sell differently.

The Green Pea Manifesto

When the Green Pea project started in 2010, sustainability was not yet a major topic. But soon the team realised that there was no such thing as “green products”, therefore the road to sustainability would be long. It was not possible to be 100% green because every action taken by a retailer had a footprint, leading to the need for close collaboration with its suppliers with the objective to create a community.

Green Pea has decided to address the issues raised by creating a Manifesto, signed by all of the retailer’s partners.  The Green Pea Manifesto details the department store’s strategy which is focused on respecting the planet. The document is meant to create clarity for all stakeholders including suppliers, management, employees, and the final customer in order for them to all remain aligned on the same vision and rules that should be upheld.

The Manifesto hopes to contribute to the improvement of human life on Earth through its 10 pillars which detail a self-constraining set of guidelines for their present and future actions. While Green Pea is a seller of products, from furniture to fashion, the Manifesto ensures that all partners are in line with the company’s beliefs. This is why almost all partners are Italian or fully produce in Italy, as locality has a major impact on sustainability.

Green Pea’s Manifesto can be seen clearly in their 15,000 square meter store that spans 5 floors. Green Pea’s building has been created so that it could be taken apart with a screwdriver and a 24mm wrench in case the building structure needs to be taken apart and reused for other buildings or projects. The wood on the outer shell of the building comes from trees that had naturally fallen in a storm. The paint used in the building turns the walls into purifiers that reduce air pollution by 88% and kill 99.9% of bacteria. All sources of energy are green and include innovative energy capture opportunities with decorative wind turbines at the entrance of the store and electric floor panels that capture the energy of foot traffic to be reused to power the store. It is important to note that building the store sustainably created added a 20% cost to the building structure than it would have been if done traditionally.

Green Pea also highlights the importance of second-hand offers, and this is especially important for their fashion and home businesses. Green Pea sells second-hand items with relative success and sees this part of the activity as alignment with their Manifesto and a strong marketing vehicle. They even offer repair services and encourage customers to bring back items that need to be fixed up.

A new vision of a store, the ins and outs of Green Pea

The first thing seen by customers entering the store is a museum which aims to educate customers about complex to simple problems. The ground floor is also dedicated to cars, energy and services, all carefully curated to offer green alternatives to customers.

The first floor is dedicated to furniture (starting at €2.500, up to €50.000 and more) and appliances (it is possible to have a fully equipped kitchen for as low as €4.000). It took 5 years for Green Pea to build partnerships with brands, from artisanal companies to international labels.

The second floor displays more than 60 fashion brands, of which 80% are Italian, in addition to a book and a cosmetics area. The following floors are also dedicated to fashion, while the rooftop is only open to Green Pea loyalty card holders and aims to be a communal space.

In the fashion area, there are 2 kinds of brands:

-    The ones which have built themselves with sustainability as their DNA (Patagonia, EcoAlf),

-    The ones with which Green Pea has made partnerships, encouraging them to produce in new ways for short product series (Superga, K-Way…) creating a sense of exclusivity for the department store.

It is not limited to mid-range: Cuccinelli, Zegna and Herno are present in the store. The brand portfolio grew from 20 to 65 brands between 2020 and 2022, which shows the attractiveness of the model, and the vast majority of them are operated under concession terms (in other categories such as cars, leases are also used). There is also the possibility to generate financial revenue by setting up sponsorships with brands willing to use Green Pea as a spot to be sustainable (Mastercard, Unicredit…).

The store is completed with a wide selection of restaurants (from a bistro to a Michelin-starred restaurant) and a congress area.

During the first full year of operation, in 2021 (when weekends were closed due to Covid-19 restrictions) the store welcomed 20m visitors, of which 10m visited the ground floor, 5m the restaurants and leisure, 3m the home section and 2m the fashion one. Green Pea expects to welcome 30m visitors in 2023 with strong growth in the home and fashion sections.

Green Pea’s customer

Green Pea’s customers are 60% 55 years old and above with 60% female and 40% male shoppers, which happens to be the same audience demographic as Eataly. The retailer offers its space as a place to host more than 250 events a year as a way to attract younger customers. Events include pizza-making classes, informative courses on sustainability, as well as venues for companies that want to host events. The events are targeted to attract customers aged 28-35 years old. Green Pea will also hold some vintage sale events in order to attract Gen Z shoppers.

The department store also offers a membership programme at a cost of EUR 50 per year which allows members to enjoy 10% off on everything in the store. Currently, there are around 5,000 members that come to the store at least once a month. Unfortunately, the whole database had to be built from scratch as it was not possible due to Italian regulations to synergize the Eataly customer database.

What is next for Green Pea?

Green Pea has big plans to expand and grow their business internationally. Green Pea is currently in talks with Amazon to build out its e-commerce offer from scratch. For the retailer’s physical footprint expansion, they are first focused on expanding internationally with a store in Dubai. Then they would like to open the next Italian store in Milan. The department store is also starting to work on becoming a certifying body that could offer a sustainability certificate to brands and partners.

Conclusion: How can other retailers be inspired?

Green Pea’s Manifesto can be of great inspiration to retailers around the world, especially retailers in the EU that are facing waves of sustainability regulations. Legacy retailers will need to deeply analyse how the business can be rejuvenated from the ground up in order to account for better practices and incorporate new ‘green’ operations. This overhaul will not be easy, but the sooner action is taken, the easier it will be to comply with future laws and regulations.

Green Pea’s positioning as a retailer that prioritizes consumer education is very revolutionary. As transparency becomes a more important topic, communication and information sharing with customers will be key in order to own the company’s brand and messaging.

Credits: IADS (Selvane Mohandas du Ménil)

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It is no secret that relational shopping is becoming very important to grow a retail business from local to international clients, and anyone not aware of it learnt it the hard way during the pandemic. Mobile and web solutions are now helping sales associates understand their customers better and increase sales thanks to a single tool pulling in consumer data points from various channels. The IADS’ role as an expert body is to be aware, explore, and inform its department store members about every aspect of innovation in retail, which is why the Association invited Arnaud Barbelet, COO of Clientela, and Thomas Meyer, CEO of Mobile Now Group to share the importance of relational shopping.

Clientela is a software company based in New York City, with global operations. They aim to reinvent the store as an engine for growth, with a complete suite of Acquisition, Loyalty and Retail Operations solutions. Arnaud Barbelet is COO and co-founder, in charge of European markets. He focuses his expertise on clienteling, consumer experience and product strategy for key brands and retailers including Chloé, Diptyque and Magasin du Nord.

Mobile Now is a leading, full service, mobile development studio, with a focus on digital experiences, products, and platforms. Founded in 2009, it is now present in Shanghai, Hangzhou and Changsha, China and Singapore. An international team of 90, Mobile Now provides consultancy through to UX and UI design, as well as development across all the key mobile platforms. Thomas Meyer, CEO and co-founder, started the company in 2009 after realizing to what extent mobile phones could disrupt consumers’ and retailers’ existences.

Together, they presented examples (Magasin du Nord, Lane Crawford) in order to generate a very lively conversation.

Clientela business case: Magasin du Nord and relational shopping solutions

Overall presentation

Clienteling is seen as an opportunity to provide every tool that a sales associate needs to help clients buy products in a more automated and seamless way.

Magasin du Nord decided to implement Clientela’s solution in order to drive digital innovation around business needs, especially in the middle of the pandemic when there was a need to build bridges between online and offline (through online booking features, for instance). Following the pandemic, there is a need to focus on better understanding clients and prospects to improve their experience online and in stores.

Clientela offers rich data capture, an advanced booking engine and scheduling service, event management, 360-degree client profile details for store staff, and full integration with other applications. These key features allowed Magasin du Nord to get a comprehensive view of data related to sales and their customers.

Clienteling allows retailers to get to know their customers

Clientela’s in-depth data capture capabilities allow retailers to understand why customers are coming and thus generates more opportunities to create value so customers will return. The system implemented enables customers to book personal shoppers for any occasion. Historically, this service was reserved for weddings and special occasions, but now retailers can extend this service to help shoppers find the right products they will need to start a new job or go to a party.

Communicating with customers across various channels and frequencies helps build relationships with them and fosters loyalty. Communications can include sending personal messages such as reaching out to them on their birthday, if they haven’t visited the store in a while, or if the products they have bought need to be refilled soon.

All of these communication channels help sales associates gather more information about their customers in order to offer efficient advice that is valuable, through one single set of tools which are simple to use.

Since Magasin’s partnership with Clientela, the department store has seen year-over-year bookings increase by 17%, returning client engagement up 13% and staff engagement up 68% on the app.

Future challenges

Clientela is now working with Magasin du Nord on a few problems aiming to simplify the processes even further:

-    Online bookings need to be easily configurable in order to adapt to a variety of product categories, client typologies and languages,

-    Data should simplify the life of the sales associate, and be also easily used by the marketing department to create dedicated communication and event without too much complexity,

-    Personal touch should be injected into the processes: the current solution allows the connection of two people (a customer to a sales associate) and, the future one should focus on how to always connect to the most qualified person in a given customer context. All in all, taking context into account is the next step for the solution in order to enrich the variety of responses and possible interactions.

The aim is to move from a Customer Relationship Management to a Prospect Relationship Manager:  the question now is not to help “if” the customer is buying, but to anticipate “when” the customer will do so. In other words, work on occasion automation (for instance, the system remembers when the customer last purchased a cosmetic cream and is able to send a reminder when the product is reaching its end of life).

Mobile Now business case: Lane Crawford WeChat O2O Commerce & CRM in China

Thomas Meyer shared how technically advanced the Chinese market is when it comes to its digital climate. WeChat, is mistakenly seen as similar to WhatsApp by Western observers, and is much richer as it offers users many capabilities within the app that allows users to even browse the internet and access apps without leaving WeChat. This integration allows retailers to serve their customers better.

WeChat Mini Program Membership and Loyalty Service

The example of Lane Crawford’s WeChat loyalty program allows synchronization between clients and sales associates. Clients can easily access and edit personal data while the tool continuously learned more about the customer as they use the tool. The sales associate can also contribute to a client’s profile by creating prospecting cards and can better serve their audience by accessing their personal data, transaction history, and communication preferences.

The sales associate is able to share recommendations via email, SMS, chat apps, or social media. Clients can then buy online and engage with the sales associate through the various channels while all the information is retained in one singular place. There is also the possibility to livestream events and commerce events to learn more about products and services. Sales associates even have the possibility to craft a shopping cart that customers can validate with a few clicks.

Lane Crawford has managed to achieve 1.5 times what they used to do with e-commerce during a full year, in the first 6 months of the launch of their WeChat account. In 2022, each month so far has doubled the 2021 performance on similar periods, with May 2022 even multiplying the sales by 6 times compared to the previous year.

Relational shopping can help global brands prepare for the return of Chinese shoppers

When Chinese customers return to shop internationally, they will be expecting WeChat-level connections and capabilities from retailers on a global scale. The rest of the world needs to be ready in a variety of ways: retailers will need to have an advanced technical landscape, and sales associates will be expected to speak Chinese. It is also important for retailers to understand that in Chinese culture, consumers shop to celebrate travel. European retailers will need to be ready to welcome Chinese customers and serve them in the same mediums that they have become accustomed to in China.

Retailers that are wanting to welcome Chinese shoppers when they return will need to focus on their customer experience, make sure that technology and digital innovation are at the core of the business, and the business needs to be ready to innovate in order to keep up with expectations.

Thomas Meyer mentions that most of the issues to overcome are cultural (this was the case at Lane Crawford, which is first and foremost a retailer which owns real estate) and human, and not technical. It is all about making sure that these projects are supported by a key sponsor close to the CEO, with an organisation able to deal with legacy systems and salespeople’s new incentivization. It also includes:

-    A shared understanding of the available tech and what it can offer,

-    Linguistic competencies,

-    Specific product offerings.

Conclusion: Customer data can create new opportunities for existing customers

Relational shopping data empowers brands and sales associates with all of the information needed to create new sales opportunities. Whether it be serving a loyal customer in a new market (as seen for Chinese customers that tend to shop while traveling) or for local customers that frequent a shop only when they need to repurchase a good, relational shopping allows brands to offer upscale services to ensure the customers are always thinking of the brand and the experience. By harnessing customer data to communicate effectively with clients, retailers can save a lot of time and effort on prioritizing the right products to ensure a five-star experience through all channels and store visits.

Credits: IADS (Selvane Mohandas du Ménil)

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The IADS attended the latest edition of the Retail Summit in Dubai, during which the Association had the privilege to moderate two roundtables, one centered on customer centricity (with the CEO of AWW group, owner of Pepe Jeans, Hackett and Façonnable, the CEO of WHP Global, owner of Toys’R’Us, and the President of Fashion, Beauty and Homeware at Chalhoub), and the second one on the future of specialty retail (with the CEO of Fred Segal, CEO and co-founder of The Latest Concept Store, and the CEO of Al Sulaiman Group).

This edition was also the opportunity to listen to great leaders and hear their insights. Below is a selection of the most interesting lessons we took home.

Overall, the Retail Summit is a rather surprising event when compared to the NRF in New York or the WRC. Its regional dimension makes it an ideal event for any organization or business interested in the Middle East, but it is also a great opportunity for networking, as guest speakers and high-ranking visitors are easily reachable thanks to its intimate and smaller format. Bumping into CEOs is easy during lunch breaks and conversations are casual.

While the first day was focused on functional approaches to the business, the second day was star-studded with retail legends, bringing the audience into another dimension. Three ranges of topics were discussed:

• New ways to address the notions of customer lifetime value, mass and scalable experience customization, and customer-centricity (a key topic in the Middle East),
• Sustainability and how it translates into fashion and retail,
• Keeping legacy businesses (either brands or retail formats) relevant for the future.

New ways to address the customer

Upon joining the company, Tom Athron, CEO of Fortnum & Mason, explained that he focused on the top 10 customer complaints collected during the previous Christmas campaign, to prepare for the upcoming one. He incentivized managers on those specific complaints. This helped him set up the right priorities, establish a climate of change and prepare for new challenges:

Taking inspiration from the hospitality sector, he created a new team, the “red coats”, whose role is to dedicate themselves to better serve customers, either by helping them when lost or providing assistance and information. Their role is really to provide high-level service and promote Fortnum & Mason as a brand. This also creates an emotional connection both with customers, but also within the staff, who increasingly sees the Red Coat team as a very desirable position, highly valued and accessible with hard work.

To better address customers’ needs, he also reviewed the product offer, making sure it was relevant to a different & younger clientele. For instance, arguing that customers were not coming to Fortnum & Mason to buy menswear (Jermyn Street, dotted with historical shirtmakers, is situated behind the store), he decided to replace the category with “supper clubs” instead, to reinforce both the retailer brand’s credibility and increase customer loyalty. In these clubs, customers can book exceptional food experiences in-store, and enjoy those experiences with their friends.

The CEO of Kiko Milano, the cosmetics brand, echoed Fortnum & Mason’s view on the fact that employees are crucial in creating and maintaining a great relationship with customers if salespersons are turned into actual brand ambassadors. For him, this is by far the most difficult part to perform. The director of Consumer and Retail Excellence at Zegna agreed, and this is why they use tech according to 3 key pillars to help teams focus on the experience and nothing else. Their systems help sales teams to:

• Show the right product at the right moment to the right person in the right channel (45% of Zegna turnover is performed online),
• Use tech at best to fine-tune and customize the B2B purchase experience,
• Have the possibility to stock, and re-stock, in a minimal time thanks to the fact that Zegna is both a brand and a manufacturer for other brands and owns factories.

When discussing customer lifetime value maximization, Majid Al Futtaim’s (MAF) Head of Customer Engagement explained that they stopped mass marketing based on promotions, after they realized that granting customers discounts, even if it could drive positive results in the short-term, was toxic. Consumers became addicted to receiving discounts and stopped purchasing at full price, while retailers ended up spiralling down and killing their brand equity. Instead, MAF believes in the importance of being an early adopter when it comes to marketing channels, in order to remain relevant to each customer according to their preferences. In turn, this requires being able to find the right marketers per channel (someone in charge of Instagram or mailing campaigns might not deal as easily and efficiently with TikTok). This is why the company massively invests in education in order to stay on top of current trends and have innovative employees, even though there are some risks involved in trying everything new.

Michael Ward, the CEO of Harrods closed the conversation by mentioning that, independently from the level of fortune owned by its customers, all of them were obsessed with their points acquired through the loyalty scheme, and the richest were probably the more vocal on this topic. After all, every retailer likes to look at tech in order to find new ideas or possibilities to increase customer loyalty, but having a sound and solid loyalty program, easily available online and offline, is the first goal to achieve.

Sustainability and retail

A panel allowed brand leaders and new-generation retailers to exchange their views about sustainability and fashion. It was interesting to hear German brand Lala Berlin CEO explain that she was hoping to learn from the other participants as she found the topic of social governance very difficult to address alone (this echoes one of the key messages from our 2022 White Paper on sustainability, in which we advocate for more cooperation and transparent exchanges between department stores). This panel was also the opportunity to hear from English social shopping platform, My Wardrobe HQ, which launched in 2019 and offers brands, but also customers, the possibility to rent and sell their collections or wardrobes, in addition to proposing a subscription model. They also provide their solution under a white label model to Harrods, Burberry and Tommy Hilfiger in the UK, and offer access to 500+ brands, including designers and luxury, from Maje to Gucci and Saint Laurent.

Addressing specific topics such as returns and fabrics, the panel shared several interesting points of view:

• To limit returns, it is key to give customers an accurate and precise set of product pictures, and the maximum information about the sizing (not only a sizing grid) to help them buy in full confidence. Asking about the reasons for returning the product is also a psychological way to make sure that customers are not simply having whims.
• Another important point stated by Lala Berlin (and which is already being applied by department stores’ private labels) is to make sure education goes both ways, with customers but also in the company’s mindset, and translates into very concrete results, such as a strict reduction of prototyping and production batches, to maximize the marginal value of each reference.
• Eyebrows were raised when new materials were mentioned, and it seemed that no one around the table was convinced that customers were either properly informed or paid a significant amount of attention to that topic. Instead of wondering about the ROI of such an operation, the CEO of Jigsaw mentioned that it was the responsibility of brands and retailers to make such efforts even though they were not directly demanded by customers.

During another talk, Chalhoub Group, the CEO of Anabela Chan, a jewelry brand, and Walpole, the UK’s association of British luxury brands, discussed the tricky question of how to include sustainability at the core of the business. For new brands, it is easy: Anabela Chan uses diamonds manufactured with carbon captured from the atmosphere or recycles aluminum from soda cans instead of using gold and silver. But for already existing businesses, the story is different as the idea is not only to go green while making sure this is not hurting the business but on the contrary look for positive outcomes for both the business and the environment. Chalhoub gave the example of their sustainable packaging project, which helped reduce the number of suppliers from 15 to 4 and costs by 20% while reducing their carbon footprint. In the same idea, Chalhoub identified that their commitment to gender equality (translated into a specific leadership program) helped the group increase its productivity, recruitment rate, and decrease its turnover within specific categories of executives.

How to keep legacy brands relevant in the 21st century

For the CEO of Manolo Blahnik, to remain relevant the company had to stop being a fashion company and focus on messages based on tradition and know-how, as Fashion, for her, is by nature transient. This view is not incompatible with a hi-tech approach, but choices have to be made: she mentions that AI is almost fully embedded in their ERP system now, while she does not believe in VR, the other hot topic among analysts, as for her this does not help convey a luxurious experience.

Zegna provided a very interesting point of view by reminding the audience that, in addition to staying on top when it comes to service excellence and luxury experience, remaining relevant also imposed remaining rooted in society and making sure to give back. This is why Zegna is the only brand in the world to own a national park, located in Italy, initially a strip of land purchased by Ermenegildo Zegna and then transformed into a park opened to the public.

The CEO of Fortnum & Mason mentioned that his biggest challenge was to “innovate everywhere while not changing anything” given the degree of public love for the iconic London-based flagship store. It was a true balancing exercise between keeping the brand alive and seemingly not changing anything, while at the same time making the needed structural changes to make sure the company would survive:

• For instance, while the store was only achieving 5% of online sales, they have grown that part of the business to 35% through a much stronger presence online and in social media, and a true digital transformation which he defines as wearing the customer’s shoes and considering the journey with a holistic approach. That translated into a subscription model for biscuit refills in a packaging that allows shipping via Royal Mail. As a consequence, this kind of new initiative allows the store to have a broader reach and use online as a true acquisition channel, for overseas or distant customers willing to have the Piccadilly Circus experience, rather than cannibalization of its in-store sales.
• Another example of subtly instilling changes in the organization is the level of attention put into hospitality, with champagne bars and restaurants operated at Heathrow airport or St Pancras train station, or in Hong Kong’s K11 art mall. Interestingly, Athron explained that hiring professionals with a hospitality background helped change the company’s retail mindset in a way which makes it much more modern and adequate to current customers’ needs. For him, keeping Fortnum & Mason relevant means being aware of what modern luxury is, and how it differs from its past definition: luxury should be, in his own words, “not for everyone, but for anyone”.

Harrods also mentioned that hospitality was the best way to remain relevant to very demanding and modern customers, as the iconic store aims to become part of their lifestyle through this new category (Harrods has more Michelin chefs than anywhere else in the world).

There were many other topics tackled during the series of interviews and conferences held during the event, and the reported selection of talks and speakers is, in essence subjective. While the sheer size of the event, much smaller than the NRF, does not provide space for more technical talks, it was interesting to hear retail leaders reflecting on their activity, always taking into account, or mentioning, the Middle Eastern customer in their talks.

After all, 16% of Harrods’ clientele comes from GCC and a recent article highlighted the fact that the region could very well be a reservoir for the growth of luxury brands in the near future.  For that reason, the Retail Summit is not as regional of an event as it may seem and it will be interesting to see its future development for next year’s edition.

Credits: IADS (Selvane Mohandas du Ménil)

What: RH ISAC reviews cybersecurity threats from the 2022 holiday season.

Why it is important: For the retail, hospitality, and travel community, the holiday season is the most intense time of year for consumers and cybersecurity professionals facing persistent threats. From the beginning of October through the end of December, cyber threats to organizations expand in both scale and intensity to match the rise in consumer traffic.

In order to examine the threat landscape facing members during theholiday season, RH-ISAC developed this report, the 2022 RH-ISAC Holiday Season Threat Trends Summary. The report is in three parts:

1. Member Perspectives: In which key subject matter experts from leading member organizations provide their insights into their current defensive preparations.
2. Threat Landscape: Where the RH-ISAC team examines the threat trends reported by the member community for the 2020 and 2021 holiday seasons from a historical and analytical perspective.
3. Associate Member Analysis: In which threat analysts from RH-ISAC associate member Flashpoint provide their perspective on the current holiday season threat landscape based on their research and data.

2022 holiday season cyber threat trends