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*The IADS visited Dubai in early March for a joint meeting with the International University of Monaco and the American University in Dubai, who will be collaborating with the Association on Private Labels-related research topics. The IADS took the occasion to visit the Dubai Mall and the Mall of the Emirates to review the department store scene in Dubai, we have included pictures for your review.

Most of the department stores available in Dubai are operated through franchised agreements. Is there anything new in their approach, has any decoupling taken place, or, on the contrary, did the Covid-19 episode tighten the links with the mother companies? And to what extent does their service offering reflect the evolution of the market? We have tried to draw some conclusions from our visit in addition to the pictures that are available separately.*

Introduction: overview of the visited malls

The Dubai Mall, which opened in 2008, is the second-largest mall in the world, with half a million square meters surface spread over 4 floors and 1,200+ stores. Its many attractions (an aquarium and underwater zoo, a VR Park, cinemas and children’s activities, Bloomingdale’s, Debenhams and Galeries Lafayette department stores) made the mall a Dubai touristic attraction. It is operated by Emaar Properties, a public joint-stock company whose logo is ubiquitous on Dubai towers. Emaar Properties is primarily a real estate building company, involved in the building of the Burj Khalifa and the Dubai Fountain in Dubai, but also in other projects in Egypt, India, KSA, Syria, Turkey and Pakistan. It initiated mall management operations after completing the Dubai Mall.

The Mall of the Emirates, opened in 2005, is smaller, with 223.000 commercial square meters dedicated to 630+ boutiques, including Harvey Nichols, Debenhams and Level Shoes department stores or equivalents. It made the headlines upon completion with the opening of the world’s largest indoor ski slope and is owned by the Majid Al Futtaim Group, which specialises in mall management, retail, leisure, entertainment and hospitality.

When asked about the two malls, it is common to hear long-term Dubai residents mentioning that the Dubai Mall is great for a weekend excursion, but they usually do not see it as a staple destination for everyday purchases (due to the traffic and dimensions of the space). As a consequence, the Mall of the Emirates stands more as an option for a human-sized everyday shopping destination, even though it is probably suffering more than the Dubai Mall of the competition created by the new malls opened in other parts of the city since then. The Mall of the Emirates, which can not compete with Dubai Mall in terms of the number of attractions, also tries to provide a sense of luxury to local customers in terms of communication, overall feeling and atmosphere.

However, at the time of visit, the sentiment was that the Mall of the Emirates was feeling worn out when compared to the Dubai Mall, where everything, public premises, service spaces, and even mall attendants’ level of knowledge, felt in better shape and more looked after. This was exactly the contrary when entering stores, as levels of attention provided by retail staff in the Mall of Emirates was incomparable with the ones in Dubai Mall where no attention was given to visitors, reinforcing local customers’ opinion.

Debenhams (franchise operated by Alshaya Group) – Dubai Mall and Mall of the Emirates

Debenhams, the British department store chain founded in 1778, went into liquidation in December 2020 and closed down all 101 stores in the United Kingdom within June 2021. The brand was acquired by Boohoo in January 2021.

However, this did not impact Debenhams’ partner in the Middle East, Kuwaiti group Alshaya, which started the partnership as early as 1997. Alshaya has since the bankruptcy announcement made a deal to retain the franchise rights with Boohoo, and operates a total of 23 in-mall stores in Kuwait, KSA, UAE, Bahrain, Egypt, Oman and Qatar, in various formats. In Dubai, there are 6 locations: 3 department stores (Mall of the Emirates, Dubai Mall, City Centre) and 3 Debenhams cosmetics stores.

IADS visited the two Dubai Mall and Mall of the Emirates locations. The feeling was rather different from one location to another, and paradoxically, the Dubai Mall location felt more worn than the Mall of the Emirates One, probably because of its smaller dimensions.

Debenhams Dubai Mall 

The store extends on one floor with very few windows and a rather classical store planning: cosmetic space at the entrance (a black generic concept with logos), then RTW (M, W, kids) and other categories.

In-store fixtures include brands-separating walls in the central section of the RTW area, giving a somehow suffocating feeling, reinforced by the very dense visual merchandising, with overcrowded racks. As a consequence, it gave a ‘bazaar’ feeling, reinforced by ubiquitous price reduction signs. At the time of visit, the location was empty with staff busy unboxing products and not paying attention to visitors.

Debenhams Mall of the Emirates

The store spans over 3 floors and gives a much more positive feeling than the Dubai Mall location, at least on the ground floor (cosmetics with brand concept corners, lingerie and accessories). Staff is omnipresent, welcoming and eager to help visitors. Lighting and the feeling of space are refreshing and give a very positive impression.

The 2 other floors are dedicated to fashion: Women’s on the 1F and Mens, Kids and Home on the 2F. Women’s fashion was overloaded with products and dense VM, however, this did not seem to deter customers from buying (Debenhams is popular in Dubai for middle-income families looking for bargains and low prices). On the upper floor, the feeling, especially in the home section, was clear and nice. In both 1F and 2F, staff was non-existent or not interested in helping or even saluting customers.

No specific services were mentioned or advertised at cash desks in both locations. The Debenhams website for the Middle East, announced by Alshaya for early 2022, is still not active at the time of writing.

Galeries Lafayette (franchise operated by Admic) – Dubai Mall

Galeries Lafayette and BHV department stores in the Middle East are managed by Admic, a Lebanese company founded in 1996. Galeries Lafayette in Dubai Mall, spanning over 21,500 square metres and 3 floors, opened in 2009 and is easy to find thanks to the mall’s public signs as a significant anchor.

The store is also extremely visible from afar, especially because of the ubiquitous branding visible from the atrium. It also emphasizes that the store’s main logos are not updated, clashing with the current “Time the time to smile” campaign on the windows with the new Galeries Lafayette logo introduced in 2017. This can be confusing for customers, especially the ones already familiar with the French locations or website, and who might be surprised to see an old-school logo on the building (shopping bags display the new logo).

The ground floor is dedicated to luxury accessories and international brands (LV, Gucci, Dior, Marc Jacobs, Valentino…) in peripheral sections, and low-rise corners with brands’ concepts dedicated to cosmetics in the centre, giving overall visibility, and a feeling of luxury and space.

On the first floor, dedicated to fashion (M, W) with flexible walls which can be moved to change brands or sections, there is a mix of local and international brands’ shop in shops fitted with their own concepts (Missoni, Ba&h…). It is therefore really possible to have 2 different feelings, one being that local brands are overrepresented, and the other one being that GL displays its savoir-faire in terms of fashion merchandising. The dressy space (an important market in the Middle East) is represented by Etoile La Boutique, a retailer specialized in evening gowns, and an extremely good-looking and inviting wedding dresses space at the entrance. The shoe space on the same floor is somehow less efficient as it is difficult to see the products. The Men’s section is also equipped in a flexible generic concept, with the exception of a few brands (Pal Zileri, Hugo Boss, Hackett, Polo Ralph Lauren).

The second floor is dedicated to kids, home and gourmet. The whole floor is in low rise concept, independently of the category, to make the gourmet space visible and accessible, which further emphasizes the logo mix-up (pre-2017, post-2017) in the Gourmet section.

Cash desks are all located in peripheral locations, forcing sales associates to ask customers to follow them to finalize sales, which seems surprising to ask of demanding Middle Eastern customers. At cash desks, no specific services are mentioned or advertised.

Bloomingdale’s (Dubai Mall) and Harvey Nichols (Mall of Emirates) (franchises operated by Al Tayer)

Al Tayer is a UAE-based conglomerate founded in 1979, operating in automotive, retail, hospitality, services and entertainment in the Middle East. It opened the largest Harvey Nichols store outside of the UK in 2006 in Mall of the Emirates, and the first Bloomingdale’s store outside of the US in 2010 in Dubai Mall.

Bloomingdale’s in Dubai Mall

Bloomingdale’s Dubai extends into 2 sections: a 3 floor department store dedicated to fashion, over 14,600 square metres, and a home store on the lower ground over 5,400 square metres (not visited). Like Galeries Lafayette, located in the opposite side of the Dubai Mall, it is extremely visible and accessible through an appropriate signage.

The ground floor is dedicated to cosmetics in the central section, and luxury accessories and shoes (but also a Gucci store with all categories) in a “drum”, with direct access to the valet parking. The size, level of attention and energy in the Cosmetics section suggests that this is where the turnover is made. Sunglasses and custom jewellery are also presented in this section but are hardly visible and not really appealing. In the “drum”, all brands are displayed in their own concept, with the exception of a generic space in the central Accessories and Shoes section where some brands are repeated (Saint Laurent, Valentino, Balenciaga).

On the first floor dedicated to Women’s fashion, only Gucci, Moncler and Keepsake have their own concepts, the rest of the brands are presented in generic sections on specific racks (which are different from the Men’s section ones). The dressy and luxury section is not specifically outstanding in terms of visual differentiation when compared to the rest of the floor, and the personal shopper’s entrance is not appealing. What is striking is a combination of smart initiatives (the Chanel fragrance chariot in a strategic location near the escalators) and the lack of services, including seating areas.

The second floor dedicated to Men’s and Kid’s is visually different, and most brands have their own concept. The personal section is appealing, with a barber, a fragrance section, and many seating spaces where to spend time. Men’s shoes are presented in a generic section and there is also a contemporary space, poorly accessible and not engaging due to the way the space is structured. The Kids section is experiential and festive, with a specific ambience and non-brand-dedicated staff.

At no point during the visit were services or Covid-related instructions mentioned. Also, the Visual Merchandising was somehow confusing and did not help to make products visible. This is all the more curious that the VM at Harvey Nichols is extremely efficient, and an executive at Al Tayer explained to us that both stores were managed by separate teams.

Harvey Nichols Mall of the Emirates

Harvey Nichols extends on 3 levels at a corner of the Luxury avenue. Signage in the mall and overall visibility is probably less efficient than for Bloomingdale’s in Dubai Mall.

The ground floor is dedicated to Accessories, Shoes and Beauty and all brands are displayed in their own concept. Visual Merchandising is extremely efficient and the space is one of the best seen during the visit.

The first floor, dedicated to Women’s fashion, is clear, welcoming and spacious. The play on colour in the atrium is similar to what Saks Fifth Avenue has done in New York, and the multi-brand space is commercially efficient. Visual Merchandising is exemplary.

The second floor, dedicated to Men’s and Kids, displays shop in shops in peripheral and central sections, with a very good display of shoes. Some questions are raised by the brand zoning (e.g. Gucci kids near Kenzo adults).

Harvey Nichols was one of the most appealing locations visited during this trip. It is (justifiably) seen as a reference by brands when trying to enter the Dubai market.

Level Shoes (original concept from Chalhoub Group) – Dubai Mall

Chalhoub Group, founded in 1955 and specialized in fashion and luxury retail operations in the Middle East, has launched Level Shoes in 2012 in the Dubai Mall over 9,600 square metres. It is not really a department store nor a shoe shop, but a “shoes & accessories district” and Chalhoub Group refurbished it in early 2020 in a spectacular fashion.

All international brands are presented either in their own-concept shop in shops in peripheral sections or in luxurious generic areas in the centre. The overall feeling is not far from a large and luxurious department store, with many welcoming seating areas, popup zones, and dedicated salespersons (attached to each brand).

Level Shoes is the only space visited where Click & Collect is advertised and proposed with appropriate signage. When IADS discussed this Click & Collect topic (or its lack of in most of the visited locations) with the Dubai Mall General Manager, he mentioned that this was the kind of service that the Dubai Mall was willing to develop at its own level, and a new section is currently being developed to welcome and accommodate customers coming to retrieve their click & collect purchases in a Dubai Mall premise, and not in each shop.

*Is Dubai still worth a retail trip? Yes, to see to what extent the need for services and retailer brand differentiation is not the same from one region to another. The most striking point during the visit was the fact that many brands were over-represented due to the multiplication of points of sales: in Dubai Mall only, Saint Laurent is represented in the Bloomingdales Accessories section (shop in shop + generic), in the Bloomingdales WRTW section (racks + double shoes/accessories exposure), in the Bloomingdales MRTW section (racks + additional shoe section), in the Level Shoes area (shop in shop) in addition to the brand’s own retail store, leading to a total of 7 locations for this mall only. Is it enough for local retailers to stand out with an international offer that can be available somewhere else?

Our conversation with the Dubai Mall General Manager suggests that they anticipate that the need for services and additional care, that is spreading in the rest of the world, is growing and that they might be looking to be part of the solution. Department Stores might want to follow what they do when it comes to Click & Collect and, above all, how they articulate it in terms of business model with brands, as this might come as an inspiration.*

Credits: IADS (Selvane Mohandas du Ménil)

What:  A new piece on the repurpose of former retail spaces.

Why it is important:  From Asia to the US, the question is important as it impacts the socio-economic environment. But department stores do not have to close to have a new sense of purpose for their own spaces. Reinvention can come from within.

Inside Retail reviews the fate of Isetan, the Japanese department store, which closed its location in Central World mall in Bangkok, Thailand, in 2020, after the expiry of its lease and 30 years of operation. Central Pattana, the mall’s owner, is planning to redeploy the space into an “urban lifestyle destination” however the project has been delayed from 2021 to 2023.

Similarly to the article about Borders’ in the US, the journalist focuses on the happening of former retail locations once they are closed. For Inside Retail, the consolidation of department stores was a period of “great terror” for mall owners, as the former were key traffic drivers to the latter. However, with time, this terror transformed into an opportunity best summarized by “what can you do with a vacant six-level department store space in one of the best locations in the city?”

For Inside retail, the solution lies into a cocktail of options: gym, retail specialy, food hall, supermarkets, events & performances spaces, schools, flexible workspaces.

From great terror to great opportunity: the rebirth of Isetan 

What: The membership model is attracting new interest for its potential to unlock sustainability solutions as well as commercial advantages.

Why is it important: Subscription-based business models are attracting interest to drive deeper engagement with customers and tackle tricky sustainability challenges. Memberships could help dissociate fashion brands’ sales from production growth, enable more recycling and reduce waste.

Brands like outerwear startup Early Majority and On Running are experimenting with the business model. On Running introduced a subscription service last September in anticipation of the launch of its first recyclable shoe this summer. The brand is betting consumers will shell out USD 30 a month for a shoe subscription, just like they do for Spotify.

Once the new shoe drops in June, members of the brand’s Cyclon service will be able to trade their pair in for a replacement every six months. The goal is to solve a pain point that has plagued efforts to make fashion more circular: the friction associated with getting back old products so they can be recycled.

At present only a handful of sustainability-focused brands are experimenting with new subscription models, but how they perform over the coming months will serve as a valuable case study for others in the sector.

Can memberships solve fashion’s sustainability challenges?

What: A review of the business model which is dominating the US fast fashion market.

Why it is important: Shein is a key player on a growing market, which is also threatening department stores. Knowing the base of their business model and its limitations can be helpful to design an alternative product proposal.

Coresight reviews the Shein business model and compares it with Boohoo and Asos to draw some conclusions.

Shein represented a turnover of USD 15.7bn in 2021 (most of this revenue having been performed in the US), with a growth of +57%, which outpaced Asos (+19.8%, USD 5.4bn turnover) and Boohoo (+28.1%, USD 1.9 bn turnover). All 3 players target Gen 2 customers by using influencers and celebs on social media channels (Shein is the 7th most-shopped retailer or apparel platform, capturing 22% of all 18-29 years old customers).

Thanks to its business model, the cost of business failure due to colours or fabrics remains lower for Shein (6,000 new items are launched every day), than for Asos (1.500 new items every week) or Boohoo (500 new items every week).

Coresight predicts that Shein’s advance in the US is going to consolidate in 2022, but also identifies the following challenges:

• A competitive disadvantage when it comes to delivery leadtime to final customers (12 days vs. 1-2 days for its competitors),
• Questions about the sustainability of its business model, even though its customers do not seem to be concerned so far.

Coresight also tries to draw some lessons from their model, that could be useful for other companies:

• Instead of relying on one source of customer data, the goal is to analyse a variety of sources, to understand customer psychology and propose a unique experience,
• Automation at scale is key to sustainable personalization in fast fashion,
• Artificial intelligence comes as a complemente to human judgment.

Shein multi billion business 

What: As top luxury brands pull back from wholesale, e-tailers are adding online concessions to their business models rather than losing access to Gucci loafers and Balenciaga hoodies.

Why is it important: Big luxury brands have long embraced “shop-in-shop” concessions on department store floors, which allow them to control product assortment and pricing while benefiting from the customer traffic and upmarket adjacencies offered by department stores. In a bid to control discounting, several top brands are imposing a similar model on e-tailers as the labels pull back from online wholesale or eliminate online wholesale completely.

Gucci and Moncler for example are moving to a concession model with luxury e-commerce sites as they end their exposure to wholesale.

The shift has added another layer of complexity to the multi-brand luxury e-commerce market, with fierce competition, high customer acquisition costs, and logistical challenges making it increasingly difficult to turn a profit.

Commissions on e-concession sales are lower than e-tailers' wholesale mark-ups thus sites must sell more products to reach the same revenue. Still, concessions can reduce inventory risk and allow sites to tap deeper product availability through a brand’s stocks.

E-tailers are working to roll out concessions while maintaining a role in product curation and fulfillment. Mytheresa for example, known for its tightly curated edit of brands, rolled out what it calls a “curated platform model” for six brands, including Moncler and Gucci, during the Autumn/Winter 2022 season. As with a traditional concession, the brand retains ownership of the inventory that it sells on the Mytheresa platform. What’s different is that Mytheresa’s buyers still curate the selection of items it sells, and market the products and ship them from the Mytheresa warehouse as they would under a wholesale structure. From the customer’s point of view, the experience of shopping at the e-commerce site remains unchanged.

For wholesale businesses, making the shift to an e-concessions model can be a significant undertaking that requires ample time and investment. In the case of Kering, the end of online wholesale might prove advantageous for the handful of players who manage to forge an e-concession partnership, as fewer online competitors are likely to be selling popular items. With the brands carefully controlling prices, retailers won’t have to worry about rival websites offering the same product for less.

The pivot to e-concessions is reshaping online luxury

What: The NRF VP of CSR and sustainability’s interview for Earth Day.

Why it is important: Customers are increasingly aware that every business decision has real-world impacts and they expect retailers not only to be prepared, but also very active… even though this is uncharted territory and each retailer is trying to make do with what they have.

For the Earth Day and in preparation for the upcoming Supply Chain 360 Expo, the NRF decided to interview Scot Case, VP of CSR and Sustainability for the Federation.

For him, there is no really one definition of sustainability on the market as he remarks that it greatly varies on who is defining it, and with 4.2 million retailers in the US, that can create confusion. This is why he prefers to stick to a simple definition: “sustainability for the retail community is about creating net positive environmental, social and community benefits”. This allows to have a rather simple way of measurement, just like how companies assess their profits, even though this does not wipe out the complexity of calculating the hidden costs of any purchase made by customers.

Consumers care: 70% of them expect retailers to commit and provide information about the products they sell, and this proportion goes higher within the younger generations.

What is retail sustainability and why should you care? 

TEST LINK

What: Resale has evolved from being a side business in fashion to a golden opportunity that can’t be seized fast enough.

Why it is important: Retailers and brands are partnering with or launching resale platforms to contribute to circularity and reduce fashion’s environmental impact. Brands also benefit from launching their own platforms or partnerships because they can control the customer relationship and can claim revenue generated by products they’ve already produced.

While giving new life to old garments is one way to deal with clothing waste, brands will need to also reduce the number of goods they produce to actually reduce their total environmental footprint. The impact of the resale model will depend on if and when brands use it to help address larger issues ingrained in the industry such as harmful manufacturing practices and industry-wide overproduction.

A 2020 report by McKinsey and the Global Fashion Agenda found that for fashion to meet climate goals, resale — along with repair and recycling — needs to account for a much bigger slice of the industry. Also, the resale model is not perfect as there will be many items that are not going to be resold, therefore brands need to be honest about the flaws and challenges of such programs.

Resale sustainability: What’s real and what’s false

What: IADS’ partner GDR quarterly report on innovation in retail.

Why it is important: GDR scouts the world to source retail innovation on all its forms, from all segments and all categories.

This quarter, GDR identifies 6 trends : The NFT conundrum, The Metaverse landgrab, The Mature Store Age, Unapolletically Analogue, Open for Business and Re-economy. We have made a selection of interesting cases for a retailer’s point of view below:

• The NFT Conumdrum: GDR argues that the current NFT craze in the press is a smokescreen distracting many from their true potential when it comes to using NFT to foster customer loyalty and engagement:

+ Use them to create a members club, as shown by Flyfish Club (which will open in NY in 2023 only to holders of the company’s NFTs), the Adidas club, or, to some extent the Gourmet NDFT which pays chefs every time their recipe is bought (what about having department stores selling exclusive recipes from their top restaurants?),

+ Link them to subscriptions services or increased product experience: holders of bored Breakfast Club receive a free monthly coffee bag, while holders of Blockbar NFTs have access to a unique bottle of whiskey, and Valdé Beauty gives access to a VIP community,

+ Make NFTs a physical product: Samsung TVs now allow to buy, trade and display their NFTs, Selfridges reportedly sells NFTs over the counter, while there are mystery NFTs sold in machine dispensers in NY.

• The Metaverse landgrab: Retail is moving to the metaverse and brands are buying virtual land to build stores: Carrefour (Sandbox), B8ta (with employees’ avatars in the virtual store), Ralph Lauren (selling digital clothing and virtual coffee), Nike (Roblox), Procter & Gamble, Samsung (which reinvents its NY flagship store), CVS…
• The Mature Store Age: GDR reports that now, the era of retail innovation and tests has come to a tipping point and technology has matured and scaled. This is the reason why we start to see increasingly complex and fulfilling shopping environments:

+ E-commerce giants going physical, such as Amazon first fashion store with a seamless shopping experience, or JD.Com making the most of its logistics capabilities in physical retail, or Cisco’s store of the future

+ Brands are also upping the game in their flagships, such as Nike mixing metaverse elements with its physical flagships, Marks& Spencer using AR to provide customers with additional information, Starbuck partnership with Amazon, Fenty offering an AR-powered body scan of each customer to proposed tailor-fit products.

+ Unapologetically analogue:  retail is also about experience, calling out for all senses:

• Fragrances (Aesop sensorium),
• Food (lab-themed coffee shop, Primark partnership with Greggs, Hy-Vee liquor store),
• Apparel and shoes (Esquivel slow-fashion experience, Foot Locker family playground store),
• Hi-Fi (Bang & Olufsen trial focused pop-up in London),
• Emotions and mental health (Selfridges Superself).
• Open for business : how to emphasize diversity and fight against discriminations? It is all about helping customers (especially the impaired one) with the right tech tools, promote charities, cater for specific needs, or represent the diversity of customers through a revisited brand and product offer. The examples mostly include brands.

Re-conomy or how to source for customers’ desire for sustainability through products, services and packaging that tap into the idea of repair, upcycling, zero waste or carbon capture (the examples include mostly brands)

• Brands: the Converse lab which promotes reuse over purchase, Arc’teryx with its Rebird service centre, zero-waste hospitality and retail concepts,
• Stores: French store YesYes helping customers to repair their electronic devices, Ikea launching sustainable living zones in the UK,
• Sustainable services: purchase in bulk, environment-friendly delivery services.

If there is any example you would like to deep dive in, please let us know and we will liaise with GDR to know more.

GDR 81st Global Innovation Future 

What: A sustainability in retail study produced by the Boston Consulting Group (BCG) found that the retail industry needs to work harder and faster to make a meaningful impact to deliver on climate change commitments.

Why it is important: This study was conducted to reveal that there is a widespread understanding that ‘winning in sustainability is a competitive advantage. However, there seems to be a disconnect between the goals of the retailers and the progress itself.

While 60% of the firms believed their company’s goals were bold and differentiated, more than half had still not set any sustainability KPIs across their businesses to measure progress.

Only a select number of companies have reached the level where they can claim that sustainability is a core company strategy. However, some of the companies are at the “sustainability basics” level which means they are only doing enough to comply with the regulations required and meet the minimum expectations of investors and other stakeholders.

The survey did find that 90% of the survey respondents that are involved in sustainability believe collaboration is key to achieving their goals and targets.

Retailers are lagging on sustainability goals

What: The HBR takes stock of the key learnings made during the Covid-19 peak when it came to organisations and their resilience, and defines the key criteria to look at to maintain this resilience and agility in the future.

Why it is important: None of the 4 pillars they identified is new, and Covid, just like for digital, was a leap forward in terms of working methodology and organisation. Companies were not adapting, they were forced to jump in the future of work.

The HBR has made a review of all successful practices that were set up and tested during the wake of the pandemic, which was an extremely stressful moment for teams having to deal with uncertainty. This reflects also the works the IADS has made in November 2020 in its first White Paper, Global pandemic, local department stores.

Moving forward, the HBR identified 4 essential ways to build adaptable teams, making sure that the resilience will be set as an embedded feature into organisations:

• Collaborate through inclusion: it is all about going beyond silos and use the richness of virtual, remote and hybrid teamwork. This can lead to corporate innovation: Google or AT&T sourced new ideas within employee networks. The Dow Chemical Company used digital virtual tools to communicate with small customers who did not have contacts with the company before. Now, it generates 80% more leads.
• Lead through agile management: the norm is now to launch new product lines (such as General Motors) or processes (such as Delta) in weeks rather than in weeks or years. This requires giving teams a clarity of mission as well as adequate resources to be self-sufficient, self-organised and self-managed. Target has developed a Target Dojo, a resource centre where employees are expected to spend a fifth of their time to learn new agile methods.
• Promote team resilience: this goes through the use of specific indicators: psychological safety, positive intent, fast and frequent check-ins, generosity, gratitude and empathy. Resilience is also sustained by the possibility given to all team members without exception to express and voice their ideas.
• Develop active foresight: as the IADS also advocates in its White Paper, it is all about making sure that companies are prepared by addressing challenges and foreseeing them through strategic planification and scenarios.

How to help teams coping with ever-changing and uncertain contexts 

What: A piece from McKinsey about creating the ideal context of hybrid working for all.

Why it is important: Department stores usually have a diverse workforce, and the needs of all employees have to be taken into account to make sure they remain desirable in their future recruitments.

Hybrid and flexible forms of working, boosted by the pandemic-related lockdowns, are here to stay, in spite of what employers would like: 4 out of 5 employees would like such methods to continue in the future. However, hybrid work does not mean the same for all employees, and can contribute to amplifying the differences between all of them. Not so many companies have mastered this challenge so far. What makes the picture worse is that usually, the most underrepresented types of employees favour most flexible ways of working: disabled, non binary or LGBQ+ employees (the reason why they prefer being able to spend time out of the office is understandable). Cherry on the cake, 71% of employees would leave their job if flexible working options were not available anymore.

However, it is difficult to fully adapt working conditions to each employee (workplace of one). McKinsey identifies some recipes to help implementing an acceptable context for all employees:

• Work-life support (demonstrate appreciation for employees non work demands, responsibilities and interests),
• Team building (foster trust, collaboration between members who see each other as human being before colleagues),
• Mutual respect (genuine concern for the well-being of all employees).

Making hybrid work fit with inclusive management

What: Returns are too costly for retailers, in addition to being environmentally unsustainable.

Why it is important: All IADS members are facing the same issues, and some options explored in the article could be worth being given a shot.

Retailers are doing their utmost to please their customers and giving them what they want, even if this means losing money when it comes to processing product returns. However, what is great for the customer might be harming both the environment and retailer’s bottom line, which is why the Robin Report advocates for a recalibration, especially in these times when logistics are getting more expensive.

On average in the US, the cost of shipping a product is $10, meaning that logistics are a whole in case of a return will cost $20. As a consequence (and this is already what large retailers such as Amazon are doing) for products costing less than $20, it is often better for the retailer to leave the product to the customer or to ask for local destruction rather than returning it.

In addition, return rates are rising, a mechanical consequence of the increase of e-commerce (from 18.1% in 2020 to 20.8% in 2021).

In order to mitigate the cost, The Robin Report looks into several options:

• Ask customers to receive multiple orders into one package for a discount,
• Incentivize slower shipping methods, and charge different prices for faster delivery options,
• Issue a waiting period on returns, or set price minimums to earn free shipping,
• Encourage pickups or returns in store,
• Offer free shipping only to high value customers,
• Offer free shipping or free return, but not both.

The Robin Report believes that, by being transparent to the customer and explaining what is at stake (both economically and environmentally ) this could actually become an asset for the retailer, which would then be recognized as socially and environmentally committed.

Is free shipping dead? 

What: The fact that modern consumers have the desire to purchase ethically is undebatable. Whether they can currently afford to put the money and time into conscious consumerism, however, is a more contentious topic.

Why it is important: For consumers that are still recovering from the pandemic, affordable goods are seen as more important than sustainable goods, thus diminishing retailers’ ability to roll out sustainable initiatives. This has led to huge physical expansions of discounters such as Dollar General and Big Lots.  To win big with new-age customers, retailers will need to find the right balance between affordability and sustainability.

Companies like Dollar General and Amazon – brands that compete based on convenience and put sustainability as an afterthought – have seen a lot of success. But this seems counterintuitive to the ethos of shoppers today who claim to be more socially and environmentally conscious.

A recent Forrester survey found that 2/3 of e-commerce shoppers in China, France, and the UK were concerned about the impact of climate change, yet only a little over half of US e-commerce consumers shared the same sentiment. The same study found that 2/3 of US online consumers want online retailers to be more transparent about their business practices, but many retailers are still in the dark about the full impact of their supply chain.

But as the US economy is still rebounding from Covid, many consumers have a gap between what they want to buy and what they can afford, thus making discount retailers more interesting. As consumers are expecting low prices, there is an added barrier to retailers’ ability to roll out sustainability initiatives.

The grey economy (informal economy) refers to any transaction that takes place outside of traditional retail sales. The advantages of the grey economy are that customers get direct insight into where goods are created, and they are able to directly interface with the individual providing services. Traditional retailers need to provide a bit of revolutionary energy that eco-minded consumers crave to find that perfect mix of affordability and sustainability.

Discounting, sustainability, and the grey economy: A reconciliation

What: Sustainability used to be disconnected from important business decisions, but now there is an increased focus on environmental, social, and governance issues (ESG) that the current C-Suite does not know how to address. This is where the Chief Sustainability Officer (CSO) comes in.

Why it is important: A well-established CSO can make a real impact by connecting the dots on ESG and supercharging the sustainability transformation. The role of the CSO will undoubtedly grow as organizations continue to put ESG at the heart of their business.

More CSOs have been appointed in 2021 than in the previous 5 years combined. As companies continue to focus on ESG initiatives, the role of the CSO will undoubtedly grow. ESG issues are dominating the discussions of how businesses remain relevant in the years ahead and are being driven by all stakeholders. Governments will start enforcing laws and regulations that will be mandatory for businesses to comply with, consumers are changing their behavior and demanding more sustainable products, and employees are looking to work for employers who share their values and understand the fragility of society. Companies will need to take all these demands into account, and the role of the CSO is meant to address exactly this.

The evolving role of the CSO has revealed key trends:

• The role has been prioritized as a piece of the heart of the business rather than back-office compliance. ESG issues touch upon the entire business, therefore the CSO must be able to deal with this complexity.
• ESG needs to be a key topic for the board and executive agenda. Having the CSO connected to the CEO helps educate and upskill the executive team on ESG issues.
• ESG needs to be embedded into the entire organization. As companies embrace sustainability into their strategy and operations, expertise and knowledge around ESG must spread through the organization.
• There is a growing importance of ESG reporting as there are increased investor expectations around ESG and companies’ willingness to showcase their progress.

The CSO role is complicated as it is intertwined in each aspect of the business. The CSO needs to thoroughly understand the business, especially how sustainability and profitability are complementary or contradictory. They also must be able to identify shifts in the industry landscape and spot related value-creation opportunities for new products and services.

As the CSO role is tied to all areas of the business, eventually other parts of the organization will gain their own sustainability expertise. Although we are far from this, the role of the CSO could eventually become redundant as each piece of the organization will eventually put ESG at the heart of all decision-making.

Empowered Chief Sustainability Officers: The key to remaining credible and competitive

What: The Economist reviews the consequences on local communities when Amazon decides to set up a fulfilment centre nearby.

Why it is important: All IADS members are investing in new warehousing and deliveries facilities. Dealing with local communities is key to secure their support and avoid any PR catastrophe.

The Economist reviews the impact of the creation of an Amazon warehouse and logistical centre in Birmingham, Alabama.

Amazon is already the 2nd biggest private employer in the US, just after Walmart, with 1.1m employees and plans to hire 125,000 more to staff the 400 fulfilment centres planned within 2024. Birmingham, once buoyant with steel factories, is the perfect example of ideal location for Amazon, with an available local workforce looking for jobs and the possibility to negotiate tax exemptions.

Reviewing the impacts of the opening of such fulfilment centres in the US, the Economist highlights that in the short-term, average wages in the county decreased by -10%. Any increase decided by Amazon have however a spill over effect and force all employers in the region to raise wages. In the long term, some studies show that such centres tend to reduce poverty and favour an increase of household income.

Another parallel effect is that the incentives granted by municipalities to Amazon to lure the company into investing in their cities rather than other imply that there is no benefit on a higher level for the community, as this does not imply a significantly higher income for the townhall. Critics tend to throw oil on the fire by mentioning that these incentives are not needed, given the fact that Amazon decides to set up a warehouse according to a geographical point of view including a review of the logistical infrastructures, and that cities could very well secure Amazon’s investments without giving too much away.

The impact of e-commerce warehouses on local economies 

What: A reflection on what became of the 500+ former Borders stores in the US.

Why it is important: Their different fate show that modern retail has evolved into something more heterogeneous: from medical facilities to studios, supermarkets or fashion stores, there is no more a single way (or a winning one) to do retail, but a multiplicity of formats, that department stores are also experiencing on their own (see the efforts led by John Lewis to repurpose its stores).

Borders used to be a bookstore chain, bigger than Barnes& Noble, that closed all of its approximately 500 locations following its bankruptcy in 2011.

Interestingly, Borders was probably ahead of its time by then, as it viewed its stores as “third spaces” with cafés, free wifi, lounges, a unique architectural approach making each of its stores a destination per se, and a curation adapted to the community where it was located. In terms of offer, it combined the discounting approach of Walmart with the browsing ability of the local library.

Experts consider that the chain failed due to a number of reasons: it sticked to CDs and DVDs although this was a diminishing market, it outsourced its e-commerce operations to Amazon and the stores were too big and facing harsh competition from Barnes & Noble.

The article focuses on what’s left of the real estate footprint of the company: 20% were transformed into local supermarket,  16% were purchased by category killers, 12% are vacant, 10% became clothing or fashion stores, 10% were divided into smaller spaces. To the surprise of the journalist, more than 20% were transformed into different spaces: studios, gyms, medical facilities, coworking spaces.

What’s in for former stores after their retail life? 

What: The first in-person WRC to take place since the last edition in Amsterdam (May 2019).

Why it is important: After 2 online editions, many retailers were glad to gather together for in-person conferences, in order to share experiences on the challenges they encountered and how they faced them (it was a fight for survival for most of them). However, the key learnings from the online editions were well absorbed, with a more interactive way of leading the show.

Interestingly, there were many exclusive studies presented by either retailers or consulting companies which are presented here. The motto of this session was “rebuilding a better retail”.

The 2022 WRC edition was built on 6 pillars, 4 of which are reported here:

• “Our planet” (report), and what is takes for sustainability to really take place in retail. The report, co-developed with the BCG, makes it clear: sustainability is possible but complex and hard, and will require efforts. So far, the report shows that most retailers are achieving opportunistic initiatives in CSR but do not harness sustainability as a competitive advantage. 70% of retailers agree that sustainability is a priority, but only 57% believe that they have invested enough in the past 3-5 years. Most of companies have pursued quick wins so far, but it is now time for harder efforts. This implies embedding sustainability (through a properly restructured and re-incentivized organisation) and using data. The BCG identifies 9 key principles:

• Sustainability needs to be an explicit CEO priority, with bold goals and clear narrative, which are embodied into flagship programs (few but at scale),
• Sustainability must be embedded into organisations through a proper end-to-end integration, helping to capture value and embracing digital,
• This requires a business model innovation, new collaborations and also new methods to finance these operations.

For the BCG, it is all about small steps and successive quick wins in order to drive a real movement and generate value for individuals and the industry.

• “Our society”, and the role of retail in a broader context,
• “Our economy”  and the contribution of retail into workforce reskilling, employment growth and participation to countries prosperity,
• “Our business” (report) with the new rules for business that have been identified in the past 2 years. The report, co-developed with OC&C, mentions that digitisation is coming in waves (it is not a singular effect and requires retailers to evolve continuously), with a tipping point expected for 2025. Winning strategies however remain the same: driving flexibility into the cost based, leverage fixed cost investments by adding scale, use digital amplification to reinforce the proposition, and invest in digital engagement to ensure customer stickiness.
• “Our consumer” (report), his/her new motivations and behaviour. The report, co-developed with Railsbank, identifies a few new personas:

• The digital arrivals, who discovered e-commerce and online with the pandemic, and realize that this suits their needs,
• The subscribers, who find handy to receive at home a selection of products according to their needs in exchange of a monthly fee,
• The ethical consumers, from Alphas to Generation Z, including also millennials and boomers, all concerned with the planet and the impact of their own consumption.
• The thrill seekers, all about demanding greater interactions and enjoyment from shopping, through playfulness and gamification. Their search is not only online but also physical, after having endured lockdowns for the past 2 years.

These new profiles of course have an impact on how stores should be organised (both offline and online), how CSR strategies should be set up, as well as what kind of product should be selected and sold.

• “Our plan for change” (report) and how dynamic leadership, empowerment of people and willingness to embrace partnerships can help retail to grow into a resilient industry prepared for the upcoming challenges. The report, co-developed with Deloitte, emphasizes how the notion of time has shifted for both retailers and consumers during the pandemic, leading into new practices in recruitment, employment, customer retention, and the notion of purpose in parallel to sustainability.

WORLD RETAIL CONGRESS 2022 - "Our Business" Report

WORLD RETAIL CONGRESS 2022 - "Our Consumer" Report

TEST LINK

What: Coresight offers a synthetic view of its key learnings at the WRC.

Why it is important: Sustainability and Values are two topics that were also strongly promoted at the NRF Big Show in January 2022, along with the Metaverse opportunities.

Coresight takes stock of the 3 days of conferences that took place in Rome during the World Retail Congress at the beginning of April, 3 years after its latest edition in 2019. The intelligence company draws conclusions on 5 topics: Metaverse, Values, Sustainability, Consumer and Macro vision.

Metaverse: for Coresight, retailers should jump in the pool with a test and learn mentality. Given the fact that it is highly probable that Gen Z will be the first metaverse-friendly generation, this is a compelling opportunity for luxury brands, including Metaverse-born ones (such as Cult & Rain). However, virtual IP protection will be vital to avoid any legal issue.

Values: many key retailers stressed out the necessity of playing an ethical role in the community they serve, as shown by Ron Johnson or Walter Robb. For them, understanding their purpose makes money happen, not vice versa. Whole Foods for instance achieved its success through adopting a stakeholder philosophy, listening to customers, team members and the environment, and maintaining high quality standards. For Robb, the role of company leadership is to support team members, who support customers.

Sustainability: from a niche and European-centric topic, sustainability has now become global, also spanning all generations. At Levi’s, sustainability is a strategic imperative and involves many innovative processes to reach the goals. Ahold Delhaize also shared their actions in this field.

Consumer: new consumer personas are identified: Digital Arrivals (who appreciate and expect convenience), Subscribers (looking for subscription models across the board), Ethical consumers (aligning their purchases with their environmental and social values), and Thrill Seekers (usually young, digitally native customers expecting retailers to serve them in all capacities).

Macro: global GDP will decline in 2022 as a consequence of the Russia – Ukraine war and its consequences on oil, food and raw material prices.

Lessons from the World Retail Congress 

What: The Netflix share decrease might not be only contextual, but the reflect of a broader downwards trend.

Why it is important: Subscription services and paying loyalty programmes might be the first initiatives to be hard hit if customer behaviour changes were spreading across the economy as suggested by the Financial Times.

Netflix saw its share price drop more than 35% after it reported a fall in subscriber numbers for the first time in a decade. Many analysts think that this is a sign that the subscription economy might be in for a contraction in the coming months or year.

For them, inflation puts pressure on consumers, who in turn evaluate their least valued purchases and get rid of non-essential spending. Such a reasoning is fuelled with the decrease in sales in fast fashion brands (Asos, H&M), food delivery, services and other industries.

However, customers are still able to make clear choices: for instance, the travel industry does not see any signs of slump so far, however all economic players remain on their guards watching the inflation numbers going high and wondering what it might mean in terms of new customer behaviour.

Great cancellation spreads beyond Netflix 

To view our photos of the Printemps revamp click here

Printable version here

Introduction

*Paris has gone through significant retail upgrades in the past 2 years, with the opening of La Samaritaine in June 2021 and the general stores and branding overhaul at Galeries Lafayette in September 2021.

In the meantime, the global events that have been unfolding one after another are blurring the visibility when it comes to getting back to normal touristic flows, a situation that has forced all major players in Paris to rethink their approach almost in real-time.

Apart from launching “7ème Ciel”, which is a second-hand and circular fashion initiative (quite different both in terms of spirit and business model when compared to Re-Store from Galeries Lafayette), Printemps has remained silent since the arrival of Jean-Marc Bellaïche, the new CEO, in March 2021 and the subsequent store closure plan in French regions that was announced.

This is the reason why the relaunch of Printemps is significant, both in terms of brand identity, customer approach and new services offered. We have visited the new Haussmann stores and reviewed the novelties for you, drawing some comments from our visit in addition to the pictures that are available separately.*

The Printemps situation in a nutshell

Printemps, founded in 1865, currently operates 29 stores, 20 with the Printemps brand (16 in direct and 4 in Franchise) and 9 with the Citadium brand, after having closed respectively 4 Printemps stores and 3 Citadium stores in 2020-2021. The group achieved a turnover of €1.5 bn in 2021, a far cry from the estimated €1.7 bn turnover from 2019 but increasing +38% compared to 2020. The CEO mentions that the 2021 turnover is -12% on comparable days (i.e. on the days when Printemps was opened in 2021) compared with 2019, which gives an idea of the tourists’ absence impact. In 2019 70m customers visited the Printemps stores, 20m of them in Haussmann only.

The goal of the Printemps brand, offer and services revamp is to regain local customers (2/3 of the customer base, with locals already growing in 2021 +10% vs. 2019 overall and +15% in Haussmann) and attract US, Middle East and European customers, through new customer journeys, starting with “less retail, more F&B and entertainment”.

The revamp took place on the 19th of March, the Spring day, with a “Tout commence au Printemps” catchphrase, playing on the meaning of Printemps (Spring in French, which means that the slogan is akin to “Everything starts at Printemps”). This allows the company to play on the concept of renewal, which is quite catchy these days when customers are tired of the Covid-19 related restrictions and are also looking to escape the gloomy news of the war in Ukraine. It is also an efficient way to emphasize all the “first times”, both in terms of advertising messages (my first emotion, my first shopping spree…) but also present Printemps as an innovative company which led the way in many aspects of modern retail (for memory, Printemps was a founding member of the IADS in 1928). In a nutshell, Printemps presented their new initiative as a moult, to complete the springy message.

A new in-store experience

The company has decided to review its logo (a stylized P which also evokes a heart), colour code (green, white and gold) as well as its tagline (everything starts at Printemps). The new advertising campaign is quite dynamic and transmits a lot of positive energy.

The in-store execution is quite effective, both in terms of signage and the use of the green colour, vivid and visible from afar, which is dotted across the floors, be it via the in-store displays, elements of décor, but also the products developed in collaboration with brands. At the entrance of the store, the information desk has been decluttered and is quite welcoming. The staff has been well briefed, 100% of them saying hello to all customers and showing enthusiasm even 1 week after the re-opening, which suggests that sales and traffic were extremely sluggish prior to this welcome rebranding and upgrade.

10 new permanent concepts have been introduced across the 3 buildings (Women’s, Men’s, Kids and Home) mixing retail, experience, leisure and F&B, also making the most of the building specificities:

• In the Women’s store: La Coupole (6F), a spectacular animation area mixing a 6-months long pop-up zone with a restaurant, Ready Up (4F), an area dedicated to promising students in fashion and design, Hors Saison (3F), a space where clothing from former seasons are sold at a discounted price, and L’Endroit (2F), a comfy designers’ multi-brand space replacing the former Maria Luisa concept store,
• In the Men’s store: a new “Café vert” area (GF), mixing coffee and plants, and an experiential shop-in-shop operated by Au Vieux Campeur (-1F), an iconic Parisian outdoor retailer,
• In the Kids and Home store, L’Appartement de Made in Design (2F), a co-op space selling design items in a home-like environment, and a new retail concept on the Beauty lower floor.

What’s new in the Women’s Store

La Coupole Plage on the 6th floor: this place makes the most of the Art Deco cupola, which housed a brasserie in the past and its name makes a reference to “Paris Plage”, the townhall yearly initiative which transforms the Seine riverbank into beaches.

The F&B area has been quite reduced and pushed on the edges, which also allows emphasis on the presence of terraces (4 terraces which can each accommodate 6 customers) while providing a sense of exclusivity and luxury. The restaurant is managed by a Chef, who co-develops with a food personality a new menu every 6 months. For the first iteration, a food critic who recently published a recipe book has been invited.

The freed space has been dedicated to an experiential retail zone, which is supposed to change every 6 months. For now, the whole area is dedicated to swimwear in a very immersive environment which is quite well executed.

Also, the whole area easily communicates with “7ème Ciel” on the 7th floor, the second-hand space that was opened in September 2021. This zone also opens on the rooftop of the store, with a food truck-like F&B offer, giving a feeling of lightness and joy that was catalysed by the sunny weather. Even though La Coupole takes time to be reached, either via escalators or lifts, it is well indicated across the store, and impossible to miss. It might be more effective in terms of traffic generation than the brasserie, at least in terms of traffic spreading across the day.

Ready-up! On the 4th floor and directly in front of an escalator, this space is the result of a partnership with Campus Mode (a structure federating fashion schools in Paris) and is dedicated to fashion students. There, they have the possibility to take part in conferences, explain their work, expose their pieces and sell them with 3-months long popups. 19 talents will be promoted for a period of 3 months, with 3 to 4 participants per session lasting 15 days.

During the visit on a Sunday, the space was not especially welcoming to customers, as students gathered to congratulate themselves, creating de facto a world where it was difficult to enter if not invited. Also, the very interest of the products can be questioned, as well as the business efficiency of such an initiative.

Hors Saison: this clever initiative on the 3rd floor aims at selling former seasons stocks on 200 sqm in a beautiful space, and singing the tune of social responsibility and care for the environment, instead of appealing to customers with low prices. Brands represented there range from APC to Victoria Beckham, and prices can go as low as -60%.

The space is beautiful and appealing, however, its location and structure make it less inviting than other initiatives. During the visit, there were no customers and sales staff were clearly desperate to have anyone coming in.

L’Endroit on the 2nd floor: replacing the former fashion multi-brand store Maria Luisa, this space emphasizes a selection of edgy designers in an apartment-like setup, where photographers are invited to display their works.

Salespersons are extremely well trained and efficient, as several sales were concluded during the visit. They know the products and brands (which is not the case in other parts of the store) and also mentioned that they were extremely happy since the rebranding of the store, as this immediately translated into an increase in terms of customer flow and purchases. Printemps CEO mentioned that traffic jumped +20% during the week of the reopening.

In the women’s building, the ground floor also displays a new selection of gifts and “easy” products, called Le Joli Cadeau, but which is not referenced as a new concept per se. This space was formerly dedicated to a multi-brand premium leather goods area.

What’s new in the Men’s Store

Le Café Vert on the ground floor, open as early as 8 am (before the store opens), aims to become a rendezvous point with a healthy and qualitative offer, enhanced by plants dotted all across the space, appealing to the need for nature that everyone experienced during the various lockdowns.

The café is operated by Brûlerie Belleville, a local Parisian coffee roaster, but the space will be also offering an aperitivo time at the end of the day, and the décor is set up with Kaki (a hydroculture plant specialist), knowing that all plants on display can be purchased by customers.

Au Vieux Campeur on the lower floor is truly a premiere, as this is the first time that this iconic Rive Gauche retailer makes a partnership and expands outside of its own stores. Au Vieux Campeur has been founded in 1941 and is known by every Parisian who had to purchase anything related to outdoor activities in the past (think a high-end Decathlon staffed by proud specialists). The store is 400 sqm wide, highly immersive and is organised by the universe: climbing (with a 6 meters high climbing wall, very visible from the ground floor, that can be used by customers), trekking, sailing and a library. Testing surfaces for shoes are also available. Dedicated Au Vieux Campeur salespersons also allow customers who might not find what they are looking for in the store, to the entire Au Vieux Campeur catalogue via a marketplace system.

What’s new in the Kids and Home Store

Many new beauty initiatives are available on the lower ground floor:

• Beauty food: a holistic cosmetics zone part of L’Officine (a space dedicated to dermo-cosmetics) where food complements are sold in addition to cosmetic routines by specialized (and exclusive) brands such as Agapem (period alleviating treatment), Apnee (collagen in powder), So Much (emotions regulating coffee) or Dijo (infusions with intestinal ingredients).
• Partnership with Kisskissbankbank (a crowdfunding initiative), which enables Printemps to contribute to the development of new brands, through a contest with an independent jury selecting 3 new brands which will be promoted by being introduced to the “Green market” area in Le Printemps.
• Large areas dedicated to manicure, pedicure, brows, as well as a large space gathering hair products and salon: such services were already available before the revamp but were not gathered in a single place. This organisation makes the offer powerful and efficient.
• Face 2 Une: a spa developed with the Face 2 Une beauty tech brand, proposing no gender services through manual massages and machines.

L’appartement with Made in Design on the second floor: Made in Design (owned by Printemps) is an online design retailer, often curating a selection of brands but also developing its own products. L’Appartement is an initiative where selected designers are invited to make a selection in the Made in Design catalogue and create a physical and immersive point of sales for Made in Design, while also bringing a new experience to Printemps.

And the Metaverse?

Printemps has also developed a phygital initiative, with an immersive virtual store accessible from their website showing a selection of products as well as exclusive collaborations (overall, the e-commerce store has increased its offer by +31% vs. 2019). In the event of the purchase of an exclusive product, customers will enter a contest to earn an NFT, which will, in turn, give access to another contest where the winner (1 out of 30 NFT winners) will receive the original piece of art from the artist who has designed the atrium and the 7ème Ciel art tunnel in the Haussmann store.

Interestingly, there is also an initiative with DressX in the form of a pop-up on the ground floor, which allows customers to buy virtual dresses for their Instagram or other social media pictures. However, after checking in person the offer, the pop-up does not offer anything more than what can be purchased online directly.

For customers who are not into such subtleties, 500 exclusive pieces have been developed with brands ranging from Loewe and Sandro to Logan and Lacoste, displayed in a spectacularly redesigned Atrium at the centre of the Women’s floor. However, during the visit, sales staff were not really inviting and busier making comments about customers who had left the space than taking care of those present.

What to think about this revamp? Execution is excellent and the feeling of renewal across the 3 stores is clearly there. Printemps is upping its game and getting back into the Parisian fight for local customers, after a period when it was lagging behind. They have based their whole campaign on the promise of permanent non-retail animations (conferences, workshops, DJ sets, etc…) which could translate into an effective traffic-driving strategy if properly conducted. The main question is therefore to know if Printemps will be able to maintain the momentum on the long-range and keep teams mobilized?

Credits: IADS (Selvane Mohandas du Ménil)

PRINTABLE VERSION HERE

Introduction

The IADS interviewed Scot Case, the Vice President of Corporate Social Responsibility and Sustainability at the National Retail Federation (NRF), who has been in the sustainability space since the mid-1990s. From his experience, sustainability is the intersection of three key aspects: business, environmental, and social issues.

Early on in our conversation, Scot shared that the sustainability space is constantly evolving. While in the 90s, the main focus regarding sustainability topics was around recycling, today the focus has shifted towards human rights and climate change issues. Nevertheless, it is worth noting that all of these topics are related in some way, it just depends on what is seen as important and to which player. It is much like an iceberg, only a piece of the issue is unveiled, the part that is being centred on by businesses or consumers, but not the much larger contributing factors that remain unseen or below the surface. A retailer, an individual, or a consumer will focus on one aspect of sustainability and not realise that all issues are intertwined and connected to a challenge that is much bigger than meets the eye.

Retail at the centre of sustainability

IADS - You made it clear at the 2022 Retail’s Big Show in New York that the word ‘sustainability’ is diluted. How do you personally define sustainability when applied to a retail business?

Scot Case - When we started this initiative at the National Retail Federation, the first key issue was to decide what an industry-wide definition looks like. After lots of conversations with retailers, we boiled it down to a simplified definition. Sustainability is creating net positive environmental, social, and community benefits. This net positive concept is similar to how one measures whether a business is profitable or not.  At the end of the year, some parts of your business are making money, some parts are kind of breaking even, and some parts are losing a little bit of money. That's what sustainability looks like as well. Some aspects of the business are clearly generating all sorts of benefits and profitability. Other times there will be some costs from an environmental or social impact. But overall profitability is necessary to be able to fund the sustainability projects and initiatives that contribute to making the world a better place.

When companies start to consider sustainability as part of their business, they might only see it as a cost, but rather they should consider it as an investment. At one time retailers probably saw cash registers as a cost, but in the end, such initiatives are contributing to the longevity of the business and sustainability should be seen as the same. Retailers that consider sustainability as an investment are the ones that are prospering. The challenge is that this is a long-term investment, but some of the most significant players in the sustainability space started their journey 15 to 20 years ago, and now the rest of the industry is struggling to catch up.

IADS - You once said that “retail is at the centre of sustainability”. Can you elaborate on this opportunity and influence that retailers have in this space?

SC - Retail is not just the centre of sustainability, retail is the centre of the universe. Sustainability is just embedded in the space. A retailer's ultimate job is to find the best products to meet the needs of the consumer. Consumers want more sustainable products now that they understand that every single purchase has hidden human health, environmental and social impacts. Retailers are best positioned to understand where the best products are, what the hidden human health, environmental, and social impacts are, and then share that information with the consumer. Retailers have access to all the information and ultimately that's what retail is all about. Sustainability is just an additional layer of the story and an additional layer of information.

Advice to retailers: beginners to advanced

IADS - For retailers that have just started investing in sustainability initiatives, what do you believe is the most important area for them to focus on first?

SC- Albert Einstein suggested that you spend 90% of your time defining the challenge. You can achieve this by asking the right questions to figure out what information your consumers are seeking so that you as the retailer are asking the right questions of your suppliers. The reality is that not everyone has the answers yet, and that's okay! The main thing is to be honest and transparent. It is okay to include consumers in the sustainability journey by sharing that the business is attempting to trace the entire carbon footprint of everything sold or trying to trace the origins of all the cotton used, and the challenges that the company is facing to reveal such information. It is important to show that you are committed to making this kind of information available so consumers can make better and more informed decisions. That is an honest story that consumers tend to respond to. Don’t let perfection get in the way of getting started, no retailer started perfectly out of the gate. The history of retail is a history of failing, learning, and doing it again.

IADS - For retailers that have been working hard on their sustainability journey for years and feel like they are no longer playing defence when it comes to CSR topics, where can they go next to be leaders in the space?

SC - I think that even the largest players have realised there are limits to what they can accomplish on their own and that's why, at the National Retail Federation and at IADS, retailers are learning that maybe they should be collaborating on some of these things. Some of these issues pop up in pre-competitive spaces, so there are opportunities for the industry to be sending clear signals deep into supply chains, to consumers, and to regulators to understand what can be accomplished currently, what areas need attention, and where working together is necessary. I think the largest players have learned to collaborate to make sure we have the best sustainability metrics and standards for sustainable fashion, sustainable electronics, or sustainable luxury products. Collaboration is the fastest way to solve problems in the space.

Sustainable department stores

IADS - In your opinion, what does the sustainable department store of the future look like to you? How does it operate? Will it sell ‘new’ products or only offer circularly produced products? How will it achieve profitability?

SC - I think when you design sustainable retail and the department store of the future, you start immediately with your own operations. The focus is on creating a maximum benefit meaning reducing your energy use, going to a hundred percent carbon-free energy and carbon-free logistics. It is important to make sure it's embedded at the core of the business and what you directly control. The next phase is having very effective programs to work with suppliers so that suppliers clearly understand your definitions of sustainability, the metrics that you're using, how you're evaluating their products and their sustainability performance, not just how they're making those products.

Another piece is communicating really effectively with the consumer. Consumers have multiple definitions of sustainability. So it is the retailer's job to understand that and to be able to match what they have available for sale to influence consumer decisions towards sustainability. Retailers are exploring business models, such as rental, that reduce all of the environmental and social impacts of making a garment, while allowing the retailer to sell the same product multiple times.

The future of sustainability in retail

IADS - What are some trends or technologies that could empower sustainable retailers? What companies or solutions should retailers be looking to invest in? (RFID, connected garments, product passports, resale marketplaces, …)

SC - I think you've just named a couple of them. So a lot of these are blockchain-based. The ability to track with blockchain where the cotton from a shirt came from, where the factory was, what kind of dyes were used, who sold it, or when the item was returned or recycled is the key to success in sustainability. Any of these technologies that are collecting, validating, verifying, aggregating sustainability data are going to be really important for moving into the future.

We are also looking at the redesign of supply chains to meet the needs of those consumers, fascinated with the circular economy. Therefore reverse logistics gets very fascinating because it is no longer only about how to make sure these products that the consumer bought and no longer wants and needs doesn't end up in a landfill or in some foreign country being burned. It is about the ability to track, measure, quantify, aggregate and then make good use of that information.

Is there anything else that you would like to share with our members about projects that you are working on, advice you can offer, or opportunities in the space that we have not covered yet?

SC - I actually have a request for retailers all around the world to be sharing their sustainability stories with the rest of the industry. These really are, in many ways, pre-competitive concepts. So I encourage IADS members to share their sustainability opportunities, challenges, risks, headaches, and solutions. We're asking the same of our members so that we can build a global solution for the retail sector. As retail is the centre of commerce, I think there's a real opportunity for retailers to redefine what a sustainable future looks like.

Credits: IADS (Mary Jane Shea)

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Keeping markets under close watch, IADS collected noteworthy beauty concepts from retailers around the world.

Check out how retailers are drawing customers into physical stores through new enticing design concepts, innovative experiences, expanded product offer, technology and fun.

Clinique Laboratories, China

The new retail concept from the skincare brand aims to personalize each customer visit. Customers have their skin analyzed before they enter the store thanks to a diagnosis made through a facial scanning system. The rest of the store experience is then determined by the result of the diagnosis: presentation of specific products and services, close to consulting, that will be unique for each customer.

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B+ Tube, Changsha

The shopping experience, organized throughout the 218 sqm store, allows teens to create social media as they shop, something which helps facilitate online to offline consumption. Sections are organized around the three basics of cosmetics: cleansing, foundation, and make-up. Each area hosts an education centre for customers to learn and experiment with the products through tutorials and videos.

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Glossier, UK

Glossier, a ‘community-driven beauty discovery hub’, opened its first permanent location outside of the US. The design is playfully balanced between old and other modern materials and finishes, like perforated paneling and sculptural marble in Glossier’s identifiable millennial-pink hue. The heart of the store is the product testing area. Mirrors are inscribed with ‘You Look Good’ – Glossier’s confidence-boosting catchphrase. Meanwhile, a ‘Wet Bar’ encourages sampling of skincare and makeup.

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H Beauty, UK

H Beauty stores by Harrods has price points suiting a vast array of consumers. “Magic Mirrors” leveraging augmented reality technology permit customers to virtually try on products and have images of their experimentation sent directly to their phones. Dedicated spaces labelled “Play” allow customers to have fun with hairstyling, product demos and makeup consultations.

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Harmay, China

Once an online retailer, Harmay stores shake up the high-end cosmetics segment. Targeting savvy young consumers and fast developing in Chinese first-tier cities, Harmay has a solid reputation as an influential incubator of consumer trends. Harmay gained a reputation for creating design-led retail spaces, aiming to boost the shopping experience. The displays encourage self-serving shopping which captures the mindset of shoppers.

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Joyce Beauty, Shanghai

Joyce Beauty at Lane Crawford, offering a serene refuge from the department store hustle and bustle, is dedicated exclusively to niche high-end cosmetics and fragrances. These brands (Dr. Barbara Sturm, Perricone MD, Augustinus Bader, RéVive, Floraïku and 111SKIN among others) show the growing appeal for prestige beauty.

more on JOYCE BEAUTY, Shanghai

MDC Next Door, Berlin

MDC cosmetics is pushing the beauty limits by offering luxury cosmetics, fine objects, small furnishings, ceramics, and jewelry. MDC cosmetic is a curated specialist shop for cosmetics and cosmetic treatments. You can find brands including Aesop, Image skincare, Susanne Kaufmann, malin+goetz, Santa Maria Novella, Frederic Malle, Escentric molecules, Emma S and many more.

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Retterspitz, Nuremberg

One of Germany’s oldest pharmacy brands, offering a wide range of cosmetics and medical cosmetics that combine traditional healing expertise with modern standards and the latest scientific research. Retterspitz offers an immersive brand experience and personal customer service, while serving as a marketing tool to discover clientele’s preferences and shopping patterns.

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The New Sanctuaries, Mexico City

Founded by Mexican designer, pharmacist and alchemist Tatiana Torrealba, The New Sanctuaries provides clean cosmetics for skin care, products that have a high energy frequency and coexist in harmony with nature. The brand is taking information from ancestral knowledge, clean beauty principles, transparency, nature and technology.

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Introduction

In December 2021, the European Union announced plans to use digital product passports to boost the circular economy and to gain a better view on the full lifecycle of various products, including textiles. The overall goal would be to prevent these items from ending up in landfills and to keep them in circulation, either as broken down raw materials to be reused or to be repurposed. Nowadays, it is expected that products should last longer, be repairable, and be recyclable. The major problem is that the information revolving around product components and recyclability is easily lost, but the EU believes that these digital product IDs can be the change that industries need to better promote circularity.

Digital product passports: what is it and what for?

Digital product passports (DPPs) provide a way to digitally capture key information about an item and create a centralised bank where this information can be stored. Basically, it is a virtual tag that captures all information surrounding the product to bring transparency about materials used and overall impact to customers and manufacturers. According to Business of Fashion’s The State of Fashion 2022 report, product passports can be used to boost authentication, transparency, and sustainability by acting as a method to store and share information easily so that either customers or businesses interacting with the product can understand how it was made and what it is made of. According to the report, this technology should not be overlooked because approximately 2 out of 5 fashion executives plan to adopt product passports in 2022 or have already done so.

Communication stemming from these product passports will need to be two fold: addressing customer-facing needs and informing recycling or repair entities with technical information about the item's components or how to extend its life. Digital product passports tackle a few key issues around product information:

• Increased transparency: easily accessible product material information will facilitate the proper recycling and reparation of items.
• Improved life cycle sustainability: availability of detailed supply chain information from material grade, carbon footprint, repair instructions and components.
• Centralised bank of information: provides all necessary information needed by stakeholders such as governments, manufacturers, customers, and for those involved with the second-life of the product.

How can product passports be helpful to retailers?

As seen with NFTs and RFID, technology that enables brands to add a unique identity to each product is increasing in value and importance. These identification technologies are unlocking a lot of potential business cases that retail players find worth investing in. Interestingly, retailers that have already invested in RFID (radio-frequency identification), blockchain technology like NFTs (Non-fungible tokens), QR codes, and NFC (near-field communication can extend their use with product passports. Already this technology has allowed businesses to get a handle on counterfeiting as well as create better transparency across the supply chain, which addressed two major pain points for retailers.

Product passports can also extend the relationship between retailers and their products. Retailers are at a time where they are saying goodbye to the short-lived relationship between brands and products where brands and customers part ways completely following a sale. Customer-brand relationships have advanced, and harnessing the power of product passports gives brands the ability to continuously identify and monetize apparel products through circular business models such as rental, repair, resale, and recycle. This extension of their product’s life not only increases their potential for margins, but also unlocks access to new types of customers, such as Gen Z, who value affordable and sustainable products.

Examples of notable players powering product passports

A major player that is helping power connected products across fashion, apparel, and retail is Eon Group with their Internet of Things (IoT) platform which brings together partners to gather and share data. CircularIDs allow brands to have instant access to connected product data that is crucial for recycling and re-commerce. A mobile app allows users to scan products using RFID, NFC, or QR codes to access details ranging from the original sales price to the material content, with the ability to capture the resale channel as well. This database of information opens garments up to become more circular overall.

Eon Group’s service also increases the amount of communication surrounding garments between brands and consumers. Once a connected product is scanned, customers can access styling tips, instructions for resale, sustainability credentials, services for rental, among other things. The group has basically created a common language and formats for brands to communicate across the lifecycle of fashion products. Eon has already partnered with retail players such as the Yoox Net-A-Porter Group, H&M, and Pangaia

There have been additional efforts in connectivity for the retail industry. In 2020, Avery Dennison partnered with Certilogo, a digital authentication platform, to integrate the solution with Avery Dennison’s apparel labelling products so customers can verify product authenticity via their smartphones through a series of questions. Also, start-up Wiliot offers bluetooth-enabled microchips the size of a stamp that have the ability to sense, compute and communicate. These chips have the ability to report every condition and interaction they face to the cloud in real-time, and are even self-powered using radio frequency!

The limits: standardisation needs to be achieved, one way or another

Although technology is catching up, creating product passports for every item will not be an easy task, especially as supply chains are already an area needing great improvement. Even though information will be easier to capture at each stage of the process, there still seems to be some questions around the overall accuracy of this data. But as product passports can be connected through blockchain technology, there is an additional layer of trust and security that can be achieved. Unfortunately, even blockchain technologies are still in the process of defining governance and standardisation, putting this kind of technology at the cusp of its potential.

But, in order to have a standardised system, businesses and governments will need to come together to agree upon common standards to be able to scale such a project. New data standards, technological innovations, and supportive policies may be able to bring definition to the global waste crisis, putting fashion players under the microscope. With the continued progress and adoption of solutions such as what Eon Group is offering, the future of fully connected products is not so far out of sight.

What’s in it: circularity!

In the past decade, items that are being sold have not been created with the intent of being durable, repaired, or recycled. This is a major problem as consumers become more conscious about their buying habits, but unfortunately, circular products are not always easy to find. There have even been some activists that want to push the European Union to impose a mandatory European standard for durability and repairability among sold items to ensure that sustainable products are the norm. Although such strict regulation has not proven to be easily enforced, such implications could seriously impact the fashion industry if imposed. Therefore, eco-conscious retailers that want to be ahead of the game should understand how digitalising information through product passports could be a tool for implementing and scaling the circular economy.

The fashion industry is a key piece in the achievement of the circular economy, but without transparency, standardisation, and data sharing, overall progress will be stalled. Digital product passports that can be the holder of all information pertaining to the creation and vitality of goods could unlock a more sustainable economy for all.

Credits: IADS (Mary Jane Shea)

What: An essay on the nature of data, and why the whole conception is misleading (and meaningless).

Why it is important: Success stories as reported in the media can be overwhelming, and lead retailers into making the wrong strategic decisions when it comes to addressing data in the broader view of their digital transformation.

Benedict Evants, a tech columnist and former associate at Andreesen Horowitz, reviews the current ongoing and generalized discussion about data and its ownership. According to him, seeing data as the new oil is a misleading conception, and so is the dream of having a decentralized web architecture where everyone could own and monetize his or her data.

He reminds that data makes sense only at the macro level and that the notion of individual data makes hardly any sense (at least from the capitalistic point of view), let alone its monetization. For him, data is valuable only in the aggregate of millions of grains, this is why for him, data is not oil but sand. In addition, he also reminds that data is a broad word that refers to many different things, contrary to sand where each grain is the same.  He gives the example of Instagram data, that would be of no use for an electricity company. Talking about “data” as a generic concept does not have any meaning.

Instead of a collection of discrete units, data should be seen more as an expression of interactions within a network.

Data is not oil, it is sand