What: Inside Retail reviews the recent strategic moves from Macy’s.

Why it is important: They have carried out a number of initiatives that include new store formats, Market by Macy’s, observed by retailers worldwide

Macy’s is innovating with new strategies, including the roll-out of 30 smaller “mini stores” in US strip centers over the next two years, which have already shown positive sales growth in initial trials. These smaller stores, previously named “Market by Macy’s,” offer a curated selection of products, host local events, and benefit from their proximity to high-traffic retail locations.

Macy’s has also launched a digital fashion platform, Mstylelab, in collaboration with metaverse tech platform Journee, offering users an immersive experience to explore their newest brand, On 34th.

Despite these moves, Macy’s continues to face challenges. Its Q2 sales dropped by 8.4% year-over-year, with both in-store and online sales declining. The broader retail landscape sees many classic department stores, familiar to Baby Boomers and Gen X, either closing or attempting to adapt to younger demographics. An example of an attempt to redefine the modern department store is Showfields, which struggled and filed for bankruptcy despite its innovative approach. Experts are skeptical about Macy's efforts, suggesting that while the shift towards where customers are makes sense, it might be too late for significant impact. The future will determine if Macy’s changes can revive the brand's former glory.

From ministores to metaverse, will Macy’s new moves pay off?

What: Dame Sharon White’s mandate will end in 2025 and the search for a replacement has been lauched.

Why it is important: Many changes have been brought to the business but so far results left analysts and consumers unconvinced. This chairman change will be challenging for the new incumbant.

John Lewis has started to look for a new chairman

What: Bloomingdale's is opening a new Bloomie's store in Seattle on November 2nd, focusing on casual and contemporary styles and convenience.

Why it is important: This expansion is part of Macy's Inc.'s strategy to create specialized off-mall formats to strengthen its presence in different markets.

The Seattle store will be curated to local preferences, featuring on-trend ready-to-wear and accessory brands such as Veronica Beard, Rag & Bone, Polo, MZ Wallace, and Alo Yoga. It will also have a shoe section with brands like Birkenstock and Vince, as well as beauty brands like Byredo and Maison Francis Kurkdjian. The store will include rotating pop-ups, trend presentations, and local food and beverage concepts. Bloomie's in Seattle will offer several brands exclusively in the Seattle market, including Sandro, Maje, and James Perse. This will be the third Bloomie's location, following Fairfax, VA, and Skokie, IL.

Bloomie’s gets set for its Seattle debut

What: The BCG reviews how AI is used in the corporate environment.

Why it is important: AI is a tool, not an endpoint, and might create a loss of creativity within organizations.

In an experiment with over 750 BCG consultants, people used generative AI (GPT-4) very effectively for creative ideation, boosting performance by 40%. But for complex business problem solving, a task outside GPT-4's competence, relying on its output reduced performance by 23%.

People seem to mistrust AI where it can add value, but trust it too much where it lacks competence. This held true even when participants were warned of GPT-4's limitations.

Using GPT-4 led to a 41% drop in diversity of ideas, as people converged on the AI's repetitive outputs. 70% of participants worried relying on AI may reduce their own creativity over time.

To benefit from generative AI, companies need an advanced data strategy, new roles/workflows that focus human effort on the remaining uniquely human tasks, strategic workforce planning to cultivate diversity of thought, and rigorous testing and experimentation as AI capabilities rapidly advance.

Generative AI adoption poses a double-edged sword - tremendous gains in efficiency but also risks around overreliance. Leaders must approach it as a massive change management challenge.

How people create (and destroy) value thanks to AI

What: According to John Lewis, predictions of the death of the high street have been overstated, as online sales have fallen while store visits have increased.

Why it is important: This information indicates a potential shift in consumer behaviour and provides insight into the company's recovery plan and financial performance expectations.

Online transactions accounted for 57% of the retailer's sales in the past year, down from 81% during the height of the pandemic, while store customers were up 8% compared to the previous year. The increase in in-person visits can be attributed to events held by John Lewis, such as a kitchen disco hosted by singer Sophie Ellis-Bextor. The company also saw a 70% increase in tailoring sales, which require customers to visit stores for fittings.

Despite uncertainties in the economic outlook, John Lewis expects its full-year financial performance to improve compared to the previous year's pre-tax loss of GBP 77.6m.

John Lewis: Death of the high street predictions are ‘overstated’

What: The John Lewis Partnership has introduced the "Made With Care" brand, a lifestyle label that supports talented individuals who grew up in the care system.

Why it is important: The label combines great design with desirable products while providing a platform for talented individuals who have grown up in the care system, supporting their creativity and raising awareness.

The brand aims to combine great design with desirable products, starting with a tote bag featuring a design by 18-year-old artist Michael Archibald. The bag is made from 13 recycled bottles and will be available in John Lewis and Waitrose stores from December 11th. All profits from the sale of each GBP 12 bag will be donated to the Building Happier Futures fund. The long-term goal is to expand the label into a full range of products.

John Lewis launches Made With Care label

What: Marshalls is organising a two-day event called the "Good Stuff Social Club" in New York City which aims to empower women and help them achieve their goals.

Why it is important: Marshalls' goal is to provide women with resources, communities, and opportunities to create the lives they want.

It will feature workshops and discussions on topics like self-worth, financial literacy, mentorship, career development, and wellness. The event will be hosted by actress Priyanka Chopra Jones and will include experts like Vivian Tu and Keltie Knight. It is in Soho, NYC on October 20th and 21st and is free to attend.

Marshalls to host women’s upliftment ‘Good Stuff Social Club’ in New York

What: The modest increase in LVMH's revenues and the slowdown in luxury spending highlights changing consumer behaviours and economic conditions in key markets.

Why it is important: The results reflect a normalisation of growth rates in its fashion and leather goods division as inflation and high interest rates impact discretionary spending.

LVMH's quarterly revenues were below analysts' estimates, indicating a slowdown from the previous quarter; the 3-months to September 30th revenues were EUR 19.96 billion, which is below the Bloomberg estimate of EUR 21.15 billion. The fashion and leather goods division saw a 9%  increase in sales on a like-for-like basis, but this was lower than the growth recorded in the second quarter.

LVMH cited uncertain economic conditions in Western economies and challenges in China as contributing factors to the slowdown. Despite the moderation in growth, LVMH remains confident in the performance of brands like Dior and is focused on optimising store numbers and category mix. Demand softened in Europe and Asia, while the U.S. saw unchanged trends. In Asia, Chinese spending on fashion and leather goods outside of Asia doubled compared to the previous year.

LVMH plans to continue marketing initiatives and expects the second half of the year to be full of new initiatives although the company's chief financial officer, Jean-Jacque Guiony, stated that it is too early to determine whether the slowdown in luxury spending is temporary or long-term.

LVMH announces its Q3 results 

What: Klarna has launched new products and services aimed at promoting circularity and encouraging sustainable shopping.

Why it is important: The new conscious shopping tools empower consumers to make more informed and sustainable choices, ultimately reducing environmental impact.

Klarna introduced a conscious shopping dashboard, offering access to sustainability-oriented products and services. The dashboard features "Shop Circular" brands that focus on reducing waste and maximizing product use. It also includes the Co2e footprint tracker and educational content on sustainable practices. The dashboard is currently available online in the US and will expand to the Klarna App and additional markets. Klarna also added sustainability search filters and a compare tool to help consumers find and compare products from thousands of retailers. The filters include third-party sustainability certifications, such as the Global Organic Textile Standard (GOTS), People for Ethical Treatment of Animals (PETA), and Cradle to Cradle, and a dedicated filter for conscious brands with sustainability ratings.

Klarna's CO2e tracker in the Klarna App now provides advanced insights into the carbon emissions tied to past purchases. The tracker analyses each product's lifecycle and includes environmental data for health & beauty and electronics categories.

Klarna introduces new conscious shopping tools

What: Siam Piwat takes bold commitments in terms of clean energy and, more generally speaking, Scope 3 objectives.

Why it is important: While sustainability is not yet a selling point in Thailand, every local player is taking position in order to be perceived as the first entrant on this value proposal.

Retail developer Siam Piwat Group commits to net-zero greenhouse gas emissions by 2050 and plans to use 100% renewable energy by 2030. They oversee significant properties in Thailand, like Siam Paragon and IconSiam. Their sustainability drive includes forming partnerships for clean energy projects and launching the Siam Piwat 360° Waste Journey to Zero Waste initiative. They intend to transform Bangkok's Pathumwan area into a model smart eco-district. The company has integrated energy-efficient systems, installed rooftop solar panels at major outlets, and introduced electric vehicle charging stations. They also focus on waste management, aiming to divert half of their waste from landfills by 2030. With assistance from experts and collaborations, they aim to position Pathumwan as a top shopping destination while promoting sustainability. Siam Piwat's ultimate goal is to champion sustainability for Thailand's better future.

Siam Piwat commits to use 100% renewable energy by 2023

What: A piece about how customers have changed and now expect to be considered individually in each of their interaction with retailers.

Why it is important: The future is much more than simple CRM, which is already difficult to execute well.

The text discusses the evolution of personalization in American culture, tracing its roots from before the internet era to the present day and its implications for the future.

Evolution of Personalization:

1. Pre-Internet Era: American culture shifted from communal to individualistic long before the rise of the internet. Evidence includes the increasing frequency of the word "I" in literature and the transformation of familial values.
2. Family Structures: Traditional family dynamics changed, with fewer multi-generational households and an increase in single-person households. The perception of being unmarried also evolved from negative connotations to indifference.
3. Consumerism & Technology: The rise of technology, especially the internet, accelerated individualism. Direct-to-consumer brands became popular in the 2010s, emphasizing personalization in products and services.
4. Content Personalization: The media landscape expanded to cater to varied tastes, from TV shows to YouTube recommendations and algorithm-driven social media feeds.
5.  Invisible Players: Companies like Klaviyo enable brands to offer personalized marketing, indicating the depth of personalization in commerce.
6. Broad Consumer Ecosystem: The ongoing trend in consumer experiences leans towards convenience, affordability, and enjoyment, often equated with personalization. This trend can be traced back to the Industrial Revolution.

The Historical Increase of Personalization through Technology:

1. Industrial Revolution: Introduced mass production, necessitating marketing for product differentiation.
2. Automobiles: Spurred mass consumption with its influence on industries like shopping malls and credit cards.
3. Internet: Fragmented culture further by offering niche communities and unlocking endless content, leading to even greater personalization.
4. AI's Role: AI is set to boost personalization in the digital realm. Examples include apps like Meeno, which offers a personal relationship mentor, and applications in education, fashion, and healthcare.

Conclusion:

The 20th Century marked the age of mass consumption, whereas the 21st Century is shaping up to be the age of "bespoke consumption". With advancements in technology, especially AI, personalization will further intensify, catering products and services directly to individual needs and preferences.

The Hyper-personalization of everything

What: Nike is expanding its 'Refurbished' platform to Europe after launching in the US in 2021.

Why it is important: The expansion of the platform to Europe promotes sustainability reducing waste and offering an alternative to purchasing new footwear.

The platform allows consumers to return their worn Nike shoes for refurbishment and resale. Only slightly worn shoes and those that cannot be sold as new will be accepted. The platform will initially roll out in Belgium, the Netherlands, Germany, France, Spain, Italy, Hungary, and the Czech Republic, with the potential for expansion into other countries in the future.

Nike Refurbished launches in Europe

What: Real estate giant Landsec has researched the potential of sustainable retail and its impact on real estate.

Why it is important: No player is advanced enough to do it right: sustainability can contribute to profitability by 13%.

Building a sustainable business not only benefits the planet but can also boost retail sales, according to a report by property firm Landsec and Bradshaw Advisory.

Brands located in sustainable retail spaces could see a revenue rise of up to 13% over a decade, and such venues could experience a 6% surge in footfall, potentially generating an additional GBP 100 million for local economies.

The study aimed to understand the significance of sustainable retail from the perspectives of consumers, brands, and local authorities. Public polling highlighted 'localism' as a key aspect of sustainable retail, emphasizing job creation for locals, using local suppliers, and supporting local, independent brands, especially among middle-aged consumers. Local authorities from various UK cities concurred.

Landsec emphasized the need for increased sustainability focus, collaboration with brands, and working with local authorities to address community-specific needs, thereby benefitting the environment and local economies.

Mall owner Landsec research says sustainable retail can be more profitable

What: BNPL giant Klarna now allows people to shop by simply taking a picture.

Why it is important: Here comes a new feature that department stores will have to have in a few years to remain relevant.

Swedish payments company Klarna introduced an AI-driven shopping feature, powered by OpenAI, which enables users to shop by photographing desired products. These products can then be quickly purchased through Klarna's app. The AI feature can identify and compare prices, retailers, and reviews for over 10 million items. To address privacy concerns, it restricts images of faces or bodies. Unlike Google's Lens tool, Klarna's is specifically designed for shopping. The feature is accessible in the US, UK, Germany, Sweden, Denmark, and Norway. Once considered Europe's top startup, Klarna offers a "buy now, pay later" service. Despite a decline in valuation, the company achieved monthly profitability earlier than anticipated.

Klarna adds AI-driven photo features to entice shoppers

What: DFS is planning to open a "seven-star" luxury retail and entertainment destination called DFS Yalong Bay in Hainan, China by 2026.

Why it is important: The development has the potential to attract millions of visitors and contribute to the growth of Hainan's luxury retail market.

The project is set to cover over 1.38 million square feet and offer more than 1,000 luxury brands, including those from LVMH. The site will feature immersive experiences across various categories such as fashion, beauty, watches, fine dining, and more. Hainan has become a popular travel destination during the pandemic, and by 2025 it is expected to become a free-trade port. DFS believes the location could attract over 16 million visitors annually by 2030. The company aims to create a luxurious and entertaining experience that goes beyond traditional luxury retail. They have coined the term "seven-star" to describe the unparalleled level of luxury they intend to offer.

DFS is to open ‘Seven Star’ luxury retail and entertainment destination in Hainan

What: Retail Dive looks at the 3 top challenges that department stores, among other, will have to face in the coming year.

Why it is important: It’s all about dealing with people (or lack of people), costs, in an omnichannel context.

In 2024, the global supply chain faces major challenges, including:

1. Labor Shortages: Triggered by the pandemic, there's a significant labor shortage in logistics and transportation. To address this, leaders are turning to automation, workforce development programs, and competitive compensation packages.
2. Rising Costs: Inflation and other factors are increasing costs, impacting profitability. Automation and data analytics can help businesses become more efficient, reduce costs, and improve customer service.
3. Omnichannel Retail: Consumers now expect a unified buying experience across all platforms. To meet this, retailers need integrated systems, real-time inventory tracking, and consistent services across all channels. Automation and technology investments can streamline operations in this regard.

For supply chain leaders to remain ahead, they should invest in automation, use data analytics, maintain strong partner relationships, remain adaptable, and stay informed about industry trends. Leveraging cloud-based solutions can help automate and track goods movement. By addressing these challenges and embracing technology, supply chain leaders can build stronger and more adaptable operations for the future.

Top 3 supply chain challenges for retailers in 2024

What: Marks & Spencer plans to expand the presence of its Jaeger brand by adding it to an additional 20 stores in the UK.

Why it is important: The expansion of Jaeger and the addition of new brands demonstrate M&S's focus on enhancing its fashion offerings.

M&S acquired the luxury fashion brand after its collapse in 2021, and it has played a crucial role in M&S's efforts to revive its fashion sales. Currently available in 26 shops, Jaeger products will be introduced to nine more M&S stores next month and 11 more in the New Year. M&S has been strengthening its third-party fashion lineup to compete with rivals like Next, and recently announced that Pour Moi will launch a lingerie range on its 'Brands at M&S' online platform.

M&S looks to elevate fashion offering as it sells Jaeger in 20 more UK stores

What: John Lewis has announced the appointment of Paul Jones as the new Head of Brand and Store Experience.

Why it is important: The appointment highlights the importance of the stores within John Lewis' omnichannel strategy and their significance to customers.

He will report to Charlotte Lock, the Pan-Partnership Customer Director. Jones is set to begin his role on January 8, 2024. His responsibilities will include developing the customer strategy for both the John Lewis and John Lewis Partnership brands, focusing on brand propositions, innovation, and store layouts. He aims to create engaging and exciting experiences for customers.

Prior to joining John Lewis, Jones worked in various head of brand roles at Tesco for 12 years and also has experience working with clients such as Harrods and Selfridges.

John Lewis taps former Tesco exec for head of brand and store experience role

What: Amazon UK will invest GBP 170 million to increase the pay of its frontline operations staff.

Why it is important: Minimum starting pay will increase by at least one pound an hour from Oct. 15. Pay will range between GBP 11.80 and GBP 12.50 depending on location, and it will further increase to between GBP 12.30 and GBP 13 by April next year.

Amazon UK to invest GBP 170 million to increase staff pay 

What: Frasers Group has sold Missguided to Shein in a deal that includes the joint venture between Shein and Missguided's founder Nitin Passi.

Why it is important: This deal aligns with Frasers Group's strategy to focus on fewer brands while maintaining a presence in women's digital-first fashion.

Frasers Group has divested the intellectual property (IP) of Missguided to Shein while retaining its real estate and employees. The deal has sparked exciting discussions around potential collaboration between Frasers Group and Shein. With the acquisition, Shein aims to reignite the Missguided brand, capitalizing on its unique brand personality and fuelling its global growth.

Missguided's products and collections will be manufactured through Shein's on-demand production model and sold on Shein sites and Missguided.com. The joint venture will manage Missguided and license the brand IP to Sumwon Studios.

Frasers Group sells Missguided to Shein 

What: Zalando has launched ZEOS Fulfillment, a service that enables brands and retailers to manage their logistics efficiently through a unified interface.

Why it is important: It enables brands and retailers to streamline their logistics through a unified interface, empowering them to efficiently manage their multichannel business and reach millions of customers.

ZEOS aims to empower brands and retailers by providing them with a platform to oversee their multichannel business across Europe. The service has already been adopted by over 30 brands and retailers, including Pepe Jeans and Kazar. To use ZEOS, brands and retailers simply need to send their products to Zalando's network of 12 warehouses.

Zalando's managing director for Italy and Spain, Riccardo Vola, believes ZEOS will help Spanish brands expand their presence across Europe and reach millions of customers through various marketplaces and e-commerce platforms.

Zalando unveils multichannel service

What: An opinion piece on the state of big tech and how it has grown into a windfall economy.

Why it is important: Not only regulation (or public backlash) could affect what is available to retailers in terms of tech to promote their products, but it is also a striking parallel on how department stores lost their edge with years as they were growing their profits, somehow losing sight on their customers

Cory Doctorow, a renowned author and activist, has spent 20 years advocating against stringent copyright laws, tech monopolies, and surveillance capitalism. In his new book, "The Internet Con: How to Seize the Means of Computation," Doctorow underscores the covert threats hidden in mundane policies of tech giants. He aspires to galvanize public understanding and action against these issues through his book.

Doctorow acknowledges that he was once more hopeful about technology. However, with time, he observed that the tech sector shifted from being innovative and user-focused to becoming more monopolistic. Previously, tech firms emphasized creativity, making products that served users. But now, larger tech companies have colluded to stifle interoperability and curtail innovations that could threaten their dominance.

His primary argument is that policy intervention is essential to foster "adversarial interoperability," allowing new entities to challenge the prevailing tech titans. Reflecting on history, he believes that if conditions are restored where tech remains dynamic and cannot exert too much power, it would benefit the industry and users.

Doctorow introduces the term "competitive compatibility" or "comcom" as a synonym for adversarial interoperability, noting its easier pronunciation and the challenges associated with the original term.

Discussing the stronghold of platforms like Twitter, Doctorow points out that users stick to these platforms not necessarily because they're the best, but because of the immense costs associated with leaving, both in terms of followers and content. These constraints aren't technical but rather stem from policy restrictions that prevent alternatives.

Concluding the discussion, he emphasizes the challenge of making people care about tech policy before it's too late. Taking a leaf from Milton Friedman's playbook, Doctorow believes that in times of crisis, peripheral ideas can suddenly become central. As activists, he thinks the goal should be to have these transformative ideas readily available, waiting for the right moment of upheaval to drive substantial change.

Big Tech: there are no fast companies anymore

What: Retail veteran Walter Loebb, answers to the pessimistic Vogue article about the US department stores' future.

Why it is important: Innovation and adaptation have been at the core of department stores since their inception. Why should it stop now?

Vogue Business recently expressed pessimism about the future of department stores. Contrary to this view, there are notable examples of success and adaptation in the sector:

• Andrew Carnegie emphasized the value of people in business success.
• European and American boards function differently, with European ones being more diverse and potentially more adaptable.
• Macy's, under new leadership with Tony Spring, shows promise with innovative strategies.
• Saks Fifth Avenue made strategic changes, including revamping its beauty department to stay competitive.

In essence, with the right leadership and willingness to adapt, department stores can continue to be successful and relevant in today's market.

Yes, US department stores can save themselves

What: The KaDeWe Group has been awarded the prestigious "Most Innovative Store in the World" by the Intercontinental Group of Department Stores (IGDS) at the World Department Store Summit (WDSS) in Dubai.

Why it is important: This accolade reinforces the group's position as an innovative retail icon and honours their transformative approach in the industry.

The CEO of the KaDeWe Group, André Maeder, accepted the award and expressed gratitude to the IGDS jury and the group's owners, Signa and the Central Group. The award recognizes their strategy and commitment to delivering an exceptional and immersive experience both in-store and online. The Wine & Spirits team from KaDeWe in Berlin also received recognition, ranking third in the "World's Best Team at a Department Store" category.

Previous recipients of this award include renowned department stores like Selfridges in the UK and La Rinascente in Italy.

KaDeWe Group honoured with IGDS Award