What: The retailer will be closing its full line store at San Francisco Centre and its Market Street Rack location as crime and safety issues continue to impact the city.

Why it is important: The market has significantly changed due to crime, impacting customer foot traffic to stores and the retailer’s ability to operate successfully.

While the retailer didn’t state how many employees will be impacted, it will continue to operate its 16 other stores in the Bay Area region.

Nordstrom to close 2 San Francisco stores (WWD)

NORDSTROM TO CLOSE 2 SAN FRANCISCO STORES (WSJ)

What: The Chinese hard discounter is doing extremely well and expanding fast.

Why it is important:  Expansion is taking place in every country of the world.

Chinese discount variety store Miniso reported a 26.2% year-on-year increase in revenue to $430.2 million, driven by a retail rebound in China and overseas expansion. The company's adjusted EBITDA rose by 164.3% year on year to USD 102.9 million. During the same period, Miniso opened 74 new stores, expanding its network to 5,514 stores as of March 31.

The group plans to further expand into Panama, Angola, Trinidad and Tobago, and Latvia. Miniso's CEO, Guofy Ye, attributed the strong performance to increased foot traffic and transaction value in domestic stores and successful efforts to optimize product design and selection in overseas markets.

Miniso posts double-digit growth thanks to overseas performance 

What:  Discounter chain is heavily penalized for increasing theft in store

Why it is important:  Theft starts to be a theme in US press, which suggests that the phenomenon is growing, all the more that investors notice and penalize retailers hit by this wave.

Dollar Tree reported a 44% decline in net income despite strong sales growth, largely due to a shift towards lower-margin essentials and a significant increase in losses from theft, termed as "shrink" in the retail industry. This theft has contributed to the shrinking of gross margins by 3.4 percentage points to 30.5%, leading Dollar Tree to cut its profit forecast for the year.

The company is in the midst of a turnaround, showing positive signs such as increased store traffic, but it needs to address this issue of theft and convince investors about its profit improvement strategy.

Theft and Thrift squeeze Dollar Tree 

What: Key learnings from Q1 earnings reports.

Why it is important: Among other elements, the level of theft described by Target is surprising, at $500mn+, while Walmart did not comment on the subject, suggesting that the rising cost of life is forcing customers into stealing products, taking a toll on retailers’ profitability and forcing them to use new methods to prevent this.

Walmart and Target, both major US retailers, reported their Q1 earnings, revealing a mixed bag and anticipating a challenging Q2 due to a slowdown in consumer spending. Walmart beat expectations in Q1 while Target fell short, but both noted a weaker consumer outlook. Still, Walmart expects improvements in H2 and raised its full-year guidance, while Target reaffirmed its guidance.

Walmart had a strong Q1, beating expectations across most metrics, with revenue growing 7.6% YoY. Despite a softer performance, Target also surpassed earnings per share (EPS) expectations. However, both retailers expect a weak Q2, with Walmart's EPS guidance coming in below expectations and Target facing "clear headwinds" in the short term.

eCommerce sales were a highlight for Walmart, growing by 27% YoY, driven by Pickup & Delivery. Target saw a decline in digital sales, but in-store sales growth outpaced digital, driven by same-day services.

Target identified retail theft as a substantial challenge, which is expected to impact FY profitability by over $500 million. On the other hand, Walmart was more muted about the issue, though they acknowledged the challenge across the retail industry.

Consumer behavior also showed signs of change due to macro uncertainty. Both companies reported that consumers are spending less on discretionary items and shifting towards necessities, such as grocery and health & wellness. Despite the shift, both retailers noted market share gains in grocery.

Walmart and Target both highlighted their membership programs, with Walmart+ and Target Circle members spending significantly more than non-members. Walmart also provided updates on its advertising and international business, reporting global ad business growth accelerating quarter over quarter.

Walmart & Target anticipate a tough Q2 

What:  Marketplace giants, local department stores and foreign e-tailers are fighting for the top spot in Japan as Japanese luxury consumers are becoming omnichannel shoppers.

Why it is important: Japanese department stores are seeing omnichannel purchasing journeys thrive as more shoppers embrace digital channels.

The pandemic-induced surge in e-commerce that was seen globally was even more pronounced in Japan. The country’s fashion e-commerce grew 27% between 2019 and 2021, rising to 2.4 trillion yen (USD 18 billion).

Although analysts believe the e-commerce market has peaked, experts suggest that companies will be able to get more milage out of the luxury segment. A survey conducted by McKinsey found that 41% of Japanese luxury consumers are researching and purchasing across channels rather than heading straight to department stores and boutiques.

Marketplace giants, Rakuten and Zozo are top competitors as they both have been adding luxury brands to their assortment in recent years, with their offerings focusing on luxury accessories.

The fate of Japanese e-tailers is important to global brands because digital channels have a growing role to play in what remains one of the world’s largest, most mature, and dynamic luxury markets. Bain estimates that sales of luxury goods in Japan are worth around EUR 24 billion this year, which amounts to half of the value of all other Asian countries combined, excluding China.

Japan’s luxury consumers also shop at foreign luxury e-tailers, however the barriers to purchasing from overseas platforms is high as poor translation can turn consumers off and the trust factor plays an important role in their purchase decisions.

In Japanese department stores, the security is trusted by consumers in terms of customer service and after-sales service, giving them a leg up in comparison to Rakuten and Zozo who are stronger in mass and medium-priced markets.

Many department stores were reluctant to embrace online sales before Covid, but most of the top department stores selling luxury goods- including Iestan Mitsukoshi, Daimaru Matsuzakaya, Takashimaya, and Hankyu Hanshin-are now seeing omnichannel purchasing journeys thrive as they increased efforts to digitize during the pandemic.

Isetan is among those with a fully-fledged international e-commerce service as they launched a shopping app to connect shoppers and sales associates in November of 2020.

Global luxury brands and Japanese consumers are still loyal to the department stores that served them for generations, however that loyalty is put to the test when their offering doesn’t align with customers’ expectations.

To benefit from the growth of the luxury market, these legacy stores will need to look beyond their current core demographic of loyal but older shoppers.

Multi-brand boutiques are also seeing success as they worked to grow their online business before the pandemic hit and capitalize on foreign demand for Japanese luxury brands.

Despite the progress seen in Japan’s luxury e-commerce market, there is still room for growth as most e-tailers are still lost when it comes to Gen-Z and social media. Online retailers will need to work harder to encourage more affluent shoppers to buy online and choose them over their rivals.

Who will win Japan’s Luxury e-commerce race? 

What: The Parisian department store has been transformed into a summer market as part of its new campaign, “Les Bons Marché de L’été.”

Why it is important: The summer campaign features a multitude of brands across a variety of categories, creating an attractive and immersive experience for customers.

Le Bon Marché’s summer campaign started on April 29 and will continue until June 18, with  Parisian label Sézane as the special guest.

Striped canvas awnings decorate market stalls throughout the store with crates, baskets, and trailers creating a rural atmosphere. There is also a refreshment area and the various entrances throughout the store feature card shops and lottery stalls.

In addition to Sézane, a variety of other brands are participating in the summer market with their own seasonal products.

Le Bon Marché turns into summer market as part of its new campaign

What: In the US, retailers replaced technology firms in cutting the most number of jobs in April.

Why it is important: The retail sector has cut 36,000 jobs this year and companies are preparing for consumers to tighten their spending as interest rates increase in an uncertain economy.

With higher interest rates to control inflation and a potential recession, retailers in America are preparing for consumers to start spending less and taking measures to protect themselves from the fallout.

US retailers cut most number of jobs in April 

What: The Higg Index, which has been scrutinized in the past for claims of greenwashing, has been rebranded as Worldy.

Why it is important: Worldly is an attempt to reintroduce the label to fashion as it expands its range beyond the Higg Index. The consumer-facing transparency program remains on hold after it was flagged for being ‘misleading’ last year.

The Higg Co, the organization behind the Higg Index, which measures the sustainability of fashion brands, has rebranded itself as Worldly. The rebranding comes after the company had to pause its Higg Index due greenwashing claims that were flagged as misleading last year. The new name reflects the company's aim to provide a global platform for sustainability data. Worldly plans to expand its services to include other industries beyond fashion, such as beauty and home goods. The company aims to help businesses measure and improve their sustainability practices by providing data-driven insights and tools.

Higg Co, the data platform behind the paused Higg Index, rebrands as Worldly

What: Major department stores in Korea are spending over KRW 1 trillion (USD 755 million) this year on renovations.

Why it is important: The amount invested on renovations is up 32.8% year on year as customers are increasingly viewing department stores as places to gain new experiences.

Three department stores, Lotte, Shinsegae, and Hyundai, are spending a total of KRW 1.24 trillion to renovate their facilities to create experiential spaces in hopes of attracting young consumers.

Lotte is investing KRW 388.9 billion this year and KRW 432 billion next year in renovations. Its Suwon branch is going through a large-scale renewal to acquire more foreign brands and expand fashion stores and its Young Plaza location will be transitioned into a food and beverage space.

Shinsegae will invest KRW 586.8 billion as it renovates existing branches and opens new branches. Its Hermes store in its central Seoul branch will be turned into two stories and the sporting goods section of its Gangnam branch is currently under renovation.

Hyundai is spending KRW 260 billion to upgrade or open new branches. The Apgujeoung branch and Pangyo branch will be completely transformed, with the former’s food court being converted into a premium dining hall and the latter recently opening a section for foreign brands.

Department stores renovate their way to the future

What: The Korean department store promotes national brands expansion.

Why is that important: This kind of activity boosts the retailer brand name and allows to generate additional revenues.

Shinsegae Group, a South Korean retail conglomerate, has launched a wholesale platform, "Kfashion82," for South Korean fashion brands.

The platform is part of Shinsegae's effort to boost the global K-fashion market and nurture talented designers. Kfashion82, which supports multiple languages and hosts over 100 domestic brands, aims to increase South Korea's fashion exports, which reached $345.6 million in 2022. The platform will officially launch on May 31, partnering with experienced logistics agencies for worldwide distribution.

Depending on sales performance, interest-free funds of up to 100 million won ($75,642) may be available to domestic companies. The platform utilizes an escrow-based payment system for secure transactions.

Shinsegae launches wholesale platform for Korean brands 

What: The Seattle-based department store has appointed Cathy Smith to succeed Michael Maher as chief financial officer.

Why it is important: With her extensive financial leadership, Smith is expected to help the retailer achieve its growth priorities.

Cathy Smith joins Nordstrom from Bright Health Group where she was serving as chief financial and administrative officer since 2020. She has held five senior-level positions at other major companies including Target and Walmart International.

Smith will replace Maher, who was serving as interim CFO and was instrumental in guiding the retailer through periods of transformation throughout his time with the company.

Nordstrom names a new chief financial officer

What:  SM store muscles up its omnichannel and fulfilment capabilities with a new Distributed Order management system

Why it is important: the Philippines is a specific market but due its specificities in terms of customer behaviour, it could be very well an interesting example for other retailers in terms of approach to omnichannel business.

SM Retail, the largest retail chain in the Philippines, has launched its new Distributed Order Management System (DOM) with the help of Fluent Commerce, a cloud-distributed Order Management System (OMS), and Merkle, Dentsu’s customer experience company. This new system is designed to improve the customer shopping experience and streamline operations across SM Retail's network of stores.

The Fluent Order Management system has been deployed with the potential to be used by more than 50 brands nationwide, starting with ShopSM. The new system introduces features like click-and-collect and home delivery, providing customers with more convenient shopping, pickup, and delivery options. It also gives SM Retail a unified view of inventory, improving efficiency in managing stock in both stores and warehouses.

A significant benefit of the new system is its flexibility, allowing customers to pay online and pick up in-store, or vice versa. This adaptability caters to the changing needs and preferences of shoppers. The system also includes a dynamic logic to handle unique logistical challenges, such as sourcing and routing items from different locations during emergencies. This feature will be particularly useful in the Philippines, which frequently experiences adverse weather conditions, like earthquakes and typhoons.

SM Retail’s new system will enable it to seamlessly connect its online and in-store channels, offering its customers unprecedented flexibility in payments and fulfillment.

SM Stores revamps its Distributed Order Management System

What: The value of retail purchases rose 0.4% and sales increased 0.6% in April.

Why it is important: The results suggest that consumer spending is holding up despite inflation and high borrowing costs

While the overall figure was below economists’ estimates, the advance in sales was higher than expected.

Seven out of 13 retail categories saw an increase, including general merchandise outlets and online merchants.

Economists at Wells Fargo stated that the sturdy job market and steady income gains are supporting consumption. However, American consumers are starting to spend more on services and there are signs that consumers are overextending themselves.

Sporting goods and hobby stores, furniture retailers, as well as appliance and electronic outlets saw a decrease in sales.

Retailers are expected to see a tough year ahead as the report suggests that consumers are starting to become more discerning with their spending as the economy slows towards a recession.

US retail sales increase in sign of steady consumer spending

What: The retailer is returning to the US after closing all its stores during the pandemic.

Why it is important: The department store is looking to make a comeback with a revitalized shopping experience.

As a result of the pandemic, Century 21 closed its 13 stores and went out of business by the end of 2020.

Three years later, the department store is returning to New York City with a flagship location across from the World Trade Center.

The revitalized store is expected to cover a total of 100,000 square feet and will have four main floors with departments including men’s, women’s, and children's designer apparel, as well as footwear, outerwear, handbags, accessories, and fragrances.

Century 21 has partnered with Legends Hospitality, a retail operations company, to introduce a more streamlined customer shopping experience through upgraded stores and an elevated e-commerce presence.

Iconic department store Century 21 is reopening 

What: A war between new-gen fast-fashion players is taking place in the world.

Why it is important: Both Shein and Temu are expanding in the world, outside of China, which might suggest renewed competition on many markets where department stores are present.

Chinese online fast-fashion retailer Shein has established a regional headquarters in Dublin to manage its operations in Europe, the Middle East, and Africa (EMEA). This move comes shortly after Chinese competitor PDD Holdings made a similar decision.

The Dublin office will also serve as Shein's IT hub for the EMEA market. The new office is expected to create 30 jobs by the end of the year in areas such as data analytics, security, finance, and law.

This expansion comes as Shein faces competition from Temu, a global budget shopping platform launched by PDD, which has been rapidly entering new markets.

Shein opens regional HQ in Dublin 

What: The UK retailer has launched a new kids offer with a collection targeting kids age 7-12.

Why it is important: The collection is a significant expansion for the retailer’s childrenswear offer and is the first time it has designed a collection specifically aimed at the tween market.

The company is looking to grow its share of the market cross a wide age range, including a range of external labels as well as its own brand. The retailer has added 10 new fashion brands for the spring season and is focusing on a more trend-led selection.

The children’s clothing market is estimated to be heading towards a value of GBP 7.3 billion by 2027 according to Mintel. In 2022, the market was worth GBP 6.8 billion.

The retailer has been focused on children younger than the toddler stage, as they have a 16% share of the UK nursery clothing market and are also the source of 34% of all strollers sold in the UK. Now, they are better positioned than ever to meet the needs of families as their children grow up.

John Lewis targets tweens with new kidswear deep dive 

What: The Dallas-based company will be opening a boutique space in LA, making it the retailer’s fourth location and first in LA.

Why it is important: The next-generation department store is continuing to expand and bring its concept across the US.

Neighborhood Goods will be opening a boutique space with an Italian restaurant in LA’s Silver Lake neighborhood.

The company has raised USD 27.5 million in funding to bring its concept all over the US with locations in New York, Dallas, and Austin, with plans to open in Newport Beach and Los Angeles.

Neighborhood Goods to open first store in Los Angeles

What: Katie Mullen has become J.C. Penney’s chief customer officer.

Why it is important: Mullen will be tasked with improving the customer experience online and in-store as the department store looks to get back on track as it continues to struggle financially.

J.C. Penney’s has continued to struggle following its bankruptcy filing in 2020. The company has had to configure another transformation plan under another set of leaders. The department store has seen chronic sales declines and struggled filling space left vacant by Sephora.

Mullen’s focus on the digital enablement of the organization has been key to the company’s turnaround. In her new role, she will link the company’s digital technology, customer insights, and personalization capabilities to create an integrated, end-to-end customer experience.

The department store has seen encouraging signs that they are on the right track as the company saw an increase in customer frequency for the first time in five years with customers spending more as well.

J.C. Penney’s head of e-commerce pivots to chief customer officer

What: The resale platform has launched its own ChatGPT-driven shopping bot.

Why it is important: Offering technology such as ChatGPT to assist in finding products can be extremely valuable, especially in the second-hand market as individualized offers can change rapidly depending on availability and what's being sold.

Mercari, a peer-to-peer selling platform, has launched a beta test for Merchat AI, a conversational shopping assistant based on OpenAI’s ChatGPT.

As a second-hand selling platform, the retailer has deep inventory that can’t always be covered by a general search as products can be hidden in the variety of categories offered.

Merchat AI can offer gift suggestions, recommend items that fit the latest trends, search collectibles that are difficult to find, and offer styling tips.

The company has launched the shopping bot as a test feature, acknowledging that some flaws may appear, and full features won’t be available. A cautious release will help set reasonable expectations and allow the retailer to test new features.

Inside Mercari’s new Merchat AI shopping bot

What: American Eagle launches a second-hand store in partnership with ThredUp, which will be heavily supported by marketing activations on Snapchat.

Why it is important: Properly marketing second-hand now also goes with a social dimension, to make sure it is visible from the younger digital clientele, and not in stores and traditional channels only.

American Eagle has partnered with ThredUp to launch RE/AE, an online resale shop offering vintage and secondhand items to cater to environmentally-conscious Gen Z consumers. To promote the 200-piece collection, American Eagle collaborated with Snapchat to create a shoppable augmented reality lens.

The RE/AE shop, powered by ThredUp's Resale-as-a-Service, allows users to filter items by pre-owned or vintage status and offers affordable prices.

The Snapchat AR lens lets users virtually browse items and educates them on sustainability.

This initiative aligns with American Eagle's goal of becoming carbon neutral by 2030 and continues the brand's efforts to engage Gen Z through targeted marketing campaigns and partnerships.

American Eagle brings secondhand clothing shop to Snapchat 

What: Nordstrom’s off-price division is in expansion mode, rebranding, and correcting past mistakes.

Why it is important: The retailer will be opening 20 new locations that are more conveniently located to its customers while also rebranding to better communicate its value proposition and better meet customers’ expectations.

The Rack’s Q4 sales were down 8.1% compared to the previous year, but 2022 sales were up 1.1% to USD 4.8 billion from USD 4.76 billion in 2021. Nearly two years ago, the retailer took some strategic bets that didn’t yield successful results and is now looking to correct those mistakes.

Nordstrom Rack is now focusing its strategy on its value proposition, “great brands at great prices” as they learned that customers come to stores for great brands with a ‘price first’ mentality. The retailer is rebranding with a new logo, ads, and messaging that better communicate the value proposition and connect to the upscale Nordstrom name.

Additionally, the Rack is resetting its merchandise mix by prioritizing 50 well-known and productive brands that are already sold at the full-price stores. 90% of the top 50 brands at full-line stores are also carried at the Rack, making up 60% of what’s been ordered for the first half of this year.

The retailer is also focusing on its “Closer to You” strategy which advocates bringing conveniences to customers, through the opening of 20 Rack stores in nine states this year. Nordstrom found that customers won’t drive more than 15 minutes in the off-price world, making location extremely important.

Inside Nordstrom's strategy for Nordstrom Rack

What: Gucci has launched its first ultra-luxe Salon store concept in LA, open to top-tier clients and by appointment only.

Why it is important: The retailer is focusing on its wealthiest shoppers as part of its turnaround strategy, creating a sense of community and displaying its most elevated and exclusive products at the Salon.

The 4,380-square-foot space is located on the prime corner of Melrose Place and Melrose Avenue, featuring products ranging from EUR 40,000 to more than EUR 3 million.

The Salon is the ultimate playground for Gucci’s top clients to explore the possibilities of the retailer’s Italian craft and interact with the brand creatively. Customers will find made-to-order collections for men and women, accessories, luggage, décor, high jewelry and watches, as well as rare and exclusive vintage pieces that have been restored by Gucci artisans.

Private appointments can be booked from two hours to a whole day and a special menu will be offered for the Gucci Osteria restaurant.

Designed by Gideon Ponte, the Salon is made to feel like an old Hollywood movie set with mirrored columns, stage-like curtains, theatrical dressing rooms with red and purple velvet stripe walls, and chandeliers. The center of the store also features the house’s recent red carpet looks.

The Italian luxury house will be opening nine permanent and temporary salons with locations in New York, Paris, Milan, London, Dubai, Hong Kong, Shanghai, Taipei, and Tokyo, each having their own collection of products.

Gucci is currently in a transition period as Alessandro Michele left the house as creative director in November and in the last three months of 2022, sales fell 14%. The Salons are the latest step in Gucci’s product elevation drive, as its average selling price rose double digits last year.

Gucci Salon ultra-luxe private store concept debuts in LA

What: While 2023 looks promising for Kohl’s, its past quarter performances led to a S&P downgrade.

Why it is important: For now, financial ratings are still based on financial performance. It is highly probable that, in the future, environmental efforts will also become a standard way of gauging businesses.

Standard & Poor's (S&P) downgraded Kohl's Corp. to a junk rating of "BB" from "BB+" due to weaker-than-expected Q4 results, lower margins, increased clearance activity, and muted demand. The downgrade suggests heightened vulnerability to default risk amid business or economic changes.

However, S&P expects improved metrics in 2023 as Kohl's enhances merchandising execution, reduces inventory levels, experiences lower freight costs, and continues its Sephora shop rollouts. S&P also noted reduced capital expenditures and favourable market trends in beauty, as well as the potential for revenue growth in 2024. Kohl's off-mall locations are considered advantageous for their lower cost structure and customer accessibility.

Despite these positives, S&P believes Kohl's operating margins will remain below historic levels at around 4%. The ratings agency expressed concerns about the company's free operating cash flow, leverage, recent management changes, and the competitive pressures faced by department stores.

Kohl’s downgraded from BB+ to BB by Standard & Poor’s 

What: As traditional brick-and-mortar stores face new challenges and e-commerce continues to grow, retailers are looking for innovative ways to reach consumers and provide engaging shopping experiences.

Why it is important: The metaverse has promised a new frontier for retailers to create virtual storefronts, showcase products, and engage with customers in ways that were previously impossible.

According to industry experts, the metaverse is still developing, as is Web 3.0 technology, and together, it presents an entirely new way of interacting online, with new consumer experiences and a shift toward a democratised and traceable future.

Experts do not believe that there is a rush for retailers to enter the metaverse, but rather there is an urgency to put the tools in place that digitise the in-store experience and allow for interactive, 3D experiences with customers.

Why these experts believe the metaverse is still relevant for retail