What: Research from SML Group found that a third of retailers say they are spending too much time manually processing returned items.

Why it is important: The rise in returns and finding impactful solutions has been an ongoing issue for retailers as 26% of retailers cite lack of staff as the main cause of the issue.

In 2022, retailers claimed that 30% of items are returned, with 47% of those returned items being sold at full price, 42% being sold at a discounted price, and 12% not being resold.

42% of retailers reported that they don’t have enough staff on the sales floor and 30% said that staff are spending too much time on mundane tasks.

Investing in item-level RFID technology is one solution suggested, as it can streamline back-end operations and send items back to floor quickly which then allows staff to be on the sales floor and help customers.

Retailers are spending too much time processing returns

What: Brand and consumer product companies are planning to invest more in technology to align operations with sustainability goals while also driving business growth.

Why it is important: The report found that more than 60% of consumer goods executives are now aligning sustainability and operational goals, with 70% of respondents agreeing that sustainability investments will accelerate growth.

The report is based on the responses of 1,800 consumer goods executives across 23 countries.

The top technologies that will play a role in aligning sustainable practices with operations were automation at 71%, followed by analytics at 69%, IoT at 62%, AI at 55%, and intelligent workflows at 44%. To improve inventory management and eliminate excess stock, 67% cited using predictive and prescriptive analytics as well as AI-powered demand sensing (69%).

Sustainability integration is an important differentiator for consumer goods businesses and the retailers they service as consumers are increasingly seeking out brands that reflect their values. Being successful in this investment requires full integration, commitment, and collaboration. The report cites brands like Levi’s, Pandora, Unilever, and Walmart as companies who have successfully executed leveraging technology to align sustainability goals with operations.

Brand executives plan to invest in tech to reach sustainability goals

What: The French luxury group reported a 2% rise in sales for Q1, largely falling behind its competitors LVMH and Hermès who saw double-digit increases in revenues.

Why it is important: The group will be focusing on its top-tier clients to help catch up with its competitors as Gucci, its top brand, is in a transitional year.

Sales for the first quarter totaled EUR 5.08 billion, increasing 1% compared to the same quarter in the previous year.

The group’s performance was mixed, as they work to enhance their brands’ appeal and increase their desirability.

At Gucci, organic sales were up 1%, compared to a 14% decrease in the previous three months. As the Italian luxury house is in a transformation phase, the group is elevating the brand through initiatives such as the launch of the Salon in LA and hosting an exhibition in Shanghai with humble ambitions for the year.

Bottega Veneta saw flat comparable sales in Q1 while Saint Laurent’s organic sales increased 8%. At other houses, sales were down 9% compared to a 4% drop in Q4 following the Balenciaga scandal.

The group’s luxury jewelry brands saw double digit growth, with Brioni performing exceptionally well.

Kering eyes ultra-wealthy as results lag peers

What: The luxury conglomerate is focusing its investments on other booming Chinese cities as Hong Kong loses its relevance.

Why it is important: Hong Kong was previously Asia’s premium shopping hub, but interest has started to decrease as mainland Chinese consumers switch to shopping at home.

Mainland tourists were attracted to Hong Kong by lower prices and wide array of product offerings but anti-government protests in 2019 and the pandemic left Hong Kong devoid of tourists, causing major retailers to shut their doors.

As a result, post-Covid recovery in Hong Kong has been much slower in Hong Kong than elsewhere in China for LVMH. The conglomerate has already moved the regional headquarters of some of its brands and the group’s local office to Shanghai as well as relocated some senior executives to the mainland.

The portion of total luxury spending that’s done within the mainland is expected to almost double pre-Covid levels, with some of the biggest names in luxury already expanding their presence on the mainland as they reap the benefits of China’s reopening.

The duty-free island of Hainan and gambling hub of Macau are two emerging cities set to see success as luxury destinations. Hainan’s duty-free sales more than tripled in 2021 from 2019 and Macau’s visitor arrivals recovered to 62% of 2019 levels over the Easter holiday, only further accelerating Hong Kong’s decline as a luxury shopping mecca.

LVMH is shifting out of Hong Kong as luxury shoppers stay home 

What: Prada has opened a café on the ground floor of Harrods in Knightsbridge.

Why it is important: The café encompasses the Prada brand with sage green walls, black-and-white checkered floors, and branded plates that will drive more traffic to the department store.

The Prada Caffé takes inspiration from the Italian luxury house’s boutique in Galleria Vittorio Emanuele II in Milan and its international flagship stores. Pastries will also be served for eat-in and takeaway, taking inspiration from Bar Luce, the brand’s Milanese café designed by Wes Anderson.

The café will be open until January 7th with a menu that includes breakfast, light lunch bites, evening cocktails, and will soon feature an outdoor stall serving ice cream.

High fashion tea: Prada opens Caffè at Harrods

What: The retailer’s new CEO has told staff that transformations will be happening quickly, without disclosing details.

Why it is important: John Lewis Partnership has GBP 1.7 billion in debt and faces increasing competition from its competitors, M&S and Next.

The UK retailer will be moving quickly to reform its business model after the newly appointed CEO stated that the way the Partnership does business needs to change in order to be more efficient and affordable.

The CEO’s comments come days after the partnership denied reports of partial demutualization in an attempt to raise between GBP 1 billion and GBP 2 billion of new investment.

John Lewis CEO tells staff business model needs fast reform

What: The Mexican department store group ended the first quarter with a total income of MXN 37,569 million while its profit fell to MXN 2,235 million.

Why it is important:  The Port of Liverpool has started the year off in growth as they saw revenue increase by 16.5%.

The group’s total revenues reached MXN 37,659 million, with MXN 32,953 million coming from the commercial segment, which increased its turnover by 15.4% compared to 2022’s first quarter. The company has also earned interest, lease, and cost of sales income.

EBITDA increased by 5.3% to 5,189 million and the commercial margin stood at 32.2%, fourth tenths less than the previous year which the company attributes to the normalization of promotional activity related to sales in autumn and winter.

Liverpool stores saw an increase in sales by 15% while Suburbia saw a 3.1% increase. The digital channel made up 24.5% of the share, increasing 280 points compared to last year.  In terms of gross merchandising value, the digital channel saw increase of 33% and the marketplace’s increased by 62%.

The chain also recorded a 21% increase in inventory in comparison to last year when the company faced shortages due to supply chain issues.

The department store group also opened one Liverpool location and two Suburbia locations, and closed one Liverpool store all within the first quarter of the year.

In FY 2022, the group saw an annual growth of 16.6% in its revenues and 35% increase in profit. As one of the largest distribution operations in Latin America, the company invoiced MXN 176,033 million in 2022 and net profit stood at MXN 17,937 million.

El Puerto de Liverpool grows by 16.5% in the first quarter, but reduces its profit by 4%

What: The retailer is considering hundreds of job cuts as part of its cost-cutting drive.

Why it is important: M&S is back in growth mode after years of decline due to more competitive pricing and improvements in its e-commerce operation.

M&S is reducing teams across the board, largely through natural attrition, however, a spokeswoman for the company has stated that this figure was “simply inaccurate” and the retailer has dismissed the report.

The retailer currently employs around 4,000 employees at its head office in London and is also weighing the option of ditching its headquarters altogether when the lease comes up for renewal in 2028.

Sales rose by 8.6% on clothing and 6.3% on food in the 13 weeks to December 31, and M&S reported interim pre-tax profits of GBP 205.5 million.

M&S eyes ‘hundreds of job cuts’ with head office roles at risk

What: The luxury conglomerate reported revenues increasing 17% in the first quarter, attributed to a strong demand for leather goods, sharp increases at Sephora and DFS, and a strong rebound in Chinese demand.

Why it is important: The numbers were double analysts’ expectations for 8% growth and represent an acceleration from Q4 in 2022.

Revenues at LVMH totaled EUR 21.04 billion for the three months ending March 31, making an acceleration from the fourth quarter, when sales gained 15%.

All business divisions except wines and spirits reported double digit growth, with strong momentum in Europe and Japan and a steady performance in the US.

The company registered significant pick-up in China following the lifting of health restrictions, boding well for the rest of the year, and putting the company back where it was prior to the complicated period of 2022. There is sustained interest in fashion, leather goods, and jewelry especially, with cosmetics being the only category remaining a little under pressure in mainland China.

Overall, revenues in the fashion and leather goods division rose 18%, with Louis Vuittion and Dior being the top performers, in addition to Celine, Loewe, Loro Piana, Rimowa, and Berluti also performing well.

Japan improved 34%, followed by 24% in Europe, 14% in Asia excluding Japan, and 8% in the US. Growth is normalizing in Europe, while the US is “good but softer.”

In selective retailing, revenues jumped 28% in organic terms, with Sephora seeing excellent performance in North America, Europe, and the Middle East.

The duty-free operator, DFS, benefitted from the recovery of international travel and gradual return of travelers to flagship destinations of Hong Kong and Macau and could return to breakeven after a difficult 2022.

Watches and jewelry grew 11% with a very good performance in high jewelry. Chaumet and Tiffany & Co. saw an excellent start to the year and the conglomerate’s watchmaking maisons reported excellent progress.

Perfumes and cosmetics saw a 10% increase in organic revenue growth, with fragrances performing very well, followed by makeup and the skin care business being flattish.

LVMH proclaims ‘excellent’ start to 2023 as Q1 sales rise 17%

What: John Lewis has unveiled new partnerships with customer loyalty and marketing experts, dunnhumby and Eagle Eye, as well as appointed its first pan-Partnership head of loyalty, Emily Wells.

Why it is important: The department store retailer is accelerating its investment in customer loyalty to deepen relationships with customers and provide them with even more benefits.

The retailer’s five year strategic agreements with the customer insights and media firm and marketing technology company will give customers greater personalization and loyalty experiences.

The group’s loyalty programs, My Waitrose and My John Lewis, have over 9 million and 5 million members respectively.

Emily Wells will also be joining the Partnership in June as head of loyalty, leading and developing the loyalty programs and teams across the organization as well as launching a new pan-Partnership proposition in 2024.

John Lewis appoints first pan-partnership head of loyalty as it ramps up rewards

What: Loewe’s first store dedicated to cleaning and repairing its leather goods has opened on Hankyu Umeda’s newly renovated Green Age floor.

Why it is important: The new store will join a variety of other brands with sustainable inititaives as the department store reopens its floor dedicated to creating a sustainable future.

Loewe is introducing Loewe ReCraft, a store dedicated to cleaning and repairing its leather goods.

The boutique offers a variety of services from sewing work, restoration, and replacement of handles among others. Customization options are also available as well as a selection of products which are made from surplus materials.

The Green Age floor of the department store has been recently renovated and revamped to accommodate more eco-friendly brands, products and services.

The department store is also offering limited edition products to commemorate the opening of the Green Age space. The floor of the department store features over 90 brands and aims to co-create a sustainable and prosperous future with consumers, brands, and communities.

Hankyu Umeda’s Green Age floor features Loewe ReCraft

What: The world’s second-largest economy reported 4.5% year-over-year GDP growth in the first quarter and retail sales were up 5.8% compared to the same period last year.

Why it is important: For the first quarter, retail sales of consumer goods total USD 167.17 billion and grew 10.6% for the month of March.

According to the National Bureau of Statistics, China’s economy expanded to USD 413.15 billion, beating analysts’ expectations of an estimated 4% growth. Compared to the fourth quarter, the Chinese economy logged 2.9% growth.

Compared to last year’s first quarter, apparel sales rose 9%, cosmetic sales rose 5.9% and gold, silver, and jewelry sales rose 13.6%. E-commerce sales registered 8.6% growth, accounting for 24.2% of total retail sales.

Service sectors have boomed in Q1, driven by Chinese consumers’ pent-up demand post-reopening.

The second quarter is expected to show significant growth due to a low base from last year’s COVID disruptions, while the third and fourth quarters’ growth rates are expected to be lower due to a higher base from the same period last year.

China GDP grew 4.5% in the first quarter, retail sales up 5.8%

What: Customers can now virtually try on 23 different pairs of jeans using Zalando’s virtual fitting rooms.

Why it is important: The retailer is simplifying and easing the experience of purchasing jeans online with this technology.

Customers can create their own 3D avatar by entering their height, weight, and gender then use the avatar to try on different sizes and check the fit. Different colors on the avatar show where the jeans are more fitted or loose.

More than 30,000 customers have already tested this technology in pilot projects with Puma and Zalando’s own brand.

The pilot project is part of the retailer’s Size & Fit initiatives, with one of the main objectives being to avoid returns. According to the VP of engineering, the retailer is the only European fashion and lifestyle e-commerce platform to have a team dedicated to Size & Fit.

The team uses models, machine learning, computer vision and other technologies to predict whether items are too big or small. Customers also receive personalized sizing recommendations based on their purchase and return history in addition to reference items that can be added to their sizing profile.

Zalando tests a virtual fitting room in its 25 markets

What: Saks’ invite-only loyalty program will be hosting an exclusive shopping experience for clients in Dallas.

Why it is important: The retailer is deepening its relationship with digital clients while also showing its commitment to the Dallas art and fashion community through a partnership with Dallas Contemporary, allowing them to connect with clients in a unique and impactful way.

The event will allow customers to shop a range of Saks.com designer merchandise, including men’s and women’s ready-to-wear, shoes, bags, and accessories, inside a private rooftop penthouse suite.

Saks is also partnering with Dallas Contemporary as a major sponsor for its spring exhibitions, which will be celebrated with a special dinner. Saks Live will be hosting an event to discuss the intersection of art and fashion as well as the best in spring fashion.

The loyalty program includes more than 5,000 top clients across the Saks Fifth Avenue ecosystem. Members can benefit from digital and in-person styling, personal shopping services, early access to new designer launches and the latest runway collections, and access to exclusive experiences and events around the world.

Saks Limitless, the Invite-only loyalty program, to host pop-up in Dallas

What: ThredUp released is 11th resale report, revealing that the global secondhand market is set to nearly double by 2027, reaching USD 350 billion.

Why it is important: The report’s global findings prove that resale is a mainstay of consumer retail and consumers are increasingly seeking out and participating in the secondhand market.

For retailers, resale often drives ROI and investor approval in many cases. Around 58% of retail executives consider resale “table stakes”, a six-point increase from 2021.

Additionally, 86% of retail executives state their customers are already participating in resale, up 8 percentage points from 2021.

In 2022, 88 brands launched dedicated resale programs, a 244% increase from 2021.

Global Secondhand Market to reach USD 350 billion by 2027, ThredUp says

What: Bergdorf Goodman has begun offering a wider assortment in its home category through its website.

Why it is important: The retailer’s home department is a rarity in US retail as it offers a specialty and extensive range of unique products.

The retailer’s home category consists of 200 to 400-square foot shops or rooms that line the corridors of its seventh level. While having this high touch operation comes with higher costs, the productivity is said to be decent considering the category is located on a higher level.

BG’s home department offers a select and extensive range of unique artwork, tabletop, glassware, books, jewelry, furniture, and more, in addition to being luxurious and not entirely expensive. It’s a kind of specialty luxury that few other retailers try to do with any degree of scale.

Bergdorf Goodman’s focuses on rotating exhibits to provide newness and keep enticing its client base in addition to the permanent selection that is offered across all categories. The department store’s home business is a mix of big, well-known brands and smaller artisans with a focus on being artisan-driven to offer unique products for its clientele.

The retailer claims that the right balance between the two is the secret sauce, and the rotating exhibits allow them to bring in brands and products they wouldn’t normally have.

The home floor features The Hallway, which runs the length of the floor and features artwork that ties together the various shops and rooms. Within the hallway of shops, there’s a space called the Loft which spans 1,000-square-feet and houses different presentations from artisans. Both of these spaces’ presentations change about every three months.

Additionally, growing the e-commerce business has allowed the retailer to expand its range and story by offering more categories. During the pandemic, a lot of Bergdorf’s fashion customers transitioned to the home category and the retailer has seen success in the category since with this past Christmas being their best ever.

At home with Bergdorf Goodman

What: Fast fashion goes full speed into circularity as an argument for their sustainable model.

Why it is important: Most department stores are testing second-hand as a way to attract younger crowds, however, the productivity of this model remains to be found in most cases. Fast fashion, which is looking for credibility on its own, is a new threat.

Primark is launching a sustainable 35-piece collection based on the Ellen MacArthur Foundation's ‘Circular Product’ standard, committing to the circular economy and reducing fashion waste.

The collection is designed for longevity and recyclability without increased cost, with prices ranging from 5 to 25 euros. Primark aims to apply these design principles across the business, working with product teams and suppliers to scale up their circular economy efforts.

Primark goes into circularity 

What: The retailer will be charging a fee to customers who make returns at the UPS store if a free option is within the same distance or closer to the customer’s delivery address.

Why it is important: Amazon is finding ways to cut costs across its organization and adjusting many of its established strategies as it adapts to a slowdown in demand.

While a free option for customers to return their item will always be offered, customers who prefer to make a return at UPS stores may be charged a USD 1 fee if an Amazon Fresh, Whole Foods, or Kohl’s location is closer or within the same distance of their delivery address.

UPS has 4,768 locations in the US, outnumbering Kohl’s with 1,170, Whole Foods with 524, and Amazon Fresh with 44.

Handling returns is not cheap and reducing the expense on Amazon’s operations comes in addition to other cost-cutting measures that the retailer has taken recently, including layoffs and the closure of warehouses.

Amazon begins charging for some returns made to the UPS Store

What: Luxury brands have been looking to Europe with renewed interest as some key cities move up the luxury agenda while smaller but fast-growing gateway markets are on the rise.

Why it is important: While new store activity has typically followed Chinese luxury consumers, luxury brands are looking towards emerging markets with redevelopment opportunities and global cities with prime rents.

In 2022, there was an 11% increase in new luxury store openings compared to the previous year.

Europe saw a 77% increase in luxury store openings and now accounts for 23% of all new openings globally. Cities such as Amsterdam, Madrid, and Milan benefitted from domestic and international tourist figures, with London being one of the most active luxury markets in Europe and maintaining the top spot for new store openings.

In Asia (excluding China), the global share of new store openings increased to 12%, the Middle East rose to 6%, and North America remained flat at 14%.

China saw the most significant decline in new openings with 41% of the global share compared to 55% in 2021. While brands agree that it remains an important market, they have also realized the need to diversify their portfolios.

While there may be fewer store openings in 2023, demand is expected to remain sturdy as reduced rents in key luxury destinations offer brands the opportunity to secure new, more attractive spaces.

Rental costs are at least 10% lower than levels seen in 2019 in a number of key luxury cities such as Toronto, Hong Kong, and London.

Ultra-luxury brands accounted for 68% of all new store openings in 2022, while the three biggest luxury groups, LVMH, Kering, and Richemont, prioritized relocating and upsizing existing sites. This was driven by increased availability and rebased rent due to the pandemic.

Thanks to elevated hospitality offerings and modern retail developments, smaller “alpha” cities such as Amsterdam, Milan, Madrid, and Toronto are seeing success.

In North America, New York, LA, and Miami are still a priority, but luxury brands are increasingly looking towards regional cities that are experiencing significant growth in wealthy households.

Southeast Asia has drawn the attention of luxury brands over the past year with standout markets including Singapore, Thailand, and Vietnam as they all are experiencing growing economies and expanding HNWI populations.

Where to next? Mapping luxury’s retail hotspots in 2023

What: 2 of Siam Piwat’s iconic destinations were in the top 5 most admired malls in Thailand.

Why it is important: Thailand is an extremely competitive market and major players are able to combine operational efficiency with a very luxurious approach.

Siam Piwat Group's shopping centers, Siam Paragon and IconSiam, ranked first and third in Thailand's Most Admired Shopping Centres for 2023, according to BrandAge's survey. Siam Paragon received 25.21% of the votes, while IconSiam garnered 13.57%.

Both centers also won additional awards: Siam Paragon for outstanding marketing activities and IconSiam for Business Performance. The group's success in this survey, which has been conducted for 23 consecutive years, reflects consumers' trust in the Siam Piwat brand and its commitment to creating world-class destinations.

Siam Piwat Group’s shopping centres awarded in Thailand 

What: The iconic homeware retailer has begun to close down locations.

Why it is important: The strategy initiated in 2019 came straight from the playbook, including heavily relying on private labels, but this did not allow being competitive enough in front of e-commerce players fast enough.

Bed Bath & Beyond filed for Chapter 11 bankruptcy protection after years of losses and failed turnaround efforts left the company short of cash.

The retailer plans to close all 360 Bed Bath & Beyond and 120 Buybuy Baby stores eventually. Top lender Sixth Street Partners provided $240 million in financing to keep the company operating during liquidation. Bankruptcy offers Bed Bath & Beyond the chance to conduct going-out-of-business sales and seek potential buyers for remaining assets. The company may pivot from liquidation plans to a sale if a bidder emerges.

The store closures will impact retail landlords, but big-box retailers like Barnes & Noble and Burlington have shown signs of expanding after years of reducing their real estate footprints.

Bed, Bath and Beyond started to be unprofitable only in 2019, with ecommerce players starting to eat the pie. Activist investors forced the founders, then at the board, out, and replaced them with a CEO coming from Target. Noncore businesses were sold, real estate was sold and leased, and name brands were replaced by private labels. However, both the pandemic, its consequences and the e-commerce competition prevented the new strategy to be working.

Bed, Bath and Beyond files for bankruptcy 

What: Mytheresa is one of the few e-commerce players that has remained consistently profitable in the past years.

Why it is important: Their success suggests that e-commerce multibrand retail can deliver profits only with high-margin products such as luxury goods.

German luxury retailer Mytheresa announced preliminary Q3 results with net sales between EUR 196- EUR 199 million, up from EUR 169.5 million in the prior-year quarter.

Gross merchandise value (GMV) is expected to be between EUR 218- EUR 221 million, compared to EUR 186.6 million last year. Adjusted EBITDA is estimated to be between EUR 34- EUR 43 million, up from EUR 10.2 million. The company updated its 2023 guidance, expecting GMV growth of 13%-15% and net sales growth of 9%-11%.

The retailer also recently launched its China Designer Program, focusing on growing its business in China and promoting Chinese fashion designers.

Mytheresa’s sales are growing in spite of the general slowdown 

What: Even though innovation is everywhere, some players are focusing on a seemingly simple tool: the barcode.

Why it is important: Tweaking the approach to be able to embed more information into a barcode could be a great and cheap way for retailers to improve their operations with low changes in their organisations.

The retail industry is embracing new technologies such as automation, VR, and AR, but behind the scenes, barcode technology is changing for the benefit of businesses and customers.

For instance, the 2D barcode, developed by GS1, looks like a QR code and can hold more information than traditional barcodes, allowing for custom web pages to deliver information about the product in question. Woolworths has integrated 2D barcoding into its fresh food and point-of-sale technology, which alerts cashiers when produce has expired or is subject to a recall. The barcode can be scanned by customers, providing valuable information on provenance, quality, and sustainability, and differentiating one product from another.

QR code adoption was low before Covid but increased quickly, and companies such as Haleon are working on integrating QR codes into their marketing moving forward.

Are barcodes the new big thing in retail tech? 

What: The UK department store group will be investing GBP 12.5 million this year, building on the GBP 10.3 million investment it made last year.

Why it is important: M&S has invested nearly GBP 23 million in London over the past two years, with the new stores set to create over 200 new jobs.

A majority of the investment will be going towards boosting food sales, as sales for grab and go items are higher in the city, but non-food upgrades are also in the works.

The investment plan intends to help the retailer reach even more customers across London as a third of its stores are located in the city and its suburbs.

Last year, the renewal of its Kingston full-line store resulted in an 8% increase in Clothing & Home sales. The group also plans to fully renew its Victoria Cardinal Place store and redevelop its Marble Arch store to be in the top 1% of London’s sustainable buildings.

M&S invests millions more in London stores