What:  A survey identified the top retail trends for business to explore this year. The who, what, where, and why behind our shopping experience is going through a metamorphosis.

Why it is important: The retail industry is reshaping the shopping experience in 2023, redefining how we shop and sell, as well as where we shop and what we buy.

1. Retailers are expanding where they sell

Retailers are expanding the number of digital channels they sell on in the next 12 months as social media continues to evolve. There is a growing number of ways to reach and connect with customers and retailers are looking for a central way to do so. It’s not enough to be present in just one place, brands need to be seen and heard beyond a physical store and online presence

1. Retailers are planning for economic uncertainty

44% of retailers in the survey noted raising prices as their top choice in taking steps to prepare for an economic turndown. Additionally, 88% of consumers said that they’d understand if their favorite local retailer raised its prices.

1. Automation can enhance customer experience

Retail customers are a fan of automation and in most cases tend to prefer it. Automation creates room for your customers to experience things their way at their own pace.

1. Customers want to engage with brands

86% of customers want to hear from businesses they frequent and email ranked the highest as customers preferred option.

1. Social and mobile commerce are two of the biggest digital trends in the retail industry- and they’re booming

The new omnichannel landscape of selling on social media is thrilling with 91% of retailers surveyed now selling on social media. Retailers have seen success with 79% of consumers making purchases directly from mobile devices.

The top retail trends for 2023

What: The FT makes a panorama of the recent luxury initiatives in the metaverse.

Why it is important: It is easy to see these initiatives as gadgetty today, however in doing so brands are acquiring precious understanding and knowledge of the market mechanisms, which will prove crucial once the trend develops (without knowing however when this will take place).

The Financial Times reviews the initiatives led so far by luxury brands when it comes to interacting in the metaverse. According to Goldman Sachs, the potential of this market could reach $8 trillion in 20 years, but this is still far away in time and it is easy to be sceptical about this opportunity. Luxury brands are eager to be in the game in order not to lose a potential opportunity. Overall, the initiatives can be classified as:

-    A way to sell a digital double at a lower price point (Forever 21, Gucci, Burberry), in the form of a NFT or a skin, coming with a physical version of the product sold at regular luxury price points,

-    Augmented reality collaborations, with 3D versions of products being available on smartphones allowing customers to try them before purchasing them (Estée Lauder, Mac, Gucci and Dior all teamed up with Snap to do so),

-    NFTs linked to the collection or the brand, sold at a particular price point and giving access to exclusive perks (Tiffany’s).

However, everything is not rosy: it is difficult to control brand images in the metaverse, in addition to potential risks to IP and trademark, as shown by the recent trial opposing Hermes and a digital creator about virtual copies of its iconic bags.

What Gucci and other luxury brands learnt from the metaverse 

What: Data revealed that visits to stores increased by 52% and the flow of people moving past stores increased by 28% in comparison to January 2022.

Why it is important: Metrics for people traffic is key to converting sales and profitability.

In addition to these metrics, the number of transactions that were carried out during January 2023 increased to 26% and the number of items sold per transaction increased 36%.

Traffic in physical stores in Mexico has accelerated by more than 50%

What: The ESG initiative pledges to turn companies into forces for good, but some are wary of its growing focus on multinational corporations.

Why it is important: When companies that create large amounts of waste and do not pay workers fairly, such as Nespresso, are awarded a B Corp certification, the entire system’s accountability is put into question.

Although it started as a way to note companies that are tackling issues that are in line with environmental, social, and governmental ideals, there is a wide debate about the future of the B Corp movement following recent companies that have successfully achieved certification. Originally B Corp set out to be the gold standard of certifications as firms would need to meet high levels of overall performance, provide transparent information, and adhere to legal accountability to balance profit and purpose.

Today there are about 6,400 certified B Corps across 158 industries. The B List used to be made up of smaller businesses that were trying to challenge how business was being conducted, but now major companies want to be included on the list. In order to gain B Corp status, companies need to score 80 points out of 200 across a variety of metrics covering governance, treatment of workers and customers, community, and the environment. The benefits of obtaining B Corp certification are that it is good PR for the business and creates a list of companies that are seen as good to do business with.

But there are limits to the certification as fair wages are only monitored for direct employees and not in relation to the company’s supply chain. Also, how companies deploy increased profits is not dictated by B Corp so the money can either be used to create more positive business practices, or it could be used to ramp up executive pay and dividends.

In order to address the criticism, B Corp is planning to change its standards to be more prescriptive about where they stand on specific topics to make points more difficult to achieve. Many critics are pushing B Corp to go back to its roots of awarding smaller organizations that are actually operating responsibly and leaving behind the idea of being a club for large multinational businesses that are not in line with the certification’s purpose.

The struggle for the soul of the B Corp movement

What: Zara announced that it will start charging EUR 1.95 for online exchanges and returns, joining all European markets where the store has already implemented this measure.

Why it is important: Charging for returns is a concern many retailers face but Zara has seen success in the implementation of this measure.

Zara in Spain is now joining stores in its European markets in charging EUR 1.95 for online returns and exchanges. Orders can still be returned in-store or to a delivery point free of charge.

Inditex has reported that it has seen success with the new policy, seeing an increase of in-store returns and a reduction in return rates. The firm believes that this will become an industry-wide practice as sustainability becomes more pertinent for brands.

Zara starts charging customers for online returns in Spain

What: Aditya Birla Fashion and Retail (ABFRL) inducted Ananya Birla and Aryaman Vikram Birla as directors on its board.

Why it is important: Aditya Birla has partnered with Galeries Lafayette to open luxury department stores and a dedicated e-commerce platform in India.

Ananya Birla and Aryaman Vikram Birla, children of Kumar Mangalam Birla, the chairman of ABFRL, were inducted as directors on the conglomerate’s board.

The siblings will bring new energy and knowledge to the board of ABFRL, as they have already seen success on their own. Ananya’s company, which she founded at the age of 17, is one of India’s fastest-growing microfinance institutions and has crossed an AUM of USD 1 billion. Aryaman is involved with several businesses in the Aditya Birla Group and helped start the group’s D2C platform in addition to spearheading the group’s venture capital fund

ABFRL sells clothes and accessories from Louis Philippe, Van Heusen, Allen Solly, and Peter England and covers all major segments of the Indian apparel market.

KM Birla’s daughter and son inducted into ABFRL board

What: Tokyu Department Store Co.’s flagship store in Tokyo has closed as a result of a local redevelopment project.

Why it is important: The department store located in Shibuya Ward was a symbol of the famous commercial district in Tokyo.

After 55 years of business, Tokyu Department Store Co. has closed its flagship store located in Tokyo’s Shibuya Ward. The iconic store was a symbol of the famous commercial district in Tokyo and was responsible for creating a wine boom after the introduction of wine cellars in 1990.

As part of a local development project, a 36-story skyscraper housing a commercial facility, hotel, and apartments will replace the store with plans to open in 2027.

Tokyu’s flagship department store in Shibuya closes after 55 years

What: India is cementing its position as a growth market for luxury.

Why it is important: With rising numbers of young and affluent consumers, India has become one of the key growth markets for international luxury.

International luxury players are taking advantage of India’s rapid improvement in online infrastructure and rising numbers of young, high-net-worth individuals. Galeries Lafayette is preparing to open a 90,000-square-foot department store in Mumbai and a 65,000-square-foot store in Delhi in partnership with ABFRL, while other luxury retailers also enter the market and expand.

Experts advise caution as Indian consumers can be price sensitive and expect brands to demonstrate a connection with the local culture. However, the luxury market is expected to grow by around 3.4% from an estimated USD 5.9 billion in 2022 to USD 6.1 billion this year. The country is also slated to overtake China as the country with the highest number of millennial consumers this year.

Inside luxury’s coming-of-age in India

What: Even though the market is just opening up, and solutions are not totally ready, Forbes argues that retail media is now a sprint retailers have to take fast.

Why it is important: They might be right when it comes to talents, as first-movers are able to experiment and identify the exact type of profiles needed, even though the topic is constantly moving.

The retail industry has become a platform for digital advertising and data monetization, representing a $100 billion growth opportunity globally (€25bn by 2026 for Europe only). Retailers have access to large amounts of data about their customers and can provide advertisers with targeted and personalized content. This granular data is becoming more valuable as technology companies change their approach to user privacy.

As such, retail media offers benefits for consumers, retailers, and brands, but of course, retailers need to have the right digital infrastructure and data capabilities to capitalize on the opportunity. To do so, retailers are either creating their own retail media platform or focusing on building a data insights platform.

The real value lies in combining the two, but this requires a new end-to-end strategy for the whole business and access to new skills. This is a fast-moving space, and retailers need to act quickly to establish a clear retail media strategy and invest in the necessary technologies, processes, and skills.

As the retail business model evolves to resemble the media business model, early-movers will have the greatest rewards. 92% of advertisers and 74% of agencies are already partnering with retailers to reach consumers, making it vital for retailers to move quickly.

Retailers need to move fast to capitalize on Retail Media 

What: Reports suggest that Frasers is preparing to buy two urban shopping centres valued at GBP 100 million.

Why it is important: Frasers has purchased several retail parks in last several years as part of its elevation strategy and seen success.

Frasers Group is reportedly purchasing The Mall in Luton and Dundee’s Overgate centre.

In 2021, the group purchased Robin Retail Park and last year, they purchased Belfast’s Boucher Shopping Park adding to its interest in around 16 retail parks and shopping parades.

The group stated that retail park purchases are part of its wider elevation strategy and commitment to elevating bricks and mortar retail.

Fraser Group to make shopping centre investments 

What: Inno, which is profitable again, could contribute to saving Galeria through its sale.

Why it is important: Inno is halfway in terms of company transformation. For that reason, its next acquirer will have to be extremely clear on the priorities to set.

Galeria Karstadt Kaufhof, the German department store chain in financial distress, is reported to plan to sell its Belgian subsidiary Inno in order to fund its own recovery.

Inno has recovered from the Covid-19 pandemic by becoming profitable again in 2022, with 16 branches reaching €314m turnover.

Galeria plans to sell Inno 

What: The retail ecosystem—which brings together Falabella.com, Falabella Retail, Sodimac, Tottus, Banco Falabella and Mallplaza—will mitigate its greenhouse gas emissions, decarbonizing its operation to be Net Zero by 2035 in its scope 1 and 2 emissions.

Why it is important: The company will begin the project with an investment of more than USD 15 million in 2023 and, in the medium term, will reduce its emissions by 65% (vs 2021) by 2030. The changes will also imply new standards for stores, such as renewing refrigeration equipment, moving towards the use of LED lights, sourcing 65% of its electricity from renewable sources by 2030, electrifying equipment to avoid using fossil fuels in addition to improving how it monitors and controls lighting and air conditioning.

Falabella commits to being carbon neutral in 2035

What: 30 luxury and retail leaders are backing the call to reinstate VAT-free shopping for international tourists.

Why it is important: VAT-free shopping could generate GBP 350 million for the economy each year and help retail sales in the UK reach GBP 1.5 billion.

The mayor of London is backed by 30 luxury and retail leaders in asking to bring back VAT-free shopping for international tourists to boost the British economy.

Harrods, Selfridges, and Burberry are some of the industry leaders backing the renewed call, in hopes to support the return of tourists and strengthen the UK as a top destination for international shoppers.

Reinstating tax-free shopping could generate GBP 350 million for the economy each year and Walpole, who has also backed the call, states that the UK could reach retail sales of GBP 1.2 billion and attract an additional 600,000 tourists.

Burberry and Selfridges join fresh call to reinstate tax-free shopping

What: The Mexican National Association of Self-Serve and Department Stores (Antad) revealed that its associated chains opened more than 1,390 stores during 2022 and around 1.75 billion dollars were invested.

Why it is important: Investments were at a higher figure than the estimated 1.7 billion dollars. Additionally, IADS member, El Palacio de Hierro, was apart of these investments.

According to Antad, a nominal growth of 8.2% is expected for its associates throughout Mexico. The largest amount of investment will be allocated to the construction of new stores, followed by remodeling, systems and technology, training, and development of human capital.

Antad is currently made up of 92 commercial chains with more than 47,000 stores. It represents the interests of its associates, promoting the development of retail trade and its suppliers in a market economy with social responsibility.

The chains associated with Antad invested 1.75 billion dollars in 2022

What: Pete Nordstrom discusses why Nordstrom launched their own podcast, and how it has impacted the Nordstrom Inc. business.

Why it is important: When the Nordy Pod launched one year ago, Nordstrom Inc.’s president and chief brand officer, Pete Nordstrom, took on the role as its podcast host.

The decision was unorthodox and surprising, but Nordstrom says he took on the role as the podcast “creates an opportunity to connect with customers in a way that is compelling to them.”

Each episode can be about Nordstrom Inc. itself, its culture and its people, or topics and people outside the Nordstrom world of personal interest to the executive.

Why Nordstrom launched their own podcast 

What: The luxury department store has launched a new 360-degree campaign aimed at supporting New York’s burst of new talent.

Why it is important: Bergdorf’s is investing in and supporting independent, local fashion labels and creatives through this creative campaign.

Bergdorf Goodman’s has partnered with New York native artist, Joana Avillez to unveil its “Only in New York” campaign. The campaign features a drawing by Avillez of a fantasy dinner party of current New Yorkers dressed in locally designed brands.

The immersive project leverages Bergdorf’s investment in independent, New York-based fashion labels and determination to support a new generation of designers.

The imaginary dinner party will be set up in the stores famous 58th Street windows, in addition to micro e-commerce websites being built, special menus in the BG Restaurant, and a live illustration by Avillez.

Bergdorf Goodman’s immersive campaign to support independent, New York City brands

What: After a year of experimenting, the company announced that it would remove the shopping capability from live broadcasting.

Why it is important: Live online shopping was predicted to go viral in 2023, but the featuring was underperforming on the app.

Users will still be able to set up and run their shop on Instagram as the platform continues to invest in shopping experiences that provide the most value for customers and businesses.

According to Instagram’s data, 90% of users follow at least one business on the platform.

Instagram’s current shopping strategy is about capturing consumers at the moment of inspiration, not pushing shopping in their faces at every turn.

Instagram ends live shopping

What: The mega shopping complex located in New Jersey missed another USD 8.8 million debt payment after initially missing an August 1st deadline last year.

Why it is important: The mall developers and operators are scrambling to reimagine the traditional enclosed shopping center but have continuously had a string of bad luck.

According to a notice to bondholders from US Bank Trust Co., American Dream had insufficient funds to make a payment on its USD 8.8 million loan.

The massive shopping complex is trying to reimagine the traditional shopping center as they diversify by introducing non-retail tenants and putting an emphasis on entertainment and over-the-top experiences.

However, the mall has seen a string of bad luck as they shut down due to the pandemic shortly after opening years behind schedule, and the next year a three-alarm fire kept the ski slope out of service for weeks. The mall lost USD 60 million in 2021.

American Dream misses another USD 8.8 million loan payment

What: One of the most prominent new-gen fintech and payment solution provider is facing headwinds.

Why it is important: Now that tech is experiencing issues, does this mean that traditional actors from the ‘old world’ (Visa, Mastercard…) will generate a renewed interest? And would that entice them into consolidating their market position?

Stripe, once hailed as a potentially $120bn public company, is experiencing a tough US tech market. Interest rates and ecommerce growth have decreased, lowering Stripe's internal valuation and making it unlikely to provide a much-needed jolt. Stripe is now looking for private funds at a $55bn valuation, and their peers have suffered from a tech market sell-off.

Ecommerce has failed to meet expectations, and Stripe is under pressure from shareholders. Investors are now demanding earlier rewards, and a low IPO count is expected if Stripe does not list.

These events indicate a lasting change in the tech sector, with lower emphasis on growth and higher emphasis on monetisation.

Payment solution Stripe is in trouble

What: Following the departure of Roland Armbruster, Coin Spa has appointed a new CEO, coming from its own ranks.

Why it is important: There are many things at stake regarding Coin’s current situation, including making sure that the diversification strategy, away from La Rinascente’s luxurious positioning, is profitable, in an inflationary context.

Italian department store group Coin SpA has appointed Ugo Turi as its new CEO, effective immediately. Turi, an experienced executive who was already a member of Coin's board, has been chosen to lead the company's growth and achieve the targets set by Coin's strategic plan at a challenging time for the retail industry.

In 2022, Coin SpA generated €300 million in revenue, up from €288 million the previous year, and had a total consolidated revenue of around €440 million, including revenue from partners operating separate accounts.

The group operates 37 directly owned branches and 102 Coincasa stores in Italy and abroad and distributes over 1,000 consumer brands across a retail area of around 110,000 square metres.

Coin Spa appoints a new CEO 

What: Kering is developing an area on rue Saint-Honoré and rue de Castiglione.

Why it is important: The new Kering development is located directly opposite of its top rival, Louis Vuitton.

The luxury group has purchased the entire building at 235 Rue Saint-Honoré for a reported EUR 300 million. The development on rue Saint-Honoré and rue de Castiglione spans nearly 8,000 square meters.

The group plans to open a new flagship store for its leading label, Gucci which would sit directly opposite of its top rival, Louis Vuitton. The store would extend over 2,350 square meters on two floors but Gucci’s CEO and Kering have yet to confirm the project.

Kering embarks on huge commercial development opposite Louis Vuitton near Paris’s Place Vendôme

What: M&S is expanding on its recently-launched ‘Bra-Fit’ campaign by adding a breast cancer awareness initiative. Working with the long-standing charity, Breast Cancer Now, the retail giant is rolling out signage to more than 1,500 UK fitting rooms in 110 stores with guidance on the signs and symptoms of breast cancer.

Why it is important: As breast cancer is the most common cancer in the UK, accounting for 15% of all cancer cases in females and males combined, the campaign will also appear in M&S’s colleague changing rooms.

Marks & Spencer to offer breast cancer information in fitting rooms

What: Singapore-based Asian retailer FJ Benjamin has managed not only to recover from Covid-19 losses but also to turnaround the business by posting its first profit in 6 years.

Why it is important: This gives a good temperature of what to expect in South East Asia with the return of the Chinese customers.

Singapore-based retailer F.J. Benjamin, which operates 144 stores for international brands across Southeast Asia, has reported a profit of SGP$1.7mn for S2 2022, which is a stark contrast with the net loss of SGP$1.3mn posted on the comparable period the previous year.

The fastest growing market has been Malaysia (+42%), followed by Singapore (+18%), allowing the group to enjoy a healthy growth rate of +26% on the period. The group has posted a total profit of SGP$3mn for the full year 2022, which is the first time this happens in six years

FJ Benjamin is back in the black

What: The Italian group OVS has abandoned its plan to buy the Coin department store chain, which currently operates 37 branches.

Why it is important: The two groups know each other well as OVS had parted ways with Coin before its IPO in 2015. Both parties have decided to end the 6-month negotiation process. OVS, determined to reduce his debt, felt that the investment was too heavy.

2022 was also rather positive for OVS with a net turnover of a value of 1.5 billion euros, up 11% thanks in particular to a positive performance of the Christmas period and, more significantly, end-of-season winter sales. OVS plans to continue growing in 2023.

OVS won’t acquire Coin