What: The iconic destination department store in Zurich will undergo major restructuration in the coming years.

Why this is important: Even though Jelmoli managed to grow from 2021 to 2022, even though it did not reach 2019 levels, the decision is very significant and raises questions about the new positioning aimed by the owning company.

The owner of the iconic store Jelmoli in Zurich, The Swiss Prime Site company, is planning to refurbish and redevelop the Jelmoli building in Zurich. The goal is to update retail spaces and introduce new uses to the building, starting in 2025.

The lower floors will have reconfigured retail spaces and a portion of the upper floor will be offices and public spaces like fitness and dining, and the refurbishment aims to maintain the building's status as a shopping destination. The company has been conducting market surveys due to the changing retail landscape and has decided to close the Jelmoli department store at the end of 2024, with a new market position in 2027.

The company will not manage operations itself. The employees and business partners will be given support and time to adjust to the changes. Nina Müller, the CEO of Jelmoli, will be handing over management to Reto Braegger, current CMO, by the end of June 2023.

Jelmoli will close for 3 years to rebuild and reposition itself 

What: Nordstrom is launching a new Ambassador program in order to lure in the top VIP customers, much needed in order to increase margins for the company.

Why it is important: Personalisation and focus on services are key to convincing top customers to come and stay in the loyalty programs. However, Nordstrom is playing on two dimensions here as this new program also comes in with its equivalent in retail media, directed at brands, as announced during the NRF.

Nordstrom has introduced a Stylist Ambassador Program in its top 20 markets. The program includes top stylists who will help bring the Nordstrom experience to life on social media and at events. Nordstrom customers who engage with the styling services are some of the company's most loyal and frequent customers, spending seven times more than those who don't use the services.

This program launch comes at a crucial time for Nordstrom, as net sales and gross merchandise value decreased in Q3 2022 compared to the same period in 2021. The company has two new stores in Manhattan and is facing high rent expenses. The shift of the Anniversary Sales from Q3 to Q2 also negatively impacted net sales.

The Stylist Ambassador Program is one way for Nordstrom to personalize customer experiences and connect them with high-quality products.

Nordstrom launches Style Ambassador program to boost styling services

What: John Lewis is creating new roles and investing in its brands, data, and technology to give more value to customers.

Why it is important: The UK retailer is uniting brand, strategy, transformation, and campaigns to focus more on its unique purpose and deliver more value to customers across all touchpoints.

John Lewis Partnership’s has announced new investment in its brands, technology, and data in hopes of giving more value to customers.

As a result, the customer director for John Lewis is stepping down and new role has been created, combining John Lewis and Pan-Partnership customer capabilities. This will bring together the leadership of John Lewis and pan-Partnership Customer teams and capabilities into a single role.

Big change at John Lewis sees customer director stepping down

What: Despite a traffic decline of 11.7% compared to 2019, French malls’ turnover is close to the pre-Covid level, at -1.9% compared to three years ago. This is an increase of 29% compared to 2021.

Why it is important: Despite uncertainties and inflation, 2023 is off to a fairly good start for the various retail sites in France, with traffic up 3.8% for retail parks (open-air shopping malls) in January (compared to January 2022), 7.2% for shopping centres, 15.6% in city centres, and even 18.9% in commercial areas.

In 2022, small towns city centres (10,000 to 50,000 inhabitants) are on the rise, recording the largest increases in attendance.

Consumer traffic in retail parks, which combine brands, leisure and catering, show a more measured increase of 8% last year (vs 2021), but this type of shopping place had suffered less during the pandemic.

The vacancy rate is between 2 and 3%, i.e. 2 to 3 points better than during the crisis.

French shopping malls’ figures close to pre-Covid level

What: Ryan Cohen accumulated a large stake in Nordstrom, causing the Seattle-based retailer’s stock price to rise.

Why it is important: After lower-than-expected holiday sales and earnings, Nordstrom’s stock jumped 30% following media reports of Cohen’s increased stake in the retailer.

Canadian billionaire and founder of Chewy, Ryan Cohen, accumulated a large stake in Nordstrom, causing the stock to soar.

The department store’s stock leapt 30% and shares were up to USD 26.38, with the shares having a 52-week high of USD 29.59.

According to reports, Cohen wants to oust Mark Trittion from the Nordstrom board and make cost cuts and structural changes in the business. Even as one of the top five investors in the company, Cohen will face challenges in making changes as the Nordstrom family still owns 30% of the company's stock.

Nordstrom stock soars on activist stake

What: Data has shown that customers are spending less online because funds take too long to process.

Why it is important: Poor return policies are a contributing factor for struggling customers to slash their spending, resulting in a loss of revenue and repeat business for retailers.

In a poll conducted by the banking platform Tink, 30% of UK consumers said they spend less online because refunds take too long and they’re worried about their bank balance. Additionally, 52% of respondents stated that they’re less likely to shop with a retailer if a refund takes a long time.

As retailers anticipate a difficult year, 54% state that they are or expect to be forced to stop offering free returns as a result of the economic climate. The cost of processing returns and length of time that it takes for a customer to get their money back are the top pain points for merchants.

36% of retailers believe that instant refunds would enhance the customer experience of returns while 32% feel they would ultimately reduce the returns cost to their business.

Refund delays mean consumers spend less overall

What: The Mexican Association of Online Sales revealed that the fashion industry had an outstanding performance in Mexico, with sales of 528 billion pesos and becoming the fourth country with the highest growth in e-commerce.

Why it is important: Mexico was the top country in e-commerce growth outside of Asia and exceeded 2019 performance, with sales almost tripling in 2022.

Digital sales represented 13.4% of total retail sales in the country with 63 million online shoppers in Mexico. Additionally, Mexicans are embracing omnichannel as the new normal with 9 out of 10 reporting they interact with online and physical stores.

Mexico establishes itself as the fourth country with the highest growth in e-commerce worldwide in 2022

What:  Partnering with local bookstore Gibert, the 490 sqm is located on the 7th floor of the men’s building.

Why it is important: Printemps continues its revamp strategy with a new bookstore concept that offers more than 20,000 books including 20% of second-hand books.

Printemps Haussmann unveils a bookstore 

Related articles on department stores selling books:

Amazon to close all of its bookstores and '4-star' shops

How bookshops survived Amazon

Canadian chain reinventing bookselling

IADS EXCLUSIVE: Department stores selling books and culture

What: Economists are indecisive on when or if a recession will happen, an NRF economists predicts that downturn won’t be severe enough to become an official recession.

Why it is important: Even if there isn’t an official recession, consumers still feel like they’re living in one and struggling with rising costs.

Economists are still pondering the possibility of a recession. While many opinions and predictions circulate, consumers are still behaving as if there is one with inflation and rising interest rates.

The chief economist for the NRF states he doesn’t expect the downturn to be severe enough to become an official recession. Morgan Stanley also doesn’t forecast a recession in their outlook but has growth falling about 0.3% in 2023.

On the contrary, KPMG predicts a recession in the first half of 2023 for the US economy and expects to see negative GDP in the first and second quarters of the year.

The economy is expected to see slight growth this year as consumers cope with inflation and high interest rates. In 2022, consumer spending grew 2.8% in 2022 but dropped 0.2% in November and another 0.3% in December. Overall, retail sales dropped 1.1% in December.

NRF economist downplays recession possibility

What: In a global survey of 9,600 shoppers, data revealed that consumers are getting fatigued by inflation and turning more frugal, with expectations to shop more online to find better value.

Why it is important: As consumer behavior shifts, businesses should focus on providing more products at competitive price points to maintain customer loyalty.

The expected shift to online follows a year of higher foot traffic in physical stores. However, respondents are becoming more frugal and expect to find better value online than in-store.

Avoiding brands due to higher prices is already having an impact on loyalty. 43% of respondents stopped shopping with certain retailers because of higher prices while only 17% continue to shop with the same retailers regardless of price.

Data clearly shows that shoppers are focused on price and convenience and only a small percentage of customers are unconditionally loyal to their favorite brands as prices rise.

53% of respondents in the US stated that the products they need have been out of stock more frequently in stores in the last six months which is another contributing factor to the shift in favor of e-commerce. 52% of shoppers try to find an out-of-stock product online and 71% will then shop for the product online the next time they need it.

Inflation is shifting shoppers to buy more online

What: The Stockmann Group’s annual revenue increased by 9.2% at EUR 981.7 million. The gross margin decreased to 57.9%. The adjusted operating result improved to EUR 79.8 million.

Why it is important: In 2023, Stockmann expects the Group’s revenue to reach EUR 960 to 1,020 million and the Group’s adjusted operating result to be EUR 60 to 80 million. The guidance is based on the assumption that the continuing rise of inflation will increase costs and have a negative impact on consumer demand. The restructuring programme is proceeding according to plan, which means that all of Stockmann’s department store properties have been sold.

The Stockmann Group consists of two business divisions: the Lindex fashion company and Stockmann, a multichannel retail company with premium department stores. Strategic priorities are the following:

•    Providing the best customer experience and achieving the highest customer loyalty through the successful development of the omnichannel operating model,

•    Using strong brands and offering to enhance customer loyalty,

•    Maintaining and developing a strong commitment to fair and responsible business models and practices,

•    Seeking growth and efficiency together with third parties in order to extend the range of meaningful products and services as well as reach new customers groups,

•    Securing sustainable business by seeking growth in revenue, better cost-efficiency and efficient capital utilisation in order to improve the Group’s profitability.

The Stockmann Group’s financial report for 2022

What: 75% of Chinese customers are asking for sustainability

Why it is important: Today, they demand sustainable brands. Will they be asking for sustainable luxury stores when travelling in the future?

According to a study conducted by KPMG, 74% of Chinese customers are willing to switch to sustainable brands, and this trend is even more important among younger customers (below 34).

Nearly 3 of 4 chinese shoppers willing to switch to sustainable brands 

What: Chloé has introduced Chloé Vertical, a project that features digital IDs that open access to product and material information, repair assistance, and resale options.

Why it is important: Chloé Vertical is an industry first, and will make products more circular as well as improve the production of key raw materials.

Products in the SS23 Chloé Vertical collection use 100% traceable materials and are equipped for Instant Resale which will be hosted in exclusive partnership with Vestaire Collective.

Instant Resale will offer a price to sellers once they’ve uploaded product images and details and then be able to deliver payment immediately before the product has necessarily sold.

Through this initiative, Chloé will make participating in resale easier for customers and give them the opportunity to make informed decisions about the transparency, traceability, and circularity of their products.

Digital identification has been gaining traction within the industry as the technology enables supply chain traceability and educates consumers about sustainable product care, driving progress towards a more circular system. Chloé has committed to rolling out a digital ID on all its products by 2025.

Chloé launches instant resale using digital IDs on Vestaire Collective

What: China is allowing its tourists to travel outbound again, a move that has been eagerly awaited by many operators looking to welcome again this clientele.

Why it is important: While South Asia seems for now a favourite destination, no one really knows how long it is going to take for Europe and US to welcome these tourists again, and in what quantity they will be coming back. Talk about a headache for department stores.

China has resumed outbound group travel to 20 countries including Thailand, Maldives, UAE, Russia, and New Zealand. This move sparked a frenzy of trip planning and saw online searches for overseas destinations spike.

According to a researcher, countries with friendly entry policies towards China are preferred, with Southeast Asian countries being at the top of the list. In 2019, 11 million Chinese tourists visited Thailand and it is estimated that 5 to 6 million will visit this year.

The mass return of Chinese travellers is boosting confidence in the economic recovery of countries dependent on tourism. A survey shows that over 90% of respondents plan to travel abroad within a year. The resumption of outbound group travel is of great significance to Thai tourism for instance.

However, the full recovery of the industry may still take time due to factors such as the shortage of international flights and the high cost of group tours. Tourism enterprises are considering diversified, small-scale, and customized products to attract vacationers with niche marketing and a better service experience. The hope is for overseas destinations to be ready to embrace the influx of Chinese tourists in terms of the supply chain, ground resources, flight delivery, personnel, etc.

Chinese tourists are resuming international travels

What: The CEO of Simon Property Group is comfortable with the company’s current portfolio and doesn’t expect to buy more retailers in the near term.

Why it is important: As CEO of a mall giant, Simon’s opinion that there’s not really a lot of distress in retail currently could be a positive sign for the industry.

David Simon stated that he’s content with his company’s current position in retail and doesn’t expect to buy more retailers in the near future.

The CEO said that if the group does acquire, it will be opportunistic as most of their work has been on the bankruptcy front. While he is aware of brands that are in trouble, he doesn’t see Simon playing in any of the situations.

The business of being a landlord is also paying up for Simon. The real estate group’s net income increased 33.9% to USD 673.8 million from USD 503.2 million a year earlier and net income for the quarter was boosted to USD 90.5 million.

David Simon not expecting more retail acquisitions, for now

What: Vietnam is the new land of opportunities for South East Asian retailers.

Why it is important: India and Vietnam might be the new hot markets to watch, all the more that they are already both quite advanced technologically speaking, and for that reason, might be reach in lessons for overseas retailers.

Thailand's Central Retail Corporation will invest $1.45 billion to double the number of its stores in Vietnam over the next five years, taking its total to over 600 in 57 cities and provinces.

CEO Yol Phokasub says the country has "immense potential for continued economic growth" (with an expected GDP growth of 6.7% in 2023 and 7.2% in 2024), and Central Retail Vietnam will invest 6 billion baht ($174 million) this year alone. The company will also renovate 10-12 Nguyen Kim electronics supermarkets and open 3-5 new supermarkets and Go! Hypermarkets.

The move comes as Japan's Aeon plans to operate 100 Vietnamese supermarkets by 2025 and South Korean retail giant Lotte also seeks to expand its footprint in the country now that it is gradually exiting China.

Central Thailand to invest $1.45b in Vietnam 

What: The American Dream has long been seen as a symbol of the malls’ decay, but even though the beginnings were difficult, the mall is seen as an example of reinvention for the US market.

Why it is important: Pure retail now involves experiences and different categories. It is not anymore only about also mixing a F&B place, but realty consider malls and department stores as third places where people have a reason to come, not only centred on shopping.

The American Dream mall is a project by Canadian conglomerate Triple Five Group to make retail shopping more attractive. The mall spans over three million square feet, and features high-end shops from luxury brands and entertainment options such as a water park, wave pool, indoor ski slope, and a Nickelodeon theme park.

Malls have been reinventing themselves to become "shop, work, live" environments, says CBRE. The mall took almost a decade to complete due to various legal issues and construction delays, and its journey has been bumpy. It lost $60 million in 2021 and missed an interest payment deadline in 2022.

However, occupancy rates are now over 80% and the mall is seen as a "learning lab" for malls to revamp their business models. Hunter believes the connection between entertainment and retail sales can help drive the latter. Malls are not in as dire of a shape as narratives suggest.

The American Dream mall sets its sight beyond traditional retail

What: Saks.com is adopting a cautious approach to 2023 as they see a deceleration in growth.

Why it is important: While the e-commerce business has increasingly seen success after splitting from Saks Fifth Avenue, the retailer is preparing for a more normalized year in the current economic climate.

Saks.com has seen two years of strong growth in volume, product choices, customers, and services following its split from Saks Fifth Avenue. The company is expecting 2023 to be a more normalized and challenging environment as consumers slow their discretionary spending.

The luxury e-commerce business plans to focus on scale and efficiency and predicts that there will be pockets of strength and pockets of softness this year. While footwear and handbag were top-performing categories over the last few years, sportswear and eveningwear will be stronger categories this year.

In Q4, the gross merchandise volume was up 11% with the top-performing categories being dresses, eveningwear, and women’s contemporary ready-to-wear.

After a run of quarterly gains, Saks tempers its 2023 outlook

What: Neiman Marcus Group is laying off hundreds of workers and evolving its leadership structure.

Why it is important: The department store group follows several other retailers in laying off its workforce as retailers look to recalibrate and manage costs to be in line with softening revenues.

The Neiman Marcus Group is laying off under 5% of its workforce, including workers in corporate stores, and other areas of the business.

The CEO of the group stated that the cutbacks are a result of the volatile economic climate, a deceleration of business since the summer, and decisions on how to best focus resources on the highest value customers.

Neiman’s is also evolving its leadership structure by shifting technology and customer insight responsibilities to NMG’s two brand presidents, strengthening their current roles and capitalizing on execution and decision speed as they are critical in a moment of volatility.

Neiman Marcus Group sets layoffs, reorganizes management

What: JD.com is set to close its e-commerce services in Indonesia and Thailand after a difficult year for China’s technology and retail sectors.

Why it is important: As China’s largest online retailer and biggest overall retailer, the company’s exit reflects the highly competitive e-commerce landscape in Southeast Asia.

JD.com is retreating from Southeast Asia, ending its services in Thailand from March 3 and Indonesia at the end of the same month.

The retailer, which started in 2015, failed to gain traction against larger competitors such as Alibaba Group, Lazada, and Sea Ltd in addition to a slowing economy and the impact of Covid-19 restrictions in China

The company stated that it will continue to serve Southeast Asia and global markets through its supply chain infrastructure. While the retailer is exiting the consumer side, they plan to focus on merchants, brands, and logistics infrastructure in Southeast Asia.

China’s JD.com to shut e-commerce sites in Indonesia, Thailand

What: China’s luxury market saw a decrease in luxury sales as a result of tense lockdowns and rounds of crackdowns on the tech, real estate, and entertainment sectors.

Why it is important: For the first time in 5 years, China’s personal luxury sales contracted.

The consultancy firm, Bain, reported that spending in the personal luxury space in China shrunk by 10% in 2022. Almost all categories were impacted but those with higher online penetration such as luxury beauty performed better than those with a smaller online presence.

The report stated that watches and jewellery saw the sharpest decline, followed by fashion and lifestyle at a 15 to 20% decrease.

A few brands managed to stay flat or grew during the challenging market. These brands were bigger, with iconic portfolios, and had a higher concentration of VIP clients. Price hikes have also helped some brands recoup their losses with a 25 to 45% price gap in the leather segment and 25 to 345% in jewelry and watch sectors between China and Europe.

Bain states that brands who understand the nuances of the China luxury market will succeed over time. Additionally, they urged brands to adapt and cater to Chinese tourists’ distinct shopping behaviors and preferences as they return to Paris, London, and Milan.

The consultancy firm expects growth in the sector to resume in 2023 with sales returning to the 2021 level as soon as the first half.

Bain: China’s luxury market contracted 10% in 2022

What: Richard Marcus, who served as chairman and chief executive officer of Neiman Marcus from 1979 to 1988 has passed away

Why it is important: Richard had a strong influence on the growth of the business in the ‘80s, he launched the first retail loyalty program as CEO and his departure marked the end of the official Marcus affiliation with the Dallas-based luxury store.

Richard Marcus, former Neiman Marcus Chief Executive Officer, dead at 84

What: Central’s European locations are advertised to The1 loyalty program members through the specific perks they can have, in addition to appetizing presentations about the experience and heritage that awaits them.

Why it is important: This is a good example of cross-border marketing making sure that international tourists from a specific country are channelled into the right locations. IADS members could take note and initiate an international cooperation on the topic.

Central Group has released an advertorial in the Bangkok Post which emphasizes the benefits that Thai members of The1 program (Central’s loyalty scheme) can enjoy while visiting the group’s European locations.

It is all about astutely mixing information on experience and heritage, and perks such as points earned according to spending levels.

Central Group advertises its European locations to its loyal Thai customers 

What: Unibail-Rodamco-Westfield’s 2022 results confirmed the end of any Covid effect on its business.

Why it is important: Tenant sales were running at 103% of pre-pandemic levels with the US at 108% and Europe at 100%. These were significant milestones and underlined that the company and retail have bounced back post-pandemic.

Net rental income for the commercial real estate company was EUR 2.26 billion, up 29.1%, with shopping centers being the biggest part of the business, bringing in a net rental income of EUR 2 billion, up 24%.

Shopping center vacancies also reduced to 6.5% compared to 8.9% in 2021, however pre-pandemic vacancies were 5.4%. Additionally, tenant sales were up, rent collection returned to pre-pandemic levels, and the company reported a EUR 1.9 billion debt reduction.

Unibail-Rodamco-Westfield leaves Covid years behind with full recovery