What: Macy’s continues with its Polaris rationalization plan initiated in 2020.

Why it is important: It is not about closing down stores but transitioning to a new, smaller, off-mall format. For that reason it is less about downsizing and more about rightsizing.

Macy’s, according to its 2020 Polaris plan and its announcements earlier in November, is closing 4 locations in January, in California, Colorado, Hawaii and Maryland. This is part of a strategy to close 125 stores between 2020 and 2023 in lower-tier malls, and trim 9% of the workforce.

In parallel, the group continues with its off-mall strategy, through the Market by Macy’s concept (8 stores so far including 4 opened in 2022), Bloomie’s with a third location in Seattle this year, and 300 Macy’s Backstage off-price locations, including 42 opened in 2022.

Macy’s closes down 4 locations 

What: Grand Central, a shopping destination in Birmingham, is losing 200,000 sq feet of retail space as commercial property giant, Hammerson plans to transform a former department store into offices.

Why it is important: The plans from Hammerson are a sign of how property giants are branching out from retail and repurposing empty retail space.

The commercial property giant, Hammerson, has announced plans to transform the former John Lewis department store into offices at Grand Central in Birmingham. This move further shows that property giants are branching out from retail and repurposing empty retail space.

The plan has accelerated with the large number of department stores closing across the UK, which was happening before the pandemic.

More retail space lost as Hammerson reveals Grand Central plans

What: John Lewis launched a new Beauty & Wellness report that focuses on key beauty trends for 2023.

Why it is important: Retailers could see success with beauty products focused on mushrooms and skin HIIT as they are expected to be the top beauty trends for 2023.

John Lewis has reported that mushroom ingredients, skin health, fast-but-transformative beauty routines, and makeup that enhances rather than covers will be the top beauty trends for 2023.

Many beauty brands have already created products that incorporate mushroom as an ingredient with Origins’ mushroom range leading with a 36% sales increase for the Mega Mushroom Mist and 32% increase for its Eye Cream.

Consumers are also looking for skincare regimes that will protect and build the skin barrier which John Lewis refers to as “skin HIIT.” Google Analytics showed that the term ‘Skin Barrier’ has almost doubled in popularity each year.

Other trends include ‘daily me-time’ which has resulted in an increase of sales for nail polish, face masks, and lip oils, glowing skin, products with long-lasting protection, and haircare.

John Lewis beauty trends forecast takes in mushrooms, skin HIIT

What: Instagram is removing its “Shop” tab from the homepage navigation to change the way consumers access commerce in its app.

Why it is important: Commerce remains important for Instagram as they make it is easier for people to discover and shop products throughout the app from feed, stories, reels and innovation.

Instagram said that the navigation bar update, which also includes moving the content creation button to the centre, is part of an effort to make it easier for people to share and connect with their friends and interests.

As Meta finds its footing in the social commerce space, some data suggest the channel could grow faster than e-commerce overall. Gen Z and millennial consumers are predicted to lead growth, accounting for 62% of global social commerce spend by 2025.

Instagram to remove shopping tab

What: A report from the World Travel and Tourism Council says Beijing could become more powerful than Paris in terms of tourism.

Why it is important:The tourism sector in Paris’ GDP is the highest in the world so far, representing USD 35.65 billion of direct contribution. But by 2032, Beijing could steal the show by posting economic benefits estimated at USD 77.28 billion.

The Chinese capital is already in the starting blocks to make tourism one of its economic engines. China's domestic tourism sector has seen phenomenal growth over the past decade as the country has invested in new hotels, transport infrastructure and new tourist destinations. By 2032, Shanghai should also be the second largest tourist power, with USD 70.88 billion in economic benefits. The largest city in southern China, Guangzhou, is also expected to ramp up, generating USD 34.94 billion.

Here are the top 10 tourism powerhouses in the world in 2022:

1. Paris - $35.65 billion
2. Beijing - $32.62 billion
3. Orlando - $31.1 billion
4. Shanghai - 29, $69 billion
5. Las Vegas - $22.99 billion
6. New York - $21.09 billion
7. Tokyo - $17.97 billion
8. Mexico City - $16.76 billion
9. London - $14.92 billion
10. Guangzhou - $13.15 billion

Beijing to become the biggest tourist power in the world

What: France has established sustainability legislation that calls for more transparency and traceability in the fashion industry.

Why it is important: The new rules are a sign of what is to come for the industry and a step in the right direction as consumers want to know what they are buying and want authentic brands.

Several new pieces of sustainable fashion legislation will curb greenwashing and cut pre- and post -consumer waste as new French laws are put into place. With deadlines fast approaching for the EU’s climate targets, France’s focus on the fashion industry is a move in the right direction as overproduction sits at 30-40%.

As the biggest plastic polluter in the Mediterranean region, France has implemented laws with a focus on waste. The most notable of these forbidding the destruction of unsold goods and retailers providing consumers with information about the environmental impact of products.

Brands will face challenges, especially with traceability as pinning down where raw materials and fabrics were made, how they were made and in what conditions is an exhaustive and ongoing process. Additionally, this legislation will push the industry towards becoming more digital. Although experts state fashion lacks digital infrastructure, brands should embrace digital product passports to capture all the information needed for product labels.

While brands affected by the French legislation will have a head start, others across the EU will soon be seeing similar laws by 2024.

France has laid down the law on sustainability

What: Paris, the department store of the Chilean conglomerate Cencosud, wanted to compete with Falabella and Ripley and was never able to achieve the desired success. More than two years have passed since Paris decided to close its 11 stores in Peru.

Why it is important: The absence of e-commerce during the pandemic, the lack of differentiation, and the weakness of its sales and brand strategy were what caused the operation in Peru to be discontinued. Besides, Paris should have opened stores first in Lima, where the bulk of consumption is concentrated, and not start with the provinces

The company 's initial argument for leaving the Peruvian market is that it did not obtain the results or the participation it expected. This can be easily corroborated with figures published by market research company Euromonitor mentions that, at the end of 2019, the retailer's participation amounted to only 8.3%, while Falabella had 46.5%, Ripley with 27.6% and Oeschle with 11%.

Another mistake is that Cencosud privileged the growth of its supermarket division in Peru, through its Wong and Metro brands. Also, despite the fact that in Chile Cencosud has a battery of strong brands for Paris, it did not bring them here. The own brands that they had failed to penetrate and those that added did not give them the necessary strength.

Why did Paris close in Peru? 

What: From January 24 to February 15, 2023, the online resale platform Vestiaire Collective is opening a pop-up at Le Bon Marché. Customers will also be able to drop their second-hand items so that they are listed on Vestiaire Collective website.

Why it is important: Luxury resale is gaining traction in department stores. Vestiaire Collective already partnered with Galeries Lafayette Champs Elysées.

The products presented in the pop-up have been selected by stylists and they have been authenticated "reliably and securely". A workshop is also organised: Vestiaire Collective will share tips on how to identify authentic counterfeit parts for their future acquisitions.

Vestiaire Collective pop-up store at Le Bon Marché

What: SMCP has created an academy to make the store associate role more exciting and modern in hopes to find a solution for its stores’ staffing problem.

Why it is important: Fashion companies are facing challenges in hiring and retaining in-store associates in a post-pandemic world where employees have new demands regarding compensation, purpose, and more.

SMCP Group has created an academy for sales associates in partnership with Parisian schools. The program will train participants on communicating with customers, livestreaming, and how to offer styling advice. The group hopes that the academy will help tackle its in-store staffing problem, while also giving them the opportunity to diversify its talent pool and evolve the sales associate role to be more exciting and modern.

Employees now expect more out of their employer and have new demands around compensation and purpose, which has made it difficult for retailers to fill their sales associate positions. Many retailers have raised their hourly wages while some companies have tried to make schedules more flexible. Around 80% of global business leaders in retail or similar industries said frontline turnover has increased and employees are rejecting conditions that went unchallenged just two years ago.

In addition to the high turnover and higher demands, consumers also expect more out of salespeople, making the need to retain and attract employees even higher. Many consumers want sales associates to love fashion as much as they do and know the happenings in the industry. SMCP’s Retail Lab will be a great way for the company to retain employees and to educate future employees while also giving them the tools necessary to become successful.

How brands can create retail jobs people actually want

What: Harrods is trialling an in-store beauty recycling scheme in partnership with MyGroup at its H Beauty store as part of its sustainability strategy to reduce waste and increase circulatory across its business.

Why it is important: With sustainability remaining a priority for consumers in 2023, Harrods is making recycling beauty products accessible for its customers.

Over the weekend, Harrods began its 3-month in-store recycling scheme at its H Beauty store in partnership with MyGroup.

Customers are encouraged to bring in their used beauty, fragrance, and skincare products to the store to be recycled at stations located by tills throughout the store. Product returns can include a range of products from compacts and mascara to vitamin bottles and lotion pumps. Most notably, the scheme also includes nail polish products and fragrance bottles, a first for UK beauty recycling, as these products are typically considered unrecyclable.

The scheme is linked to its MyBeauty rewards program, further incentivizing Harrods’ customers to come into the store and recycle their beauty products to gain access to a range of experiences and benefits.

The launch of the recycling scheme showcases Harrods commitment to bringing a more circular and sustainable shopping experience to its customers.

Harrods tests in-store recycling at H Beauty Branch

What: Galeria is planning to close 70% of its stores and finding buyers for them is not an easy feat.

Why it is important: The German chain has been in trouble for years and benefitted from the German state support twice during the pandemic. The pressure to salvage jobs is high, which makes it an explosive cocktail.

Galeria Kardstadt Kaufhof is planning to sell 90 of its 129 stores in Germany, due to a very difficult financial situation. However, given the fact that the stores in question are in small towns and rather larges, buyers are not interested.

One entrepreneur, the CEO of multi-brand chain Aachener, founded a year ago and which operates now 6 stores, has expressed his interest in a non-specified number of stores.

Retail Detail mentions that Inno, the Belgian department store chain which belongs to Galeria, is not impacted by the issues of the mother company in Germany, and even closed 2022 posting a profit.

German group Galeria has trouble finding buyers for its closed stores 

What: Walmart launched a dedicated e-commerce site that is tailored to small and medium businesses with the intention of simplifying business-related purchases.

Why it is important: As America’s number one retailer, Walmart is continuing to evolve its shopping experience to cater to its customers’ needs and address the challenges businesses face.

Walmart is continuing to expand its B2B initiatives with Walmart Business, a dedicated e-commerce site that is catered to small and medium business customers. Customers have the opportunity to upgrade to a Walmart Business+ membership for $98 a year which gives them access to no minimum shipping, free pickup and delivery from stores, as well as rewards and savings.

The site focuses on products that are necessities for small business owners like office supplies, snacks, and restroom supplies among many other products. Additionally, Walmart Business is efficient and user-friendly, allowing customers to share payment information and order histories across teams as well as having items organized in a way that tailors to organizations.

The new site follows many other B2B initiatives Walmart has made in the past year. The company began selling its omnichannel capabilities to other businesses in 2021, has partnered with Popable, and also introduced a white-label delivery service.

Walmart launches dedicated e-commerce site for businesses

What: The WSJ considers that 2023 might be, relatively speaking, more difficult for the rich than usual in a recession scenario.

Why it is important: For one, the US job market structure is specific and might not be the same in Europe. Second, if the WSJ prediction realises, this could lead to a generalized crunch where rich customers do not spend for fear of the future.

For the WSJ, while economic downturns usually hurt mostly the poor people, the 2023 downturn, if it turns into a recession, might unusually hit the richer harder than usual.

When comparing the evolution of income by social classes, it appears that the lower classes have benefitted more from the governments’ relief policies than the higher ones, meaning that the richest people are not particularly better-off when compared to the beginning of the pandemic (note: this reasoning is valid if one does not consider the money saved during the lockdown periods).

In addition, the recent wave of layoffs in the tech industry includes a significant amount of former employees with a heavy pay check, in a context where, due to the structure of the US market, a recession might not mean a crisis on the job market for the lower classes.

As a consequence, for the reporter, the well-off customers might be more reluctant to spend in 2023, which will naturally impact retailers catering for their needs.

Get ready for the Richcession 

What: x Southeast Asian E-commerce giant is closing Poland this January, after a year of operations and having exited France a year ago.

Why it is important: Is this the beginning of the end of regional pure players’ international expansion?

Shopee, which launched operations in Poland in 2021, is closing down its operations there. The company has also exited France and India, meaning that the international expansion of the Singapore-based company is now on hold.

Shopee recorded a loss of $931,2m in Q2 2022, up from the loss of $433,7m in Q2 2021.

Shopee to shut Poland operations 

What: A debit card now allows customers to perform their payments in cryptocurrencies.

Why it is important: Even though the model is unclear, retailers should be aware of their customers’ evolving needs and expectations when it comes to payments, especially the ones with their own credit card program.

Revolut, the “easy banking” app, adds a new feature coming on top of already all the specific elements its credit card already allowed customers to do (such as buying crypto directly or trading gold), as customers are now allowed to pay in crypto via their credit card simply by tweaking parameters in their app.

It is not clear from the article if this feature is ‘transparent’ for the retailer, however this move is an additional step towards democratization of payments via crypto, even though cryptocurrencies are currently out of favour.

Revolut adds crypto spending feature to debit card 

What: Reliance’s acquisition seems to be an answer to Shopper’s stop latest move.

Why it is important: Galeries Lafayette are set to open two new stores in India within 2024. India seems to be accelerating into becoming a serious rival to China when it comes to retail growth.

Indian conglomerate Reliance Retail has acquired the Indian division of German retail company Metro for $344m.

Metro entered India in 2003 and currently operates 31 stores with 3,500 employees, mostly in prime locations. It recorded $930m in sales in 2022 (ending September).

Interestingly, the market is accelerating and this move seems to be a response to Shopper’s Stop new store format that we reported here.

Reliance retail acquires Metro AG India for $344m

What: Analysts predict that marketing chiefs will face serious challenges with growing brand value and loyalty amid the economic storm causing major trend shifts for consumers.

Why it is important: Loyalty is becoming ever more important as consumer behaviours change with the increasing inflationary pressures across socioeconomic demographics, which has been supported by Gartner’s research from September.

Gartner believes traditional methods of tracking and shoring up brand value, including brand reach, brand sentiment and perceived differentiation, are at risk because of disruptive new market entrants, higher consumer expectations and the fact that it’s easier than ever to learn about unfamiliar brands. Three-quarters of surveyed audiences have searched for information on a brand they didn’t previously know about while browsing online, while only 15% said they were loyal to a given familiar brand.

One-fifth of surveyed respondents are ditching in-store shopping for online, and one-third are trading down to store-name brands. The results line up with reports that retailers are investing more in promoting their private labels to capture increased interest, amplifying the competition.

Cross-functional collaboration is also creating worse outcomes for marketers, and disruptive market dynamics are weakening mainstay tactics for winning consumer favour. CMOs may need to make less money going further and fight for their independence considering these headwinds and as larger corporate mandates focus on preserving growth and cutting costs in the marketing department.

2023 uncertainty poses unique challenges for marketers

What: Amazon reached a settlement with the European Union on three antitrust investigations, as the e-commerce giant addressed EU concerns over clauses applicable to third-party sellers, saving itself a fine that could reach 10% of its worldwide turnover, i.e. billions of dollars.

Why it is important: Amazon was accused of using its size, power and data to promote its own products and gain an unfair advantage over rival merchants selling on its online platform which has resulted in the company agreeing not to use third-party seller data for its own competitive retail business.

Amazon has also agreed to create a second purchase option for competing products in the event that an Amazon product appears as the first choice if it differs substantially in price and delivery speed.

Finally, Amazon agreed that sellers under Amazon's Prime function could choose their own logistics and delivery services, other than those approved and chosen by Amazon.

Amazon avoids fines through agreement with the EU

What: Alibaba is expanding its presence in Spain with the launch of Miravia, a new fashion, beauty, food and lifestyle marketplace.

Why it is important: Alibaba’s Miravia platform seeks to offer a different shopping experience to consumers, giving them access to the latest trends in fashion, beauty and lifestyle through innovative solutions, such as exclusive content created by influencers or virtual make-up trial tools.

Miravia also offers a wide variety of products in categories as diverse as beauty, fashion, body care, electronics, food, babies, pets and health, with big international brands, Spanish brands, and local young entrepreneurial brands.

Alibaba launches a new fashion and lifestyle marketplace in Spain

What: Nordstrom CEO cites strain across all consumer demographics affecting the shift in its merchandising mix as part of its plan to improve the retail group’s performance in 2023.

Why it is important: As a response to the uncertainty surrounding the next year with low-income households the most affected economically, clean inventories, improving Nordstrom Rack and elevating the customer experience are step one for the 2023 agenda.

At the beginning of 2022, Nordstrom announced its mission to simplify its outlet offshoot Nordstrom Rack’s focus “to great brands at great prices.” Thus, the company is looking to differentiate by offering brands not normally available in off-priced channels, and which customers can identify from the regular Nordstrom assortment.

Like many other retailers, Nordstrom is looking to clear out inventory in light of softening demand for clearance during the inventory glut.

Finally, the supply chain is a key focus for reactivity in the next year for Nordstrom and other companies hoping to survive a potential recession.

Nordstrom’s 2023 Focus 

What: John Lewis has extended both its Christmas delivery and click-&-collect windows in a bid to attract last-minute shopper sales.

Why it is important: The retailer has added an extra day, allowing customers to complete their online Christmas shopping with a deadline of 4 pm on 22 December for orders selected for delivery.

Meanwhile, the Partnership’s click & collect service has been extended until midday on 23 December, allowing customers to arrange their orders to be collected from more than 360 John Lewis and Waitrose stores on Christmas Eve.

John Lewis extends pre-Christmas delivery window

What: According to findmycasino.com, Harrods, Selfridges and Macy’s were ranked as the ‘most popular’ department stores globally.

Why it is important: The metrics for ranking included average Google search volumes, Instagram hashtags and TikTok views.

Paris’s Galeries Lafayette store took fourth place in the ranking, followed by Saks Fifth Avenue for most popular department stores; Harrods was the clear winner in the first place, followed by Selfridges and Macy’s. Harrods scored 10 out of 10, with 134,000 people per month Googling the store, while shoppers have so far uploaded 1.5 million images of the retailer on Instagram. Selfridges, with a score of 9.49 out of 10, with Google searches for the retailer averaged 109,000 per month. However, it’s loved on TikTok, with over 47 million views on the platform. Macy’s, the largest department store in the US, had a lower Google search ranking, but the store still receives over 1.2 million hashtags on Instagram and 2.3 billion views on TikTok.

Harrods, Selfridges, Macy’s ranked as ‘most popular’ department stores globally

What: The Indian department store company is entering a new market.

Why it is important: While many department store companies in the world go upmarket, Shoppers Stop aims to pre-empt a lower segment, probably having in mind the arrival of new players on the market.

Indian department store company Shoppers Stop is opening a new store format, based on “value” in fashion and lifestyle categories. The new format, between 700 and 800 sqm, will be opened in Tier 2 cities outside of metropolitan areas and the first pilot is bound to open in the next months.

This marks a change for a company which has traditionally relied on premium and mid-segments in metropolitan cities.

Shoppers Stop to open a new store format 

What: Vogue Business reviews the main retail trends worth to be remembered that took place in 2022.

Why it is important: 2022 was the return of the high-scale collaborations, not only between brands, or between a brand and a retailer, but also between retailers themselves. The IADS expects more of such collaborations as it is a great way to generate brand visibility and open up databases, while maximizing the local aspect of both retailers at the same time.

Vogue reviews what happened in retail in 2022, in terms of store openings, collaborations and consolidation. According to the medium, physical stores made a comeback in 2022 and the formula for brick and mortar evolved since the pandemic, with more experience and entertainment.

This is the reason why the collaboration that took place were interesting: Dior takeover at Harrods (reported to be ‘overwhelmingly positive’ even though on another note, Harrods sent a promotional email with 50% discount as early as the 24th of December), Dior and Sacai collaboration at Browns, Jacquemus in Selfridges, or the collaboration between Machine-A and Smets, or Nordstrom and 11 Honoré. More collaborations of that scale are planned to take place in 2023.

The year in retail and a look at collaborations