What: a full feature about Steen & Strom in a glossy magazine.

Why it is important: Steen & Strom is winning its bet to revamp and be perceived as a global luxury destination.

Steen & Strøm is the historic art deco department store in Oslo, Norway. It opened in 1797 as a grocery shop and is now a 6-story luxury fashion hub.

Promenaden Management is the property company that manages Steen & Strøm as well as the Nedre Slottsgate luxury fashion district in downtown Oslo.

In the late 2000s, Promenaden began buying up properties in central Oslo with the goal of creating a high-end shopping district.

Promenaden has brought in luxury brands like Louis Vuitton, Chanel, Dior and Hermes to open stores on Nedre Slottsgate.

Promenaden and Steen & Strøm aim to support and showcase local Norwegian fashion brands alongside international luxury names.

The success of the luxury district has helped establish Oslo as a global fashion capital and destination for high-end shopping.

Norway’s Steen & Strom featured in Monocle Magazine

What: A piece about how customers have changed and now expect to be considered individually in each of their interaction with retailers.

Why it is important: The future is much more than simple CRM, which is already difficult to execute well.

The text discusses the evolution of personalization in American culture, tracing its roots from before the internet era to the present day and its implications for the future.

Evolution of Personalization:

1. Pre-Internet Era: American culture shifted from communal to individualistic long before the rise of the internet. Evidence includes the increasing frequency of the word "I" in literature and the transformation of familial values.
2. Family Structures: Traditional family dynamics changed, with fewer multi-generational households and an increase in single-person households. The perception of being unmarried also evolved from negative connotations to indifference.
3. Consumerism & Technology: The rise of technology, especially the internet, accelerated individualism. Direct-to-consumer brands became popular in the 2010s, emphasizing personalization in products and services.
4. Content Personalization: The media landscape expanded to cater to varied tastes, from TV shows to YouTube recommendations and algorithm-driven social media feeds.
5.  Invisible Players: Companies like Klaviyo enable brands to offer personalized marketing, indicating the depth of personalization in commerce.
6. Broad Consumer Ecosystem: The ongoing trend in consumer experiences leans towards convenience, affordability, and enjoyment, often equated with personalization. This trend can be traced back to the Industrial Revolution.

The Historical Increase of Personalization through Technology:

1. Industrial Revolution: Introduced mass production, necessitating marketing for product differentiation.
2. Automobiles: Spurred mass consumption with its influence on industries like shopping malls and credit cards.
3. Internet: Fragmented culture further by offering niche communities and unlocking endless content, leading to even greater personalization.
4. AI's Role: AI is set to boost personalization in the digital realm. Examples include apps like Meeno, which offers a personal relationship mentor, and applications in education, fashion, and healthcare.

Conclusion:

The 20th Century marked the age of mass consumption, whereas the 21st Century is shaping up to be the age of "bespoke consumption". With advancements in technology, especially AI, personalization will further intensify, catering products and services directly to individual needs and preferences.

The Hyper-personalization of everything

What: The Robin Report reviews the evolution of DTC stores at Nike and how they used the learnings on the way to craft their new iteration.

Why it is important: Nike is not about sport or performance, but wellness, which is a lucrative USD 1.5bn market.

Nike introduced its House of Innovation as a blend of an interactive museum and store in 2018, with locations in New York, Paris, and Shanghai. As part of its "Move to Zero" sustainability initiative, Nike has pledged to produce products with at least 20% recycled content, achieve 100% renewable energy in their facilities by 2025, reduce carbon emissions by 30% by 2030, and divert 99% of footwear manufacturing waste from landfills.

Parallelly, Nike shifted its retail strategy by cutting ties with some long-term wholesalers and focused on localized and personalized retail experiences, launching several prototype store concepts, such as Nike Live and Nike Rise. The recent addition is the "Nike Well Collective" stores, which focus on holistic fitness, particularly tailored for women, and are designed according to the local market needs.

Nike is promoting its Direct-to-Consumer (DTC) model without sidelining its wholesale commitments, exemplified by a collaborative approach between the new Collective stores and Dick's House of Sport, whereby they refer customers to each other based on merchandise availability. The goal is a harmonious balance between DTC and wholesale channels.

Nike’s DTC stores development culminates with the new Nike Well Collective

What: Unibail-Rodamco-Westfield has announced its plan to reduce carbon emissions by 90% by 2050.

Why it is important: Unibail-Rodamco-Westfield is the first retail real estate company in Europe to receive net-zero certification from the Science-based Targets Initiative and wants to apply its reduction plan to the entire group.

The company aims to achieve carbon neutrality on its direct emissions (Scope 1 and 2) by 2030 through a 90% reduction based on 2015 levels. Unibail-Rodamco-Westfield plans to compensate for the remaining 10% of emissions. The goal is to reduce overall emissions, including those from clients and retailers in its centres, by 50% by 2030 and 90% by 2050.

To achieve its sustainability goals, the company plans to enhance energy efficiency, implement renaturation projects, promote water saving, and reduce waste. It will increase renewable energy production through solar panels and aims to produce 30% of on-site consumption through renewable sources by 2030.

The company plans to invest 28 million euros annually for the next seven years, including funds dedicated to solar energy production and the installation of electric vehicle charging stations, and it intends to support environmental initiatives by investing in the Climate Fund for Nature and making contributions to WWF.

Unibail-Rodamco-Westfield outlines carbon neutrality plan

What: Fenwick is profitable again, thanks to the sale of the New Bond Street store.

Why it is important: Is that a good sign?

Fenwick reported a pre-tax profit of GBP 57.1m last year, a significant turnaround from a GBP 5.2m loss the previous year, largely due to the GBP 430m sale of its New Bond Street store. Gross sales increased by 31% to GBP 315m, with online sales up 51% in the year leading up to January 28, 2023.

CEO John Edgar emphasized the importance of the sale in bolstering the company's transformation, allowing greater investment in digital avenues and physical stores, especially in Newcastle.

Despite some inconsistent trading this year, largely due to unpredictable weather, the company maintained a focus on full-priced sales and improved inventory management. Edgar is optimistic about the upcoming Christmas season and has no plans to close any stores, instead looking to potentially open more in strategic locations.

Fenwick returns to profits thanks to the sale of its London flagship

What: Retail veteran Walter Loebb, answers to the pessimistic Vogue article about the US department stores' future.

Why it is important: Innovation and adaptation have been at the core of department stores since their inception. Why should it stop now?

Vogue Business recently expressed pessimism about the future of department stores. Contrary to this view, there are notable examples of success and adaptation in the sector:

• Andrew Carnegie emphasized the value of people in business success.
• European and American boards function differently, with European ones being more diverse and potentially more adaptable.
• Macy's, under new leadership with Tony Spring, shows promise with innovative strategies.
• Saks Fifth Avenue made strategic changes, including revamping its beauty department to stay competitive.

In essence, with the right leadership and willingness to adapt, department stores can continue to be successful and relevant in today's market.

Yes, US department stores can save themselves

What: Chinese travels are recovering fast, but not as fast as expected by the government.

Why is that important: the country is accelerating toward normalization, but the government’s unmet optimism shows some febrility.

China's domestic travel during the eight-day Golden Week holiday surpassed previous pandemic levels and increased by 71.3% compared to last year, with 826 million domestic trips. Data from the Ministry of Culture and Tourism revealed these figures were up 4.1% from 2019. However, this growth was slower than the increases seen during other holidays earlier in the year, indicating a deceleration in the service sector's recovery, as noted by Goldman Sachs.

Despite the travel surge, the figures fell short of the government's forecast, which had anticipated 896 million trips generating CNY782.5 billion ($108.75 billion) in revenue. Actual revenue was recorded at CNY753.4 billion, a considerable rise from the previous year and a 1.5% increase from 2019.

In terms of international travel, inbound and outbound trips during the holiday recovered to 85% of the pre-pandemic figure, but this too was below government predictions. Retail sales by major companies grew by 9% compared to last year, while the nation's movie box office saw revenues of CNY2.7 billion, higher on a daily basis than 2022 but lower than 2019 and 2021. Meanwhile, China's property sector appears to be facing challenges, with new-home transactions in selected cities dropping approximately 20% compared to both last year and 2019 figures.

China travel continues recovery during golden week, but below Government expectations

What: Retail Dive looks at the 3 top challenges that department stores, among other, will have to face in the coming year.

Why it is important: It’s all about dealing with people (or lack of people), costs, in an omnichannel context.

In 2024, the global supply chain faces major challenges, including:

1. Labor Shortages: Triggered by the pandemic, there's a significant labor shortage in logistics and transportation. To address this, leaders are turning to automation, workforce development programs, and competitive compensation packages.
2. Rising Costs: Inflation and other factors are increasing costs, impacting profitability. Automation and data analytics can help businesses become more efficient, reduce costs, and improve customer service.
3. Omnichannel Retail: Consumers now expect a unified buying experience across all platforms. To meet this, retailers need integrated systems, real-time inventory tracking, and consistent services across all channels. Automation and technology investments can streamline operations in this regard.

For supply chain leaders to remain ahead, they should invest in automation, use data analytics, maintain strong partner relationships, remain adaptable, and stay informed about industry trends. Leveraging cloud-based solutions can help automate and track goods movement. By addressing these challenges and embracing technology, supply chain leaders can build stronger and more adaptable operations for the future.

Top 3 supply chain challenges for retailers in 2024

What: Nike is expanding its 'Refurbished' platform to Europe after launching in the US in 2021.

Why it is important: The expansion of the platform to Europe promotes sustainability reducing waste and offering an alternative to purchasing new footwear.

The platform allows consumers to return their worn Nike shoes for refurbishment and resale. Only slightly worn shoes and those that cannot be sold as new will be accepted. The platform will initially roll out in Belgium, the Netherlands, Germany, France, Spain, Italy, Hungary, and the Czech Republic, with the potential for expansion into other countries in the future.

Nike Refurbished launches in Europe

What: A piece from the FT about how much luxury packaging has impacted our psychology in the past 40 years.

Why it is important: For department stores, the notion of image carried through the packaging is even more important today.

At the Sprüth Magers gallery in London's luxury district, Swiss artist Sylvie Fleury's installation showcases dated, possibly empty, luxury-branded bags such as Prada, Versace, and Chanel. Originally introduced in the early 1990s, these bag installations provoke reflections on the powerful allure of luxury branding and our consumerist tendencies. Fleury's work underscores the power of luxury packaging, which has historically signified a certain status. Professor Paurav Shukla comments on the design and appeal of luxury bags, associating their design with feelings of love and gratitude. The growth of online luxury shopping and the emergence of a secondary market for luxury packaging on platforms like eBay emphasize the persistence of this allure. Fleury's London exhibition further delves into consumerism themes, while avoiding a moralistic stance on the subject.

Luxury packaging tells a lot about customers… and the faith they put in retailers

What: House of Fraser may disappear from the high street as part of a major rebranding effort, according to CEO Michael Murray.

Why it is important: Murray stated that House of Fraser was a failing business that needed significant changes in its operating model.

The company plans to move away from the traditional department store model and focus on a premium concept filled with its own brands and it intends to downsize some of its larger stores, as most department stores could achieve the same turnover in half the space.

Frasers Group, the parent company, has seen a significant increase in profits— from GBP 335.6m last year to GBP 660m—  due to its diverse range of brands and focus on capturing a younger demographic.

House of Fraser could vanish from high street 

What: Saks Fifth Avenue is showing support for mental health initiatives by donating a portion of the purchase price of items in their branded collection.

Why it is important: The company’s support for mental health initiatives and organizations helps increase access to resources and prioritise mental health care in vulnerable communities as well as show their commitment to helping meaningful causes to all stakeholders of the foundation.

At least 50% of the proceeds will go towards supporting mental health resources and initiatives through the Saks Fifth Avenue Foundation. The collection includes hats, gloves, blankets, T-shirts, hoodies, and sleepwear, all made in Italy and featuring the Saks Fifth Avenue logo. The collection is available for purchase on the Saks Fifth Avenue website.

Additionally, the Saks Fifth Avenue Foundation is providing grants totalling USD 250,000 to nonprofit organizations that support mental health, with a focus on diverse communities and disadvantaged groups.

Saks furthers support for mental health

What: Klarna has launched a new program called "Spotlight Fall" which includes 13 new products built upon Klarna's previous applications of AI by introducing features like shoppable videos and an AI-powered image search.

Why it is important: The company aims to bridge the gap between the physical and digital world by using AI to provide personalized recommendations and access to intelligence and context in retail.

According to Klarna, 80% of consumers expressed interest in having an AI shopping assistant. The image search feature allows shoppers to snap a picture of an item and find similar products with over 50 million store offers. Klarna's app also includes barcode scanning and a 10% cash-back program. The in-app shopping lens is available in several countries, including the US, UK, Germany, Sweden, Denmark, and Norway.

Klarna rolls out 13 new products for fall

What: UPS has acquired Happy Returns, a reverse logistics start-up, from PayPal.

Why it is important: The acquisition enables UPS to provide cost-effective box-free return solutions to online retailers, addressing the increasing demand for efficient reverse logistics services.

Happy Returns helps online retailers by providing box-free return solutions to customers. It will now integrate its services with UPS, including the use of UPS stores as drop-off locations. UPS has previously invested in returns management platforms such as Optoro. The deal is expected to close in the final quarter of the year.

UPS acquires Happy Returns 

What: The John Lewis Partnership has introduced the "Made With Care" brand, a lifestyle label that supports talented individuals who grew up in the care system.

Why it is important: The label combines great design with desirable products while providing a platform for talented individuals who have grown up in the care system, supporting their creativity and raising awareness.

The brand aims to combine great design with desirable products, starting with a tote bag featuring a design by 18-year-old artist Michael Archibald. The bag is made from 13 recycled bottles and will be available in John Lewis and Waitrose stores from December 11th. All profits from the sale of each GBP 12 bag will be donated to the Building Happier Futures fund. The long-term goal is to expand the label into a full range of products.

John Lewis launches Made With Care label

What: Nordstrom has announced the appointment of Lisa Price as the Chief Human Resources Officer, effective November 6th.

Why it is important: With nearly 30 years of experience in the retail and hospitality industry, Price will oversee various aspects of human resources, including recruitment, learning and development, diversity and inclusion, and rewards.

Price has previous experience at Nordstrom, where she served as Senior Vice President of Human Resources from 2015 to 2019. Nordstrom's CEO expresses confidence in Price's expertise and believes that her focus on creating an exceptional employee experience will enhance customer service.

Nordstrom appoints Lisa Price as Chief Human Resources Officer

What: Klarna has launched new products and services aimed at promoting circularity and encouraging sustainable shopping.

Why it is important: The new conscious shopping tools empower consumers to make more informed and sustainable choices, ultimately reducing environmental impact.

Klarna introduced a conscious shopping dashboard, offering access to sustainability-oriented products and services. The dashboard features "Shop Circular" brands that focus on reducing waste and maximizing product use. It also includes the Co2e footprint tracker and educational content on sustainable practices. The dashboard is currently available online in the US and will expand to the Klarna App and additional markets. Klarna also added sustainability search filters and a compare tool to help consumers find and compare products from thousands of retailers. The filters include third-party sustainability certifications, such as the Global Organic Textile Standard (GOTS), People for Ethical Treatment of Animals (PETA), and Cradle to Cradle, and a dedicated filter for conscious brands with sustainability ratings.

Klarna's CO2e tracker in the Klarna App now provides advanced insights into the carbon emissions tied to past purchases. The tracker analyses each product's lifecycle and includes environmental data for health & beauty and electronics categories.

Klarna introduces new conscious shopping tools

What: HBR reviews how AI could be best used by retailers.

Why it is important: More than using AI to cut on costs as we advocate, they believe that it will give an edge to retailers eager to create connections with customers.

The rise of generative AI is sparking both innovative consumer experiences and concerns, especially regarding data privacy and reduced human interaction in sectors like banking and healthcare. While every new technology brings apprehensions, many companies are prioritizing ethical data use and accuracy in their AI strategies. However, there's a potential risk of businesses leaning too heavily on short-term, profit-driven AI models, leading to diminished customer experiences.

In this AI era, the focus should remain on the customer. While metrics to gauge customer sentiment might evolve, the essence remains: every interaction shapes a customer's brand perception. Prioritizing enriching experiences can help businesses navigate an AI-driven future, with studies already showing the benefits of AI tools in enhancing productivity and customer satisfaction.

A pivotal aspect of the AI revolution is personalization. Traditional algorithms might focus on instantaneous returns, but AI promises deeper, more insightful interactions, as shown by banking surveys and examples like the Royal Bank of Canada's digital assistant, NOMI. Furthermore, AI tools not only benefit customers but also empower employees to build stronger client relationships, with large language models now enabling more tailored interactions based on unique customer patterns.

To integrate generative AI effectively, businesses should first adopt tools that augment human capabilities, like AI-driven suggestions for customer interactions. As AI's role grows, we can expect more deeply embedded applications, from predictive call routing to real-time interaction suggestions. Yet, it's crucial that businesses view AI not just as a cost-saving measure but as a means to enhance customer experiences. In the end, companies that prioritize their customers will thrive in the AI age.

Harvard Business Review on using AI to emotionally connect with customers

What: Neiman Marcus Group CEO, Geoffroy van Raemdonck, discussed the luxury retailer's transformation strategy.

Why it is important: The CEO highlights the company's efforts in building relationships with luxury brands and top customers, despite a negative sales trend in the fourth quarter of fiscal year 2023.

Fiscal year 2023 sales were relatively flat compared to the previous year, and revenue in the fourth quarter of 2023 saw double-digit growth compared to the same period in 2019. NMG's liquidity stood at USD 1 billion, allowing for investments in the supply chain, distribution centres, and store renovations. The company also saw a nearly 20% increase in business with its top customers, who spend an average of USD 25,000. Notable designer labels at NMG include Chanel, Dior, Gucci, Brunello Cucinelli, Christian Louboutin, and Louis Vuitton.

While NMG faced pent-up demand early in the year, business normalized and has been consistently ahead of 2019 levels. The company added 800 points of distribution with designers over the past two years, and almost 200 new and emerging brands were added to its assortment. NMG experienced softening in business with its aspirational customers, leading to increased promotionality. Efforts to manage inventory resulted in a relatively flat position compared to the previous year, despite some pressure on profitability in the fourth quarter.

How Neiman’s transformation is working out

What: Frasers Group is among the potential buyers for online bike retailer Wiggle, which recently entered administration.

Why it is important: The potential acquisition of Wiggle by Frasers Group is significant as it showcases the continued expansion strategy of Frasers and highlights the ongoing challenges faced by online retailers in the current market.

Frasers has been acquiring various companies in recent months, including German retail chain SportScheck and increasing its stake in Boohoo. Wiggle, which employs approximately 450 people, is still trading during the administration process. Frasers Group already owns Evans Cycles and bought online cycling retailer ProBikeKit earlier this year. The administration of Wiggle is being handled by FRP Advisory.

Frasers Group considers their bid to buy Wiggle

What: Showfields Inc., a retail company, has filed for bankruptcy and secured financing for restructuring.

Why it is important: The company is navigating how to maintain their outstanding liabilities while still expanding into new markets.

While the amount of funding obtained from existing investors remains undisclosed, the new funds will be used to cover expenses related to store closures, outstanding bills, marketing, and expansion of the Brooklyn store.

Showfields is utilizing the Small Business Reorganization Act, Subchapter V, to restructure without creditors taking control. Despite the restructuring, the company's plan to launch stores in Europe is still underway.

Showfields operates on a fee-based model, charging brands to display their products in their stores. The company overhauls its merchandising every six months with a new assortment of brands.

Showfields is restructuring and gets new financing

What: American department stores are striving to save themselves by refining internal and consumer-facing strategies.

Why it is important: The department stores in the US need to adapt their business models to remain relevant and innovate over time.

Department stores are considering integrating physical and digital teams (like Neiman Marcus) or separating them entirely (like Saks). Personalisation is a key focus, with stores tailoring all channels to specific consumers to provide a personalized shopping experience.

The current US wholesale system has challenges due to high inventories, discounting, and competition from e-commerce players. The main hurdle faced by department stores is "social and commercial irrelevance" in a post-internet world, according to Doug Stephens, founder of consultancy Retail Prophet.

Department stores are rethinking team structures to improve efficiency, with Neiman Marcus adopting an integrated model and Saks opting for a complete split between offline and online businesses. Buying strategies need to strike a balance between tried-and-true products and newness and innovation to drive customer frequency and repeat visits. Bloomingdale's is focusing on new brands and products to compete with alternative entertainment and travel options. "Advanced contemporary" clothing is performing well, with brands like Veronica Beard, Farm Rio, and Self-Portrait gaining popularity. Buyers are also focusing on tried-and-true products to manage inventories and mitigate risks.

Can American department stores save themselves?

What: The Selfridges Corner Shop in London will showcase the collaboration between Prada and Magnum Photos that explores the relationship between humanity and nature through photography.

Why it is important: The exhibition boosts Selfridges' image as a retailer that goes beyond mere shopping and provides a platform for meaningful and immersive experiences.

The project will showcase 150 works of photography in an exhibition titled "Witness to Nature,” which features our key themes and eight photographers, including Paolo Pellegrin, Trent Parke, Cristina García Rodero, Cristina de Middel, Nanna Heitmann, Alec Soth, Hiroji Kubota, and Newsha Tavakolian. The themes explore topics such as transformation, costumes and cultures, community and seclusion, and the effects of global warming.

The exhibition will be displayed through November 11th and will then travel to other international cities. In addition to the exhibition, customers will be able to shop for items that reflect the photography and the attire of nature photographers. These items will be available at Selfridges Corner Shop.

Prada Reporter debuts at Selfridges Corner Shop

What: The sales of Lotte, Shilla, and Shinsegae duty-free stores in Korea have experienced a significant decline due to changing shopping patterns among Chinese tourists.

Why it is important: It is important to understand the decline in sales of Lotte, Shilla, and Shinsegae duty-free stores due to changing shopping patterns among Chinese tourists to adapt and strategize accordingly in the tourism and retail sectors.

Data and analysts indicate that fewer tourists are shopping at traditional duty-free stores, opting instead for local retail channels and regular retail stores. While the number of customers for Korea's duty-free stores increased by 307% from the previous year, combined sales of major duty-free stores dropped by 28%. Foreign tourists' spending at traditional duty-free shopping channels also decreased by 37%.

Market analysts suggest that duty-free stores have failed to appeal to foreign tourists who prefer experiencing the latest products and trends in Korean culture. The decline of Chinese resellers is another reason for the fall in sales. Lotte Duty Free reported a sales decline of 38.6% in the first half, while Shilla Duty Free Shop and Shinsegae Duty Free saw sales declines of 33.6% and 37.2%, respectively.

The stock prices of duty-free operators also experienced a sharp decline. However, there is a possibility of a duty-free stock rebound in the future, as the Chinese government recently lifted a ban on group tours to Korea.

Lotte, Shilla, Shinsegae hit by drastic sales fall despite Chinese tourists' return