What: UK-based retailer, John Lewis, is employing a new circularity strategy which encourages customers to recycle by providing rewards.

Why it is important: Customers who donate five or more pre-loved clothing items to a John Lewis store, which will either be resold or recycled, will receive a 5-pound offer to use on purchases 20-pounds or more.

The offer can be applied to fashion or homeware categories but excludes online purchases. As part of the company’s ‘FashionCycle’ initiative and following the success of ‘BeautyCycle’, this newest loyalty strategy reinforces a ‘repair, reuse or recycle’ plan.

‘FashionCycle’ is part of John Lewis’ commitment to ensuring all product categories have a 'buyback' or 'takeback' solution by 2025.

John Lewis rewards customers who recycle

What: In an effort to stop a COVID-19 outbreak, Hainan Island has shut down business and transport for locals and tourists.

Why it is important: Following an outbreak, lockdowns threaten the island’s duty-free business which only recently began to recover this year.

As one of the only places Chinese citizens could travel to during the pandemic, Hainan saw China’s pent-up demand for travel retail skyrocket in duty-free spending over the past two years. According to data from the Department of Commerce of Hainan Province, duty-free revenue within the tropical island increased by 84% in 2021 to 60.17 billion renminbi, or $9.47 billion. Personal duty-free shopping allowances tripled from 30,000 renminbi to 100,000 renminbi.

Unfortunately, sporadic outbreaks across China have caused a 37% drop in visitors to the island for the first half of 2022. Hainan’s airports saw departing passenger numbers drop by 56 %, 79 %, and 66 % year-on-year in March, April, and May, respectively. And now with a large outbreak of COVID-19, 80,000 tourists are reportedly stranded on the island with 982 confirmed cases in the past week.

Although duty-free stores were forced to close August 4th, luxury and beauty players such as LVMH, Kering, Richemont and Burberry remain bullish on the future of duty-free on Hainan Island.

Duty-free suffers from Hainan Island lockdown

What: Walmart is partnering with Paramount Global to bundle Walmart+ and a streaming subscription to the Paramount+ Essential plan at no extra cost.

Why it is important: The partnership expands Walmart’s offer to subscribers and exposes them to a limited ad-load plan with the steaming site.

Paramount+ hosts content tied to franchises such as “Paw Patrol” and “Star Trek” which Walmart products occasionally feature. The deal’s financial terms were not disclosed, and Walmart has not released its subscriber numbers. Paramount has reported over 43 million subscribers.

Walmart+ has other incentives to keep users engaged, such as a six-month trial of Spotify Premium, free shipping and fuel discounts at select gas stations.

Walmart partners with Paramount

What: Reports from The RealReal and Thredup suggest that customers crave constant newness and still overconsume resulting in consistent behaviour across resale, full-price and fast fashion.

Why it is important: Reports reveal consumers continue to overconsume and chase trends in the resale market, eliminating the supposed environmental benefits of secondhand.

Gen Z and millennials, who now represent 41% of the US-based luxury consignment website The RealReal’s user base, are growing: The RealReal reportedly attracted 5.3 million new users in the last year, bringing its total user base to 28 million. Its sales grew 44% in the last year as well.

Since the pandemic, re-consignment has grown, and many users are turning a profit on the site while maintaining a constant churn of clothes. Gen Z is flipping fashion faster than ever by using these platforms. Thredup reported its consumer base has also increased the rate at which it rotates clothes. In its latest report, 36% of Gen Z respondents said they now purchase apparel weekly or monthly which is the same rate at which they clear out or resell. The most popular resold items are from classic luxury brands.

The RealReal says it is trying to address the impact of this rotation increase by using more recycled and recyclable packaging, as well as creating carbon offsets. Thredup recently launched a hotline to curb overconsumption, particularly of fast fashion, but its hotline still promoted buying secondhand styles from the platform.

Consumers treat secondhand like fast fashion

What: Neiman Marcus’ newest campaign “Live Your Luxury” seeks to demonstrate the different purposes and occasions for luxury in an inclusive campaign that shows designer fashion in different settings.

Why it is important: The fall 2022 campaign seeks to incorporate all media types and channels in a 360° approach which involves everything from store to connective television — window displays; store activations and merchandising; events; digital advertising media; digital content; paid social media; social content; email and print.

The idea of inclusivity goes beyond cultural or physical representation and seeks to eliminate the stereotypes connected with certain types of garments and brands. Images of elevated and traditional fashion imagery go alongside those that incorporate irreverence, humour and musicality. Some 250 to 300 videos, ranging from five to 30 seconds, were produced. Some videos show Neiman Marcus style advisers humorously interacting with diverse customers, telling different stories about what shoppers want. The videos did use hired actors.

The campaign’s “flagship” fashion story is “The Art of Fashion,” which features 418 brands across women’s, men’s, children’s, home and beauty. The Book features a section called “The List” covering style tips from executives and more. Another section called “The Refresh” examines emerging trends in both fashion and beauty and contains interviews with creative directors from luxury fashion brands.

The cover of The Book features Valentina Sampaio, making this issue the first time a transgender woman has appeared on The Book’s exterior further demonstrating Neiman Marcus’ commitment to inclusivity.

Neiman Marcus’ “Live Your Luxury” 360° campaign

What: The change in the perception of off-price retailers and an influx of orders following months of delays have improved the beauty assortment for customers looking to save money.

Why it is important: Covid created an ideal environment for off-price retail stores to have a more complete assortment of beauty products, as well as normalized bigger brands using these distribution channels. Ultimately, as inflation shifts consumer spending habits, off-priced retailers are well positioned to meet customer needs.

Brands have begun adapting their strategies to create off-price channel-specific products. However, the longevity of this ideal environment for off-price retail is uncertain, with issues of product expiration and counterfeiting likely to increase.

Consumers flock to off-price retail for beauty

What: JD.com pushes interactions with customers to the next level by opening showrooms showcasing third parties products.

Why it is important:  IADS has already seen such spaces in department stores, especially at NK in Sweden where 150 sqm are dedicated to a fashion marketplace operator. However, there, purchasing process goes instore and not on the app.

JD.com, the Chinese e-commerce operator, has open a new omni-channel store format which comes as a showroom for its website. There, it is possible to try and discover a selection of fashion products from its marketplace operators.

4 locations have been launched: Xi’an, Shenzhen, Chengdu, Yinchuan, and range from 335 to 1,000 sqm in size, with 2,000 products from 350 brands.

The buying process is specific: when customers want to buy something, an app will lead them to actually complete their purchase online, a not in store. All products are delivered either same day or next day.

JD.com opens fashion showroom for its ecommerce site 

What: Gucci has added ApeCoin and EuroCoin to the 10 cryptocurrencies they accept through BitPay payments.

Why it is important: While long-term gains remain uncertain and reports show declining interest, luxury retailers continue experimenting with crypto payments.

The Federal Reserve reported that only 3% of adults used cryptocurrency to make purchases or transfer funds while 19% of cryptocurrency users have paid for purchases with their coins. A majority do not use their digital tokens for shopping.

Gucci currently accepts crypto payments in 70% of its US store locations with plans to bring the remaining 30% of stores up to date. According to Gucci, their increased coin payment options come directly from consumer demand.

Gucci expands crypto payment options

What: JCPenny has named Stephanie Plaines CFO, bringing her decades of experience in using data to improve performance and profitability.

Why it is important: Plaines brings over 20 years of having worked as CFO for other companies with a successful track record of high-performance strategic and financial leadership.

As the new CFO, Plaines will be responsible for the financial strategy, real estate, capital deployment, credit services, sourcing and procurement, treasury, and accounting for JCPenny. The company is hoping to utilize her strengths in data-forward financial planning and value creation in their mission to develop its digital capabilities and transform the company’s performance.

Stephanie Plaines named new CFO of JCPenny

What: Hermès sees the second-hand market as a threat that increases pricing and fuels counterfeiting.

Why it is important: Despite the growing second-hand market and larger rivals like Kering investing in the sale of its preowned merchandise, Hermès sees no appeal in adopting the trend.

Wary of second-hand dealers and compromising on quality to meet the quantity of demand, Hermès sees more threats than opportunities in the second-hand market. Engaging with resellers would also be detrimental to their regular clients visiting in-store.

While Kering has added second-hand to its strategy, LVMH is choosing to avoid participating in the second-hand market but has emphasized efforts to offer repair services for its products instead.

Hermès rejects second-hand market

What: Farfetch reported quarterly earnings that demonstrate strength and growth for the luxury e-retailer despite market uncertainty.

Why it is important: Despite industry-wide headwinds, inflation and market uncertainty, Farfetch has revealed quarterly earnings that showed an impressive three months of growth.

Following the announcement of its purchase of a large portion of YNAP’s stake, Farfetch’s stock jumped 21.05% when the market closed on Wednesday. It closed up at 0.32% (9.54 USD per share) on Thursday; and, would jump another 18% during after-hours trading due to the most recent quarterly reports showing the luxury platform’s boosted gains on both top and bottom lines.

High-value items like fine jewellery, watches, handbags and limited-edition sneakers were shown to have been performing well as the firm even beat out its record 2.4 million USD watch sale with an even higher sale during the quarter.

According to founder Jose Neves, high-net-worth families and earners will not swap their designer fashion purchases for fast fashion items simply due to inflation. The pandemic demonstrated that even when the economy was uncertain and people were not leaving their homes, the luxury e-retailer’s fashion sales were growing.

While the platform lost around 50,000 shoppers when it ceased its operations in Russia, Thursday’s reports also revealed that the platform acquired more than 500,000 new customers during the quarter. The restrictions in China also posed problems, yet full-priced selling grew 20% year-over-year. Gross profits grew to nearly 268 million USD as a result, up from 230 million USD the same time last year.

In addition, total revenues for the three-month period ending June 30 increased nearly 11% to more than 579 million USD, up from approximately 523 million USD a year ago. Farfetch ended the quarter with approximately 575 million USD in cash and cash equivalents.

Shares of Farfetch are down 76.4% year-over-year, but Neves has a positive outlook for 2023 remaining bullish on medium- and long-term prospects.

Farfetch’s outlook for luxury fashion remains strong

What: Hotel turned shopping mall, JC Plaza has moved in across the street from rival retail location Plaza 66 with an aim of differentiating by offering new luxury labels and local brands favoured by GenZ.

Why it is important: The 215,000 square foot, five-story retail location is Chinese developer Baohua Group’s first shopping mall project.

Across the street is fierce competition, the Plaza 66 flagship mall of Hang Lung Properties which has been established as the most important luxury retail mall in Shanghai for over 20 years. JC Plaza sees the competition as being built around LVMH and French luxury houses which have guided their goal to become a “home to Italian luxury brands.”

Additionally, JC Plaza emphasizes its “exquisite Shanghai lifestyle” positioning by offering local Chinese designer brands in a shopping mall context as well as new names. The department store also houses Michelin-star hotel Moose, which serves local Huaiyang cuisine.

JC Plaza opens in downtown Shanghai

What:  Fenwick, a former IADS member, appointed a new CEO early 2020. For the first time, he takes the opportunity to reflect on his achievements and ongoing issues.

Why it is important: John Edgars is the first non-family member to be appointed CEO of Fenwick, which has had a specific development in the past, with all stores being independent from each other (a feature that was dropped in the 2000s).

John Edgars, Fenwick’s CEO who was appointed early 2020, gave a lengthy interview to WWD, reviewing his achievements and concerns since he took the position, a few months before the pandemic. He is the first non-family member to hold the position in the 140-years-old organization.

For him, he started with a clear mission: to survive during the pandemic, until reaching some kind of stability in the summer of 2020, when he started to review the business model (with a focus on full price), products quality (including new brands), customer service and of course, online sales (95% of womenswear is now available online, through dropship, concession or wholesale). New brands allowed Fenwick stores to attract a new, younger clientele, which was also lured in with a new F&B offering, including a vegan restaurant in London.

Owning the real estate is, for him, a key feature which helped the organization to go through the pandemic and a point that is not questioned today.

Interview of John Edgars, CEO of Fenwick

What: 15-year-old fashion brand Cos will embark on a wholesale strategy for the first time partnering with Breuninger, Nordstrom, and Yoox.

Why it is important: As part of a push to expand brand awareness and presence in markets where Cos operates on a smaller scale, the brand is partnering with department stores and retailers through wholesale.

With only 12 US locations, Cos plans to leverage Nordstrom’s New York client base by placing a curated selection of products in-store during New York Fashion Week. In early October, Cos will begin selling on the Breuninger website to improve its availability across Germany, Switzerland, Austria and Poland. As well, the brand will become available across all Yoox’s live markets by stocking its products on the Net-a-porter Group member’s website starting in December. Each retailer is reported to be receiving a unique assortment based on clients and location.

Cos plans to continue growing its wholesale business with selective long-term partnerships, without compromising on its own brick-and-mortar expansion. Bringing Cos into other stores and websites will be a great indicator of demand in markets where the brand is underrepresented.

Cos unveils wholesale strategy

What: Traveling exhibition SUPERFUTURES curated by Berlin’s Reference Festival has partnered with Selfridges to bring the immersive exhibition of 13 experiential spectacles and surreal interventions by leading artists, brands and thinkers.

Why it is important: Throughout 2022, SUPERFUTURES will exhibit the concept of ‘tomorrow in the making’, inviting visitors to Selfridges to co-create the future through a year-long discovery period.

The exhibition presents a vision of a hybrid future, serving as a generative portal between the world-as-is and a predicted world-to-come by artists and creators with unique backgrounds. Staged within the familiar Selfridges retail environment, the installations have been designed to disrupt, provoke and inspire customers.

The partnership is representative of Selfridges’ commitment to reinventing retail to create a more sustainable future.

Selfridges hosts the SUPERFUTURES exhibition

What: Bots, crashes, scams and digital counterfeiting are still rife in the early stages of web3 innovations and NFT releases.

Why it is important: The high visibility of luxury brands and the consumer expectations regarding their shopping experience are threatened by bots, scams and digital counterfeiting which ultimately could affect brand perception.

Nike’s Rtfkt and Gucci have both recently apologized to consumers after an inventory system overload and bot raids threatened the respective release for each of the companies. With the functionality and supply chain for digital assets still in the construction phase, established brands will likely face greater criticism when facing the same issues as smaller projects within the growing web3 industry as consumers hold them to a higher standard.

Ian Rogers, chief experience officer at crypto hardware wallet provider Ledger and advisor to LVMH, recommends brands don’t shy away from entering the space but ensure they understand the risks and prioritize security and ease of use.

While navigating high gas fees for minting remains a challenge, brands can actively address some of the other potential problems. Combatting bots can be accomplished by limiting mints to one per digital wallet, blocking access through a token-gate and keeping drop times secret. Brands should be transparent and honest about the completion of their digital projects to help address fraudulent minting or wallet phishing.

Opensea and Metamask are also actively addressing fake or ‘copyminted’ NFTs. Metamask now notifies users of potential scams when entering sites. And Opensea is working out a verification process for official accounts while also using image recognition to ensure authentic NFTs aren’t fraudulently replicated.

The perils of entering web3 for established brands

What: Kohl’s Corp. has expanded its self-pickup service to improve the customer experience by eliminating long checkout lines and creating an efficient alternative to traditional in-store pickup.

Why it is important: Kohl’s continues the expansion of convenient customer service through digital services to now include self-pickup for online orders.

Customers can access a link sent through email to acquire their “pickup pass” that guides them along the process. Once in the pickup area, customers begin by receiving a four-digit code to access the number of the bin that has their merchandise. All steps are completed by themselves by clicking buttons which are accessible through the email.

Kohl’s rolled out ‘buy online, pickup in-store’ across all of its stores back in 2015. The self-service pickup method was piloted for one year in 100 stores to ensure its success. Now, in-store pickup includes both self-pickup and pick-up from the customer service section

The self-pickup service will soon be available to customers at 1,100 of Kohl’s stores.

Self-pickup available at Kohl’s

What: NFTs are coming to Instagram with various applications within the social media platform.

Why it is important: A brand or retailer selling NFTs will get more reach and awareness on Instagram through the huge user base. More visibility means more opportunities for education which can lead to potential monetisation opportunities and greater adoption rates.

After testing it in May, Instagram’s Digital Collectibles feature, which allows people to share NFTs on their feeds, will be rolled out to people in more than 100 countries. People will be able to share images of their NFTs by connecting their crypto wallets and will be able to tag creators and owners. Crypto wallets Coinbase and Dapper will now be supported, in addition to MetaMask, Rainbow and Trust Wallet.

Instagram plans to expand the NFT functions within the app to establish AR filters that incorporate NFTs. Rival Snap chat is ahead for digital fashion through AR having let artists begin testing NFT AR filters in July.

Instagram becomes NFT compatible

What: Richemont sells a majority stake in YNAP leaving the company without a majority stakeholder.

Why it is important: The deal aims to merge the Yoox Net-a-porter platform with Farfetch to create a neutral luxury platform to protect “the uniqueness of the luxury industry” and appeal to both clients and brands.

While Farfetch acquired 47.5% of the stake sold, Symphony Global’s Mohamed Alabbar acquired a 3.2% stake preventing the immediate merge of the digital luxury platforms. The agreement also sees Richemont and YNAP adopting Farfetch Platform Solutions, which means the companies will sell their merchandise using Farfetch’s digital expertise.

Richemont has been reported to be planning a neutral industry-wide platform by combining the complementary businesses. The YNAP business has been a drag on the Richemont bottom line which has further encouraged releasing their majority stake.

Farfetch is optimistic about the partnership to transform YNAP into a hybrid business model that drives growth and profitability by creating an “iconic portfolio of iconic luxury destinations, appealing to different demographics, price points and regions.”

Richemont sells majority stake in Yoox Net-a-porter

What: Bloomingdale’s will open its second smaller store concept “Bloomie’s” in the greater Chicagoland area at the end of 2022.

Why it is important: The existing Bloomingdale’s Old Orchard location in Skokie Illinois will close once the Bloomie’s location opens.

The new 50,000-square-foot Bloomie's store will open at Westfield Old Orchard in Skokie, Illinois, and will feature a broad curation of soft home categories. The clearance of the former Bloomingdale’s location will begin clearance on September 6th and is expected to fully close at the end of October.

Bloomingdale’s opens second Bloomie’s location

What: The US makeup conglomerate saw some growth despite pandemic supply disruption but plans cautiously for 2023 as inflation looms.

Why it is important: Record inflation, supply chain disruptions, the strengthening US dollar, risk of a slowdown in many global markets, and the headwind from recent Covid shutdowns in Hainan all factor into the makeup company’s predictions of growth slowing 3-5% year-over-year in 2023.

Net sales for the group rose 9% to 17.74 billion USD for the year ended 30 June 2022, driven by the Americas and Europe, the Middle East and Africa. However, the sober outlook for 2023 could be linked to the 23% drop in net sales in the Asia Pacific region. Overall, net sales slumped 10% year-on-year to 3.56 billion USD in the fourth quarter.

The company ties the reduced capacity caused by the pandemic’s restriction as a major contribution to the declining skincare sales. Fragrance performed well as did makeup. Some attribute increased sales of makeup and beauty products as a result of recession-related consumer behaviour increasing a desire to feel confident in uncertain times.

Reports are that Estée Lauder continues plans to buy Tom Ford in a 3 billion+ USD deal.

Estée Lauder Companies foreshadow slowdown

What: High volumes of unsold merchandise after supply chain issues and uncertain client demand post-pandemic do not guarantee success for value retailers.

Why it is important: Following the reactions to pandemic-related issues, retailers now hold high volumes of merchandise which can be a big opportunity for off-price sellers as inflation looms.

The landscape seems to be perfect for off-price retailers, however, the pandemic caused a similar ordering boom. As these companies’ core customers were flush with stimulus cash from the government, value retailers also are seeing rising inventory levels and sales drops. Just like traditional wholesalers, off-price must be agile and strategic when buying merchandise.

In addition to navigating their own inventory overload, off-price retailers will need to compete with second-hand and resale channels that also target a price-conscious shopper.

In order to compete, off-priced retailers should look to improve their operations by incorporating digital functions. Ghost, a platform connecting brands to the right buyers, appears to be optimizing the process.

Threats to off-price retail

What: Saks Fifth Avenue has secured increased credit facilities as part of its e-commerce strategy.

Why it is important: While customers eagerly return to malls and stores as pandemic restrictions lift, Saks is using capital to invest in winning the e-commerce battle between Mytheresa, neimanmarcus.com, Moda Operandi, Net-a-porter, Farfetch and Matchesfashion.

Looking to grow its luxury e-commerce Saks raised its existing Bank of America arranged asset-based revolving credit facility from 350 million USD to 450 million USD. As well, the company closed on a 60 million USD “upsize” facility resulting in a total credit facility of 175 million USD. Securing the additional financing will be used to improve its technology, marketing, contact centers, customer acquisition efforts and to enhance its shopping experience with personalization, styling services and shipping and return options. The user experience through appearance and navigation has also been a point of improvement for the company.

In March 2021, the parent company, HBC, leveraged its new business model, equity partner and stronger balance sheet to split the Saks Fifth Avenue store fleet and Saks.com into separate companies. Some have speculated that the division of the Saks Fifth Avenue stores and e-commerce businesses into separate companies is a step to potentially turning the e-commerce operation into a public company, depending on market conditions.

Insight Partners made a 500 million USD minority equity investment in the Saks e-commerce business, valuing it at 2 billion USD.

Saks acquires more capital to grow e-commerce

What: The FT reviews the recent trade-off made by Richemont in abandoning its majority stake in YNAP

Why it is important:  The financial newspaper raises the case of the actual possibility to sell luxury goods online at a profit. It argues that the validation of this business case has not been reached in 20 years so far.

The Financial Times reviews the deal recently made by Richemont and Farfetch in which Richemont cedes the majority stakes in Yoox Net a Porter to the luxury marketplace operator, writing off a total of €2,7bn spent over the course of two decades, in exchange of 12% of Farfetch’s shares.

The FT reminds that Farfetch’s shares are currently down 87% since the start of 2021, and Mytheresa’s are -66%. For the financial newspaper, this is the proof not that Richemont has been unable to manage at the same time the profitability of its own brands (Cartier and Mont Blanc among others) and the development of the online activity, but rather that there is not, so far, any validation of the fact that luxury can be sold online at a profit.

The Financial Times’ take on the Farfetch/Richemont deal