What: Klarna continues its pop-up tour with a Los Angeles-based temporary store experience.

Why it is important: Klarna is teaming up with an extensive range of brands to target the shopping habits of clients per pop-up location on its retail tour across the world.

Unlike its Berlin pop-up which partnered with fast fashion brand Shein, Kalarna’s Los Angeles location strives to be a hub for sustainable fashion and beauty products.  Brands that will be offered include Rebecca Minkoff, Christy Dawn and Westman Atelier. Shoppers can also donate used clothing and shoes to Soles4Souls in-store.

With recent challenges and risks posed by the BNPL industry, Klarna continues to expand and explore brick-and-mortar opportunities to establish stability.

Klarna’s Los Angeles pop-up

What: Selfridges transforms their Corner Shop into a well-being destination in-store to focus on curating sex- and sleep-enhancing products and services.

Why it is important: Selfridges’ Corner Shop is transforming into well-being destination called “The Feel Good Bar.” The concept will include products, services, and professionals on standby to advise clients in improving their sleep, sex, and overall health.

Selfridges highlights the pandemic’s acceleration of the well-being ecosystem becoming more holistic and tech-driven. Supplements, superfoods, and ingestibles were up 125 percent since last year and almost 700 percent compared to pre-pandemic.

The department store is differentiating through a more biologically based offering that includes at-home health tests that allow customers to inspect their genes, blood, thyroid, and more. Many luxurious and unique health-based experiences like acupuncture sessions, IV drips, bio-hacking, and oxygen therapy will become available later in the year. Throughout July the cinema at Selfridges will convert into a sleep session area, allowing customers to take time out between shopping to nap.

Well-being will be extended throughout the store with chef Matthew Kenney offering a plant-based menu and an organic and biodynamic wine list at his restaurant Adesse on the second floor.

Selfridges introduces “The Feel Good Bar”

Going further: Selfridges “The Feel Good Bar”

What: Chairman Shin Dong-bin suggests that Lotte Group will continue its capital expenditures despite inflation, rising interest rates, a global slump, and other challenges for the Korean conglomerate.

Why it is important: Earlier this year, Lotte Group pledged 37 trillion won investment over the next five years.

Chairman Shin emphasized that Lotte must transform its business portfolio by incorporating bio, healthcare & wellness, as well as mobility into its existing business lines of logistics, chemical, food, and hotels. Plans were discussed for the group to build up infrastructure, create a healthcare platform, and migrate the chemical business into hydrogen energy and battery materials.

Apart from business plans, Lotte discussed ways to help Busan’s bid to host the World Expo in 2030. It formed a group-wide task force led by Co-Vice Chairmen Song Yong-dok and Lee Dong-woo.

Lotte committed to capex investments despite challenges

What: Improved economic performance has inspired Frasers to act on serious plans for international expansion through acquisitions and new store openings.

Why it is important: This new expansion plan will necessitate consolidation of the group’s portfolio, reducing the number of Sports Direct stores, but increasing the sales area.

Part of this expansion includes the luxury brand Flannels. Due to great performance, there are plans to double the number of stores in the UK and Ireland and to establish the brand in cities across the European continent.

Frasers is readjusting its strategy by closing locations that are too large for the cities they are in but working on acquisitions, joint ventures and organic openings to further its international operating activities. Its goal is to offer a better experience to customers by optimizing store performance, location and size.

Frasers plans expansion

What: Nordstrom has promoted Deniz Anders to senior VP and chief marketing officer; and, Nina Barjesteh has joined the team as president of Nordstrom Product Group.

Why it is important: The experience shared between these two female executives will be used for Nordstrom to build and transform its private label business.

Nina Barjesteh, who will become the new president of the Nordstrom Product Group, brings her previous experience in merchandise and branding across apparel and accessories for both women and kids. She is leaving her previous role as Dick’s Sporting Goods senior VP of product development and design.

Deniz Anders has had 22 years of experience with Nordstroms, most recently as vice president of marketing. Through her deep marketing knowledge and background with Nordstrom, the combined skills of Anders and Barjesteh are projected to grow and develop Nordstrom Made products.

The efforts made toward marketing and developing private labels indicate a shift in strategy that may grow Nordstrom’s product positioning.

Nordstrom’s growth strategy relies on new executives

What: Brands and customers are still confused about the differences between web3 and the metaverse.

Why it is important:  A McKinsey study predicts that the metaverse will have up to 2.6 trillion USD in value for e-commerce by 2030. While the survey results showed that 64% of consumers indicated they were excited about metaverse shopping, other research from Wunderman Thompson Intelligence showed that consumers have very little understanding of what the metaverse is.

Brands also lack a deep understanding of the difference between web3 and the metaverse. Still, there continue to be many brands joining platforms like ROBLOX, which does not use blockchain technology, to establish a solid digital presence and offer virtual shopping experiences.

Virtual shopping is mislabeled as metaverse

What: Reports show that the acceptance of crypto payments is not always in the best interest of brands or retailers.

Why it is important: Younger consumers are quick to adopt cryptocurrency and many companies are looking at the long-term role of crypto in retail transactions, expecting the current user demographic to grow and change over time. Some companies are justifiably hesitant when they consider their target consumer.

While many brands have recently announced accepting crypto payments, reports show that cryptocurrency is, for the moment, primarily used for investment and trading. In addition, the percentage of women using crypto for payment, trading, or other reasons is significantly lower than it is within the male demographic.

Reports also point to market volatility as a caution for retailers. While it is assumed that fees will be lower, it has been reported that transaction fees for merchants fluctuate regularly. As well, crypto transactions aren’t private since businesses need to report any changes in crypto value as they are subject to capital gains taxes.

Only 2% of U.S. adults used crypto for payment over the prior 12 months, making it clear that smaller retailers should define their target consumer when considering accepting crypto payments.

Retailers navigating crypto payment

What: Business of Fashion explains the driving force behind the menswear market’s unprecedented boom.

Why it is important: In preparation for our IADS Men’s Fashion Meeting on September 6, we would like to share Business of Fashion’s highlights on the menswear boom. Streetwear is out, casual tailored styles are in.

Casualisation has been seeping its way into fashion long before the pandemic, but the work-from-home lifestyle has cemented new silhouettes that prioritise comfort. Surprisingly, the importance of comfort does not equal streetwear. Retailers report that streetwear is losing momentum and loungewear pieces such as hoodies, tracksuits and sneakers are no longer hit items. The items replacing these fall into clothing that can be styled for multiple occasions with a priority on fit and feel. Men’s shirting, casual jackets, loafers, and even accessories like bags and sunglasses are increasing in popularity.

The connection between a more casual yet styled menswear look has been tied to social media and chat platforms (Instragram, Podcasts, Discord channels, and subreddits) allowing men to discover fashion on their own and exchange with each other regarding menswear trends. In addition, gender fluidity plays another role in widening the scope of men’s fashion.

Suiting is being scaled back by both retailers and designers to promote casual menswear like sports coats and knitwear. The trend “blokecore” – a viral subculture that celebrates the style of middle-aged men and has reached 27 million views on Tiktok – is one example of shifting menswear styles and how these trends are communicated.

Men are also favouring a tailored look. Flannels is meeting the rising market demand by investing in a personalized menswear shopping experience. Their Liverpool flagship will be offering alterations and made-to-measure styles with a selection of fabrics from over 10 participating brands.

As suiting fades in relevance brands are pursuing a sportier approach. Brands like Burberry Gucci and Dior are looking to new sports star ambassadors to capitalize on the growing interest from new audiences of men.

Euromonitor projects the category will grow faster than womenswear over the next four years, expanding to 547.9 billion USD by 2026, at an average annual growth rate of 5.8%, compared to 5.3% for womenswear. At London-based luxury retailer MatchesFashion, sales of men’s clothing are up 40% compared to the same period last year, while men’s footwear is up 50%.

Menswear Market on the rise

What: Iguatemi names for the first time a non-family member and a female at the top post.

Why it is important: Even though Iguatemi is a mall operator, its challenges and points of attention are not far from many department stores’ in the world.

Cristina Betts is the first female and non-family member to be the CEO at Iguatemi, succeeding Carlos Jereissati. Iguatemi, a luxury shopping center company in Brazil, currently operates 14 malls, 2 outlets and various real estate locations.

It reports a 30% sales increase for Q2 2022 vs. the same period in 2019, with a stronger performance for apparel, shoes and leather goods which achieved a growth of 51%. This performance is allowed by the fact that 70% of the brands present at Iguatemi are local, and therefore relatively spared by the international issues. This combines with an increased conversion rate with customers realizing that buying in the country is actually equivalent, and more convenient, than buying internationally.

For her, the priorities are:

• Security in malls, especially given the fact that physical retail is here to stay,
• Combination with online, which, in the case of Iguatemi, means a marketplace for luxury brands,
• Being able to cater for the needs of all customers and not only luxury ones, through the right brand assortment and F&B or experience proposal.

Cristina Betts is the new CEO at Iguatemi 

What: Klarna and Shein team up for a pop-up shop in Berlin as part of its 2 Summer Oasis2 pop-up tour.

Why it is important: A temporary experience at Kurfürstendamm 68 in Berlin will welcome Klarna and Shein for a pop-up with events, music, food, and even a beauty bar.

As part of Klarna’s 2 Summer Oasis2 pop-up tour, customers can enjoy discovering Shein’s summer collection in-store with the ability to purchase online at a reduced price and receive home delivery. In addition, customers can attend one of the three workshops. The workshops are focused on beauty and a clothing exchange market.

Klarna aims for the partnership to be an inspiring exchange for customers that can help them decelerate from the bustle of the city.

Shein and Klarna pop-up in Berlin

What: Bloomingdale’s Aqua is extending its lineage of collaborations by teaming up with Studio 189 on a limited-edition collection.

Why it is important: Bloomingdale’s private brand, Aqua, has a history of collaborating with different designers, brands, and celebrities. This limited-edition collection is a collaboration with actress/activist Rosario Dawson’s brand Studio 189. Bloomingdale’s and Dawson will release hand-dyed garments produced by Studio 189 artisans from Ghana, Africa.

“The special hand-batiked prints that were created exclusively for this collaboration resulted in Studio 189’s largest single fabric order to date, which grants us the opportunity to present the craftsmanship of our artisans to a broader audience. It’s an accessible collection that embraces joy with vibrant and tropical designs fitting for the summer season,” said Abrima Erwiah, head designer for Studio 189.

Bloomingdale’s Aqua brand collaborates with Rosario Dawson’s Studio 189

What: The trend of branded cafés and restaurants continues as more luxury fashion brands open food&beverage locations.

Why it is important: Consumer experience continues to be the goal of brands as brands and retailers shift towards well-being, hotels and restaurants.

Gastronomy can constitute a new lever for growth for brands by converting less efficient commercial spaces into areas dedicated to catering. This diversification also allows brands to enrich their offer and reinforce their image and lifestyle positioning.

Considering the pandemic, the rush into diversifying their income seems logical as the crisis forced brands and retailers to reconsider how to expand their audience while encouraging the customer to extend their presence in their spaces.  By creating a complete universe around the brand, it also manages to build better customer loyalty, capture their attention, and encourage a larger basket size.

Ultimately, the consumers also assist the brands outside of revenue through earned media posts on social media about the experiences in these spaces.

Fashion brands continue entering F&B

What: The fragrance category gets a shake-up as a new generation of brands addresses the trend of wellness, innovation, and sustainability.

Why it is important: In many cities, fragrance accounts for a large percentage of prestige beauty sales and is reported to be increasing. Credentials and marketing are falling behind successful campaigns which emphasize wellness and commitment to sustainable values.

Over the past decade, beauty brand acquisitions have been on the rise. Market research from the NPD Group notes that fragrance remains the “undisputed champion in beauty”. Strategic partnerships between fragrance brands and companies in other sectors have seen success as well.

As it is difficult to shift the needle in a crowded market, fragrance brands are betting on wellness, leaning into cultural hypes, and spotlighting sustainability. All of these tactics as well as harnessing influencers are drawing in young customers, whose spending is in flux as they are likely to have a fragrance wardrobe, rather than a signature scent, and are motivated by the experience of shopping and wearing the perfume.

Shifting consumer habits for fragrances

What: Saks Off 5th is moving further into the second-hand market through its recent partnership with Rent the Runway by adding labels previously not carried on the platform and bolstering the current assortment.

Why it is important: The partnership enables Saks Off 5th to introduce brands it didn’t previously sell, expand selections from those already carried, and tap a rapidly growing segment of customers seeking more value.

As inflation increases, the partnership comes at an ideal time to offer consumers a sustainable and value-centric offer.  The expansion of Saks Off 5th previously present assortment also answers consumer demand by providing greater size, integrity and depth that is beneficial from a pre-owned perspective. Rent the Runway has an engaged customer in the resale market due to their strategy of broadening reselling and subscription services. Their mission is to introduce an even wider audience to the environmental and financial value of preloved fashion.

Saks Off 5th entered the resale market in 2020 with LXR & Co., a provider of pre-owned vintage handbags and leather accessories from luxury and premium brands. For this partnership, SaksOff5th.com has created a “pre-owned” section to house Rent the Runway’s second-hand items labelled with a distinct badge. Saks aims to include “predominantly in season” merchandise to only be sold on SaksOff5th.com.

Both Saks Off 5th and Rent the Runway mutually benefit from the shared audience and consumer trust in each brand’s respective expertise.

Saks Off 5th partnering with Rent the Runway

What: User-generated platform Xiaohongshu is the source of lifestyle trends for Chinese consumers making it an ideal entry point for international brands seeking authentic feedback.

Why it is important: With a large community of consumption-motivated users seeking new experiences and items, Xiaohongshu is a key partner in connecting brands with the Chinese consumer.

The organic user-generated content can also inform established brands on how to adjust their product lineup to meet Chinese consumer interest. Its popularity as the leading source of lifestyle trends and product recommendations helps guide many Chinese consumers in their purchasing decisions.

In recent years, international brands also have gained more consumer familiarity with increased time spent working, living, travelling and studying abroad. Thus, Xiaohongshu is ideal for international luxury and fashion brands seeking to uncover Chinese consumer trends, leverage the platform to raise awareness and nurture loyalty by directly connecting with consumers.

Xiaohongshu’s large community of consumers is the perfect testing ground for new things. This includes metaverse trends with the possibility to sell NFTs in its virtual space, R-Space.

Brands gain entry to Chinese market through Xiaohongshu platform 

What: Predictions for the coming holiday season leave retailers cautiously preparing for uncertain loss.

Why it is important: Uncertainty around inflation, geopolitics and labour market strain is making retailers especially cautious in their holiday season preparations.

Agility will be a key skill for retailers navigating unpredictable losses in the coming months. Interviews with retailers, vendors, consultants and industry analysts have indicated an extended season with increased promotions and price breaks starting even earlier than in 2021. Second quarter spending by American customers is decelerating as many took advantage of Amazon Prime Day and back-to-school sales to get ahead on holiday shopping.

Eveningwear, dresses, party outfits and related categories for jewellery, footwear and beauty are expected to see good sell-through while casual apparel, loungewear, electronics and home categories are predicted to drop. In addition, 83% of shoppers will seek out sustainable brands and products this holiday. Retailers will test NFT drops, and 46% of shoppers said they would consider purchasing NFTs.

Being able to respond to the replenishment of best-sellers and the ability to manage the quantity of merchandise that’s not selling, will determine which retailers succeed this holiday season. Department stores and nimble off-price retailers will be best positioned for stable performance during this unpredictable season.

Holiday promotions come early this year

What: Fashion brands in France struggle to return to pre-pandemic levels of activity for the first half of 2022.

Why it is important: New behaviours of customers that were induced by the health crisis still persist today and are leading to lower traffic and conversion rates as well as consumer trade-offs that are being made against clothing.

Retail Int. for the Trade Alliance reports that sales are down 5% compared to the same period in 2019 for fashion brands in France. Store turnover is at a decrease of 9% compared to 2019. While the rise of e-commerce is up 68% compared to 2019, the trend’s plateau in 2021 only offsets the decline in physical stores by half for this year.

January of this year saw poor performance due to new variants of Covid-19 and a hopeful recovery in February was stamped out by the start of the Russian-Ukrainian war. May saw a spring upturn helped by favourable weather. However, the month of June showed a drop-in activity of 13% (vs. 2019).

The beginning of the discount period (from June 22 to July 2) saw a drop in sales of around -19% (vs. 2019), accompanied by a drop of 28% in traffic. While an increase in the average basket is observed (+12%), there is no visible increase in the conversion rate. The Alliance du Commerce reported that men’s fashion performed well, the children’s segment performed decently, and complicated trends for the women's and lingerie departments. Footwear is having a difficult period.

Consumer behaviour remains affected by the pandemic with consumers going in-store less frequently and favouring shopping outside cities. Outlets have seen an increase in sales of 8% over the period. Retail parks are also holding up well. And as tourism begins to increase, popular city districts are seeing an improvement in foot traffic and sales.

On average, fashion players have increased their selling prices by 4.1% as consumers are in search of good deals. Yet with brands still reeling from increased costs within the supply chain, the challenge to meet the consumer in the middle becomes a difficult balance.

The new minister of trade, SMEs, crafts, and tourism is looking to tackle investment support for brands, changes in taxation (additional depreciation, reduction in CVAE and Tascom, tax credit), capping of commercial rents, and financing assistance (reinforcement of loans offered by the BPI in particular).

Fashion sales remain low for the first half of 2022 

What: Sephora and the BuzzFeed Inc.-owned media brand are partnering for six months to produce beauty-focused content that can be found on Complex’s channels.

Why it is important: Sephora is tapping into the audience of Complex with the intention to uplift minority communities and show a commitment to their diverse brands and clients.

The “Beauty Beyond the Surface” hub will feature editorial and video series from recognizable names and faces in the lifestyle and sneaker space focused on the storytelling of personal beauty and style journeys. Bringing style and beauty together, this is Complex’s first official venture into the space. Sephora sees Complex’s lack of beauty coverage to date as an opportunity as opposed to a hindrance.

The partnership will entail a mix of online articles and videos, with content published on a weekly basis centred on a non-traditional approach to beauty journalism that targets BIPOC women.

Sephora teams up with Complex Networks

What: The Chinese government plans an economic support package to stimulate the economy into recovery after strict lockdown measures have left market growth across sectors in contraction.

Why it is important: The luxury retail market is expected to see lacklustre growth as the housing market suffers and COVID-19 restrictions continue to affect China’s overall GDP.

According to a Barclays report, the investment bank continues to favour luxury names with a strong portfolio such as LVMH and Richemont. Luxury sales in Asia-Pacific are expected to climb by around 5% in the second half of 2022. However, cities such as Shanghai, Xi’an, Macau, and Hainan’s Haikou started imposing COVID-19 lockdowns in recent weeks, as the Chinese government is sticking to its zero-COVID-19 policy.

Despite being the world’s second-largest economy, China has the weakest GDP growth since the coronavirus outbreak, only 0.4% year-over-year in the second quarter. Retail sales grew 3.1% in May compared to the same time last year, while in the first half of this year, retail sales contracted 0.7% year-over-year. Apparel retail (clothing, shoes, hats and knitting textiles sales) rose 1.2% year-over-year to 119.8 billion renminbi, or 17.7 billion USD in June, but dropped 6.5% for the first half of 2022. Due to COVID-19-related lockdown measures in recent months, Beijing’s GDP dropped 2.9% in the second quarter from a year earlier, and Shanghai’s contracted a sharp 13.7% in the same period.

To reach the goal of 5.5% GDP growth for 2022, the Chinese government has unveiled a broad package of economic support measures to stimulate the economy, including tax cuts and funnelling money into public infrastructure projects.

Slow retail recovery due to China’s weak GDP

What: H&M teams up with Camp to create a family experience centred around sustainability.

Why it is important: With the importance of consumer engagement combined with H&M’s growing family customer base, the retail chain decided to partner with another children’s retailer, Camp.

Two attractions, “The Style Cabin” and “The Upcycler”, will be housed in Camp’s Columbus Circle store where families can upcycle materials into toys and accessories. “The Upcycler,” a pedal-powered station that uses kinetic energy, will tally up accrued mileage in support of donations to The Learning Tree. The two brands surprisingly don’t have any goals for sales generation or brand interest but instead are focusing on education and engagement. There won’t be any H&M merchandise sold at the Camp Columbus Circle location

It is unclear if H&M will partner with different retailers for future installations. The focus, for now, is on this initiative and its reception. The word-of-mouth metrics and physical attendance will be used as key barometers to measure the success of the activation.

H&M teams up with Camp for activation

What: LVMH is struggling to offset Chinese lockdowns with European and US sales leading to a slower growth compared to 2019 quarter reports.

Why it is important: Despite strong performance in Europe and the US, LVMH fails to offset declining sales due to China’s Zero-Covid policy.

Sales in fashion and leather goods rose 19% in the second quarter compared to a 30% rise seen in the first quarter. While sales in Europe and the US were up 48% and 22% respectively, Asia dropped 8%. Normal levels still seem uncertain for LVMH in China.

LVMH is still optimistic about the US dollar strength and American tourist shopping, but will remain vigilant regarding geopolitical tensions, health restrictions and recession trends.

LVMH growth slows 

What: K11’s first flagship project in the Chinese mainland will bring art and culture into a retail hub covering 228,500 square metres.

Why it is important: Located in Prince Bay, Nanshan, Shenzhen, the new 'K11 Ecoast' serves as K11’s first flagship project in the Chinese mainland to comprise the K11 Art Mall, K11 HACC multi-purpose art space, K11 Atelier office building and the 'Promenade.’

The K11 HACC multi-purpose art space will combine a variety of contemporary arts and creative culture to offer an exhibition and activity platform for artists, designers, and art organizations. So far, partnerships have been established with leading art and cultural institutions like MoMA PS1, the Centre Pompidou, the New Museum of Contemporary Art, and the Palais de Tokyo.

The complex’s projected completion is set for 2024, boasting it will be dedicated to promoting a sustainable, circular lifestyle and the integration of environmental protection.

K11's new Shenzhen retail precinct

What: Meta has launched the ability for users to pay for products within Instagram chats streamlining the customer journey within social commerce.

Why it is important: This new feature allows for small- and medium-sized businesses to integrate selling, purchasing, and after-sales into the conversations with clients.

Qualified businesses on Instagram can directly convert customer inquiries and interests into purchases using Meta Pay, without users needing to leave the chat to make a purchase. Completed orders can also be tracked in the same chat. The chat becomes a one-stop space for inquiry, purchase, tracking, and follow-up questions.

Meta is continuing their mission of growing social commerce on its platforms with its pay-in-chat features that create a more efficient and personalized customer experience.

Instagram launches pay-in-chat

What: Trading challenges have caused Burberry to close a second Hong Kong store location since the pandemic.

Why it is important: Burberry has closed a second store in Hong Kong. The flagship on Canton Road was too expensive for the brand estimated at around 6.5 million Hong Kong dollars, or 828,200 USD, a month for the prime location. In addition to high rent payments, Burberry has suffered from lockdowns and a lack of Chinese tourists in Hong Kong.

Since the introduction of broader controls between mainland China and Hong Kong in early 2020, in addition to waves of social unrest before that, luxury retail in Hong Kong has taken a big hit.

The brand admitted during its recent earnings call that trading in Hong Kong is “very challenging” because there are few Chinese tourists in the region.

Burberry will continue to invest further in China, position the brand for when the lockdowns lift and utilize the remaining 10 points of sales in Hong Kong to take full advantage of the rebound of tourism and China’s expected recovery.

Burberry closes Canton Road flagship