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: Canadian e-commerce operation, The Bay, is laying off 250 corporate workers.

Why it is important: With sales softening and the possibility of a recession, layoffs are starting to hit the retail sector.

The Bay, which is part of the HBC portfolio of retail businesses, will be laying off about 250 of its corporate workers at its Toronto headquarters. The brand split off from Hudson Bay in 2021 to drive a digital-first agenda, similar to Saks Fifth Avenue and Saks Off Fifth which are also a part of HBC and laid off 100 workers at Saks.com earlier this month.

The layoffs occurring at HBC are across various corporate functions as The Bay states that it’s realigning strategic priorities and increasing efficiencies within its operations. The 250 employees at The Bay represent 2% of the workforce while the 100 employees at Saks.com were about 3.5%.

While retail has steered clear from layoffs up until this month, the cuts happening at The Bay and Saks.com could be a sign of what’s to come in the industry. As the recession looms overhead, industry experts believe that this could just be the beginning and other retailers could start laying off executive positions, rather than sales associates, to cut costs and meet sales expectations.

The Bay triggers 250 layoffs

What: Nordstrom experienced a tougher holiday season than expected, leading to the company having to lower its outlook fiscal 2022.

Why it is important: With lower-than-expected sales, it’s becoming clear that consumers are being more selective with their spending given the impending recession

The Seattle-based retailer had a tough holiday season with intensified markdowns and sales lower than anticipated. Net sales decreased 3.5% for the nine-week holiday period in comparison to the prior year.

By division, Nordstrom’s net sales decreased 1.7% and net sales at Nordstrom Rack decreased by 7.6%. As a result, the stock fell more than 6% in after-market trading.

The company did state that its inventories are in better shape and healthy which will allow them to react quickly to the changing consumer demand as they continue to enhance their customer experience and further optimize their supply chain.

Nordstrom loses ground during holiday season 

What: Department stores are reducing the operation expenses related to VIP management.

Why it is important: In an inflationary context, this might make sense from a P&L point of view but could create issues with customers who will not feel supported anymore and might be tempted to find other ways to spend their money.

South Korean department stores have reduced benefits for top-spending VIP customers as they are becoming too costly.

Lotte has changed for the first time in 20 years its VIP program, reducing the number of classification categories and the number of mid-level VIP customers.

Hyundai has increased its minimum yearly spent amount to claim for VIP benefits from $31,520 to $48.860 and for higher level VIC from $63,800 to $95,700.

Finally, Shinsegae does not give away free drinks to entry-level VIP customers.

This is due to the fact that the number of VIP customers has surged so  much in the past 2 years that supporting their benefits is becoming unsustainable for department stores’ P&L.

South Korean department stores reduce VIP benefits 

What: Hong Kong’s retail sales unexpectedly dropped in November by the most in 8 months as the city struggled to shake off the lingering effects of its pandemic-era controls and a slowing global economy.

Why it is important: Hong Kong's retail sales value fell 4.2% from a year ago. Sales volume decreased 5.3%, compared with economists’ expectations of a 3.3% rise, with a government spokesman saying in a statement that the retail business had “softened” in November.

Hong Kong’s retail landlords are bracing for a further squeeze on the lowest rents in more than a decade as tenants seek relief in the aftermath of the city’s worst Covid outbreak. The drop that month may be due to Hong Kong’s reopening of its international border.

A long-awaited reopening of Hong Kong’s border with mainland China is likely to boost the economy and lift retail sales in the coming months. City leaders have said they intend to start that reopening by the middle of this month.

Hong Kong’s retail sales surprise drop in November

What: House of Fraser is closing down its last city centre location in London.

Why it is important: This follows a general resizing of the department store's presence in the capital city, with the total exit of House of Fraser, the bankruptcy of Debenhams, the announced closures of Fenwick on Bond Street and John Lewis in Oxford Street.

House of Fraser has now completely disappeared from Central London with the closure of its last location in Westfield Shopping Center. The 11,500 sqm has been taken over by a nightclub, which will turn the location into flexible offices, a gym for fitness raves, a members-only club and a restaurant.

House of Fraser closed its Oxford Street location early 2022, which means that the closest to city centre location is now the Croydon store in the suburbs. House of Fraser now has 30 stores in the UK, down from 60 in 2018 when it was purchased by Frasers Group for £90m.

House of Frasers closes its last location in London

What: Google Cloud is rolling out four new and updated AI technologies to help retailers transform their in-store, shelf-checking processes and enhance their e-commerce sites with more fluid and natural online shopping experiences for customers.

Why it is important: These solutions and upgrades come in response to the challenges retailers and brands encountered with supply chain disruptions and inventory issues.

The shelf-checking AI solution, which is built on Google Cloud’s Veex AI Vision, utilizes Google’s database of facts about people, places and things, giving retailers the ability to recognize billions of products to ensure in-store shelves are right-sized and well-stocked.

The company also said there was an update to its Discovery AI solutions while introducing a new personalization AI capability and new Browse AI feature to help retailers upgrade their digital storefronts with more dynamic and intuitive shopping experiences.

Finally, Google Cloud’s Recommendations AI solution features new machine learning capabilities that empower retailers to dynamically optimize product ordering and recommendations panels on their e-commerce pages and deliver personalized suggestions for repeat purchases.

Google Cloud rolls out AI self-checking solution

What: Data shows ongoing workforce issues across retail and service-related business segments.

Why it is important: Prioritizing investments in technology to empower frontline workers and improve their work lives will deliver a better customer experience and increase efficiency.

Data has shown that workforce shortages are occurring across retail and service-related business segments. Businesses are open to using to technology to address workforce issues, but can’t commit to making the investments needed.

74% of executives said frontline employees are rejecting work conditions that went unchallenged two years ago, while 80% said frontline turnover has increased. The study also revealed that 80% want to leverage technology to improve the frontline experience but struggle to prioritize digital investments.

Prioritizing the frontline employee experience and investing in technology to improve this experience will lead to a better work life for employees and is also key to achieving business goals, growing revenue, retaining associates, increasing efficiency and delivering a better customer experience.

Retailers continue to struggle with workforce issues

What: UK retail sales fell unexpectedly last month, capping the worst year on record

Why it is important: Retailers should prepare for the looming recession as consumers are cutting back on spending due to inflation

The volume of goods purchased in shops and online fell 5.8% from a year ago, the sharpest December decline since records began in 1977. Economists had originally expected a 4 percent drop but with inflation, consumers are cutting back on spending due to affordability concerns. Experts suggest that consumer spending will remain under pressure going forward with the rising cost of living and increased food prices.

Retailers reported a mixed picture about sales before the official figures were released. Some companies such as Next Plc and Marks & Spencers had better-than-expected holiday sales while others like Dr Martens and ASOS struggled.

In comparison to pre-Covid levels, consumers are having to pay more to buy less as sales were reported 13.6% higher in value terms but volumes were 1.7% lower

UK retail sales had worst year on record in spending squeeze

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: Selfridges and new owners Central Group and Signa Holding, have plans to offer shoppers mood-boosting experiences and countless ways to tap into the circular economy.

Why it is important: Amid all the domestic turmoil, Selfridges is shifting up a gear, accelerating its green agenda and its commitment to experiential retail. It’s also promising a year of positive intentions, colour therapy and a call to action on the environmental front.

Selfridges’ new year is set to begin on Monday with the unveiling of windows in London, Manchester and Birmingham, England. They’ll be filled with a host of colourful, original illustrations around this year’s theme, Selfridges Celebrates.

The store asked illustrators to create pieces that will be displayed in the windows and across the stores throughout the year, they are to be a point of contrast in a world that celebrates the hyper-connected and the multisensory and be a celebration of form and color.

As reported last September, Selfridges accelerated its net-zero carbon-emissions goal, moving its deadline up to 2040 from 2050 as a promise to the Climate Pledge, a cross-sector group of companies committed to reaching net zero 10 years ahead of the Paris Agreement.

As part of that commitment, the retailer also set a new target of ensuring that at least 45% of its transactions (excluding food, restaurants and homeware) come from recycled products or circular services such as resale, rental, refill or repair.

It has also established “Reselfridges,” a portfolio of circular initiatives it hopes will eventually become the backbone of the business.

As part of that commitment to the circular economy, the store plans to launch a bag subscription service this year and expand its existing rentals for childrenswear.

Selfridges is also taking on new labels that have embedded green values into their collections, such as urging customers to buy less and more responsibly.

Co-chairman of Selfridges Group and chairman of the executive board of Signa, said initial investments at Selfridges will focus initially on the food and beauty halls and the omnichannel offer.

The plan is to have a food market in addition to a series of restaurants.

The new owners are also planning to refurbish the Old Selfridges Hotel, next to the Oxford Street store in London. The space hasn’t functioned as a hotel for years, although it’s been used for fashion shows and other events.

The two partners said they want the new hotel space to enhance the surrounding neighborhood on Oxford Street and serve the community for the next 20 to 30 years.

Selfridges continues to raise the retail bar

23

23

What: In order to generate some growth, Shopify opens up its system to large retailers who can access it a la carte.

Why it is important: This could be a great way for department stores to test and learn new options with a limited cost and time spent.

Shopify is granting large retailers a way to integrate individual Shopify components in their own systems. Toy maker Mattel is the first one to use such features, called Commerce Components by Shopify, and which allows an integration of Shopify modular components in retailers’ own systems according to their needs.

This can be seen as an “a la carte” option, allowing to make the most of Shopify tools without having to create from scratch a new platform.

Shopify peaked during the pandemic, however its stock lost 70% since mid-2022 as growth slowed.

Shopify announces new ways for retailers to use its platform 

What: Harvey Nichols is starting to phase out fur products with the process to be complete by the end of the year.

Why it is important: The number of retailers and brands going fur-free is increasing as the industry work towards a more sustainable future, putting pressure on the remaining retailers who continue to sell fur.

The British department store, Harvey Nichols, is going fur-free by the end of 2023. The company first introduced a fur-free policy in 2004 but began selling fur products again in 2013. Now, the brand has stated that ethical fur doesn’t exist, and fur farming goes against sustainable practices. The department store follows many other brands who have gone fur-free including Frasers Group, Farfetch, Net-A-Porter, Burberry, Chanel, Dolce & Gabana, and Prada.

 Harvey Nichols is latest big name to say no thanks to fur

What: Bloomie’s, the scaled-down format of Bloomingdale’s, plans to open a third unit later this year, north of downtown Seattle.

Why it is important: The decision reflects confidence in the fledging Bloomie’s concept, which was introduced in 2021 with the opening of a 22,000-square-foot site in the Mosaic District lifestyle centre in Fairfax, Virginia. The second Bloomie’s, a 51,000-square-foot unit, opened in October in the Westfield Old Orchard Mall in Skokie, Illinois.

By opening a Bloomie's in the Seattle area, the department store also fills a big geographic void in its national footprint.

Bloomie’s advances its expansion agenda

What: Thirteen Lune, the inclusive beauty platform founded by Nyakio Grieco and Patrick Herning, has raised $8 million in a seed plus investment round, with new participation from The BrainTrust Fund.

Why it is important: Last year, IADS interviewed Grieco to understand more about the inclusive e-commerce beauty marketplace. She created her first beauty brand 20 years ago to celebrate the sophistication of Africa in premium beauty. During the racial reckoning of 2020, she found herself and many other founders of colour on various lists celebrating Black beauty founders.

Alongside an initial Seed round led by Fearless Fund, the new capital means that Thirteen Lune has $12.5 million in total funds raised, which should help it reach profitability this year, according to the company.

While the company declined to disclose a revenue figure, it said that the business has seen 2,000 percent plus sales growth year-over-year. The capital raise will drive its omnichannel approach, supporting brick-and-mortar, experiential retail and Relevant: Your Skin Seen brand expansion. It will also continue expanding into 600 JCPenney locations nationwide and open its own flagship store, a 1,700-square-foot space in Larchmont Village in Los Angeles later this year.

Thirteen Lune raises more capital

What: The group will open eight "full-line" stores in shopping centres such as the Bullring, Birmingham, and the Trafford Centre, Manchester, as well as in retail parks and high streets. It also will open 12 food halls, including in Stockport, Barnsley and the North Ayrshire seaside town of Largs, Scotland.

Why it is important: The group last November had proposed a target to reduce its full-line stores by 67 to 180 by 2028, while increasing its food-only stores by 104 to 420. Chief Executive Stuart Machin said that the investment in stores "fits into the levelling-up agenda, with the creation of jobs across the whole of the UK."

Marks & Spencer plans to open 20 new stores in Britain

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: 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: Flannels has opened the doors to its latest store in Blanchardstown, Ireland.

Why it is important: Representative of Flannels’ commitment to growth, their first Irish store expands the retail offering across the UK and Europe, marking over 60 stores.

The Blanchardstown store stretches across 30,000 square feet offering luxury and major streetwear brands along with Flannels Beauty and curated luxury fragrances.

Flannels opens first Irish store

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: Footfall for the UK dropped 15.3% compared to pre-Covid levels for this year’s Boxing Day.

Why it is important: Store traffic in the Southeast and London reflected the smallest footfall decline on Boxing Day compared to 2019 (-8.0%), but was up year over year (61.2%) for the day. From a category perspective, Clothing and Shoes attracted the highest traffic on Boxing Day compared to 2019 (-6.3%) and was up almost 71% over last year.

UK footfall drops 15.3% on Boxing Day

What: The UK has lost a total of 9,300 retail outlets in the pace of 2 years due to the pandemic.

Why it is important: The country used to have the second highest number of retail square feet per capita in the world, and the pandemic led to a reset for more balance (creating casualties on the way).

According to a BBC/Ordnance Survey, the pandemic contributed to a 13,4% drop in the UK (excluding Ireland) between March 2020 and March 2022, leading to the closure of 328 units (including the Debenhams and Beales entire fleets).

At the same time, 8,5% of fashion stores had to close (4,300 units) including Burtons, Dorothy Perkins, Wallis, Topshop and Miss Selfridges entire fleets. Malls have replaced them by hair & beauty services (+5,9% in total units), services and hospitality-based venues.

In the UK, the pandemic was the most damaging to department stores and fashion stores 

What: The former Arcadia Group brands and Debenhams, which were snapped up by Boohoo last year, have continued to make a loss under the etailer’s ownership.

Why it is important: Debenhams, Boohoo’s largest acquisition, made an 11.7-million-pound pre-tax loss against 56.9 million pounds in sales in a slightly longer period of 14 January 2021 to February 28 2022.

The group acquired the department store retailer in a 55-million-pound deal in January 2021 after it fell into administration. It then snapped up Burton, Dorothy Perkins and Wallis in a separate 25-million-pound deal the following month.

The online retail giant blamed falling consumer demand and rising returns post-lockdown for the disappointing performance of its newly acquired brands, which also hit the wider Boohoo Group.

Arcadia brands and Debenhams fail to profit under new owners

What: The National Association of Large Distribution Companies Agned’s collective agreement is expiring at the end of 2022 which has opened negotiations for its renewal along with ‘historical’ salary increases.

Why it is important: Of the 234,000 employees that Anged brings together, the main union at El Corte Inglés, will request a total wage increase of 19.6% in four years (6% in the first two and 3.2% in the following), while Comisiones Obreras aligns itself with Fetico requesting an 18% increase in salaries during the term of the agreement.

The unions support their demands with the argument that wages in Spain have risen only 1% since the current agreement was put in place during the pandemic in 2020, and with inflation rising, workers are concerned.

Unions negotiate for historic salary increases in Spain