What: The ADdress, opening at the American Dream in New Jersey, will sell modest clothing for populations that require cover-up styles.

Why it is important: The specialty department store will be the world’s first modest clothing department store that caters to Orthodox Jews, Muslims, and other populations who need cover-up styles.

The American Dream team developed the department store concept as they understand their culturally rich market and wanted to provide a convenient one-stop shopping experience for the diverse community they live in. The store will fill a gap in the market while also making modest clothing more accessible.

The specialty department store will offer women’s and men’s fashion, footwear, jewelry, accessories, children's clothing, home goods, and gifts.

Dreaming up a department store for less skin-revealing clothes

What: Central’s European locations are advertised to The1 loyalty program members through the specific perks they can have, in addition to appetizing presentations about the experience and heritage that awaits them.

Why it is important: This is a good example of cross-border marketing making sure that international tourists from a specific country are channelled into the right locations. IADS members could take note and initiate an international cooperation on the topic.

Central Group has released an advertorial in the Bangkok Post which emphasizes the benefits that Thai members of The1 program (Central’s loyalty scheme) can enjoy while visiting the group’s European locations.

It is all about astutely mixing information on experience and heritage, and perks such as points earned according to spending levels.

Central Group advertises its European locations to its loyal Thai customers 

What: Data revealed that visits to stores increased by 52% and the flow of people moving past stores increased by 28% in comparison to January 2022.

Why it is important: Metrics for people traffic is key to converting sales and profitability.

In addition to these metrics, the number of transactions that were carried out during January 2023 increased to 26% and the number of items sold per transaction increased 36%.

Traffic in physical stores in Mexico has accelerated by more than 50%

What: The mega shopping complex located in New Jersey missed another USD 8.8 million debt payment after initially missing an August 1st deadline last year.

Why it is important: The mall developers and operators are scrambling to reimagine the traditional enclosed shopping center but have continuously had a string of bad luck.

According to a notice to bondholders from US Bank Trust Co., American Dream had insufficient funds to make a payment on its USD 8.8 million loan.

The massive shopping complex is trying to reimagine the traditional shopping center as they diversify by introducing non-retail tenants and putting an emphasis on entertainment and over-the-top experiences.

However, the mall has seen a string of bad luck as they shut down due to the pandemic shortly after opening years behind schedule, and the next year a three-alarm fire kept the ski slope out of service for weeks. The mall lost USD 60 million in 2021.

American Dream misses another USD 8.8 million loan payment

What: Unibail-Rodamco-Westfield’s 2022 results confirmed the end of any Covid effect on its business.

Why it is important: Tenant sales were running at 103% of pre-pandemic levels with the US at 108% and Europe at 100%. These were significant milestones and underlined that the company and retail have bounced back post-pandemic.

Net rental income for the commercial real estate company was EUR 2.26 billion, up 29.1%, with shopping centers being the biggest part of the business, bringing in a net rental income of EUR 2 billion, up 24%.

Shopping center vacancies also reduced to 6.5% compared to 8.9% in 2021, however pre-pandemic vacancies were 5.4%. Additionally, tenant sales were up, rent collection returned to pre-pandemic levels, and the company reported a EUR 1.9 billion debt reduction.

Unibail-Rodamco-Westfield leaves Covid years behind with full recovery

What: In the last quarter, the real estate investment trust traded its share in Eddie Bauer as the group’s net operating income fell 35.4% in the fourth quarter.

Why it is important: If the company is going to reach its potential, retail and brand operations need to improve as the company faces rising costs, including higher interest expenses as USD 1.8 billion in debt matures this year.

Net operating income from Simon Property Group’s retail and brand interests, which include investments in J.C. Penney, Sparc Group, Authentic Brands Group, and Rue Gilt Groupe fell 35.4% to USD 125 million and 33.4% to USD 355 million for the year.

In the fourth quarter, the group’s comparable funds from operations rose 1.1% to USD 1.18 billion and net come attributable to common stockholders rose 33.9% to USD 673.8 million. However, retail and brand operations were still down considerably and must improve.

Simon Property Group sells off Eddie Bauer interest as its retail investments tumble 

What: One of the most prominent new-gen fintech and payment solution provider is facing headwinds.

Why it is important: Now that tech is experiencing issues, does this mean that traditional actors from the ‘old world’ (Visa, Mastercard…) will generate a renewed interest? And would that entice them into consolidating their market position?

Stripe, once hailed as a potentially $120bn public company, is experiencing a tough US tech market. Interest rates and ecommerce growth have decreased, lowering Stripe's internal valuation and making it unlikely to provide a much-needed jolt. Stripe is now looking for private funds at a $55bn valuation, and their peers have suffered from a tech market sell-off.

Ecommerce has failed to meet expectations, and Stripe is under pressure from shareholders. Investors are now demanding earlier rewards, and a low IPO count is expected if Stripe does not list.

These events indicate a lasting change in the tech sector, with lower emphasis on growth and higher emphasis on monetisation.

Payment solution Stripe is in trouble

What: The latest report from PwC revealed that customers are eager to return to shopping in-store for the experience while also continuing to shop online for deals and more transactional purchases.

Why it is important: As consumers become more mindful of how and where they spend, retailers and brands need to be smart about marketing products that are in stock with lower inventory levels.

When consumers were asked where they shop, in-store shopping topped the list at 43%, followed by using mobile devices at 34%, then computers at 23%. Additionally, 43% of consumers don’t plan to increase online shopping in the next six months, down 50% in comparison to last year’s study by PwC.

Although 69% of the respondents stated that they intend to cut back on nonessential spending over the next six months, there were two exceptions for ESG practices and the luxury segment.

70% of respondents said they were willing to pay more for local produce and goods made by a company known for ethical practices. Additionally, the survey found that 26% of respondents plan to spend the same amount on luxury goods.

ESG and responsible spending saw a big uptick this year in comparison to previous studies. As consumers are trying to find ways to cut back, they are spending their money more responsibly as ESG becomes more important to them.

PwC research shows shoppers seeking in-store experience

What: Despite a traffic decline of 11.7% compared to 2019, French malls’ turnover is close to the pre-Covid level, at -1.9% compared to three years ago. This is an increase of 29% compared to 2021.

Why it is important: Despite uncertainties and inflation, 2023 is off to a fairly good start for the various retail sites in France, with traffic up 3.8% for retail parks (open-air shopping malls) in January (compared to January 2022), 7.2% for shopping centres, 15.6% in city centres, and even 18.9% in commercial areas.

In 2022, small towns city centres (10,000 to 50,000 inhabitants) are on the rise, recording the largest increases in attendance.

Consumer traffic in retail parks, which combine brands, leisure and catering, show a more measured increase of 8% last year (vs 2021), but this type of shopping place had suffered less during the pandemic.

The vacancy rate is between 2 and 3%, i.e. 2 to 3 points better than during the crisis.

French shopping malls’ figures close to pre-Covid level

What: The Falabella retail division recovered more than 251 tons of clothes hangers in Chile during the 2022 financial year.

Why it is important: Falabella is managing its waste and continuing to grow in line with the circular economy.

Falabella has recycled 16.6 million hangers since the start of its recycling program in 2019. The retailer stated that the project aims to manage their waste and prevent it from ending up in landfills, while also continuing to implement a circular economy into their company.

The hangers are organized into color, model, and state of conservation. Those that are in good condition are taken back to Falabella stores to be refurbished and the unsalvageable hangers are crushed into raw material and then used to manufacture new hangers or other products.

Falabella accumulates 16.6 million recycled clothes hangers in Chile

What: John Lewis is creating new roles and investing in its brands, data, and technology to give more value to customers.

Why it is important: The UK retailer is uniting brand, strategy, transformation, and campaigns to focus more on its unique purpose and deliver more value to customers across all touchpoints.

John Lewis Partnership’s has announced new investment in its brands, technology, and data in hopes of giving more value to customers.

As a result, the customer director for John Lewis is stepping down and new role has been created, combining John Lewis and Pan-Partnership customer capabilities. This will bring together the leadership of John Lewis and pan-Partnership Customer teams and capabilities into a single role.

Big change at John Lewis sees customer director stepping down

What: Instagram is testing a new one-to-many broadcast tool that allows creators to keep followers up to date in a quick and casual way.

Why it is important: Retailers and brands will have a new way to reach and connect with their customers through this tool.

The new feature will allow followers to respond by polls and reactions, eliminating a comment section.

Users will have access to Broadcast Channels in their Instagram inbox, where they can join a channel to be notified when updates are posted.

Instagram tests new broadcast channel

What: The CEO of Iguatemi predicts continued double-digit growth for the luxury retailer.

Why it is important: As Brazil’s most important luxury retailer, the group’s success proves that luxury can be successful in the country despite challenges.

The CEO of Iguatemi predicted that the luxury retailer will continue to see success in 2023. Despite the challenges the group faced in 2022, Iguatemi still managed to score low double digit growth.

Brazil faced a tense presidential election, declining global stock markets, and slow recovery from Covid. Additionally, the market is tricky for foreign luxury labels due to taxation and security among other concerns.

The group owns 16 prestigious malls including 2 key locations in Sao Paulo and Brasilia where major Western brands congregate. In the next decade, the group plans to focus its growth on M&A, pivoting from its previous strategy of building new malls in new cities.

Christina Betts bullish for Iguatemi, explains the Brazilian giant’s future M&A roadmap

What: Ryan Cohen accumulated a large stake in Nordstrom, causing the Seattle-based retailer’s stock price to rise.

Why it is important: After lower-than-expected holiday sales and earnings, Nordstrom’s stock jumped 30% following media reports of Cohen’s increased stake in the retailer.

Canadian billionaire and founder of Chewy, Ryan Cohen, accumulated a large stake in Nordstrom, causing the stock to soar.

The department store’s stock leapt 30% and shares were up to USD 26.38, with the shares having a 52-week high of USD 29.59.

According to reports, Cohen wants to oust Mark Trittion from the Nordstrom board and make cost cuts and structural changes in the business. Even as one of the top five investors in the company, Cohen will face challenges in making changes as the Nordstrom family still owns 30% of the company's stock.

Nordstrom stock soars on activist stake

What: Korea is already reaping the fruits of the borders reopening.

Why it is important: The trends might give an idea of what is next for international department stores once Chinese customers start travelling again outside of Asia.

South Korea sees an uptick in sales as international shoppers are coming back. Hanwha Galleria reports that its luxury section has increased sixfold when compared to the previous semester, even though the proportion of foreign customers is still below the prepandemic levels (5% vs 15%).

Similar trends are noted by Lotte (sales to international customers increased +590% yoy) and Hyundai (+1142.8%).

Chinese customers account for the most, followed by Southeast Asians, Americans and Japanese.

Korean department stores see a rebound in sales 

What: The FT makes a panorama of the recent luxury initiatives in the metaverse.

Why it is important: It is easy to see these initiatives as gadgetty today, however in doing so brands are acquiring precious understanding and knowledge of the market mechanisms, which will prove crucial once the trend develops (without knowing however when this will take place).

The Financial Times reviews the initiatives led so far by luxury brands when it comes to interacting in the metaverse. According to Goldman Sachs, the potential of this market could reach $8 trillion in 20 years, but this is still far away in time and it is easy to be sceptical about this opportunity. Luxury brands are eager to be in the game in order not to lose a potential opportunity. Overall, the initiatives can be classified as:

-    A way to sell a digital double at a lower price point (Forever 21, Gucci, Burberry), in the form of a NFT or a skin, coming with a physical version of the product sold at regular luxury price points,

-    Augmented reality collaborations, with 3D versions of products being available on smartphones allowing customers to try them before purchasing them (Estée Lauder, Mac, Gucci and Dior all teamed up with Snap to do so),

-    NFTs linked to the collection or the brand, sold at a particular price point and giving access to exclusive perks (Tiffany’s).

However, everything is not rosy: it is difficult to control brand images in the metaverse, in addition to potential risks to IP and trademark, as shown by the recent trial opposing Hermes and a digital creator about virtual copies of its iconic bags.

What Gucci and other luxury brands learnt from the metaverse 

What: The company said it would remove several hundred overhead roles from its workforce of about 17,000. The cuts come in corporate functions and not in the staffing of “frontline” roles in logistics centres, customer care and outlet stores or in Zalando Studios.

Why it is important: Zalando — like other e-commerce companies and many fashion players — grew quickly during the pandemic and has since seen those tailwinds subside as life returned to normal and inflation hit the economy.

The full scope of the cuts is still to be determined. The senior leadership level will be impacted.

Zalando isn’t the only e-commerce company to find itself leaning too far forward when the market shifted. Amazon started laying off 18,000 workers in January and Shopify laid off 10% of its workers last summer. Traditional retailers have also been cutting back, from Neiman Marcus Group to Kohl’s Corp.

Zalando to cut jobs

What: Singapore-based Asian retailer FJ Benjamin has managed not only to recover from Covid-19 losses but also to turnaround the business by posting its first profit in 6 years.

Why it is important: This gives a good temperature of what to expect in South East Asia with the return of the Chinese customers.

Singapore-based retailer F.J. Benjamin, which operates 144 stores for international brands across Southeast Asia, has reported a profit of SGP$1.7mn for S2 2022, which is a stark contrast with the net loss of SGP$1.3mn posted on the comparable period the previous year.

The fastest growing market has been Malaysia (+42%), followed by Singapore (+18%), allowing the group to enjoy a healthy growth rate of +26% on the period. The group has posted a total profit of SGP$3mn for the full year 2022, which is the first time this happens in six years

FJ Benjamin is back in the black

What: Ikea is increasingly expanding its reach by opening locations in city centres.

Why it is important: Such a strategy emphasizes the interest of city centres and potentially creates new flows, which is great news for department stores, in addition to potentially opening up opportunities of collaboration with Ikea.

Ikea has been working on the past three years on smaller store formats, which opened in various cities across the world (LA, Paris, Moscow, Toronto and New York).

The idea is to reach shoppers where big-box retail is not available, by opening 800 to 900 sqm stores, located in the heart of cities and focusing on specific areas of interest (kitchens, bathrooms, bedrooms).

Ikea is not the only big box retailer to explore such options: Best Buy for instance is also exploring similar ideas.

Ikea goes big for city centres smaller stores 

What: Richard Marcus, who served as chairman and chief executive officer of Neiman Marcus from 1979 to 1988 has passed away

Why it is important: Richard had a strong influence on the growth of the business in the ‘80s, he launched the first retail loyalty program as CEO and his departure marked the end of the official Marcus affiliation with the Dallas-based luxury store.

Richard Marcus, former Neiman Marcus Chief Executive Officer, dead at 84

What: The ESG initiative pledges to turn companies into forces for good, but some are wary of its growing focus on multinational corporations.

Why it is important: When companies that create large amounts of waste and do not pay workers fairly, such as Nespresso, are awarded a B Corp certification, the entire system’s accountability is put into question.

Although it started as a way to note companies that are tackling issues that are in line with environmental, social, and governmental ideals, there is a wide debate about the future of the B Corp movement following recent companies that have successfully achieved certification. Originally B Corp set out to be the gold standard of certifications as firms would need to meet high levels of overall performance, provide transparent information, and adhere to legal accountability to balance profit and purpose.

Today there are about 6,400 certified B Corps across 158 industries. The B List used to be made up of smaller businesses that were trying to challenge how business was being conducted, but now major companies want to be included on the list. In order to gain B Corp status, companies need to score 80 points out of 200 across a variety of metrics covering governance, treatment of workers and customers, community, and the environment. The benefits of obtaining B Corp certification are that it is good PR for the business and creates a list of companies that are seen as good to do business with.

But there are limits to the certification as fair wages are only monitored for direct employees and not in relation to the company’s supply chain. Also, how companies deploy increased profits is not dictated by B Corp so the money can either be used to create more positive business practices, or it could be used to ramp up executive pay and dividends.

In order to address the criticism, B Corp is planning to change its standards to be more prescriptive about where they stand on specific topics to make points more difficult to achieve. Many critics are pushing B Corp to go back to its roots of awarding smaller organizations that are actually operating responsibly and leaving behind the idea of being a club for large multinational businesses that are not in line with the certification’s purpose.

The struggle for the soul of the B Corp movement

What: Data has shown that customers are spending less online because funds take too long to process.

Why it is important: Poor return policies are a contributing factor for struggling customers to slash their spending, resulting in a loss of revenue and repeat business for retailers.

In a poll conducted by the banking platform Tink, 30% of UK consumers said they spend less online because refunds take too long and they’re worried about their bank balance. Additionally, 52% of respondents stated that they’re less likely to shop with a retailer if a refund takes a long time.

As retailers anticipate a difficult year, 54% state that they are or expect to be forced to stop offering free returns as a result of the economic climate. The cost of processing returns and length of time that it takes for a customer to get their money back are the top pain points for merchants.

36% of retailers believe that instant refunds would enhance the customer experience of returns while 32% feel they would ultimately reduce the returns cost to their business.

Refund delays mean consumers spend less overall

What:  A survey identified the top retail trends for business to explore this year. The who, what, where, and why behind our shopping experience is going through a metamorphosis.

Why it is important: The retail industry is reshaping the shopping experience in 2023, redefining how we shop and sell, as well as where we shop and what we buy.

1. Retailers are expanding where they sell

Retailers are expanding the number of digital channels they sell on in the next 12 months as social media continues to evolve. There is a growing number of ways to reach and connect with customers and retailers are looking for a central way to do so. It’s not enough to be present in just one place, brands need to be seen and heard beyond a physical store and online presence

1. Retailers are planning for economic uncertainty

44% of retailers in the survey noted raising prices as their top choice in taking steps to prepare for an economic turndown. Additionally, 88% of consumers said that they’d understand if their favorite local retailer raised its prices.

1. Automation can enhance customer experience

Retail customers are a fan of automation and in most cases tend to prefer it. Automation creates room for your customers to experience things their way at their own pace.

1. Customers want to engage with brands

86% of customers want to hear from businesses they frequent and email ranked the highest as customers preferred option.

1. Social and mobile commerce are two of the biggest digital trends in the retail industry- and they’re booming

The new omnichannel landscape of selling on social media is thrilling with 91% of retailers surveyed now selling on social media. Retailers have seen success with 79% of consumers making purchases directly from mobile devices.

The top retail trends for 2023

What: The iconic destination department store in Zurich will undergo major restructuration in the coming years.

Why this is important: Even though Jelmoli managed to grow from 2021 to 2022, even though it did not reach 2019 levels, the decision is very significant and raises questions about the new positioning aimed by the owning company.

The owner of the iconic store Jelmoli in Zurich, The Swiss Prime Site company, is planning to refurbish and redevelop the Jelmoli building in Zurich. The goal is to update retail spaces and introduce new uses to the building, starting in 2025.

The lower floors will have reconfigured retail spaces and a portion of the upper floor will be offices and public spaces like fitness and dining, and the refurbishment aims to maintain the building's status as a shopping destination. The company has been conducting market surveys due to the changing retail landscape and has decided to close the Jelmoli department store at the end of 2024, with a new market position in 2027.

The company will not manage operations itself. The employees and business partners will be given support and time to adjust to the changes. Nina Müller, the CEO of Jelmoli, will be handing over management to Reto Braegger, current CMO, by the end of June 2023.

Jelmoli will close for 3 years to rebuild and reposition itself