What: The e-commerce beauty platform recently covered in IADS’ exclusive, Thirteen Lune, is opening its first brick-and-mortar store in Los Angeles sometime in early 2023.

Why it is important: As covered in this week’s exclusive, Thirteen Lune is taking its innovative and inclusive approach to beauty retail from online to in-store as it prepares to open in Los Angeles early next year.

Its first iterations of physical retail were accomplished through its shop-in-shop partnership with J.C. Penney. Now, Thirteen Lune looks to further its omnichannel approach with a flagship that goes beyond a traditional beauty store model.

Thirteen Lune to open first physical store

What: Rumors are spreading that Shein is changing its strategy to become a marketplace in order to compete with big online retailers like Amazon and Alibaba.

Why it is important: The Wall Street Journal reportedly saw a memo sent by Shein to its investors stating that they are considering a move to sell merchandise from third-party brands in addition to its own brand which lines up with Shein recently divesting operations and opening warehouses and manufacturing in central Europe.

Shein rumoured to become an online marketplace

What: Coresight Research and Bolt release digital sales data that reveals key holiday trends.

Why it is important: As consumers embrace flexible payment options, retailers and brands are responding by onboarding platforms to meet that demand.

Other trends include more investments in e-commerce management, personalization, and experiential retailing this year. On the front end, the authors of the report said retailers and brands have slashed prices on top categories such as apparel, toys and electronics.

Mastercard SpendingPulse said U.S. retail sales (minus automotive) grew 7.6% year-over-year this holiday season.

Coresight shares digital sales data for holiday trends

What: The Hong Kong-based group Bluebell is strengthening its position in China through the duty-free market in Hainan Island after completing the acquisition of Star Brands Travel Retail.

Why it is important: The acquisition makes Bluebell Group the sole owner of travel retail operator, Star Brands Travel Retail, in Hainan’s duty-free hub, an important location for luxury shopping in China.

While tax-free shopping has been allowed on Hainan Island since 2011, its activity has boomed since 2020 becoming the preferred destination of Chinese shoppers, deprived of international travel since the pandemic. This trend has continued and accentuated, allowing many houses to achieve strong increases in the region, making Hainan Island a strategic location for the luxury industry.

Star Brands Travel Retail operates 14 brands, has 50 employees, and has seen retail sales under its management grow 300% in 2022 compared to 2021.

Bluebell Group fully acquires Star Brands Travel Retail

What: The Baltic countries are experiencing inflation rates that would not be acceptable in other parts of Europe.

Why it is important: They might only experience before the others what is next for all. The worrying part is that Baltic countries have built-in psychological and structural cushions that might miss in other European countries. For that reason, 2023 will be long and difficult both in terms of economy but also politics.

In the Baltics, inflation has reached considerable peaks when compared to the rest of Europe. In Lithuania for instance, inflation reached 21%, which significantly impacted retail activity. It is believed that Baltic countries are canaries in the coal mine when it comes to inflation and Europe, as the three countries might experience what is coming next for other European countries.

Baltic countries already have experience of inflation, and the memories of the forced occupation by the Soviet Union makes the pill easier to gulp. The rest of Europe might not have the same feelings and the shock could be more important. 10% inflation in the rest of Europe could be as impactful and difficult as the current 20% rate in the Baltic countries. Economists are worried that the current levels of inflation might leave permanent marks on the economy.

Inflation in the Baltics, a warning for the rest of Europe 

What: Korean rivals are competing for a new location in Gwangju, south of the country.

Why it is important: While Lotte shies away from the competition, this suggests that there is still room for expansion for physical retail in Korea, one of the most connected markets on the planet.

Hyundai and Shinsegae are competing for a new mixed-use project in Gwangju (south of Korea) which would include a shopping mall, a hotel, a theatre and a park. It would be the first one for Hyundai in the city (where its last location was closed in 2013) and the second one for Shinsegae. Both proposed projects would be of an approximate size of 300,000 sqm.

Hyundai and Shinsegae competing to open a new mall in Gwangju 

What: Everything in the Corner Shop will be from the Reselfridges category, including ready-to-wear, accessories and lifestyle products.

Why it is important: To fit with the silver theme, the Corner Shop will hold a special section for green jewellery featuring sustainable diamonds made with atmospheric carbon by Sky Diamonds and customizable fine jewellery from Hatton Labs.

The company has set out a 2030 target of reaching 45% of circular transactions to come from circular products and services by stocking products that meet its environmental and ethical standards.

Selfridges transforms the Corner Shop with silvery vintage pop-up

What: Kering and L’Occitane are joining forces to launch the Climate Fund for Nature.

Why it is important: In order to protect and restore biodiversity, Kering and L’Occitane will endow the fund with 140 million euros, with a goal to reach 300 million euros in the long term eventually opening up to other partner companies.

The fund will be managed by the management company Mirova, a subsidiary of Natixis Investment Managers dedicated to responsible investment and will be operational in the first quarter of 2023 in the form of a simplified joint-stock company with variable capital. Its aim is to support projects dedicated to the protection and restoration of nature as well as to farmers for the transition to regenerative agriculture.

In addition to being sustainably focused, the fund will prioritise projects that promote the independence of women in terms of access to finance, land and trading in countries where investors obtain their main raw materials.

Kering and L’Occitane team up for climate fund

What: Around a dozen companies have signed The Fashion Pact’s Collective Virtual Power Purchase Agreement.

Why it is important: The 12 chief executive officers have committed to procuring renewable electricity with the goal of getting to 100% renewable energy across their companies’ own operations by 2030.

Bally, Michael Kors and Versace owner Capri Holdings Ltd.; Ermenegildo Zegna Group; Farfetch; Ferragamo; Gucci, and Saint Laurent parent company Kering; Ferragamo; Prada Group; Calvin Klein and Tommy Hilfiger owner PVH Corp.; Ralph Lauren; Coach and Kate Spade parent company Tapestry Inc.; Under Armour, and Zimmermann have all signed The Fashion Pacts renewable energy initiative to help the fashion industry move toward more sustainable practices.

Kering, Capri Holdings, Tapestry and PVH sign renewable energy initiative

What: Amazon reached a settlement with the European Union on three antitrust investigations, as the e-commerce giant addressed EU concerns over clauses applicable to third-party sellers, saving itself a fine that could reach 10% of its worldwide turnover, i.e. billions of dollars.

Why it is important: Amazon was accused of using its size, power and data to promote its own products and gain an unfair advantage over rival merchants selling on its online platform which has resulted in the company agreeing not to use third-party seller data for its own competitive retail business.

Amazon has also agreed to create a second purchase option for competing products in the event that an Amazon product appears as the first choice if it differs substantially in price and delivery speed.

Finally, Amazon agreed that sellers under Amazon's Prime function could choose their own logistics and delivery services, other than those approved and chosen by Amazon.

Amazon avoids fines through agreement with the EU

What: Macy’s Inc. CFO shares insights on the retailer’s new digital marketplace, pricing science and holiday positioning strategies.

Why it is important: Macy’s has adjusted how they view inventories and buying as they use their new marketplace as a testing ground for new categories and products without the same risk and operating expense as a traditional website.

Data showed that customers had been searching for products and categories that Macy’s did not have. Thus, the retailer created their marketplace which has also attracted younger consumers who are generating larger baskets in terms of units per order. According to Macy’s CFO, they are also innovating on the wholesale front by changing the way they buy and integrate teams across planning, finance and the supply chain. Buying has become more conservative as they build reserves into their product purchasing so that they can have more flexibility to adjust during the season based on demand. According to Macy’s data, 96% of marketplace customers are shopping what Macy’s has traditionally bought wholesale and listed on its website.

Price promotions are also seeing a revolution through technology. Using pricing science, Macy’s is conducting markdowns by store, by location, by style and even based on the availability of inventory and the level of sell-throughs.

Macy’s CFO did not underestimate the impact of inflation but believes that the retailer’s recent modernization initiatives have positioned them well for the gifting season.

Macy’s CFO shares on modernization

What: Allbirds CEO shares insights into the company’s success as a direct-to-consumer brand, highlighting the need for more than simply a storefront and social media as an online business.

Why it is important: The pandemic created an overcrowded online competition for brands that saw online as the future, but Allbirds is looking at physical stores as a centre for acquiring new customers, underscoring the importance of wholesale partnerships to bring products to where existing and prospective customers are.

The path to profitability, according to Allbirds CEO, is investing in infrastructure to build global channels that can support the brand.

Allbirds CEO shares DTC playbook

What: Following its YNAP acquisition in August of this year, Farfetch lays out plans to reach profitability and secure the luxury market.

Why it is important: The company’s near-term focus is on profitability with expectations of gross profit and order contribution margins to improve in 2023 but expects the costs of new partnerships to amount to around USD 170 million.

In 2023, the company expects GMV to increase 20 to 22% year-on-year compared to the 2022 outlook, reaching USD 4.9 billion, driven by underlying business growth and GMV from signed partnerships. Farfetch has been struggling with GMV this year: in the most recent earnings, Q3, it said GMV dropped 4.9% year-on-year; in Q2 it increased 1.3% year-on-year; and, in Q1 it increased 1.7% year-on-year.  Farfetch’s shares dropped 34.9% today during the investor event during which it announced its plans to achieve profitability.

More growth is planned for its Farfetch Platform Solutions business, the whitelabel arm of the company used by Bergdorf Goodman, Ferragamo and others to run their e-commerce sites. By 2025, Platform Solutions is expected to represent USD 4.3 billion in GMV, while its marketplace represents USD 3.8 billion, growing 8 to 10%. Brand platforms, which includes Off-White owner New Guards Group and the partnership with Reebok, are expected to represent USD 1.5 billion.

Farfetch lays out plans for the future

What: Gen Z is attracted to self-expression and individuality but is easily influenced by price and inclusive marketing.

Why it is important: Several surveys of Gen Z regarding their spending and shopping habits has revealed a new understanding of how they view brand loyalty.

According to the Gen Z Fashion Report by student affinity network Unidays, a majority (61%) of respondents said they think brands should do more to eliminate gender from styling, and just under half said they are more willing to buy from a brand that has better gender inclusivity through their marketing. Overall, Gen Z is harder to please overall, according to Morning Consult which found the average favorability rating for brands across the country is 27% for Gen Z, compared to 33% for all adults and a rating of 36% for millennials.

According to data from Bank of America for September of 2022, 73% of Gen Z say it’s hard to save money right now, and 56% say inflation has created more financial stress. Teens’ self-reported spending increased slightly by 3% year over year to USD 2,331 according to research firm Piper Sandler’s fall 2022 Taking Stock With Teens Survey of 14,500 U.S. teens. Female teens led that spending increase too, with that group’s overall spend up 10% year over year and clothing being 30% of their wallet share, the highest it’s been since 2012.

60% of Gen Z agree that the brands they shop with are an expression of who they are and 77% don’t want to feel like they’re put in a box, derived from 2020 survey data from Wunderman Thompson Intelligence.

Gen Z brand loyalty looks different

What: The fashion industry has cheered this year as consumers have repeatedly defied economists’ predictions, and while a global recession may still be on the table, there are still reasons for hope.

Why it is important: Easing inflation is leading to an uptick in consumer sentiment regarding the economy.

Consumers don’t seem to share economists’ and fashion executives’ doom-and-gloom mindset, which was demonstrated through the University of Michigan’s index of US consumer sentiment, hitting 59.7 in December, below a reading of 70.6 a year ago, but up from November and above economists’ average forecast.

And a Wednesday survey from the Confederation of British Industry reported an 11-point uptick in consumer demand in December, up from a 19-point drop in November. Forecasters had been projecting a 20-plus-point decline this month. As well, UK clothing sales volumes rose 2.1% last month, while in the US, sales for stores specialising in clothing and clothing accessories dipped a relatively mild 0.2%.

Hopes for 2023 improve

What: Marks & Spencer is set to open a new store in Liverpool One, a retail park in the city’s centre.

Why it is important: Scheduled to open in mid-2023, the store is in a former Debenhams unit, spanning 100,000 square metres over two floors.

The signing completes the evolution of the former Debenhams unit and follows the announcement that Gravity Active Entertainment is creating a 10-million-pound entertainment experience on the remaining upper two levels.

Marks & Spencer to open new store in Liverpool city centre

What: Frasers Group has announced the acquisition of several premium fashion brands in which JD Sports Fashion has stakes.

Why it is important: The company has snapped up 15 of the group’s retailers via shares held by JD including Tessuti, Base Childrenswear, Missy Empire, Choice, Clothingsites, Cricket, Giulio, Kids Cavern, Nicholas Deakins, Pretty Green, Prevu Studio, Rascal Clothing, Scotts, Watch Shop and Topgrade Sportswear.

All of the indebtedness is to be transferred to the subsidiaries of Frasers Group. Frasers said the amount payable for the acquisition of the shares and indebtedness amounts to 47.5 million pounds, which will be funded by the group’s existing cash resources and completed in 2023.

Frasers Group acquires JD Sports’ premium fashion brands

What: Falabella Retail opens a location of its express format store in Chile, exclusively focused on fashion.

Why it is important: The 2,000-square-metre establishment, already operating in the Power Center Open complex in Puente Alto, offers the Falabella fashion portfolio including the group’s private labels in a specialized format that utilizes QR codes, virtual assistance and self-checkout payment options.

Falabella opens express format store

What: Advancing in its sustainable commitment, Falabella Retail is launching the +Green Seal, which is a system of evaluation and qualification of the environmental, economic and social performance of its stores.

Why it is important: Developed by the Chile Green Building Council (GBC), Falabella’s +Green Seal is the only seal focused on sustainability for retail operations.

Falabella Retail began the evaluation of 16 stores and all managed to access the +Green Seal, which consists of a total of 28 points across 7 categories: sustainable environment, operations, water efficiency, energy efficiency, material selection, the health and well-being of collaborators, and social responsibility.

Falabella launches +Green Seal

What: Meta group has indicated that brands and creators can create and sell their NFTs directly from Instagram with the initiative initially reserved for a selection of American creators.

Why it is important: The platform is using the Polygon blockchain to provide buyers of NFTs on Instagram a gas-fee-free transaction with a positioning that is intended to rival other NFT marketplaces such as OpenSea, Magic Eden and Rarible.

Instagram will not claim any commission on NFT sales until 2024, yet these transactions will still be subject to the 30% claimed by Apple for transactions made via the App Store. It was already possible previously for creators of works to connect their NFT portfolio to Instagram in order to present their gallery there.

Instagram begins transformation into NFT marketplace

What: Nordstrom, like many other major retailers, lowered guidance due to decelerating consumer demand; however, the department store group was able to meet the renewed expectations despite declines.

Why it is important: Nordstrom Rack posted a 1.9% decrease in net sales, surprising analysts as its poor performance is contrary to expectations that off-priced retail should thrive in times of economic uncertainty. Nordstrom stresses the goal of adjusting Rack’s product mix to contain more premium labels, differentiating the concept from other discount retailers.

Overall, Anniversary Sale timing, with one week shifting from Q3 to Q2, had a negative impact of approximately 200 basis points on net sales compared with 2021. Core categories, including men’s and women’s apparel, shoes and designer, had the strongest growth this quarter versus 2021, as customers continued to shop for occasions, travel, work and holidays. Active and home categories showed a softer growth. Net sales decreased 2.9% to USD 3.43 billion, compared to USD 3.53 billion for the Q3 period of 2021.

While Nordstrom did meet its expectations, after-hours trading on Wall Street pulled the stock down 8.3%.

Nordstrom meets expectations despite Q3 declines

What: Harvey Nichols has unveiled a new shop-in-shop for Jacquemus with architecture inspired by Provençe through the materials and structures.

Why it is important: Harvey Nichols launched the first UK-based Jacquemus shop-in-shop two years ago and has now expanded the concept to cover 900 square feet making it the largest retail space for the brand in London.

The new immersive space designed by architecture practice OMA/AMO replaces the former, smaller Jacquemus shop-in-shop in the Knightsbridge store.

Harvey Nichols unveils Jacquemus shop-in-shop

What: Zak Milan will join the John Lewis Partnership as the group’s first chief of transformation and technology officer.

Why it is important: As part of the group’s five-year ‘Partnership Plan’, Joh Lewis will welcome its first executive-level role focused solely on transformation and technology as they work to improve digital capabilities.

Zak Milan has over thirty years of experience leading business transformation and technology teams having most recently world as transformation director at Lloyds Banking Group.

John Lewis hires first chief of transformation and technology

What: As part of its birthday celebration, KaDeWe held a party for the reopening of converted areas of the Berlin building.

Why it is important: KaDeWe celebrated extravagantly the reopening of and the 115th anniversary of the store which has been marked by a party and Christmas shop windows designed by Dior.

2,000 guests celebrated on three floors with multiple guest DJs who performed in the department store. As well, the in-house pastry shop made a 6-tier birthday cake, 2 metres long, 1 metre wide and 2.20 metres high featuring the new escalator at KaDeWe as the design.

KaDeWe celebrates 115th anniversary