What: Judith McKenna’s interview on Covid-19 vaccines, supply chain and remote working

Why it is important: An interesting sum up of what’s on the mind of the largest retailer in the world, plus a crucial reminder of retailers’ social roles as a whole.

Walmart International division CEO oversees 5,141 stores in 23 countries, staffed by 550,000 employees, in addition to managing the global sourcing operations. In other words, the context makes the position even more challenging than ever.

On the Covid-19 vaccine front, by reminding that 95% of the US population is within 10 miles of a Walmart store, the fact that Walmart wants to be involved in the national vaccination campaign comes as a consequence of its place in society, which is a constant for all department stores in the world. Interestingly, the complexity of such an operation at such a scale implies that it is not just about how many vaccines are delivered, but how a retailer organises itself to complete the action of health authorities in an efficient, traceable and transparent way.

McKenna also discusses the implications of remote working (see our most recent IADS exclusive articles here and here on this topic) as she recruited the new president for China operations 100% remotely, and the new person has not met anyone from Benton, USA, face to face. Even though she reckons remote working and management works, McKenna stresses the importance of travelling and visiting stores from time to time to keep connected with the reality of markets.

Walmart International CEO Talks Vaccination Ramp-Up 

What: S5A new store will open in September 21 at the American Dream mall, a bit later than planned

Why it is important:  What retail crisis?

The Covid-19 pandemic has only delayed, not cancelled, the Saks Fifth Avenue project at The American Dream mall. Rescheduled many times, the latest date announced being March 21, the project is finally green-lighted for next September. It will be the only S5A location in New Jersey (in the past, the retailer used to operated at Short Hills and Riverside).

This is rather good news for The American Dream mall, whose owner Triple Five had to redeem 49% of stakes it owns in other malls, following a debt default on a construction loan. In addition, the mall was hampered by retailers planning to open a location there, but which went bankrupt beforehands (Barneys, Lord & Taylor, Century 21).

In addition to Saks Fifth Avenue, 100 retailers, including Primark, Hermés, Best Buy, are planned to open.

Saks Fifth Avenue Thumbs Up on American Dream

What: H&M has been removed from online shopping and service apps in China after it published a statement expressing “grave concern” over allegations of forced labour in the Xinjiang cotton industry. H&M has disappeared from ecommerce sites Alibaba’s Taobao, JD.com, Pinduoduo, as well as from apps Dianping, Tencent and Baidu. Many brands in China do not operate their own apps or websites but rely on a network of third-party e-commerce platforms and “super apps”.

Why it is important: H&M operates 445 stores across the country and China represents one of its four largest markets. A blog from the Communist Youth League called for a boycott of the brand just days after The UK, Canada, the EU and the US announced sanctions. Other brands which support the Better Cotton Initiative (BCI) such as Nike, Adidas, Ikea have also come under attack. The BCI said last October that it was suspending its approval of cotton sourced from Xinjiang.

Assessing China’s Xinjiang Cotton Fallout 

China erasing H&M from internet amid Xinjiang backlash

What: it’s Seoul’s first department store opening in a decade

Why is it important: Hyundai allocated 49% of the total space to rest areas and indoor garden

The company has opened its new location in Yeouido. With this new location, Hyundai aims to reach KRW 630 billion (USD 560 million) in annual sales and IBK Securities and Investment predicts the store will breakeven in 2023.

The Hyundai Seoul spans 89 100 sqm — around 13 football fields — and was already crowded on its pre-opening date last Thursday, with locals eager to explore the capital’s first department store opening in a decade. Almost half of the space has been allocated to rest and relaxation, including 11 240 sqm of indoor gardens and wider passageways, un unprecedented experience in Korean department stores.

New brands are also onboarding. Nordic fashion and lifestyle brand Arket (which parent company is H&M) launched its very first store in Asia. Bungaejangter, which is Korean’s first second-hand transactions app, also introduced its first physical store, and people lined up to get a look into some of the selected luxury goods displayed in the store.

Designer brands have also entered, such as Gucci, Prada and Burberry. Hermès, Louis Vuitton and Chanel are currently negotiating with Hyundai.

According to Hyundai, the new location carries 90 food options, the largest food outlet of any department store in Korea.

Hyundai Unveils Seoul’s Biggest Department Store 

Seoul’s newest, biggest department store offers new shopping experience

Related item:

• Hyundai to open giant store in Seoul

What: The campaign is in line with Project Earth.

Why is it important: the retailer is moving away from seasonal campaigns and will instead focus on exploring the theme of nature throughout 2021.

Last year, Selfridges launched its ambitious five-year sustainability plan, Project Earth. In the same spirit, the company is now unveiling a yearlong campaign celebrating the great outdoors and exploring “the intersection of nature and culture.”

The campaign is a direct response to the “boom in outdoor appreciation” after prolonged global lockdowns have kept the population confined. It also marks a shift away from seasonal campaigns for the retailer, which will instead explore the theme of nature throughout 2021. “A move away from seasonal campaigns means we can be more sustainable in our creative production and delivery” said Hannah Emslie, the retailer’s creative director.

A series of digital art commissions that “bring nature to the digital space” are set to launch on the retailer’s site. In store, shoppers will be able to discover technical gear for all sorts of outdoor activities and an exhibition by Jonathan Schofield. A podcast is also set to launch this week and has been designed to be enjoyed outdoors.

Seasonal events will be rolled out during the course of 2021, explored through the lens of nature, not the fashion calendar.

Selfridges Debuts Yearlong ‘Good Nature’ Campaign

What: the US department store chain will revive its online store, a few months after liquidating and closing down its physical stores

Why it is important: the speed-up of e-commerce during the pandemic has made investors rethink their business and they are now bringing back Lord & Taylor webstore to take success up again

Lord & Taylor liquidated all its stores last September, and was bought by Saadia Group LLC in October (along with parent company Le Tote). Now the group has built up a team to revive the website. Lord & Taylor e-commerce should launch mid-April, initially selling men’s and women’s fashion, beauty, skin care, fragrances and home. Children’s wear, fashion accessories and footwear will be added to the offering later this year.

Saadia Group LLC is also considering reviving the physical store network, with small format stores but it shouldn’t happen before at least another year.

Retail Resurrects: Lord & Taylor Relaunching E-commerce

Related item:

• Lord & Taylor liquidates, closing all stores

What:  A selection of examples by GDR UK (IADS partner) on concierge delivery services

Why it is important: in addition to the last mile logistical hurdle, such initiatives are key to generate and retain high levels of customers loyalty

GDR UK, an intelligence company based in London, collected a series of examples on services aiming at improving, and increasing, the level of service at the time of delivery:

• Harper Concierge (London), Toshi (NY, London) are delivery services for luxury brands. They propose to customers a 1-hour slot to deliver the products in branded vehicles. They wait at the door to know what customers buy or return: payment of kept items is made by the customer via SMS, while these services take care of returning non bought items to each retailer
• La Moda, an online retailer in Russia, had to find a solution to compensate for the poor national delivery services in the country. This is the reason why they have developed their own fleet of vehicles, to deliver items to the doorstep, and, like Harper or Toshi, wait for the customer to try and buy.
• Amazon allows Prime customers to try for free for 7 days up to 6 items. Customers are free to return unwanted items at no cost.

Russian Fashion retailer turns couriers into brand ambassadors and concierges

toshi offers wait while you try concierge service for at home luxury shoppers

harper concierge offers a contact free luxury you try we wait service

prime wardrobe lets customers try on six fashion items before sending back what they don't want

What: SKP has announced it will open a flagship in Hohhot, the capital of Inner Mongolia

Why is it important: the influential department store is beating a path into lower-tier cities

Local media reported that SKP Beijing garnered USD 2.7 billion in sales over 2020, surpassing famed luxury destination Harrods. And according to Beijing Business Daily, the high-end mall has been China’s top department store by revenue for the last ten consecutive years.

According to Bain & Company, China’s 2020 domestic luxury goods consumption went against the trend, predicted to achieve 48% growth (USD 53 billion). So the next piece of the puzzle for luxury brands and companies is where to find these new consumers in lower-tier cities.

Chengdu in particularly has emerged as a viable alternative to Shanghai and Beijing. Hohhot, on the other hand, is less of a safe bet yet, still tantalizing. Ten years ago, Louis Vuitton opened a boutique there in 2010 and shuttered four years later.

However, the demand for luxury goods in lower-tier markets is undeniable and its residents have seen their incomes rise. In 2019, Deloitte found that third- and lower-tier cities had shown strong spending growth and purchasing power. That same year, Seeco reported that these cities were highly-ranked in annual purchase frequency as well.

Is Hohhot Luxury's Next Hotspot

What: What counts as a sale differs if you are a brand or a landlord

Why it is important:  Department Stores are facing the same issue with their concessions: should the rent include the click & collect business?

Retail spaces rent calculation has been for long composed of a monthly fixed fee, completed by a variable indexed on the turnover. However, now that omnichannel is becoming the norm, accompanied by its manifestations such as click & collect or kerb side pickup, landlords are more and more willing to include turnover generated through this new channel in the calculation, an option that retailers do not want to discuss. Sephora and Everlane are cited in the article as extremely reluctant to do so, if not hermetic.

Landlord’s position is dual: on the one hand, they want to make sure that the stores are not used as warehouses, to guarantee the long-term value of the location, but on the other hand, they also want to maximise the immediate profit by increasing the rent level with any possible manner.

As a consequence, contractual discussions and negotiations on leases are becoming increasingly complex and long.

Retailers and Landlords Clash Over What Counts as a Sale

Related items:

• Is turnover rent the new norm for retail?
• A new rent model under consideration in UK malls

What: the retailer launches a series of “exciting foodie collaborations”

Why is it important: award-winning restaurant collaborations to enhance traffic in department stores

Selfridges have opened a new pop-up space in its London Foodhall that will showcase different food industry talent. First up is Pabellón, a Venezuelan street food brand, who began its residency on 12 March. In 2019 and 2020 they won multiple British Street Food Awards.

Calling it a series of ‘exciting foodie collaborations’, Selfridges’ head of food, Andrew Bird, adds: ‘The space has been designed to be a launchpad for new brands as well as a destination for the capital’s best street food and exciting chef collaborations.

The Pop Up Kitchen at Selfridges will operate a takeaway service during standard opening hours to begin with, given lockdown rules.

Selfridges unveils first pop-up kitchen collaboration 

What: Canadian bookstore chain is adding departments to its core book offer.

Why it is important: Many ideas for real department stores an reasons to reconsider entering the book market.

Indigo is experimenting with a new model of a “cultural department store” where customers who enter to browse through books often end up lingering as they impulsively shop for slippers, bowls, a knife set or a cookbook. It extends to food, health and wellness, and home décor. It is also offering its own brand merchandise.

How a Canadian Chain Is Reinventing Book Selling 

What: BoF and McKinsey & Company published an update to The State of Fashion 2021

Why is it important: recovery could be slower than expected in Europe, with bright spots in the US and China

Recent developments around more virulent mutations of Covid-19 and delayed vaccination programmes could further delay our path to herd immunity. But there are evolving ideas such as the “roaring twenties” recovery scenario for 2022.

2020 results in a nutshell

-European fashion sales were down roughly 20% on 2019 levels with Germany and France performing the best (down only 16-18% compared with 2019), while fashion sales in Spain and Italy contracted by 30%,

-In the United States, sales plummeted 23% year on year,

-Strong market performance in the summer in both Europe and the United States,

-China returned to a growth trajectory in August compared with 2019, with full year results only down 7% year on year,

-Markets with a high e-commerce penetration, including the United States and the United Kingdom, reported growth of between 45 and 50% in e‑commerce,

-China, where fashion e-commerce already has more than 50% market share, continues to grow.

2021 in Europe, down and out

Our outlook for 2021 is particularly downbeat in Europe, where it is conceivable that lost sales might range between 12 and 24% compared with 2019.

Two key uncertainties remain. First, how bad will the first quarter really be? The extension of European lockdowns until Easter alone would be sufficient to set 2021 sales back to 2020 levels, or worse if there are further setbacks in the second half of the year. Second, while it is still possible to avoid lockdowns in the fourth quarter, consumer sentiment remains highly uncertain.

2021 in the United States, improvements expected

The United States is expected to perform significantly better in 2021 than in 2020. Fashion sales will be down between 6 and 16% compared with 2019, but this is still a welcome improvement on 2020. This partial recovery will largely be driven by the continued surge of e-commerce, with online fashion sales set to outgrow pre-crises levels by as much as 40%.

2021 in China, a full recovery

Life in mainland China has largely returned to normal, so the most pressing question is really around the future of Chinese tourists. One important consideration is the Chinese vaccination strategy: given the relatively low case numbers in China, some observers have argued that China will not distribute the vaccine at a high speed, which means Chinese travellers are unlikely to return in significant numbers before 2022. In the meantime, Chinese luxury consumers are expected to increase their spending at home by as much as 50% this year.

The State of fashion 2021 reality check

What:  the retailer expands its online reach to over 100 countries

Why it is important: M&S reported a 75% increase in international online sales last November

The group said the expansion into countries from Argentina and Brazil to South Korea and Pakistan was part of its strategy to accelerate its online business.

When M&S published first-half results in November it reported a 75% increase in international e-commerce sales, underlining the shift in online spend throughout the COVID-19 pandemic.

“We’re focused on turbocharging our online business both in the UK and internationally, and as part of this we see a real opportunity in extending the number of countries where we run an online channel further,” said Paul Friston, M&S’s international director.

The websites will offer M&S’s clothing and home products.

In January, rival John Lewis said it was no longer pursuing international expansion and had ceased its online delivery service.

M&S EXPANDS INTERNATIONAL ONLINE BUSINESS

M&S expands online business to over 100 countries

What: the programme is called the Livestream Shopping channel

Why is it important: having already hosted more than 50 virtual events since last year, it formalises the retailer’s commitment to the digital and service-oriented business model

Livestreaming has become popular in Asia, but in the U.S., it’s in the very early stages. Some brands have begun experimenting with the format, especially in the beauty category and on Amazon Live and TikTok.

The virtual events will allow Nordstrom shoppers to seamlessly shop while engaging with the hosts and ask questions about the featured products. The first event on 18 March is a virtual styling tutorial with Burberry and stylist José Ramón Reyes, including a Q&A session and a recorded runway show stream.

This new shopping channel will give customers real-time access to Nordstrom employees and brand partners as well as experts in the beauty, fashion, and home categories. Six events are already planned, including four events related to cosmetics and beauty.

Nordstrom worked with an external partner to create the Livestream Shopping customer experience but didn’t specify the partner.

Nordstrom’s Next Channel Livestreaming 

Nordstrom Introduces Livestream Shopping

What: Saks pushes into luxury ecommerce

Why is it important: online experience will evolve and expand with “a hybrid retail and marketplace platform”

Hudson Bay, with USD 500 million from private equity firm Insight Partners, is establishing a standalone e-commerce company known as "Saks." Marc Metrick, who has been running Saks Fifth Avenue, will be CEO. The private equity firm will take a minority stake in the new company, which is valued at USD 2 billion.

The department store's 40-store fleet will operate separately as "SFA" and remain wholly owned by HBC. "Saks Fifth Avenue" will be the customer-facing branding for both.

Transforming the Saks Fifth Avenue stores and e-commerce businesses into separate companies could be a prelude to spinning off the e-commerce operation into a public company. Saksfifthavenue.com generates about USD 1 billion in annual sales. That’s roughly twice the volume of the Mytheresa luxury website that went public in January and saw its stock price quickly soar.

HB said strategic investments will be made to “evolve and expand” the online experience, including strengthening service, styling capabilities and data-driven personalization. Saks e-commerce business will also feature “a hybrid retail and marketplace platform, expanding its assortment while maintaining a curated experience.”

Saks and SFA will work in conjunction to continue delivering a seamless customer experience. Returns, exchanges and SaksFirst credit cards will continue to be accepted both online and in stores.

Saks will lead marketing and merchandising across both businesses, while the stores will fulfil the physical functions of Saks, such as buy online, pick up in-store, exchanges, returns and alterations. Saks will retain ownership and control of the Saks Fifth Avenue intellectual property, including the brand and visual identity.

Larry Bruce has been appointed president of SFA and will report directly to HB’s chairman and CEO, Richard Baker. Bruce has been with Saks Fifth Avenue for nearly 20 years, including the past eight years as director of stores. Sebastian Gunningham will join the company’s board of directors and serve as an adviser. He was previously a member of the executive team at Amazon and led its marketplace expansion, among other large technology and operational divisions at the company. He has also held executive roles at Apple and Oracle, among other leadership roles.

Saks stores and ecommerce to become separate companies

What: the new format has been inspired by Nordstrom’s neighbourhood stores

Why is it important: it comes as John Lewis plans to shutter 8 more department stores

John Lewis has been opening concessions in its Waitrose supermarkets. And while only a few have opened so far, it's reportedly planning to ramp up this process considerably as chairwoman Sharon White wants most of its 331 supermarkets to have one within the next year to 18 months.

It added that the new plan to expand the local format has been inspired by US chain Nordstrom’s neighbourhood stores.

While John Lewis remains the only one of the non-luxury-specific UK department store chains not to have faced some sort of collapse in recent years, it's still been under heavy pressure and has been forced to look at new ways of growing its business and maximising its efficiency.

In the face of a fast shift online by consumers (which means the company expects 75% of its sales to come via the web by 2025), the business needs to make sure that its physical spaces really pay their way.

John Lewis plots hundreds of shop-in-shops in Waitrose 

John Lewis is opening concessions in sister brand Waitrose 

What: the retailer is aggressively introducing active labels, across the athleisure, performance wear and fitness gear categories

Why is it important: Nordstrom plans to become a stronger destination for active categories

The department store is rapidly introducing labels and products never before offered by the retailer, the goal being to carry 75 new labels to Nordstrom, Nordstrom Rack stores and websites. Brands being introduced in March include Eleven by Venus Williams, Bad Birdie, and Gramicci, and among the brands that were introduced within the last three months are IVL, Outdoor Voices, Brooks Running, On Running, Malbon Golf, and Parks Project. For fitness and training, Nordstrom recently began selling items like Bala weighted bangles, Sweaty Betty running gloves, Topo Designs hiking backpacks, Smith snow helmets and ski goggles, and Yoga Design Lab yoga mats.

Also new to the mix: Hyperice and Theragun massage devices, and digital fitness equipment such as the smart Tangram Jump Rope, which syncs to one’s phone to track jump counts, and Tonal, a high-tech, at-home digital weight and personalized coaching system.

Nordstrom’s strategy to become a stronger destination for active is internally designated “active ambition.” It’s a key element in the retailer’s strategy for long-term growth and it’s logical considering the nation’s interest in health and fitness has only intensified with COVID-19.

In December, Nordstrom launched an active microsite, enabling customers to search for active brands by activity or category for the whole family. On the microsite, shoppers can also find fitness and wellness advice, expert tips, and product and performance guides to support fitness and wellness goals.

Currently, Nordstrom has more than 200 brands in its active portfolio including men’s, women’s, kid’s, shoes and athletic gear divisions, though the mix constantly changes and evolves depending on customer preferences.

Nordstrom’s in-house Zella private brand, Nike, Adidas, The North Face, Canada Goose, Sweaty Betty, Ivy Park, Beyond Yoga, Alo, Vuori and Rhone are among the retailer’s important active collections. In athletic shoes and sneakers, key brands have been Hoka, Brooks, On Running, Asics and Teva, to name a few.

Nordstrom Pumps Up Active 

What: The Toronto-based retailer's marketplace strategy brings a broader assortment to thebay.com

Why is it important: With marketplace vendors, there is less risk for Hudson’s Bay since it’s not purchasing the products, but there would be less profit per transaction

Hudson’s Bay has transformed its e-commerce website into a marketplace format, which launches 19 March with an augmented assortment. By the end of 2021, Hudson’s Bay expects to have added more than 1 000 brands to thebay.com.

Categories Hudson’s Bay is introducing Friday through its marketplace include pet supplies; books; stationery; health and wellness; gourmet food; electronics; vintage designer handbags, and sports equipment.

According to Hudson’s Bay, thebay.com expects to generate about CAD 1 billion in 2021. The website attracts 220 million visits annually, nearly half of whom come from mobile, and has 5.7 million loyalty customers.

Iain Nairn, president and CEO of Hudson’s Bay, said getting brands onto the marketplace is faster and easier than the normal wholesale process. “It can be as quick as a week for a brand to get on our website,” versus the six-to-seven-month normal wholesale process involving buyers visiting showrooms and placing orders. Supported by the marketplace solution by Mirakl, a French firm, Hudson’s Bay can react rapidly to consumer trends and expand its assortment in a matter of days.

With marketplace vendors, there is less risk for Hudson’s Bay since it’s not purchasing the products, but there would be less profit per transaction. Hudson’s Bay does make money by charging the third-party sellers on its marketplace a commission based on sales plus a monthly CAD 30 fee. Hudson’s Bay takes the transaction and sends it to the seller, which holds the inventory and handles the shipping and customer service.

With the marketplace, “We can tap into inventory already available,” Nairn said. “We now have the ability to add millions of products to our offering, quickly adapting to customer demand. The response from the seller community has been extraordinarily positive as more and more brands seek to join this modern and convenient shopping experience.”

Hudson’s Bay Launches an Online Marketplace 

What: Nordstrom partners with Package Free giving customers the ability to buy in bulk to reduce waste

Why is it important: an innovative business model to challenge traditional product offerings with zero waste as the main focus.

Zero-waste retailer Package Free will be the star of Nordstrom’s Pop-In shop, available in select Nordstrom stores and online through May 9. The Pop-In concept has been known to promote sustainability and the partnership with Package Free offers customers an accessible solution to trash-free living.

Biodegradable and eco-friendly items across all verticals are available including beauty, grooming, kitchen, cleaning, and children’s items. Some products carried by Package Free do have packaging, but they are typically compostable or recyclable, and are vetted by a team of sustainability experts.

Package Free has seen a lot of success and will be offered in select Nordstrom stores including Toronto, Seattle, Chicago, Austin, Dallas, and the New York City flagship. Nordstrom staff are trained on zero-waste tips and living as per the Package Free ethos. In the case of online orders, fulfillment will be handled by Package Free where the company uses 100 percent post-consumer paper to pack and ship orders.

Package Free had physical stores in Chelsea Market and Brooklyn that were closed due to the pandemic, but hope to revive their physical presence again following the initiative with Nordstrom Pop-In.

Nordstrom Wants You to Buy in Bulk, Shop Zero Waste With Package Free

What: Macy’s, Gap and Neiman Marcus will let you buy now and pay later

Why is it important: retailers add BNPL options to attract younger shoppers

Traditional retail chains like Macy’s that derive much of their income from shoppers who pay with a store credit card are making room for a less-lucrative customer: buy now, pay later. Historically, BNPL had been used to spread out the cost of large purchases. But in the past year, a greater number of consumers have used it for items costing less than USD 500.

The emerging payment option is a modern take on layaway plans, allowing shoppers to pay for purchases over time. The difference is they get the goods upfront. Chains from Macy’s to Gap to Neiman Marcus have introduced BNPL options in recent months to attract younger shoppers, who are less likely to use credit cards.

Instead of earning a profit from customers who revolve a balance on their store cards, retailers pay fees to the financial-technology companies that offer BNPL plans, including Klarna Bank and Afterpay.

Macy’s Chief Executive Officer Jeff Gennette said in an interview that the risks are offset by the new, younger customers that BNPL attracts. He said 40% of shoppers using Klarna are new to Macy’s and 45% are under 40 years old. By contrast, slightly more than a quarter of Macy’s existing customers are under 40.

Afterpay Co-CEO Nick Molnar said the firm sent about 45 million customer referrals in December 2020 from its app to its retail partners, on par with traffic generated by social media platforms.

While still fairly new in the U.S., BNPL options are expected to grow to 4.5% of North American e-commerce payments by 2024 from 1.6% in 2020.

Macy’s, Gap, Neiman Marcus Will Let You Buy Now, Pay Later 

What: the lease expiring next October will not be renewed

Why is it important: Covid-19 and online surge explain the store termination

Globus department store announces the closure of Marin-Centre store. 35 retail jobs are at stake.

The company will focus on strategic store renovations (Zurich, Geneva and Basel) and e-commerce. Globus is clearly aiming at positioning itself as a luxury destination, and reports an increase of 50% in e-commerce sales, from 10 to 15% of total contribution.

Globus to close a store

Related item:

• Globus will maintain its renovation plan

What: this is the first Korean duty free’s ESG (Environmental, Social and Governance) Value Management Commission.

Why is it important: Lotte Duty Free laid down an action plan for new eco-friendly initiatives, corporate social responsibility and increased corporate management transparency.

Eco-friendly initiatives

The plan includes replacement of plastic product packaging by biodegradable materials. Plastic bags are also to be replaced with eco-friendly paper shopping bags at all Lotte Duty Free branches.

The Lotte Duty Free logistics centre in Incheon will reduce its carbon emissions by decreasing electricity consumption through the introduction of photovoltaic power. In addition, all one-tonne delivery vehicles will be converted to electric vehicles by the end of this year.

The company will also encourage the listing of “eco brands”, with the opening of an eco-friendly brand zone at its World Tower store in Seoul this year.

In all Lotte stores, further digitisation will be encouraged, for example to replace paper receipts with electronic receipts, sent via SMS on mobile devices.

Local communities and small businesses

Lotte’s STARUPS project, which has been running since 2019, will continue. It focuses on fostering young businesses to create local jobs and revitalise tourism. Lotte Duty Free is also introducing its new CHEERUPS project to help small business owners. It will start with 30 restaurants to support them in reducing waste.

On the governance side, Lotte Duty Free has pledged to strengthen its fair trade compliance systems. It is doing this in order to ensure transparency in its transactions with product suppliers.

Putting the planet and society first: Lotte Duty Free establishes ESG Value Management Commission

What: Luxury brands are leaning into traditional analogue marketing as a way to cut through the noise online and connect with consumers at home.

Why is it important: Post-pandemic, retailers will have to find ways to stand out.

Mansur Gavriel is an interesting example. The brand introduced its first direct marketing campaign this month, in the form of a free 32-page book featuring new editorial imagery as well as past campaigns and original artworks. The brand has already seen a clear jump in new customer acquisition and the next edition will be sent to customers in May. In order to track sales, Mansur Gavriel has a promo code embedded in its book.

Luxury brands have long relied on direct advertising and printed marketing materials. As online spaces are now “flooded” with content, it’s tougher to stand out without investing in paid marketing. Direct mail is also becoming an advertising alternative as brands find a way to prepare for Apple and Google’s upcoming privacy changes, which will make it harder for marketers to track consumer data and personalise.

Books, alongside other physical materials like handwritten notes are like keepsakes, rather than disposable catalogues. Furthermore, top spending customers are increasingly expecting brands to come to them. But there are drawbacks: direct mail is expensive to do well, and tracking is more difficult. Experts say it’s still a worthy investment for luxury.

Post-pandemic playbook - The return to physical marketing

What: coming with an extensive experience in the field, Jean-Marc Bellaiche is to focus on digital

Why is it important: the plan includes an omnichannel strategy, a concept store approach for the store, sustainable projects, exclusive products and a wider local customer base

Product range

“The first thing is to develop new categories in addition to the ones we are historically very strong in, like accessories, men’s and women’s fashion, beauty products, home goods, children’s section. I think there are other areas that we can expand in, like art, cultural items, technology, objects linked to sports” he said. Bellaiche is also eager to seek leadership in the realm of exclusive brands. “Printemps needs to work with fashion schools around the world, with little brands, to return to being a kind of incubator and constantly offer surprises to our clients, with unknown brands” he said.

Sustainability

“This year, we plan to open a space dedicated to the circular economy” he said. The retailer has also been working on a project in the northern French city of Lille with a startup called Revive, which customizes unsold, Printemps-branded garments to give them a second life. Printemps is also looking into second-hand market.

Omnichannel retail

Bellaiche has some ideas about leveraging the department store’s key asset: prime, physical space. Bellaiche comes with a background in data, as chief strategy officer at Contentsquare, a French start-up that tracks consumer behaviour online.The retailer launched e-commerce a year ago, and plans to expand the platform to other product categories. The executive is also planning the use of tablets in stores, so clients can order things that the retailer has run out of — the idea is to set up a system with the brands. And, going the other direction, he would like to push in-store sales through online channels with personal shoppers. E-commerce also offers an opportunity to expand abroad and there are plans to roll out printemps.com, which was launched in the U.K. in November, in the U.S., Asia and elsewhere in Europe.

Customer centricity

“My obsession is the client,” he said. Loyalty program Printania will expand abroad. The plan is also to launch recruiting drive to gain new clients, younger ones, families, different nationalities.

Internal transformation plan

Bellaiche wants to rebuild teams with a more entrepreneurial approach and more women in leadership roles. Internally, Sophie Boquet, who formerly headed Citadium, has taken charge of the store network beyond the Haussmann flagship, while Karen Vernet, general director of offer, will take up relations with brands. External recruits include Stéphane Roth, who is directing marketing efforts and comes with experience in Asia and the U.S., and with digital activities, and the head of transformation Maude Funaro, who has a digital transformation background.

Investments

They will be focused on the digital front, and the company has said it plans to invest more than EUR 40 million a year in this area over the next few years. Printemps also intends to open a store in Qatar in 2022, to coincide with the FIFA World Soccer Cup.

Printemps' transformation plan