What: NFTs are coming to Instagram with various applications within the social media platform.

Why it is important: A brand or retailer selling NFTs will get more reach and awareness on Instagram through the huge user base. More visibility means more opportunities for education which can lead to potential monetisation opportunities and greater adoption rates.

After testing it in May, Instagram’s Digital Collectibles feature, which allows people to share NFTs on their feeds, will be rolled out to people in more than 100 countries. People will be able to share images of their NFTs by connecting their crypto wallets and will be able to tag creators and owners. Crypto wallets Coinbase and Dapper will now be supported, in addition to MetaMask, Rainbow and Trust Wallet.

Instagram plans to expand the NFT functions within the app to establish AR filters that incorporate NFTs. Rival Snap chat is ahead for digital fashion through AR having let artists begin testing NFT AR filters in July.

Instagram becomes NFT compatible

What: Concept stores selling lesser-known brands took off in China, particularly among young customers, however, pandemic challenges have forced many to close their doors or change strategy.

Why it is important: Post-pandemic operational distress has caused many Chinese beauty retailers to close causing surviving brands to compete for customer retention in a landscape that can no longer rely only on experiential retailing or travel to increase traffic and sales.

Some regular challenges for these concept stores include their size as smaller concept stores lack the bargaining advantage of bigger retailers. In addition, there is a challenge to obtain brand authorization while official channels are still monopolised by well-established stores such as Sephora and Watsons. The source of goods for many beauty collection stores is still regular purchases from department stores or from agents. This creates doubts about product authenticity, makes the margin of prices uneven, and creates competition within the brands they carry. As customers are determined to go where they can find the products, loyalty is a serious challenge.

A wide range of brands and a high number of SKUs have been a common trend among beauty collection retailers that have survived the pandemic. One example is Harmay which has more than 400 brands and more than 9,000 SKUs with a selected range of products that includes well-known international first-line beauty brands as well as exclusive authorisation of well-known international boutique brands.

These mid-to-high-end positioned beauty collection stores have also adopted a conservative expansion strategy, typically following a "one store in one city" approach. With core competitiveness remaining in brand selection, beauty buyers can improve the selection by scouting trendy brands only available abroad and focusing on the local aesthetics and needs of their Chinese customers. For consumers, mid-to-high-end brands are most worth revisiting.

Affordable collection stores need a clearer brand positioning, with more tactical spending on store investment and marketing. While the concept store model was effective in acquiring customers, retention will be vital for longevity.

Beauty concept stores shift strategy in China

What: The Selfridges Corner Shop and over three department store main window displays have been taken over by Casablanca’s aviation-inspired pop-up.

Why it is important: Casablanca and Selfridges team up for a pop-up that further solidifies the trend of luxury conceptual retail and hospitality while also demonstrating the brand’s dedication to global activations that build brand awareness.

Titled ‘Casa Airways’, the pop-up showcases an exclusive 45-piece collection with limited-edition azure-hued bikinis, beach towels, silk scarves, graphic T-shirts, crochet hats, bags, knitwear, and tailoring from the AW22 collection. As well, customers can purchase luggage from the Casablanca collaboration with Globetrotter as part of an exclusive pre-sale.

Champagne branded with the Casablanca name is available in the ‘departure lounge’ designed to include graphic 1990s airport signage, security, and private jet set pieces.

Selfridges hosts Casablanca pop-up

What: Business of Fashion’s podcast ‘The Debrief ‘ covers navigating the return to wholesale.

Why it is important: Business of Fashion’s ‘The Debrief’ podcast reports that as shoppers return to stores, brands are seeing value in ramping up their partnerships with multi-brand retailers through wholesale models.

Department store bankruptcies, pandemic-induced store closures and the boom in online shopping pushed brands further towards their direct-to-consumer and e-commerce businesses to drive revenue and avoid the pitfalls of wholesale. However, there is a shift back towards wholesale models as customers return to in-store shopping looking for curated experiences in which they can discover new designers and brands.

Some other factors contributing to the return of wholesale include its ease as a means of entry for international brands looking to expand to the U.S. market. Brands are also having more of a say over how their products are marketed through retailers, like sharing campaign assets or designing shop-in-shop setups.

Both parties are also increasingly open to exploring other models like concession, consignment and drop-shipping, where the brands themselves are responsible for fulfilling orders made through retailer’s websites.

The wholesale model is returning post-pandemic

What: Burberry is releasing limited-edition virtual Lola handbags on Roblox for only 24 hours.

Why it is important: Digital fashion leader Burberry is continuing its adoption of virtual clothing through its first sale of limited-edition Lola handbags on Roblox.

The bags include clouds, foliage, and other natural elements that would only be possible in the digital world. Each design will only be available for purchase for 24 hours. From 11 to 15 July, an unlimited number of each bag will be released daily costing 800 Robux, the Roblox currency. It may be less expensive than the real handbag, but luxury items have higher resale value on the platform. For example, Gucci's limited-edition, virtual accessories were priced between 1.20USD to 9USD on Roblox, but some buyers were willing to cough up large sums for the coveted items in resale. One user paid roughly 4,115 USD, or 350,000 Robux, for Gucci's Roblox-only bee-embroidered purse.

Burberry has focused primarily on gaming and in-game NFT series making this the first time it is selling virtual products to its expanding community on the Roblox platform.

Burberry’s limited-edition virtual bags for Roblox

What: Tommy Hilfiger opens a virtual shop in Roblox with games, virtual event space, and the Tommy Jeans Pop collection.

Why it is important: This is the next stage of Tommy Hilfiger’s Roblox collaboration.

The brand had previously worked with eight digital fashion designers from Roblox to create the Tommy X Roblox Creators collection and had established a virtual space for socializing and delivering content updates. Now Roblox fans of Tommy Hilfiger can shop puffers, windbreakers, hoodies and accessories from the Tommy Jeans Pop collection in the Tommy Play store. In addition to the virtual retail space, visitors can enter a spray paint area and create their own tags or unlock street dancing. There are also secret spaces and achievements for visitors to unlock.

The virtual storefront provides more experiences for the younger consumers on Roblox to engage with the Hilfiger brand.

Tommy Play store on Roblox

What: Alicia Williams PhD enters Saks as VP of diversity, equity and inclusion (DEI) with 15 years of experience in talent and diversity.

Why it is important: Appointing Alicia Williams PhD demonstrates Saks’ commitment to its roadmap of achieving certain DEI goals outlined last year. These goals include growing BIPOC leadership, investing in black designers, diverse marketing and donating money to support underserved communities.

Having previously worked for US banks at Morgan Stanley in similar roles, Williams brings her 15 years of experience in launching and implementing DEI initiatives to the luxury e-commerce platform.

Saks names Alicia Williams VP of Equity & Inclusion

What: Companies are improving workplace culture, opportunities and benefits to retain their employees in a tight labour market.

Why it is important: Companies are adjusting their employee retention strategies to combat the increasing trend of departures for new jobs, new industries, early retirement or self-employment.

According to McKinsey, the voluntary quit rate in the United States is 25% higher than pre-pandemic levels. Despite an impending recession, openings are not likely to return to normal levels. Companies are betting on improving corporate culture to curb employee departure. For example, companies are increasing their PTO, bonus values and remote work opportunities. In response to inflation, some companies are planning to offer financial planning education and increased wages for the expected rise in cost-of-living. Other companies are looking to improve health and wellness benefits.

71% of i4cp survey respondents said that their companies are putting more emphasis on corporate culture from a values perspective. This means an emphasis on a clear mission and purpose as well as showing greater commitment to diversity, inclusion and environmental actions.

Shifting corporate culture combats the great resignation

What: Influencers are unhappy with Nordstrom’s updated affiliate commission policy as the latest Anniversary Sale sees less influencer hype.

Why it is important: The benefits of Nordstrom’s influencer marketing adoption in the 2010s brought the Anniversary Sale to fame, yet now the influencers who once looked to the sale as their top money maker are downplaying the event.

Partly this is due to Nordstrom’s adjusted strategy to lean away from influencer marketing. This year they slashed the cut influencers get when followers make a purchase off their recommendation, dropping down 7%- 20% from last year. The department store narrowed the window where a link generates a commission to seven days. Influencers also won’t get paid until 270 days after a successful transaction.

Some influencers felt a sense of ownership over the event, believing their collective annual flood of posts helped turn Nordstrom’s online sale into a phenomenon. But Nordstrom’s pullback from influencer marketing was years in the making. The Anniversary Sale is still important to Nordstrom’s top and bottom line but it has suffered from overexposure in recent years with social media feeds flooded with creators discussing discounts or sharing products and hauls. Some found the assortment repetitive from year to year, adding to the fatigue. And other retailers followed Nordstrom’s lead creating their own grand holiday sales.

The overall timing of Nordstrom’s pullback can also be seen in the shifting timeline of the sale. In 2020, the sale was pushed back a few months due to the pandemic; when it eventually went live, it was on a smaller scale. Now being sold in early July, the adjusted timing has made it more difficult to sell the predominantly fall and winter merchandise that makes up the sale.

Influencers say the assortment includes more of Nordstrom’s own private labels and fewer items from brands their followers are interested in. Additional criticism centres around the same items being marked down every year.

Now that the sale is well known to customers, eliminating influencer marketing and cutting back on affiliate commissions will also help shore up margins as other costs rise. However, it should be noted that influencers are sharing less about Nordstrom’s Anniversary Sale but have invested more time in posting about Amazon’s Prime Day.

Nordstrom’s Anniversary Sale drops influencer marketing

What: The exhibit will consist of installations throughout the London department store designed to provide a window into the future based on our world’s current trajectory.

Why it is important: To connect with their consumer’s mindset, Selfridges is hosting a partnered collection of installations in its London department store which are curated by Agnes Gryczkowska. The installations are in partnership with Reference Festival, a Berlin-based event mixing fashion, art, and music. The focus of the installation is based on imagining the future of what the world would look like following its current trajectory.

This partnership between Selfridges and Reference Festival is the latest example of the department store’s bet on experiential retail. The strategy has resonated with shoppers and has been tied to revenues doubling to 1.2 billion USD in 10 years before the pandemic.

The installations will be visible in-store from Jul. 14 to Oct. 16 and will also be available to view digitally online.

Selfridges partners with Berlin’s Reference Festival on in-store exhibition

What: Big box retailers move in on the democratization of beauty.

Why it is important: As department stores invest in renovating their beauty floors, consumer spending habits shift again as big box retailers and drugstores strategize on becoming the new key locations for discovering new beauty brands and products.

Department stores lost their dominance in the prestige beauty market as Sephora and Ulta expanded their offerings and gained more relevance to the consumer. However, big-box retailers and drugstores are now seeing an opportunity to profit from the beauty industry’s democratization, with thousands of stores and plenty of space to house products, they too can be a place of discovery.

In beauty, it all comes down to where discovery actually takes place. Sephora in the past held great legitimacy for carrying unknown lines. As these products gained more than niche popularity, they trickled down to Ulta and then into the wider market but had rarely reached drugstores. Now, the consumer is less inclined to prioritize where they purchase those products. The mixing of high and low-priced items and dispelling the mindset that expensive means “better” made brands more willing to widen their distribution to mass channels.

Target has made the biggest inroads so far, after opening about 100 Ulta Target shop-in-shops last year with plans to open around 250 more in 2022.

Beauty buying habits change again

What: Agility gained through navigating pandemic-related complications has left luxury in a better position to face an upcoming recession.

Why it is important: Inflation and interest rates are soaring in Europe and North America, squeezing household budgets. Despite post-pandemic ‘revenge spending’ boosting performance, there is a visible decline in consumer splurging.

Historically, luxury companies are less affected by recessions as a decline in wealthy shopper spending has a less dramatic impact. Predictions that luxury will be even more resilient this time than in previous crises, compare the upcoming recession to that of 2008 which primarily hit lower-income and middle-class consumers.

However, the importance of middle-class and ‘aspirational’ shoppers continues to make up a significant number of sales. A damaging effect could be increased as luxury brands have increased their offerings in accessible categories in recent years.

LVMH and Hermès are likely to report positive numbers due to their focus on high-paying clients and strong brand DNA. Companies that prioritise aspirational customers are likely to suffer the most within the luxury sector.

Bain & Co. continues to expect luxury industry growth between 5 and 15 percent for 2022, depending on the recovery of the Chinese market and inflation pressure in the West. Overall, the pandemic has placed brands in a better position.  The increase in DTC has led to higher margins on each sale. And supply chain optimization during the pandemic has positioned brands better to react to current events and the impending recession.

The luxury industry and the impending recession

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

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

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

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

Instagram launches pay-in-chat

What: Jeff Gennette on the future of stores, the point of omnichannel and what is takes to be a great leader.

Why it is important: For him, stores will never be irrelevant, however retailers need to find the method to bring the brick & mortar business to a “healthy” level.

Macy’s CEO Jeff Gennette has given a lengthy interview to Time.com in which he details his views on the future of work in department stores, the shift in consumption and the role stores will play in the future.

For him, omnichannel is of course here to stay, however stores remain a significant part of the picture: online will allow to deliver a tailor-made experience, while stores will be providing services impossible to have online (size fitting), or experiences (which explains for instance the implementation of 400 Toys “R” Us). E-commerce (35% of Macy’s business, or USD 8,6 bn in 2021) is going to continue growing, but never to the point of making stores irrelevant: he expects the share of e-commerce to top 40% by 2027.

When it comes to leadership, he advocates leaders to bring their “authentic self”, which in turn will allow their teams to do so and achieve a higher performance.

Macy’s CEO’s interview on authenticity and the future of stores 

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

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

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

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

Klarna’s Los Angeles pop-up

What:  A retail tech supplier shows a real world application of what a connected store looks like.

Why it is important: Such an equipment involves significant amounts of investments. However, it is interesting to see a fully fitted store live, rather than prototypes in suppliers’ showrooms, in order to evaluate the actual added value and ROI of said investments.

In 2017, just after its acquisition of Browns in London, Farfetch promised the retail world a new era with the “Store of the Future” concept, a place where everything would be connected for the customer’s sake. Since then however, this has remained a promise rather than a reality, as retailers embraced the tech by bits and pieces rather than investing full Capex on this topic.

The new COS store in Los Angeles (from the H&M group) could be a good example of what a connected store looks like:

• Touch-screen smart mirrors interact with the RFID chips included in every product, allowing to display more in-stock options, alternative proposals or alert salespersons that the customer is ready to leave with the product,
• Dedicated tablets allow store managers to monitor in real time what is going on in the store: inventory level, shelving situation, area management.
• The tablets also allow to train sales associates on a permanent basis whenever they have some free time
• Of course, the whole store is fully fitted for buy online, pick-up or ship from store, and other convenience options given to customers.

Retail tech applied, the LA COS store example 

What: Placer.ai Mall Index looks at mall foot traffic for five malls that have been outperforming their own 2019 levels.

Why it is important: There is no set formula for malls to succeed, but offering unique experiences remains key for longevity.

By offering a mix of stores, experiences and dining options that can appeal to the surrounding community within the mall’s reach, some retail leaders are leveraging the damage caused by the pandemic.

Despite challenges and household income dropping over the past couple of years, all five malls that were analysed managed to exceed their 2019 monthly visitation levels. The common factor between these locations was an offer of attractions and events established to bring in customers.

Attracting customers today comes from offering exciting and stimulating spaces for people to meet, be entertained, eat, shop and discover new products. The top-performing malls are moving beyond the traditional offering into art exhibits, pop-up shops, events, live performances, gaming, and immersive installations that draw visitors in for more than just shopping.

The pandemic was inhospitable to many retailers leading to closures and empty spaces that have yet to be filled. Thus, adaption to the evolving consumer habits will necessitate capitalizing on the gaps in the market left by the pandemic.

Experience remains key for drawing in customers 

What: The Neiman Marcus Group is actualizing its revolutionized work philosophy by constructing corporate hubs around the world to improve flexibility for employees.

Why it is important: The Neiman Marcus Group is advancing its progressive plan for establishing corporate hubs around the world, enabling associates to work remotely while also fostering collaboration and providing more convenient locations for meetings.

There is a clear focus on combining technology and flexibility to deliver employees an enjoyable and collaborative work environment. Neiman Marcus Group is exploring additional corporate hubs across the country and abroad with plans to establish hubs in Texas, New York and India.

The company believes that associates’ homes can act as their own “individual working hubs.” The retailer also considers each of its stores and distribution centres as hubs. Within their existing and new hubs, digital and physical spaces, meeting rooms and workstations instead of permanent desks are expected to improve productivity and satisfaction.

With the rise of employee departures increasing across the US, improving the working conditions of employees is a great strategy for Neiman Marcus Group. The retailer is seeing great results from this strategy with retention up and time-to-hire down in the fiscal year 2022 compared to 2019.

NMG’s philosophy allows the best corporate talent to choose where they live and work, which is setting them apart from competitors.

Neiman Marcus Group’s international work hub initiative - Source 1

Neiman Marcus Group’s international work hub initiative - Source 2

What: Macy’s plans to bring a Toys”R”Us shop into all American locations in time for the holiday shopping season.

Why it is important: Macy’s exclusive online distribution partnership with Toys”R”Us is moving in-stores due to record sales of toys being 15 times higher than in the pre-partnership period.

Beginning late July and rolling out through October 15th, the in-store shops will range from 1,000 sq. feet and span up to 10,000 sq. feet in flagship locations in Atlanta, Chicago, Honolulu, Houston, Los Angeles, Miami, New York and San Francisco. The footprint of stores may increase an additional 500 to 3,000 sq. feet during the holiday season to offer an even wider assortment of products. Opening celebrations will feature in-store events that will include family-friendly activities and daily giveaways.

Toys represent a growth category for Macy’s stores. Macy’s plans to use the opportunity to lure in millennial parents and others with attachment to the Toys R Us brand, who might then shop other departments at Macy’s.

Macy’s Toys”R”Us shop-in-shops - Source 1

Macy’s Toys”R”Us shop-in-shops - Source 2

What: Inflation and a return to classrooms are causing an increase in back-to-school shopping that’s coming earlier than expected.

Why it is important: U.S. consumers are likely to spend more on back-to-school shopping this year due to fears that prices will continue to rise.

The National Retail Federation and Prosper Insights & Analytics as well as KPMG conducted surveys of U.S. consumers regarding their back-to-school shopping plans. NRF and Prosper reported that back-to-school spending is expected to match 2021’s record high of 37 billion USD with families planning to spend an average of 864 USD on school items.

The pandemic plays a significant role in the increased spending on school-related purchases. Adapting to virtual and hybrid classes had normalized families spending more on computer equipment, home furnishings, chairs, desks, and lighting, so their kids could attend classes online.

Back-to-college spending is also expected to reach the highest in NRF and Prosper’s survey history, projected at nearly 74 billion USD. Prosper and NRF indicate that the top five shopping destinations are: online (50%), department stores (45%), discount stores (29%), office supply stores (27%), and college bookstores (26%).

According to KPMG, U.S. consumers spending on back-to-school shopping will go up 20% compared with 2021. 56% of consumers that were surveyed plan to spend more on back-to-school in 2022 compared to 2021. And 82% said this is because of rising product costs.

Consumer fear of inflation has contributed to the increased spending as well.  As of early July, 56% of shoppers had already started shopping for school and college supplies, with consumers figuring the longer they wait, the higher the prices could get. KPMG emphasized consumers getting out and physically shopping to search for the best deals and stretch their budget.

Consumers are indicating a heightened sense of consciousness around what to wear as offices and schools reopen and live events resume. As such, apparel and footwear will likely rank lower on the list of categories seeing spending cuts from consumers during the back-to-school season.

Some consumers did indicate shifting their shopping to lower-priced channels. Many turning to off-price stores as their first choice for ‘brand agnostic’ items like notebooks and pens.

Increased spending for back-to-school shopping season - source 1

Increased spending for back-to-school shopping season - source 2

What: First-half reports show a decline in gross margins for apparel brands in China.

Why it is important: The apparel sector is struggling in China, but international brands, DTC channels, and flexible product lines can help improve agility in this difficult first half of the year.

Throughout China’s apparel sector, companies with a high proportion of physical retail have been affected by factors such as lack of customer flow and weakened desire to shop in stores after repeated lockdowns. In addition, enterprises with more direct-to-consumer channels have better cost control in a market that is seeing ongoing declines, which helps to stabilize gross profit margins. At the same time, a flexible product line for large apparel groups is one way for them to grow even during adversity.

Firms have been squeezed between declining sales and rising costs of operation, supply chain and raw materials. A sharp drop in profits in the first half appears to be the inevitable result for apparel groups focused on physical stores, either in direct-to-consumer or in traditional retail business models. Looking at many apparel brands present in China; their net profit year-over-year shows a tremendous decline with some companies reporting 60-80% drops for the first half of 2022.

Despite these reports, some categories remain resilient, particularly the activewear segment.

International brands in China appear to be doing better than local apparel brands and retailers, leading to new market dynamics and a hopeful outlook for the second half of the year.

Apparel in China continues to struggle

What: Scrutiny on Amazon linked to its scaling back on the number of items sold under its private label.

Why it is important: Congressional investigators framed Amazon’s own brands as a conflict of interest for the company as its private labels are often in direct competition with others selling on its site.

Members of a House of Representatives subcommittee accused Amazon executives of lying about whether the company has used specific data from other brands on its platform in its own private label business, and whether it prioritizes its own brands in web search algorithms. However, Amazon’s private labels have not necessarily dominated its site. Marketplace Pulse has found that some categories of Amazon’s private labels represent less than 1% of sales. The biggest exception found apparel to represent 9% of Amazon’s sales.

Similarly to other retail giants, Walmart and Target, Amazon has been trying to refocus around its most popular private label products after the e-commerce specialist in past years worked to broaden and diversify its private label goods.

Amazon scales back private label business

What: UK retail footfall continues to be well below the pre-pandemic period with no signs that this summer will get it back into positive territory.

Why it is important: Retail destinations are more dependent on visitors from abroad and from dedicated UK shoppers rather than their former key clients of local office workers.

The latest numbers from the Ipsos Retail Traffic Index show that in the week to 10 July, UK footfall dropped as much as 19.9% compared to 2019 in the non-food sector. Ipsos also said that in addition to the 20% fall compared to 2019, against the previous week, the seven days saw a 5.9% footfall drop.

Towns were better off with a drop of 16.8% compared to 2019 and 5.8% compared to the previous week. Retail parks remained the best performers on a three-year comparison with a drop of 17.3%, yet they performed the worst on a one-week basis with a 7.2% drop.

High streets were down 20.4% against 2019 but were only down 4.4% week on week. Shopping centres had the worst of both worlds with a 21.7% drop against three years ago and a 6.3% drop against the previous week.

UK footfall still below 2019 levels

What: Americans are predicted to spend 109.6 billion USD on their pets in 2022 alone.

Why it is important: The expanding pet market relates to customer loyalty as owners are in need of trustworthy brands and retailers that can provide an elevated assortment of products.

The pandemic saw a spike in pet adoptions which has expanded the market for the pet category. While these customers can be difficult to please, they are passionate and ready to invest in quality products that can help bring their pet into every aspect of their life. For example, the easing travel restrictions has shown an increase in searches and purchases of travel accessories and equipment within the pet category. There has also been a visibly increased demand for convenient methods of care towards the long-term health and wellness of pets, be it supplements or organic treats.

Pet owners are overwhelmed by the abundancy of products and are looking for a curated assortment of quality goods so they can care for their pet in the same way they care for themselves.

Pet category leads customer loyalty