What: a tiny shophouse opened on the site of the original.

Why is it important: the converted space pays homage to The roots of the Chirathivat family, owners of Central Group, offering a glimpse of Bangkok’s past

Last October, Central Group opened the doors to a converted five-storey shophouse on the site of the original Charoen Krung shop. Dubbed Central: The Original Store, the building houses a concept store that sells vintage magazines and memorabilia, as well as a live-music venue and a cafe. The top-floor restaurant highlights forgotten recipes from mid-20th-century Bangkok, delving into cookery books of the 1940s and 1950s.

Learn more about the Chirathivat family and the origins of Central group below:

Thai-Chinese family’s rise from shophouse to conglomerate is a slice of Bangkok history

What: an extension of an existing activewear line to cater to men and children

Why it is important: casualwear has seen an acceleration during 2020 due to the many lockdowns and stay-at-home regulations worldwide. The UK retailer has therefore decided to expand of its activewear label Goodmove

The brand debuted a year ago for women only, and is now launching for men and children. The initial launch of the label suffered some criticism at the beginning, but it turned out to be a success for M&S, giving the circumstances in 2020.

The retailer sees the growth of its label as part of its “bigger focus on casualwear” in the new normal. Products have been developed to suit the new consuming habits and include a range for workouts and everyday activities. According to a survey conducted by the company, 80% of M&S customers say they want to get fitter in 2021, which will also serve the purpose of the expansion.

The menswear line is the more sustainable to date, with more than 98% of products being made from sustainable materials.

M&S EXPANDS POPULAR ACTIVEWEAR RANGE GOODMOVE TO INCLUDE MENSWEAR AND KIDSWEAR

The Financial Times has reported examples of workplace surveillance dressed up as safety measures. Amazon has introduced AWS Panorama which uses footage from security cameras to detect employees who are not distancing. But as the article says, it’s not hard to imagine a future where workers are blamed for contracting Covid with implications for sick pay. Walmart has filed a patent for a system of sound sensors placed near cashiers which “could determine a performance metric for the employee based on the audio data”.

Research has shown that close and constant monitoring is injurious to human health. Monitoring at work is seen as increasingly important with remote work which puts the time factor back into the hands of the employees.

Workplace surveillance may hurt us more than it helps

What: the possible IPO of Saks Fifth Avenue digital operation

Why it is important: the IPO would establish Saks.com and the Saks Fifth Avenue bricks-and-mortar stores as separate companies.

The rumour of HBC taking Saks.com public comes out just days after luxury online retail Mytheresa went public and saw its stock price quickly soar. The manoeuvre would make the physical operations and the digital operations two freestanding companies, which would be a first in the retail industry.

Saks relaunched its webstore last October, offering a more curated offer and a user-friendly navigation based on an enhanced data gathering process.

Hudson’s Bay Co. Planning to Take Saks.com Public

What: more measures implemented by the department stores to ensure safety of employees and customers.

Why it is important: while the UK is under strict lockdowns with all non-essential stores closed, John Lewis has reinforced its safety measures, reducing even more its activities in order to avoid unnecessary risks of spreading the virus

For instance the department store has decided to suspend the Click & Collect services at John Lewis stores in order to remove reasons for non-essential travels during the lockdown. Additionally, The John Lewis in-home services and installations teams will put on hold services which are not essential to the health and wellbeing of customers. Other measures include mandatory face covering at Waitrose stores, and encouraging, wherever possible, that only one member of each household shops.

JOHN LEWIS PARTNERSHIP TO STRENGTHEN COVID SAFETY MEASURES

Related item:

• John Lewis Partnership rolls out covid-19 testing

What: Walmart is setting up small, local, robot-staffed warehouses.

Why it is important: Fulfilment is a real competitive advantage. Best practices include speed and convenience. Could department stores use stores for fulfilment?

Walmart is planning to set up small local warehouses staffed with robots to handle surging online orders. The warehouses will be in or close to existing stores and will use robots to pick boxed items. More complex items will be picked by humans. The orders can then be picked up at the store by customers or by delivery workers.

Walmart also plans to experiment with automated pick-up systems that would present the goods at a hatch once a customer scanned a code on their smartphone. This effectively turns stores into micro-fulfilment centres which will cut the cost of the “last mile” delivery, the most expensive part of fulfilment. The move is seen as part of Walmart’s competition with Amazon which itself introduced a chain of grocery stores last year esigned to work as micro-fulfilment centres.

Walmart Presses Into Stores as Fulfillment Center Strategy 

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What: Closure of landmark department store

Why it is important: Echoes the problems of retailers including department stores to cover real estate and rental costs during the pandemic.

The landmark Edinburgh department store operated by Frasers Group but owned by Danish billionaire Anders Holch Povlsen will close on 3 May 2021. Frasers Group has not been able to reach a agreement with the owner. The closure will mean the loss of 200 jobs. Povlsen, who is also the largest investor in online retailer Asos and one of the UK’s most important landowners, apparently has plans to turn the building into a hotel with a bar and restaurant.

Many UK retailers have been struggling to reach agreements with their landlords, for example by linking rent to turnover. The mall operator Hammerson last week said it had received less than half of the rent owed by tenants in the last quarter.

Edinburgh's landmark department store Jenners to close after 183 years

Related item:

• Jenners to leave Edinburgh site

What: a net sales decline for the nine-week holiday period ended January 2, 2021, compared with the nine weeks ended January 4, 2020.

Why it is important: Sales decline 22% year-on-year, while digital sales grew 23%

Combined November and December sales were aligned with the company’s expectations for a decrease in the fourth quarter. As a result of its holiday performance, Nordstrom continues to expect to deliver positive earnings before interest and taxes (EBIT) and operating cash flow for the fourth quarter. The company’s full-year 2020 financial results should be released on March 2, 2021.

Nordstrom Reports Holiday Sales

What: the online giant buys its own air fleet to deal with deliveries

Why it is important: in a time where many sectors, including retail and travels, have been severely hit by the crisis, online retailers are soaring

Amazon is buying 11 used Boeing 767-300 jets to support its rapidly expanding air cargo operation. This is the first time the pure player is buying planes, instead of leasing them. It is a response to the major demand for cargo carriers and fast deliveries that increased during the pandemic.

Amazon had already been growing its air cargo fleet through leases in order to support fast delivery, especially Prime services. Such services became even more popular during the pandemic.

Amazon will be buying jets from Delta and WestJet, which have also suffered the lack of travels this past year and are trying to cut costs.

Amazon Buys First Aircraft From Delta And WestJet In Bid To Speed Up Deliveries

What: the departure of the head of Walmart e-commerce.

Why it is important: Marc Lore is the founder of Jet.com that was acquired by Walmart in 2016. He became President and CEO of Walmart U.S. e-commerce when that acquisition was made, but the retailer shut down Jet.com last year.

Walmart has benefited from Jet.com to develop its digital infrastructure, thanks also to Lore’s expertise. Lore has also helped to drive deal decisions to snap up other e-commerce retailers including Bonobos and Modcloth (which Walmart sold in 2019), and strategic moves to leverage its physical stores to expand customer services.

Walmart chief executive officer Doug McMillon said: “the Jet acquisition was critical to jump-starting the progress we  have made the last few years, […]our walmart.com nonfood e-commerce growth accelerated after the arrival of Marc and the [Jet team].”

Walmart’s Marc Lore to Step Down From Retailer – WWD

Related item:

• IADS Exclusive - Walmart: thinking outside the (big) box

What: Walmart is launching a fintech start-up dedicated to designing innovative and affordable financial solutions.

Why it is important: Walmart boasts a large customers base with a strong level of loyalty, which could help to a massive adoption of the solutions they could provide them

Walmart teamed up with a fintech investment firm to create a strategic partnership on payment solutions (reminding the strategy of Falabella for the latest years). The goal is to deliver tech-driven financial experiences both to Walmart employees and customers, with a focus on lowering the costs of the service.

Walmart to create fintech start-up

What: the necessity for Lotte Group to undergo innovative changes and portfolio revisions to respond to the post-Covid-19 market changes.

Why it is important: South Korean Lotte Group is one of the biggest retail group but was not spared by the covid-19 pandemic. The group Chairperson Shin Dong-bin is firmly warning CEOs about the necessity to make drastic changes to the structure in order to respond to the retail group’s “sluggish performance”.

Shin Dong-bin also reprimanded executives that failed to defend the group’s previous lead in the retail market. “Those that succeed in the post-crisis era are those that manage to achieve innovation during crisis. […] Portfolio adjustment may be considered for companies that fail to innovate themselves. A company that only pursues survival has no future” he said.

In November, the group already carried out an executive reshuffle, replacing the chiefs of 13 out of its 35 affiliates.

Lotte Group chief calls for drastic changes in post-COVID-19 era-프린트화면

What: more store closure for the UK bankrupt department store chain.

Why it is important: while Debenhams is still hoping for a rescue deal, the new wave of UK lockdowns has put even more pressure on the retailer who has no choice but to close stores

The department store entered in liquidation at the end of 2020, and has been forced to close physical stores as a national lockdown was renewed. In this context, Debenhams could not secure lease extensions and has had no choice than to never reopen some stores, even after the lockdowns. Six stores are concerned by the decision, including the flagship located on London’ Oxford Street, leading to a possible redundancy of more than 300 people.

While the UK is still under lockdown, Debenhams’ closing sales continue online.

Update on winding-down process; closing down sale continues online

Related items:

• Debenhams will close
• Brexit forces Debenhams to shut Irish webstore

What: Infrastructure investments are being made in logistics to deal with the pandemic.

Why is it important: Yet more elements of digital commerce are being built up to deal with the explosion in the format provoked by the pandemic. The future is bound to be impacted by these investments.

The Financial Times argues that e-commerce companies are building logistics networks that will last for decades. In spite of the last tech bubble bursting, foundations were nevertheless laid such as fibre-optic cable and capacity that reduced broadband costs which have served the growth of Google, Amazon and Facebook years later.

The argument here is that the current pandemic-fuelled e-commerce boom is building physical infrastructure and networks which will last for a long time. Examples include courier and driver networks, and delivery warehouses, big and small, often automated. Amazon has struck a deal with the City of London to turn 39 car parking spaces into a last mile logistics hub.

Delivery vehicles are the most common sight in many areas. Others are creating “dark stores” and “cloud kitchens”. In North America, it is the cities outside the 100 largest metropolitan areas that are the fastest-growing e-commerce markets. Even if the e-commerce bubble does deflate after the pandemic, we will be left with a much stronger logistics network.

In a further article, the FT claims that investment in DCs in the UK in 2020 reached  £ 4.7 bn, 25% more than the previous year and £ 500 m more than the record set in 2014. While retail landlords are suffering, established warehouse owners are thriving. This is expected to continue into 2021.

The pandemic tech boom is reshaping our cities 

UK WAREHOUSE INVESTMENTS HITS RECORD HIGH AS SHOPPERS SHIFT ONLINE

What: a severe consequence of the recent Brexit in UK

Why it is important: amid the current health crisis, UK is also experiencing a significant economic change due to the recent Brexit and its exit from the European Union trade agreements

UK department store chain Debenhams might be bankrupt, its website is still operating in the wait of news of a possible acquisition and save. Yet the British retailer has been forced to stop taking online orders coming from the Republic of Ireland due to complications linked to Brexit. The Irish webstore is temporarily closed over the Brexit ‘rule of origin’ clause. The news comes in the same week that several European retailers said they could no longer ship to the UK due to similar issues.

As early as 9 December 2020 John Lewis & Partners decided to close its international business and put a stop to international online orders to avoid the increase in shipment costs due to the new Brexit regulations.

Debenhams shuts Irish webstore on Brexit issues

Related item:

• John Lewis stops overseas online order

What: new investment to reinforce the management team and the supply chain

Why it is important: the department store entered and exited Chapter 11 last year, and is now making investments to better respond to the crisis. The investments will reshape the Neiman Marcus and Bergdorf Goodman customer experience.

To support multi-brand luxury online business, Neiman Marcus Group (NMG) will invest USD 85 million gross in supply chain innovation, specifically systems and fulfilment centres, by implementing a new order management system, a new warehouse system, and by investing in the company's Pinnacle Park distribution facility. "We are transforming NMG's core operating capability to support our growth as the luxury destination of choice for customers," said Willis Weirich, Executive Vice President, Group Operations & Chief Supply Chain Officer. "As the demand for luxury products continues to grow, so does our supply chain network and infrastructure. These investments ensure that NMG can quickly deliver the luxury products our customers want."

NMG is also making changes in its management teams. After reshuffling its board last December, it has appointed Bob Kupbens  Executive Vice President, Chief Product and Technology Officer. He acquired a strong background in elevating customer experiences through multiple senior roles overseeing eCommerce, digital products and technology.

Another appointment is the one of Paolo Riva at the newly created position of General Manager, Brand Partnerships & Merchandising in the Neiman Marcus brand. He has an extensive brand and P&L experience in luxury senior global roles.

Investing in the supply chain is the latest move done by department stores to respond to the new demands and cope with the crisis as digital retail has been skyrocketed since the beginning of the pandemic. In Chile, Falabella will invest USD 1.085 billion to develop information technology and logistics over the next few years; while El Corte Inglés in Spain is also investing and reinforcing its logistical infrastructures to become more competitive.

Neiman Marcus Group Reshapes the Luxury Customer Experience with [...]

What: Macy’s continues to streamline by closing 45 stores in 2021, after 29 in 2020.

Why it is important: US department stores are waking up: big is not always beautiful when not profitable.

Within the 3 years strategic plan, Macy’s is planning to close 45 stores this year, out of 540 stores at the end of 2020 (after having closed 29 stores the same year). The locations will be disclosed later in Q1 and is part of an overall plan of closing 125 stores in order to focus on e-commerce and m-commerce. The goal of this plan is to save USD 1.5 bn over the next 3 years, after an overall saving of USD 600 m in 2020.

Macy's closing 45 more stores in 2021 as part of its restructuring 

UPDATE 12.01.21: M&S has confirmed the acquisition of the Jaeger brand. It will complete the purchase of Jaeger’s stock and other assets by the end of the month, and will exclude Jaeger’s 63 remaining stores. The deal is currently being finalised but no purchase price has been released.

What: a department store chain buying a struggling brand

Why it is important: UK retail scene has been particularly hit by the crisis, with big names such as Debenhams and Arcadia falling into administration. Yet it can be the opportunity for some to make strategic acquisitions

08.01.21: UK Edinburgh Woollen Mill Group is struggling and had Peacocks and Jaeger brands filed for administration last November -a results from the covid crisis. The group, owned by billionaire Philip Day, is now looking for buyers for the brands and Marks & Spencer could be one of them. M&S is increasingly looking at adding new brands to its formerly-own-brand-only offer and this could be the perfect opportunity. The department store would buy the brand but not the physical stores, given its own already huge estate of department store across UK.

Marks & Spencer buys Jaeger fashion brand from administrators

Related item:

• M&S launches 3rd-party brand for the first time

What: a US department store chain looking to file for administration in an attempt to protect itself

Why it is important: like many department stores in the US, Belk has been suffering from the changes in consuming habits and from the health crisis. Now it is about to enter a deal to file for bankruptcy, taking the department store chain through a pre-arranged restructuring of its debt

Covid-19 has been tough on retailers all over the world, and to cope with that Southern department store Belk had to delay and halt payments to some vendors; now it is looking at bankruptcy in an attempt to salvage its business. Owned by Sycamore, the retailer could hand an ownership stake to lenders.

Belk Department Store Chain Said to Plan Bankruptcy to Tame Debt

What: former department store spaces turn into vaccines centres

Why it is important: Vacant retail spaces have emerged as anchors of public-health infrastructures in the U.S. since coronavirus outbreak.

US department chain Sear went bankrupt a few years ago, before the pandemic, and left many of empty locations behind itself. The vast floor plans give enough space for workers and vaccine recipients to adhere to social-distancing guidelines.

Earlier during the outbreak, health officials were looking for easy-to-access locations with large parking lots to set up tents as testing centres. Vacant department stores spaces, and even struggling or closed malls where used to that end. John Turner, vice president of Cayuga Health System, said: “with all the retail gone you’ve got this big open area. You’re able to actually bring people through.”

The Florida Department of Health operates a drive-through vaccine clinic in the parking lot of a former Sears at the Gulf View Square Mall. “It was vacant at the time we needed it, and the logistics of parking and a place to have staff out of the weather made it a great location,” a county spokeswoman said.

To be able to use these empty spaces to try and stop the pandemic is the only silver lining of the tragic outcome that forced many retailers to liquidate.

Finally, a Use for the Old Sears: Covid-19 Vaccine Center

Related item:

• IADS insights - SEARS: a victim of old age, mismanagement or evolution?

What: two business partnering to offer experience to customers

Why it is important: experiential retail was soaring when the pandemic hit the world and put a stop to any type of gatherings and happenings, even forcing many retailers to close their stores in a bid to slow down the spread of the virus, loosing benefits in the process. Now 7-Eleven is partnering with start-up AirBnb to offer gaming nights to clients, in a way to generate revenue in a critical time and attract new customers.

The partnership will allow for customers, for USD 11, to spend the night at a newest 7-Eleven Evolution Store concept location in Dallas turned into a “gaming palace”. People can  enjoy video games items such as the new PlayStation 5. Other features include unlimited Slurpees (slushies) and a one-hour Twitch streaming session with gamer FaZe Temperrr, founder of the gaming organization FaZe Clan.

For 7-Eleven it is a way to market the opening of its latest concept 7-Eleven Evolution Store in Dallas. Apart from the merchandising and product offering innovations, the evolution relates back to the same points: safe means of payment, queue and customer experience management, integration into local communities.

Giving a gaming focus to the marketing around opening the newest experiential store in an attempt to engage the 79% of people in the U.S. aged 13 and up that identify as gamers. “Everyone knows that the PlayStation 5 console launch has been one of the biggest headlines in the gaming world the past few months," 7-Eleven Chief Marketing Officer Marissa Jarratt said in a statement. Giving fans access to a PlayStation 5 makes 7-Eleven the latest brand to market around the new console to attract new customers.

7-Eleven turns latest experiential store into 'gaming palace' Airbnb

What: new online events to cater to customers during the lockdowns.

Why it is important: retailers in UK are suffering from new lockdown measures, forcing them to close their doors. Retailers need to reinvent the way they do business and need to find ways to stay relevant and to stay in touch with their customers; and hosting virtual events are a good solution.

In April 2020, when lockdowns started to be implemented almost worldwide and stores were forced to close, UK’s John Lewis launched several online experiences to provide advice, inspiration and support to customers in nursery, home and personal styling.

Now that the country is under lockdown again with non-essential stores closed, John Lewis is relaunching its virtual event programme with more experiences such as cooking classes, sewing classes, styling advice (dressing for the perfect Zoom date or finding the best wellness wardrobe).

These events come after John Lewis Partnership delivered its "most virtual Christmas to date" with more than 100 experiences across November and December 2020.

John Lewis unveils experiences for locked-down consumers

John Lewis online experiences

John Lewis online events programme

Related items:

• IADS Exclusive - Virtual stores: the future of retail?
• John Lewis launches virtual experiences
• John Lewis launches a virtual Christmas Shop

What: the first large-scale commercial complex opening in Wuhan since Covid-19.

Why it is important: K11 is introducing 35% of new brands in its art-meets-entertainment-meets-retail concept, and enlarges its footprint in China, with a target of 38 new locations within 2025.

K11 is a concept that mixes art with retail and entertainment. Store zoning often mixes F&B with stores in order to create modern malls where it is easy, and fun, to spend time. K11 is opening a new location in Wuhan, on 247,000 square metres (of which 86,000 will be dedicated to retail). They will be introducing 30 new brands, such as Marionnaud (perfumes), Nars (cosmetics), Atelier Cologne. This mall is the first of 2 units projects, the second one being opened next year.

K11 Concepts unveils K11 Art Mall II in Wuhan 

What: another department store launching a small format concept

Why it is important: department stores are at a pivotal time where they need to reinvent themselves to cope with the crisis and stay relevant in the future. Many retailers are now betting on smaller and more local store format to reach the local clientele

Bloomingdale’s is reportedly launching a small-store concept which will be called "Bloomie’s," the long-time nickname of the retailer. The 2040sqm store should open near Washington DC in fall 2021, with the goal to support the full-line Bloomingdale’s locations in the area by providing consumers with an alternative destination to shop, make returns or pick up packages ordered online. The Bloomie’s concept is part of parent’s Macy’s Inc three-year "Polaris" strategy which include closing stores to open new off-mall formats. Bloomie’s is likely to carry a limited assortment of some of Bloomingdale’s most successful categories such as women’s fashion, beauty and accessories.

Macy’s last year launch a small format store dubbed Market at Macy’s, with a second location opened earlier this month. This is a community-centric, flexible retail store format with community-driven events.

Seattle-based chain Nordstrom was one of the first to enter that segment when it launched its Nordstrom Local concept in 2017. The Local hubs are much smaller than regular Nordstrom locations and serve as supportive units for the full-line stores. There are no merchandise instore, but it features different services such as custom alterations, online ordering for in-store pick-up and easy drop-off returns.

With the pandemic, retailers, and especially department stores, realised how local retail and communities are important and essential to keep a business running. The theme of local retail was explored in our IADS Exclusive piece: "The rebirth of local retail" and in IADS White Paper: "Global pandemic, local department stores".

Bloomingdale’s Sets Bloomie’s Strategy

Related items:

• IADS Exclusive - The rebirth of local retail
• IADS White Paper: "Global pandemic, local department stores"
• Macy’s opens second "Market" concept
• Nordstrom expands its Local business in California