What: Simon Property Group is testing a search platform that allows shoppers to find in-stock items at participating stores within the mall before or during their visit.

Why it is important: Search capability is key to the efficiency and ease of shopping online. An up-to-date inventory tool like Simon Search could encourage consumers to visit malls that have in-stock items they want – but it could also prevent them from taking part in the aimless window shopping experience malls were once known for.

That could help boost traffic to malls, which has been declining for decades and has yet to recover from pre-pandemic levels. Compared to 2019, visits to indoor malls in May this year declined by 3.8%, at open-air centers declined 5.9% and at outlet malls declined 7.7%.

The digital tool, “Simon Search,” can be used via the Simon app, a mall’s website or the interactive directory located on the property, according to a company press release.

The pilot involves 29 Simon properties. Participating retailers include Anthropologie, Athleta, Banana Republic, Gap, Old Navy and J.Crew, as well as Simon-owned JCPenney and Aéropostale.

Simon tests digital search tool for mall shoppers

What: Lotte Duty-Free has announced that it will not renew its license to operate its COEX store in Gangnam, Seoul. Once it expires, Lotte plots to maximise sales at its remaining stores in Seoul; The Lotte World Tower (Jamsil) and the Myeongdong flagship store.

Why is it important: The number of domestic duty-free shops in the region has fallen from 57 in 2019 (pre-Covid) to now just 48. However, South Korea’s duty-free sales have displayed ‘gradual improvements’ during Q1 2022. This follows a 15% increase in duty-free revenue to US$14.7 billion in 2021, of which approximately 95% was sales to foreign customers.

Lotte also plans to expand its product and brand offering at both the World Tower and Myeongdong flagship whilst strengthening marketing activities for both.

Lotte announces COEX store closure

What: Neiman Marcus says innovative immersive store experiences are planned for over the next 18 months.

Why is it important: While many retailers embrace a digital-first identity, Neiman Marcus is touting its blueprint for “retail-tainment.” It is about “reimagining” store experiences, and it entails working with brands and designers to come up with more imaginative and often complex experiences and presentations for shoppers that go beyond the usual retail theater.

The onset of the strategy started with the three-week Prada Coast installation at the Neiman Marcus store in the NorthPark Center in Dallas in June 2021. The setup was elaborate, recreating an Italian beach, with LED walls with live crashing ocean waves, sand, lifeguards, gelato and Prada’s summer collection set in a 2,200-square-foot installation on the main floor.

On Thursday, Neiman’s unveils a Burberry takeover at its store in the Lenox Square mall in Atlanta. The exterior has been wrapped with Burberry’s TB monogram print and more than 50 styles in men’s, women’s and accessories, all exclusive to Neiman’s, are displayed inside.

Neiman’s retail-tainment strategy has been resonating with shoppers and benefited from consumers’ renewed interest in shopping stores. Whether that endures or is just a short-term reaction by consumers after being cooped up at home during COVID-19 remains to be seen.

Neiman Marcus’ latest calling: ‘Retail-tainment’ 

Neiman Marcus welcomes Burberry's summer takeover

What:  Poor inventory decisions and shifting consumer behavior are putting US retailers at risk according to UBS.

Why it is important:  Sales might take place earlier and be more brutal than expected for this season in the US. The inventory level seen by IADS in the Seattle Nordstrom store was already a worrying sight early June 2022.

According to a recent note from UBS, department stores such as Nordstrom, Macy’s, Kohl’s or Dillard’s are at risk of carrying an unprecedented level of excess inventory, due to poorly made decisions at the moment when inventory was ordered for 2022, and a shifting behaviour from customers asking for more dressy styles and dropping the casual look. As a consequence, retailers carry too much stock on poorly-performing categories. UBS expects this to also affect off-price retailers, such as TJX or Burlington stores.

US department stores at risk of an unprecedented inventory excess 

What: As retailers continue their journey down the digital transformation path, they are on a constant strive to be agile in how they respond to ever-evolving customer requirements. One of those retailers being Neiman Marcus Group.

Why it is important: With customer expectations and technology evolving at an unprecedented pace, moving to cloud is no longer a nice-to-have, but a must-have for retail companies in terms of operational resilience, reliability, security, scalability, and agility.

The process of migrating a monolithic application into microservices requires modernizing legacy systems. To accomplish this, NMG incrementally refactored monolithic applications, instead of refactoring the entire code at the same time.

NMG built a Cloud Center of Excellence team, responsible for the complete DevSecOps practice across the organization. They are responsible for setting up the cloud build pipelines, guard rails, governance, platform architecture & security standards, so that different product teams have a certain baseline and are still within those guard rails, can operate really fast and execute scalable and standard performance tested architectures.

Even though NMG started operating in the cloud, they needed to have certain enterprise guidelines, best practices and architectural standards in place. So, they built a solid platform that different product teams can innovate at scale and quickly deliver value to business partners. Serverless architecture also helped NMG elastically scale their app to quickly meet demand.

Some of the rewards for Neiman Marcus Group felt from building their serverless platform were accelerated business agility and speed to market, an increase in online customer satisfaction, and a major uptick in associate productivity as they were given a platform where they have the information and the intelligence needed to engage the customers effectively and efficiently.

Cloud-Native Architecture Transforming Retail: Lessons from Neiman Marcus Group

What: H&M has shut its flagship Shanghai store, its latest closure in China where consumer demand has slumped amid Covid-19 lockdowns and faced a backlash against companies that refuse to use Xinjiang cotton.

Why it is important: The world’s second-biggest fast-fashion retailer entered China in 2007 with the opening of the Shanghai flagship store. H&M had more than 500 stores in mainland China early last year but its website currently only lists 376, including the flagship Shanghai store.

Although nearly a month has passed since Shanghai lifted a strict two-month lockdown, consumers have yet to return to malls in significant numbers.

Chinese consumers have also beat a retreat from its products after a letter in which H&M expressed concerns about allegations of forced labour in the Xinjiang region came to light in 2021.

H&M Closes Shanghai Flagship Store

What: Bottega Veneta is re-releasing handbags from its archives, considering lifetime repairs, and has an internal app aimed to bring staff up to speed on sustainability.

Why it is important: Bottega Veneta will be selling handbags from its archive on an integrated platform called Bottega Series, accessible via its e-commerce site. The bags will be a re-release of its timeless leather bags from past collections referencing as far back as the 1966 intrecciato bags. The bags will be sold at full-price, which reflects their enduring value. New monthly pieces will be dropped for a limited time, the brand said. A lifetime warranty programme is also in the works.

Bottega Veneta is not the first Kering brand to explore circularity, though today’s efforts mark a significant step-up from the brand. Bottega says the philosophy of Bottega Series is to “challenge the very construct of seasons – pieces that are timeless do not need to abide by a seasonal calendar.” Instead, the brand says it is focused on creating objects that last forever.

To support future ventures into circularity, Bottega Veneta is also re-assessing its design process, with a focus on durability, craftsmanship and creativity. At the end of 2021, it developed an internal app to simplify sustainability for its staff.

The idea is to reduce overall production in the coming years but focusing on high quality, timeless products, soon to be sold with a lifetime warranty.

Bottega Veneta to re-release archival pieces, build lifetime repairs 

What: Big brands are adopting crypto payments, but, before brands follow, they need to consider several factors, from how to handle transactions to the risks involved.

Why it is important: Fashion and luxury sellers may be feeling some peer pressure right about now to jump on the bandwagon and start taking cryptocurrencies as payment. But there are costs in time and money involved, so despite the hype, companies need to decide what's right for their business and their brand before they jump in.

Many big brands have turned to companies such as BitPay or CoinGate to simplify the process for them. These payment gateways can integrate into the brand’s online checkout or point-of-sale system in stores, allowing the merchant to accept any coin they’re set up for and handle transactions from start to finish. A shopper typically scans a QR code to make a payment. The payment gateway accepts the cryptocurrency directly, validates it, converts it to fiat currency, and deposits the funds in the merchant’s bank account.

Brands have different options for handling payments, including gateways that do all the work for a fee, but there are still risks and legal issues to consider. Unlike a credit card, a crypto wallet can be anonymous, raising the threat of illicit transactions.

Brands are still subject to reporting large and suspicious purchases. Importantly, they need to ensure they’re not taking payments from sanctioned individuals or enabling money laundering.

Still, some brands may want to associate themselves with crypto as part of a longer-term web3 strategy. Allowing crypto payments can be an effective way of attracting the crypto audience, plus, the group of shoppers wanting to pay with crypto does look to be expanding.

What brands should know about accepting Cryptocurrency 

What: The Norwegian Consumer Authority has found outerwear brand Norrøna’s use of data from the Higg Index to back up environmental claims is misleading to consumers and warned H&M Group against using the same type of marketing.

Why is it important: The decision comes amid mounting scrutiny of big fashion companies’ sustainability claims, as concerns about greenwashing attract greater regulatory interest. It also deals a blow to the Higg Index, a widely used suite of tools developed by trade group the Sustainable Apparel Coalition.

Norrøna was among the first to use a consumer-facing product labelling tool introduced by the SAC last year, using data from the Higg Index’s materials module to show shoppers how a handful of its organic cotton T-shirts measured up on environmental factors like water use and global warming, compared to an equivalent T-shirt made from conventional cotton.

While Norway’s consumer watchdog only investigated Norrøna’s marketing, it also wrote to H&M Group warning the company to ensure it is not using the same kind of marketing by Sept. 1 or risk economic sanction. H&M is among the companies that have used Higg data in consumer marketing. Meanwhile, the SAC received a warning that it could be held responsible if its members use Higg data as a basis for environmental claims in their marketing.

The finding plays into an increasingly urgent debate over what “sustainable fashion” really means and how brands can back up any marketing. The SAC has sought to position the Higg Index as a suite of tools that can underpin such claims, but critics have argued the tools are not fit for use in marketing messages in line with the NCA’s decision.

H&M misleading sustainability claims

What: Two Swedish giants are teaming up to promote English design and innovation.

Why it is important:  This initiative kills two birds with one stone: find something to do with the leftovers of the previous Oxford Street store purchased by Ikea, and root their name into local communities by promoting regional culture.

H&M and Ingka Group are teaming up to open the Atelier 100 space in Hammersmith (London) with the objective to promote local British designers and entrepreneurs. Following a regional contest, 20 winners will display their products in the Atelier 100 space.

The products are often using material recycled from the old stocks of Top Shop, which flagship store on Oxford street was purchased by Ikea earlier in 2021.

H&M and Ikea’s owning company team up 

What: Nata Dvir’s rise through the ranks of Macy’s to become the retailer’s chief merchandising officer has been meteoric, Dvir talks about the secret sauce to serving consumers and the approach to climbing the ranks.

Why is it important: Dvir’s roles have spanned the retailer’s offering: She started in intimate apparel, then worked on cross-category strategy, in addition to fine jewelry and women’s shoes. For the past five years, though, she’s helmed the retailer’s beauty business and then was given merchandising responsibility for everything.

The secret is understanding so many different categories, and how customers have been able to shop across those categories. As chief merchant, versus running beauty, time is spent thinking about the customer across all the different categories, and how Macy’s brings it all together. Investing in categories that are important for the customers and new categories that customers are looking for from Macy’s.

For instance, in Beauty, it is important to keep customers in the loop about what’s trending and keep current on each new trend on TikTok or Instagram so they can provide what customers are looking for.

Dvir credits her rise to that ethos, as well as the proper guidance.

Macy's retailer's chief merchant’s view on customers

What: Neiman Marcus Group announced the closing of the USD 200 million common equity minority investment by Farfetch Limited in NMG, and the signing of the commercial agreements with Farfetch Platform Solutions.

Why is it important: Neiman Marcus Group will use the proceeds to further accelerate growth and innovation through investments in technology and digital capabilities to make life extraordinary for its customers.

In addition to the minority investment Farfetch is making in NMG, Farfetch and NMG have negotiated a commercial agreement whereby Farfetch Platform Solutions will re-platform the Bergdorf Goodman website and mobile application.

As a result, Bergdorf Goodman will introduce its digital customer experience and curated offering to customers globally, integrating seamlessly with the iconic New York City flagship.

Neiman Marcus is committed to using select FPS modules, including foundational international services. Both Bergdorf Goodman and Neiman Marcus will join the Farfetch Marketplace as a partner, adding participating brands in key global geographies.

Neiman Marcus Group announces the closing of a USD 200 million minority investment by Farfetch 

What: Zalando is looking to go bigger in streetwear and has bought a majority stake in Highsnobiety, the media brand at the crossroads of streetwear and luxury.

What it is important: Highsnobiety will act as a strategic and creative consultant to Zalando, but also “retain its editorial independence, with creative agency work remaining fully autonomous and management structure unchanged.”

Highsnobiety’s art of turning stories into products and products into stories, will bring Zalando these capabilities to their commitment toward fashion inspiration, and together they can reimagine the future of content and commerce. Zalando’s unrivaled expertise in scaling e-commerce platforms will bring Highsnobiety to the next level.

For the deal between Highsnobiety and Zalando, Highsnobiety was advised by Liontree, V14 – Vogel, Heerma & Waitz, and Taxess. Zalando was advised by White&Case, PwC, and McKinsey.

Zalando buys control of Highsnobiety 

What: Levi Strauss & Co and H&M Group ranked highly inThe BoF Sustainability Index 2022.

Why is it important: Every year, BoF Insights benchmarks the sustainability efforts of fashion’s biggest companies within the luxury, high street (or mass market) and sportswear segments. The index was designed to assess the fashion companies’ progress towards ambitious environmental and social targets across six impact categories, designed to align with the UN’s Sustainable Development Goals.

The 2022 edition of the Index analyses the sustainability performance at 30 of fashion’s largest public companies, addressing the 10 biggest by 2020 revenue in each of the three segments. It assesses performance across six impact categories: Emissions, Transparency, Water & Chemicals, Waste, Materials and Workers’ rights.

The high street segment was one category to note with the overall average score for the segment comes in at 27 points out of 100, Within the individual impact categories, the segment performs on par with the overall Index average in Emissions and Materials, but slightly underperforms in the four other impact categories assessed. It also contains the only company (Chinese retailer HLA Group) in the Index to score no points at all, making it one of two in this group of companies to score less than 10 points overall.

Levi Strauss & Co. tops the high street segment’s rankings with an overall score of 44 points out of 100, closely followed by H&M Group with an overall score of 42. Both companies place in the top five when ranked against all 30 companies assessed in this year’s Index.

Are mass-market fashion companies the industry’s worst sustainability performers?

What: JD.com sees worrying signs that shoppers are reluctant to reopen their wallets even as major cities emerge from bruising Covid lockdowns, suggesting consumer spending may take months to recover.

Why it is important: The months-long closure of cities like Shanghai has caused a fundamental shift in how people spend their money, with a pullback in discretionary spending continuing even after the lockdown of the financial hub ended a few weeks ago.

The slow recovery now means it will be even harder for China to achieve the full-year economic growth target of around 5.5%, especially if there are further large-scale Covid outbreaks.

Even with policymakers promising more support for private investment and the platform economy to mitigate the Covid shocks, economists have continued to cut their forecasts for growth this quarter and this year. Online retail sales will likely only grow in the low single digits this year after expanding 12.5% last year.

Logistical hurdles have also persisted as various places across China implement Covid Zero policies, including testing and travel restrictions, with varying degrees of aggressiveness. The State Council gave warnings this past weekend to provinces including Hebei, Anhui, and Shaanxi for excessive enforcement of policies that have blocked domestic supply chains.

However, spending from consumers in smaller and less developed cities is picking up, particularly those less affected by Covid shutdowns. Spending growth in smaller tier-five and tier-six cities has greatly outpaced that of tier one and tier two cities like Shanghai and Shenzhen.

JD.com warns consumer recovery is months away

What: ‘Buy now, pay later’ services that allow consumers to pay for purchases in installments have driven higher spending at apparel retailers in recent years, and investors worry higher interest rates and a slower economy will spell trouble for the model.

Why is it important: Concerns are growing that the boom in short-term financing that has fueled apparel sales is saddling a growing number of vulnerable shoppers with debt they can’t pay. But the concept can still benefit brands, lenders, and consumers, with a few key changes.

Despite its recent problems, the category looks set to keep growing. Earlier this week, Apple announced it was launching a BNPL service. If deployed responsibly, buy now, pay later can benefit lenders, retailers, and consumers. But changes are needed: BNPL firms can reposition their installment plans as a way for young and low-income consumers to build credit and do a better job screening out those who are most likely to fall behind on their loans. Retailers can do more than add a button from Klarna or Affirm alongside the credit and debit card options on the checkout page; they can educate consumers about how installment payments work and be as transparent about the terms of these loans as they are about shipping.

Linking BNPL with credit agencies could allow a wider group of consumers to build credit histories, which are necessary to gain access to many benefits of the financial system.

Retailers should roll out financial literacy tools to help young shoppers navigate BNPL platforms and monitor their spending, with branded education materials and budgeting tips that can be shared via their influencer partners.

At Afterpay, customers can set up budget trackers to help manage when installments are due and set up reminders ahead of their scheduled payments.

Education can be difficult when brands see BNPL primarily to nudge consumers to spend more. The wide array of plans, each with its own schedule of payments and interest rates, can also be confusing. BNPL lenders typically don’t charge interest for smaller payments made over a few weeks, but annualized rates can be as high as 30% for big-ticket items financed over months.

A Better Approach to ‘Buy Now, Pay Later’

What: As women dress up again, Rent the Runway’s revenue doubled in Q1.

What it is important: Before the pandemic, Rent the Runway had begun to expand its market by offering more office-appropriate options, but its momentum right now is being driven by special occasion dressing.

Rent the Runway doubled its revenue in Q1, from USD 33.5 million last year to USD 67.1 million, according to a company press release.

Its active subscriber base rose 82% to 134,998 by the quarter’s end, a 17% increase from the previous quarter and its highest end-of-quarter count.

Gross profit rose 178% to USD 22.5 million, as gross margin expanded to 33.5% from 24.2% a year ago. The company’s net loss widened from USD 42.3 million last year to USD 42.5 million.

The recently unveiled at-home pickup offer, available in 20 cities to more than a third of the subscriber base, is proving to be not only more convenient to customers but also less expensive for the company.

During the quarter, Rent the Runway launched six new exclusive collections, with plans for almost 20 such partnerships this year, on track to becoming 60% of the company’s product acquisition mix this year. The company is aiming for those exclusive to become two-thirds of its assortment, part of its plan toward free cash flow profitability.

The company still must prove itself but is tapping into the market forces that are stoking the rapidly growing secondhand apparel market.

Rent the Runway revenue doubles in Q1 

What: Department stores are fewer in number, still downsizing, but not extinct.

Why it is important: Coming off recent restructurings, heady digital growth, channel integrations and a lot of introspection, the sector has turned a corner, and around the world department stores are in varying degrees of transformation.

A retail sector that’s resilient and getting progressive came across at the Global Department Store Summit, organized by the Intercontinental Group of Department Stores, this month, where presentations and conversations centered on ESG, redefining the workplace, reinvention, and renewal, not recession. Retailers’ unwavering optimism was evident, leaving looming uncertainties for the near term more on the sidelines than center stage.

The event, held June 9 and 10, was themed “Retailing From the Outside-In” and drew some 250 leaders and senior officials from department stores, brands, suppliers and service companies.

Among the key takeaways from the event:

• Department stores have a future; perceptions of being “dinosaurs” are passé.
• Environmental, social and governance is good for business; retailers and brands must simplify the language of ESG so it’s less technical and consumers can readily understand goals and accomplishments.
• In a data and digitally driven world, retail is still about providing experiences.
• Companies are grappling with how to remake the workplace with a balance of office and remote situations to attract and retain talent and get the most productivity out of the workforce.

Sizing up department stores and the survival instinct

What: Frasers Group has snapped up fast fashion retailer Missguided for 20 million pounds just a day after it fell into administration.

Why it is important: The group hopes that Missguided’s digital-first approach to the latest trends in women’s fashion will bring additional expertise.

Frasers Group, whose portfolio includes Flannels, Sports Direct, House of Fraser, and Jack Wills, said Missguided will continue to operate as a standalone business within the group.

Frasers Group buys Missguided out of administration

What: Macy’s has launched 10,000 free NFTs, celebrating the retailer’s Fourth of July fireworks show and for the new NFT drop, it’s also launching a channel on Discord.

Why it is important: The NFTs are available on a first-come, first-serve basis via the Macy’s Discord channel at Discord.com/invite/weBCA2nevs. The NFTs will be in “classic, rare, and ultra-rare” designs with graphic elements from this year’s Macy’s Fourth of July fireworks. The NFTs provide access to augmented reality wearables that can be used on a selection of social media and video communications platforms.

Macy’s fireworks NFTs are built on the Polygon blockchain. The 25-minute Fourth of July fireworks display is a barrage of more than 48,000 shells and effects.

Macy’s Latest Launch: Fourth of July NFTs - WWD

Macy’s Launches Discord Channel and New NFT Series - Press Release

What: Amazon will soon offer some of its first U.S. Prime Air drone deliveries to customers in Lockeford, California.

Why it is important: Prime Air will deliver packages weighing up to five pounds in less than an hour via drones, according to Amazon spokesperson Av Zammit. Once an order is placed, Amazon’s new MK27-2 drone will fly to the location, descend to the customer’s backyard, and hover at a “safe” height before releasing the package.

Benefits to Amazon delivering to a smaller community via drone. Yard space is readily available, providing a spacious drop-off point for packages. The efficiency of traditional van delivery, currently challenged by steep gas prices and a competitive labor market, is also limited in communities with low population density.

Regulatory clearance will be critical for Amazon’s drone delivery ambitions as it ramps up its operations in Lockeford and, eventually, to other areas of the country.

Amazon said it is working with the Federal Aviation Administration and local officials to obtain the necessary permissions to conduct deliveries in Lockeford. The FAA will review the plans to confirm operations abide by the National Environmental Policy Act, a regular procedure for advanced drone operations.

Amazon to start drone delivery in California

What: Farfetch has teamed up with sustainability ratings company Good On You to launch a sustainability hub to help brands better understand and communicate their sustainable credentials.

Why it is important: The new ‘one-stop-solution’, called Good Measures, will give brands a “comprehensive view” of their current sustainability rating and provide customised guidance on where they can improve.

Brands can submit publicly disclosed information on their performance that allows them to get rated or re-rated by Good On You. If they achieve a high enough rating, they will qualify for the Farfetch Conscious Collection.

Good Measures is grounded in Good On You’s sustainability rating system, which measures how individual brands impact people, the planet, and animals. The system collates information from over 500 data points such as independent standards and certifications; third-party indices; and brands’ own public reporting.

Farfetch links with Good On You

What: Colorifix has announced the closing of a Series B funding round of GBP 18 million led by the H&M Co:lab.

Why it is important: Fast fashion retailers are getting a lot of heat for their business models and are trying to find other ways to make their business more sustainable.

Already launched with H&M and Pangaia, the product, an eco-textile dyeing process (considered to be the first of its kind) , hopes to aid in the sustainable transformation of the industry.

The funding will be used to support the trebling of Colorifix’s team as it prepares to expand further into Europe and Asia, bringing its technology into the supply chains of brands.

H&M leads GBP 18 million Series B for Colorfix

What: Apple is partnering with Goldman Sachs for its buy-now, pay-later payment, built directly into Apple Pay, the update will allow users to pay for purchases in four installments over six weeks.

Why is it important: BNPL services have gained wide popularity in recent years. Fintech upstarts like Affirm, Afterpay and Klarna have been able to capitalise on young consumers’ distrust of traditional credit card companies and convince thousands of merchants to pay for their services.

In the US, the largest BNPL player, Affirm, has seen its stock value plummet nearly 75 percent this year.

The function will be an addition to the current Apple Pay offering and will be rolled out as part of its upcoming iOS 16 update.

Apple Launches Buy-Now, Pay-Later