What: Two years have passed since Selfridges launched its sustainability strategy and has now released its first report on its effectiveness.

Why it is important: The company aims to have 45% of all transactions generated by one of its circularity models: resale, rental, repair.

Rental still requires a push, although resale and repairs have been quite successful. The company will continue to promote circular shopping to answer the challenge of consumer adoption. As the company has little control over its Scope 3 emissions (accounting for 95% of its overall footprint), Selfridges is also taking a category-specific approach, working with concessions regarding material tracking and altering its assortment. Starting in 2025, the department store plans to no longer stock products that do not meet its material commitments.

Selfridges committed to reducing Scope 1 and 2 emissions by 64% by 2030. Scope 3 emission reduction is set to a 30% decrease by 2030. Of these emissions, 57% comes from purchased goods and services, followed by use of sold products at 21%, capital goods at 11% and transportation and distribution at 7%.

Internally, Selfridges has appointed 300 ‘Green Warriors’ from among its staff to champion sustainable change in their teams, from organising beach clean-ups to raising awareness of new initiatives internally.

Project Earth - Selfridges Press Release

Selfridges’ sustainability initiative: Project Earth

What: Overall spending on transport, energy, school supplies, food and more, the French shopper has altered their consumption habits.

Why it is important: Inflation trends are likely to continue throughout 2023 with shoppers reducing purchases, buying more durable products, selecting timeless designs and planning their buying to coincide with sales.

OpinionWay conducted a study which revealed that 73% of consumers have reduced their fashion consumption over the past two years, with only 12% stating that they have returned to their pre-pandemic buying habits. Some habits include carefully comparing prices between brands (80%) and simply making less frequent purchases (59%).

82% of respondents are looking for clothing that is timeless and 76% are looking for clothing that transcends fashion trends. 57% of respondents are waiting for the economic climate to be more favourable to renew their wardrobe, leading retailers and brands to believe the sales season will see greater purchases. This is backed by the study results showing that 69% of consumers will wait for sales to make necessary purchases and 44% will avoid shopping altogether to avoid the temptation of buying.

Second-hand platforms appear to be ideal alternatives in the eyes of French consumers with 41% using these channels for deals. New networks of hard discounters are also appealing, as 39% of respondents report shopping through these channels.

Inflation changes French shopping behaviour

What: John Lewis has released an advertisement that highlights the highs and lows of modern family life in connection with its renewed brand promise: ‘For All Life’s Moments.’

Why it is important: Following research on the shifting consumer habits, John Lewis has rebranded its retail endeavours to be focused on ‘moments’ that connect with each customer’s lifestyle.

In an attempt to connect with clients in a new way and to navigate the uncertain financial times, John Lewis’ newest film communication portrays the difficulties of parenting through moments shared between a father and daughter.

The ad was created by adam&eveDDB.

John Lewis launches advert for rebrand

What: At the Goldman Sachs 29th annual Global Retailing Conference Macy’s, Nordstrom, Shopify and Capri point to the opportunities and threats of the market right.

Why it is important: Macy’s sees occasion-based categories doing especially well right now and says promotions will be high this fall. Nordstrom continues to see a lot of strength in their core categories, like women’s apparel, while their inventory excess is going to take a couple of quarters to get through.

Macy’s is looking to new tools involving a more scientific approach to pricing, including markdown optimization , by style, category, store, and channel, as well as personalization.

Nordstrom’s private label business has been poor considering there has been a leadership change along with decreased inventory compared to the first half of the year.

Shopify says the e-commerce growth curve is back to where it was in 2019 but with a higher base, and projects hitting 7 million USD by 2025.

Nordstrom and Macy’s present challenges at Goldman Sachs Global Retailing Conference 

What: Prada, Tiffany & Co., RTFKT and other brands are using NFTs as a way to sell physical products to specific customers based on the NFT they hold.

Why it is important: Different strategies have emerged in the growing NFT market with fashion companies creating digital twins, using token-gating, and targeting specific NFT holders.

Tiffany & Co. recently announced their NFTiffs for CryptoPunks holders offering the ability to purchase an exclusive pendant costing 30 Eth or 50,000 USD at current conversions. Buyers of the pendant will receive an NFT resembling the physical item.

Many other brands like 9dcc, Dolce & Gabbana, and Prada are linking NFTs with physical products. This is seen as an opportunity to engage loyal customers and release physical goods. Buyers who receive a physical product are predicted to repurchase by receiving access to future sales through the NFT. Some criticize this release model as a pre-order program with unnecessarily complicated steps for the average consumer.

The reliability of blockchain in providing an open infrastructure for anyone to use is leading the argument against using emails and traditional records which could accomplish the same abilities as NFTs today.

Fashion using NFTs to sell exclusive physical products

What: Return of in-person events, such as weddings, are increasing menswear sales for occasion wear.

Why it is important: Despite inflation concerns, menswear retailers are reporting positive reports on men’s apparel sales for special occasions and work wear as the post-pandemic world begins to normalize.

A surge in in-person events caused a lot of men to update their wardrobe after lockdown restrictions have lifted and the shopping highs appear to be continuing in the special occasion categories as events such as weddings increase. Merchants are expecting strong sales to continue at least through the second half. Still, some are cautious after over-purchasing, leaving them with plenty of inventory to sell through. Consumer pull-back remains a concern because of the ongoing pandemic stress, inflation and tensions overseas.

Tailored clothing and neckwear categories have been performing well as men prepare for holiday events and weddings. The return to work has translated into increased sales around hybrid pieces such as sports coats and pants that can be worn with sports shirts or sweaters while remaining comfortable.

Another cause for an increase in professional wear has been demonstrated by recent graduates buying professional and sophisticated clothing for job interviews and new employment.

Positive outlook for men’s occasion dressing

What: 15-year-old fashion brand Cos will embark on a wholesale strategy for the first time partnering with Breuninger, Nordstrom, and Yoox.

Why it is important: As part of a push to expand brand awareness and presence in markets where Cos operates on a smaller scale, the brand is partnering with department stores and retailers through wholesale.

With only 12 US locations, Cos plans to leverage Nordstrom’s New York client base by placing a curated selection of products in-store during New York Fashion Week. In early October, Cos will begin selling on the Breuninger website to improve its availability across Germany, Switzerland, Austria and Poland. As well, the brand will become available across all Yoox’s live markets by stocking its products on the Net-a-porter Group member’s website starting in December. Each retailer is reported to be receiving a unique assortment based on clients and location.

Cos plans to continue growing its wholesale business with selective long-term partnerships, without compromising on its own brick-and-mortar expansion. Bringing Cos into other stores and websites will be a great indicator of demand in markets where the brand is underrepresented.

Cos unveils wholesale strategy

What: The Jing Daily reflects on the meaning of a retail icon closure in Hong Kong

Why it is important: Retail is not dead in the city, on the contrary, the current crisis provides some fresh air for a reset, even if this means that some iconic locations have to close (just like what happened in other markets such as the UK).

Joyce has announced earlier during the summer that it would close its iconic Central location in the heart of Hong Kong. For Jing Daily, this does not mean that Hong Kong is doomed as a retail destination. For instance, luxury brands have decided to seize the opportunity to invest in bigger flagships stores. Similarly, fashion operators have decided to open new stores in key locations while expanding their offering, such as Sweaty Betty and Whistles.

Analysts and observers believe that the low rents (they are at their lowest since 2003) provide a healthy correction and allows the Hong Kong scene to regenerate, in order to maintain its distinction with Mainland China as well as the rest of the world.

What the closure of Joyce Central means for retail in Hong Kong 

What: Adobe reports price drops for 14 out of 18 tracked categories, year-over-year and month-over-month.

Why it is important: While food prices continue to rise both online and in stores, online prices are dropping in major categories like electronics and apparel. The deflation of online prices is a welcomed relief for consumers who are pulling back on spending in response to the impending recession.

Consumers spent 73.7 billion USD online in July, down from 74.1 billion USD in June. On a year-over-year basis, however, e-commerce spending in July grew 20.9%. Online spending in July also decreased compared to May (78.8 billion USD) and April (77.8 billion USD).

Of Adobe’s observed categories, groceries, tools/home improvement, pet products, and non-prescription drugs experienced inflation last month. On a year-over-year basis, only seven of the 18 categories saw price drops: electronics, jewellery, books, toys, computers, sporting goods and apparel.

The price deflation online has been tied to retailers’ oversupply coupled with the need to address wavering consumer confidence and a pullback in spending.

Online prices drop 

What: Hermès sees the second-hand market as a threat that increases pricing and fuels counterfeiting.

Why it is important: Despite the growing second-hand market and larger rivals like Kering investing in the sale of its preowned merchandise, Hermès sees no appeal in adopting the trend.

Wary of second-hand dealers and compromising on quality to meet the quantity of demand, Hermès sees more threats than opportunities in the second-hand market. Engaging with resellers would also be detrimental to their regular clients visiting in-store.

While Kering has added second-hand to its strategy, LVMH is choosing to avoid participating in the second-hand market but has emphasized efforts to offer repair services for its products instead.

Hermès rejects second-hand market

What: Brands are adopting the popular new platform ‘BeReal’, which poses restrictions on posting that force a level of transparency and authenticity which is unlike other apps.

Why it is important: Tentative experimentation by E.l.f. and Pacsun has shown that there is a demand for brand presence on the app that is opening a new channel for selling and generating brand loyalty.

For brands, the app could be a great opportunity to connect with ‘superfans’ and build on brand loyalty by, for example, showing an inside look into the studios or offices. The app facilitates cross-platform sharing and does not threaten to replace other social media applications.

Users of BeReal have only two minutes to post after they have received a notification allowing them access to take a photo with both their front and back cameras. The result is intended to show a selfie and the location you are in, ultimately forcing users to show what they are doing, where they are and how they are feeling. The app has also openly shared that it is not interested in creating influencers, outright telling users to “stay on TikTok and Instagram” if they want to be famous.

The BeReal creators are surprisingly secretive and have yet to reveal anything about their growth plans, generating speculation on the platform’s longevity and potential monetization. Some believe a subscription service, similar to Patreon, could allow brands the ability to provide shopping codes and exclusive content through the app.

E.l.f. tested a coupon code post on BeReal and saw surprising success. They had no metrics or expectations for the post’s performance which was shared with 150 followers.

BeReal: the social media forcing brand ‘transparency’

What: Harrods has unveiled a new men’s grooming, fragrance and sunglasses destination on the second floor of its Knightsbridge department store.

Why it is important: The new space offers a new men’s proposition, catering for the first and final steps of a daily routine, creating a one-stop-shopping experience, including the largest men’s sunglass destination in Europe, alongside skincare and fragrance products.

The space also features a private room for customers to try on sunglasses or use the ‘Smart Shopper’ screen which allows for digital try-on. In addition to the sunglass offer, men’s grooming, skincare products and fragrance are designed to complement the Adam Grooming Atelier service also offered on the second floor.

There are several new brands coming to Harrods, including Retro Super Future, Dita, Cazal, Prada, Cartier, Oliver Peoples and Ray-Ban.

Harrods’ new men’s destination

What: The strength of the Gen Z Chinese luxury consumer is threatened by the rising youth unemployment rates while in the US inflation is slowing sales for younger generations.

Why it is important: Many luxury companies had adjusted their product offer to appeal to the growing Gen Z influence on sales; but, with inflation and rising unemployment, their contribution to the overall financial growth for the sector is in question.

Focusing on core Gen Z luxury consumers less likely to be impacted by inflation or unemployment seems like a logical move. But the concern is over those would-be buyers that had factored into reports that a fifth of all luxury spending by 2025 would be made by Gen Z.

Some brands have chosen to adapt by focusing on entry-level products and digital garments which have seen continued success despite the unfavourable economic conditions. However, real and virtual entry-level products call for high levels of creative investment at an affordable price point that do not dilute the brand.

Finding success in offering the right assortment of entry-level products at the right price will help mitigate the potential economic restrictions imposed on Gen Z consumers today.

Uncertain future for Gen Z’s luxury industry contribution

What: US retail giant Kohl’s has revealed a new sub-brand under the name ‘Sonoma Community’ as part of its private label flagship brand, ‘Sonoma Goods for Life.’

Why it is important: The new brand will build on the work of Kohl’s Diversity Design Council (DDC), a group of associates who create authenticity in the retailer’s products through their collective experiences and cultures.

The new sub-brand will launch during Hispanic Heritage Month, featuring apparel and products that highlight Hispanic and Latino culture and traditions. Throughout the year, Sonoma Community will offer seven collections reflecting different cultures, including Lunar New Year, Black History Month and Women’s History Month, with artwork created by either the DDC or external guest artists.

Kohl’s celebrates diversity with new private label

What: Tommy Hilfiger is moving into a “360°” resale program in the US in partnership with ThredUp.

Why it is important: The resale service offers loyalty rewards customers can use in the brand’s network of stores or on the sale platform by providing a simple method completed through digital services eliminating the need to bring clothes in-store.

Customers will be able to receive credit for purchases with Tommy Hilfiger by printing shipping labels via a dedicated portal to return men's and women's products stamped Tommy Hilfiger, but also products of any brand when it comes to women's and children's clothing.

The partnership is a step toward Tommy Hilfiger’s goal to make the brand fully responsible by 2030 by incorporating circularity into the product life cycle.

Tommy Hilfiger launches second-hand program with ThreadUp

What: High volumes of unsold merchandise after supply chain issues and uncertain client demand post-pandemic do not guarantee success for value retailers.

Why it is important: Following the reactions to pandemic-related issues, retailers now hold high volumes of merchandise which can be a big opportunity for off-price sellers as inflation looms.

The landscape seems to be perfect for off-price retailers, however, the pandemic caused a similar ordering boom. As these companies’ core customers were flush with stimulus cash from the government, value retailers also are seeing rising inventory levels and sales drops. Just like traditional wholesalers, off-price must be agile and strategic when buying merchandise.

In addition to navigating their own inventory overload, off-price retailers will need to compete with second-hand and resale channels that also target a price-conscious shopper.

In order to compete, off-priced retailers should look to improve their operations by incorporating digital functions. Ghost, a platform connecting brands to the right buyers, appears to be optimizing the process.

Threats to off-price retail

What: Traveling exhibition SUPERFUTURES curated by Berlin’s Reference Festival has partnered with Selfridges to bring the immersive exhibition of 13 experiential spectacles and surreal interventions by leading artists, brands and thinkers.

Why it is important: Throughout 2022, SUPERFUTURES will exhibit the concept of ‘tomorrow in the making’, inviting visitors to Selfridges to co-create the future through a year-long discovery period.

The exhibition presents a vision of a hybrid future, serving as a generative portal between the world-as-is and a predicted world-to-come by artists and creators with unique backgrounds. Staged within the familiar Selfridges retail environment, the installations have been designed to disrupt, provoke and inspire customers.

The partnership is representative of Selfridges’ commitment to reinventing retail to create a more sustainable future.

Selfridges hosts the SUPERFUTURES exhibition

What: Simon Property Group surprised many analysts when it decided to acquire and operate brands since the beginning of the pandemic

Why it is important: A landlord becoming a retailer is not unusual: in the department stores world, NK in Sweden is one of the most recent examples. However, SPG is raising the model to an unprecedented scale.

Simon Property Group has invested recently in J.C. Penney, Authentic Brands Group (Brooks Brothers, Aéropostale, Lucky Brand, Forever 21…). David Simon, the chairman, reports that this is still a small and high profile part of a business otherwise based on real estate.

He stressed that these investments have already paid for themselves. He remains confident that the high-income customer is in good shape, and they want to be in brick-and-mortar stores.

SPG second-quarter net income has slipped from $617m in 2021 to $497m 2022, and occupancy rates rose from 91,8% to 93,9%, with 2,200 leases representing 700,000 sqm signed during the first half of 2022.

Retail pays off for Simon Property Group (WWD)

What: Balenciaga partners with Reliance Brands to enter the Indian market.

Why it is important: Luxury brand Balenciaga has signed a deal with Reliance Brands Limited to tap into the developing luxury fashion market in India.

This is the second franchise deal with a Kering-owned brand for RBL, making them an exclusive partner to Balenciaga.

RBL believes Balenciaga is at the forefront of the digital realm with an international cult following. With India’s luxury fashion consumer having shifted to a move expressive use of fashion, Balenciaga’s ability to adapt and reinvent itself through collaboration is the source of the deal’s potential success.

Balenciaga plans to bring the brand to India

What: After almost 20 years as managing director, Anne Pitcher announced her departure in addition to the completion of the reportedly 4 billion pound deal for Central Group and Signa Holding to jointly take over Selfridges and its portfolio.

Why it is important: Central Group and Signa Holding plan to create a leading luxury omnichannel platform and reshape luxury retail through the acquisition by updating the F&B offers, integrating the e-commerce platforms and redeveloping the hotel sites.

The deal includes the Selfridges Group’s portfolio made up of 18 department stores, including Selfridges in London, Manchester and Birmingham. As well as locations de Bijenkorf in the Netherlands; Brown Thomas and Arnotts in Ireland, and their associated e-commerce platforms and the properties in London, Manchester and five locations in Ireland. The Selfridges’ portfolio will be integrated with Central and Signa’s combined existing portfolio of 22 luxury department stores and two new stores opening soon in Dusseldorf and Vienna.

Anne Pitcher will remain on the leadership team until the end of the year to ‘ensure a smooth integration.’

Anne Pitcher resigns as Selfridges acquisition is finalized

What: Korea’s top three local luxury department stores are expecting continued “revenge spending” after enjoying notable sales growth over the past three months.

Why it is important: Local department stores in Korea have seen strong growth post-pandemic guiding plans to build up the luxury and furniture offer expected to grow to 20 trillion won.

Lotte, Shinsegae and Hyundai Department Store achieved all-time high business performances in the second half of this year, thanks to increased sales in various sectors, including sports, domestic fashion and kids. Growth in sales of luxury goods and furniture has also contributed significantly to the major department stores’ all-time-high figures.

The three department stores have been focusing on building their furniture offer through their own furniture brands. The goal is to prepare for the growth of the local market expected to reach the size of 20 trillion won by 2024.

Last year, Lott took over the local interior and furniture brand Hassem, while Shinsegae has Casamia and Hyundai Department Store acquired e-commerce mattress company Zinus in March.

Korean department stores see positive growth in Q2

What: The US makeup conglomerate saw some growth despite pandemic supply disruption but plans cautiously for 2023 as inflation looms.

Why it is important: Record inflation, supply chain disruptions, the strengthening US dollar, risk of a slowdown in many global markets, and the headwind from recent Covid shutdowns in Hainan all factor into the makeup company’s predictions of growth slowing 3-5% year-over-year in 2023.

Net sales for the group rose 9% to 17.74 billion USD for the year ended 30 June 2022, driven by the Americas and Europe, the Middle East and Africa. However, the sober outlook for 2023 could be linked to the 23% drop in net sales in the Asia Pacific region. Overall, net sales slumped 10% year-on-year to 3.56 billion USD in the fourth quarter.

The company ties the reduced capacity caused by the pandemic’s restriction as a major contribution to the declining skincare sales. Fragrance performed well as did makeup. Some attribute increased sales of makeup and beauty products as a result of recession-related consumer behaviour increasing a desire to feel confident in uncertain times.

Reports are that Estée Lauder continues plans to buy Tom Ford in a 3 billion+ USD deal.

Estée Lauder Companies foreshadow slowdown

What: The FT reviews the recent trade-off made by Richemont in abandoning its majority stake in YNAP

Why it is important:  The financial newspaper raises the case of the actual possibility to sell luxury goods online at a profit. It argues that the validation of this business case has not been reached in 20 years so far.

The Financial Times reviews the deal recently made by Richemont and Farfetch in which Richemont cedes the majority stakes in Yoox Net a Porter to the luxury marketplace operator, writing off a total of €2,7bn spent over the course of two decades, in exchange of 12% of Farfetch’s shares.

The FT reminds that Farfetch’s shares are currently down 87% since the start of 2021, and Mytheresa’s are -66%. For the financial newspaper, this is the proof not that Richemont has been unable to manage at the same time the profitability of its own brands (Cartier and Mont Blanc among others) and the development of the online activity, but rather that there is not, so far, any validation of the fact that luxury can be sold online at a profit.

The Financial Times’ take on the Farfetch/Richemont deal 

What: Bloomingdale’s will open its second smaller store concept “Bloomie’s” in the greater Chicagoland area at the end of 2022.

Why it is important: The existing Bloomingdale’s Old Orchard location in Skokie Illinois will close once the Bloomie’s location opens.

The new 50,000-square-foot Bloomie's store will open at Westfield Old Orchard in Skokie, Illinois, and will feature a broad curation of soft home categories. The clearance of the former Bloomingdale’s location will begin clearance on September 6th and is expected to fully close at the end of October.

Bloomingdale’s opens second Bloomie’s location