What: another department store going virtual for this year’s Christmas season

Why it is important: with the health crisis still very critical in Europe and in America, retailers are taking a new approach with the Holiday season differently this year, many of them launching online event in order to protect customers and bring them the Christmas spirit at the same time

In Southern US, department store chain Belk has launched several digital events to celebrate the Christmas season, which include an online holiday home decorating contest, and free phone calls from Santa.

The first-ever Holidays at Home Contest invites customers to post a photo or video of their house, or of their favourite holiday-inspired room on Facebook or Instagram, tagging @Belk and #BelkHolidaysAtHome2020 for a chance to win gift cards.

Belk also launched its Very Merry Surprise event selecting one in-store or curbside pickup customer per day, per store, to receive a surprise Belk gift card in the value of their online order.

Belk Offers Virtual Holiday Festivities and Continues to Spread Cheer this Season

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• Debenhams launches virtual beauty room
• Bloomingdale’s engages shoppers through ‘On Screen’ virtual series
• Macy’s virtual meet-and-greets with Santa

What: our partner GDR reports a new store format for Apple.

Why it is important: a radical innovation in terms of square footage, implying a strong organisation beneath.

IADS’ partner intelligence consulting firm GDR reports the opening of a new Apple store format, the Express stores, across UK and US. They are considerably smaller than the flagships and propose only 2 services, pick up online orders and advice from the Genius bar.

Interestingly, they have been rolled over not only existing locations with a separate entrance but also in standalone sites. Interestingly enough, the pick up service supposes a strong logistical supply chain beneath to sustain the process.

Apple launches Express store format for appointments and collections

What: an interview with Selfridges Group CEO Anne Pitcher

Why it is important: Anne Pitcher discusses the future of Selfridges, and of retail globally. She talks about emerging trends and the repositioning of the company

In an interview with BoF, Selfridges Group CEO Anne Pitcher talks about the opportunities she sees for the group and for retail after the pandemic. She strongly believes that it is time to bet on the local community, especially for flagship stores located in big cities (see IADS Exclusive articles: The rebirth of local retail and Adapting to new consuming habits).

She also acknowledges that customers’ shopping habits will continue to evolve toward a more responsible consumption and therefor the retailer will reinforce its commitment to sustainability through its sustainable initiative Project Earth launched last August, with plans to change the way we shop by 2025.

Selfridges’ Anne Pitcher on the Sudden Pivot to Local Shopping

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• IADS Exclusive - Sustainability: department stores’ destiny

What: panorama of 5 top retailers’ actions for Christmas.

Why it is important: they all have a very distinct strategy and approach to windows in a Covid-19 context.

Bergdorf Goodman decided to team up with associations and structures involved in diversity, equality, access to food, to disclose windows that are simpler than usual, focused on the core values of the retailer without dispersing on sophisticated setups. This is also linked to the fact that they were pre-build and only assembled on-site, instead of being fabricated in the store, to ensure teams’ safety.

Bloomingdale’s unveiled its windows via a virtual event with benefits given to an association protecting children, and the theme of the season is “give happy”. The traditionally interactive windows with touch components are replaced this year by scented windows, with fragrance diffusers.

Saks Fifth Avenue decided to celebrate New York by representing six windows staging quintessential moments of the city life. They were co-designed with brands (Dries Van Noted, Alexander McQueen) and were unveiled through a series of live-streamed events, each one supporting a charitable cause. In addition, SFA is planning to make a donation to non-profit organisations dedicated to the city.

Macy’s celebrates the essential workers with a ‘Give, Love, Believe’ campaign. They were designed and produced in a record time of half what it normally takes.

Nordstrom’s building structure does not include boxed-in windows, and instead, chose to use its façade as a décor. They decided to use superlative numbers of lights, ornaments and symbols to translate the Christmas spirit and attract customers.

How 5 department stores updated their holiday window displays for 2020

What: Retailers build communities to battle big tech and gain “homebodies”.

Why it is important: Consumer spends more time shopping from home.

Korean retail companies are racing to form their own online communities so they are not so dependent on the likes of Facebook and Instagram. This is especially urgent as people spend more time indoors: "homebodies" are increasingly looking to fulfil their needs for shopping and community from the comfort of their couches.

Retailers build communities to battle big tech, gain 'homebodies'

Related item:

• IADS Exclusive - The rebirth of local retail

What: Foot traffic drops by half at U.S. stores on Black Friday.

Why it is important: Overall consumer spending had remained strong.

Traffic levels across the U.S. on Black Friday dropped about 50% year-on-year while older shoppers had shunned malls over concerns they might contract Covid-19. At the same time, a jump in ecommerce orders among those who had never shopped online before helped digital sales rise 22% from a year ago to US$9bn. Those who did visit stores were more likely to buy and the conversion rate increased 4 points from a year ago, while the average transaction value rose 5.9%, RetailNext found. Bricks and mortar revenues still dropped about 30% while in-store and kerbside collection increased 52 %.

Foot traffic drops by half at US stores on ‘Grey Friday’

What: a new space to support independent designers

Why it is important: the fashion sector has been hit hard by the pandemic. Now department stores are reinventing their store space by offering new options and services in order to optimise their attract more customers. As a response to the crisis, Selfridges opens a new space dedicated to emerging designer brands. The initiative allows for the store to offer exclusive items and deals, and to support independent European designers at the same time.

“Rewiring Space” opened at Selfridges flagship on Oxford Street and is the first tangible result of “Rewiring Fashion,” a series of virtual meetings between designers, brand operators, retailers and advisors looking for ways to reshape the fashion system as a result of the pandemic. The Twenty Europe-based designers selected to enter the space were hit hard by the pandemic, and suffered from cancelled orders and late payments. Through “Rewiring Space” they sell current and past-season for up to 70 percent off the original retail price. Selfridges does not buy the merchandise, but provides its floor space, retail fixtures and sales personnel free of charge, and will take a 15 percent commission on sales to pay for operating fees. Through this initiative, the department store both support young designers and reinforce its ties with them.

![selfridges Rewiring Space

Selfridges Launches New Retail Concept in Support of Independent Designers

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What: a department store offering tests to employees to ensure safety

Why it is important: many businesses had to deal with their teams and employees’ safety this year and protect them from the virus, whether through isolation and remote working or by providing them protecting gear. Now John Lewis is going further by implementing a test centre at one of its distribution centre.

Thanks to a partnership with the Department of Health and Social Care, John Lewis Partnership was able to introduce rapid covid testing at Milton Keynes distribution centre. Testing is voluntary and provides results within 30 minutes that are directly recorded into the national testing database.

The centre is full of employees as the end of the year is a busy timing, with Black Friday and the Christmas orders. With around 1 in 3 individuals with Covid-19 not displaying symptoms, testing helps to protect staff and customers by identifying those that need to isolate.

If this pilot project turns into a success, it should roll out to more John Lewis and Waitrose centres including supply chain sites, customer fulfilment centres, textiles factory and some shops.

JOHN LEWIS PARTNERSHIP BECOMES ONE OF THE FIRST UK BUSINESSES TO ROLL OUT NHS TEST [...]

[video] John Lewis Partnership Rapid Covid-19 Testing

What: Farfetch rolls out ambitious 2030 sustainability plan.

Why it is important: The company is ready to reimagine how it does business.

By 2030, the retailer wants to see its circular business outgrow sales in the primary market, and to sell nothing but “conscious” products. Achieving carbon neutrality, centralized fulfilments and “embedding a consciously inclusive” company culture are also part of the plan. The goals have been divided among four pillars: Circularity, inclusion, conscious products and carbon neutrality, as one of the key issues the retailer is facing is the high amount emissions from shipping and returns of its sellers around the world.

Farfetch Lays Out Ambitious 2030 Sustainability Goals

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What: An expanded reach in China for Gucci, a position consolidation for Ali Baba

Why it is important: at a moment when e-commerce is consolidating worldwide, Ali Baba confirms its central position in the game, by teaming up with a luxury giant, even though the brand already has its own operations

Gucci will launch two flagships on Tmall, the first one dedicated to Fashion on 21 December, and the second one, in coordination with licencee Coty, in February for its beauty products. Interestingly, it comes as a complement to the already existing infrastructure Gucci built in China, with dedicated business unit, website, marketing approach, products.

This agreement comes at an opportunistic moment, as Kering, owner of Gucci, had previously stated in the past that it would never work with Ali Baba due to concerns over counterfeit goods sold on Tmall’s various platforms. As Bain estimates that in 2025, Chinese customers will represent 50% of the luxury business, and 30% of purchases in China, it seems that Gucci is adopting a pragmatic attitude in order to preserve its growth reservoir.

This partnership confirms the prevalence of Ali Baba, which, through its recent partnership with Farfetch and YNAP, is moving fast to be at the center of the worldwide luxury e-commerce business.

Gucci Inks Partnership With Alibaba’s Tmall

Gucci targets China’s post-Covid luxury surge with Alibaba tie-up

What: Dickson Concepts saw a rise in first-half profit despite lower sales.

Why it is important: For the 6 months to the end of September, they saw turnover fall 42.7%.

Harvey Nichols owner Dickson Concepts has reported a rise in profit for the first half of its financial year, despite lower sales. For the six months to the end of September, Dickson Concepts, a Hong Kong luxury goods company which owns Harvey Nichols and also operates retail stores in Asia under the Roger Vivier and Tod’s brands, saw turnover fall 42.7% to GBP93.4 million. However, a “substantial increase in profit contribution from the investment portfolio, a doubling of profit in Taiwan, profit contribution from China and tight control in operating costs at all levels of operation” helped the company turn to a profit.

Harvey Nichols owner posts half-year profit despite lower sales

What: a retail group shutting in UK.

Why it is important: retailers have been hit hard by the pandemic, forced to close their doors for months, and Arcadia is one of the latest victims of the crisis that will be filling for administration

Arcadia Group, owner of eight retail brands (including Topshop), has filed for bankruptcy, putting about 13,000 jobs at risk. The group was struggling even before the pandemic hit, and avoided bankruptcy in June 2019 after it managed to renegotiate debt repayments and restructure the business. The collapse will tarnish even more the reputation of its owner Philipp Green, who has been surrounded by controversies these last few years -since the debacle around department store BHS.4

Frasers Group, led by Mike Ashley, offered a GBP 50 million "lifeline loan" that that Arcadia had declined.

Sir Philip Green’s Arcadia Group Files for Bankruptcy

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What: the holiday season at Selfridges, Harrods, Lane Crawford, and Neiman Marcus.

Why it is important: Nothing comes up as unexpected, however, all the points we have been stressing up until now are beginning to be commonly executed across the board.

Vogue business is making a review of 4 top department stores’ actions on how they address the holiday season. Interestingly, there is no radical innovation, however a consistent adaptation to the new business trends we have been reporting for the past 6 months:

• Address local community with dedicated actions, such as Lane Crawford supporting local businesses, Selfridges hosting a film festival and Harrods with a new Gordon Ramsay restaurant,
• Use omnichannel to ease the purchase processes, such as Neiman Marcus offering an online gift service, Selfridges a one-stop-shop and ship service,
• Make sure there is a feeling of safety, with Selfridges proposing sanitising pumps on every corner.
• Enhance the digital shopping, with Neiman Marcus hiring consultants to upgrade its sales associate team with digital competences, Lane Crawford proposing Zoom calls, and Harrods striking a deal with Farfetch.

In terms of category, while Saks is booming on fragrances and jewelry (just like El Palacio de Hierro mentioned a few weeks ago), Lane Crawford reports growth on home, lifestyle and beauty, just like overall IADS members. This does not prevent the department stores from proposing discounted products, such as Harrods who had a very aggressive discounting approach this season.

How luxury department stores are navigating the holiday season

What: another round of store closings for the US department store chain

Why it is important: after filing for bankruptcy in May, the retailer started closing 154 stores in June. Now that it has been saved from bankruptcy it announces new store closures for early 2021

The retailer has emerged from bankruptcy after being acquired by mall owners Simon Property Group and Brookfield Asset Management, Inc. Now it said it will be closing another 15 stores by the end of March 2021, adding to the list of stores already closed down this year. "As part of our store optimization strategy that began in June with our financial restructuring, we have made the decision to close an additional 15 stores," J.C. Penney said in a statement.

J.C. Penney closing more stores after exiting bankruptcy [...]

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What: Shinsegae seeks local retail paradigm shift with new content offer.

Why it is important: The retailer breaks down barrier between shopping and television content markets.

Shinsegae Group will introduce a new paradigm in retailing by combining TV shows and online shopping with a concept the company calls "drama commerce." This brings the shopping experience to another level where people can purchase products while watching dramatic content on their mobile phone. TV commercials are nothing new but Shinsegae's drama commerce will deliver TV shows that place the featured products squarely before any kind of storyline. The group hopes that this advertising model can help its retailing unit gain momentum to become a top player in the e-commerce sector.

Shinsegae seeks local retail paradigm shift with 'drama commerce'

What: Rinascente introduced its physical Christmas windows via a Zoom call.

Why it is important: a perfectly executed communication plan both offline and online.

Rinascente, which expects a sales decrease of 30 to 40% this year, has introduced its Christmas windows from Milan, Florence and Rome shops with an efficient strategy making the best of all dimensions: a physical event, introduced by a Zoom call, backed by a love letter to Milan in Corriere della Serra signed by la Rinascente CEO and Milan flagship director. A good opportunity to have a look at their Christmas windows too.

Under the impetus of its owner Central of Thailand, Rinascente has been pushing its digital game over the past two years. It debuted its online store last June and announced it would be introducing a “gamification” element to its site. Read more in our IADS Exclusive: E-commerce & Department Stores.

Christmas at Rinascente Comes With Tradition, Investments and Digital Learnings

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What: A new board for Neiman Marcus.

Why it is important: 7 members, including only one incumbent from the department store world.

Neiman Marcus appointed Pauline Brown as non-executive chair of its board of directors. Brown co-founded Inspire Brands, a restaurant company, in addition to having a track record at Hilton, Expedia, McKinsey and the BCG. He will chair a board composed of:

• Pauline Brown, former LVMH, Estee Lauder and the Carlyle Group
• Pamela Edwards, from CitiTrends and L.Brands
• Kris Miller, coming from Bain and EBay
• Meka Millstone-Shroff, from BuyBaby
• Scott Vogel, managing partner at Vogel Partner
• Geoffroy van Raemdonck, CEO of Neiman Marcus

Neiman Marcus Names Paul Brown Non-Exec Chair

What: a new proof of concept implemented in 4 stores designed to address omnichannel.

Why it is important: they rethink their stores: reduce the shoppable area, edit sku assortment, allow space for pickup and ship from stores. Is that an idea for department stores with regional networks?

Best Buy has open 4 new store formats in Minneapolis to be stores and fulfillment hubs: SKU assortment is limited to bestsellers, the shoppable area is reduced by half, pickup and ship from store spaces are increased. It is supposed to be rolled over 90 stores with a network ship from store capability of 70% in Q4 2020.

This move is unusual during the holiday season but reflects both the need for agility and the understanding that the key to omnichannel is to rethink the role of the store and its contribution to value.

Best Buy tests limited SKUs on store floor to make space for fulfillment

What: a look at American past and present difficulties and its options.

Why it is important: All ‘stakeholders’ (read our White Paper on this topic) are progressively understanding that no retail structure is too big to fail, and any failure would have a social cost much bigger than just financial debts

After 15 years of construction, financial issues, and unplanned glitches, the American Mall opened in East Rutherford, New Jersey in October 2019. It progressively opened its sections until the pandemic hit, and the shutdown 6 months after the opening, in March 2020. As a consequence, traffic, experience, retailers were affected and question the future of a shopping complex that had never its chance yet to operate a full capacity. Questions on its financial stability worry not only bankers but also the mall’s stakeholders, especially the city of East Rutherford, which is realizing that such a big venture could also simply end up in closure if it is not able to weather the pandemic issues.

New Jersey’s American Dream Mall Is Still Waiting to Fully Open

What: The third renovation of  the Italian retailer  is completed

Why it is important: The rooting of the flagship into its territory is achieved through a special space dedicated to local artisans

After 2 years of works worth EUR 12,5 million, Rinascente unveiled its newly renovated Florence store, after Rome and Turin. Interestingly, the ground floor includes, side by side with the traditional luxury accessory brands, spaces dedicated to local artisans and brands, to maintain the bond with the local community. Category wise, the spaces dedicated to menswear and shoes also expanded. The flagship never closed during the works and reported a turnover of close to EUR 29 million in 2019.

Rinascente Celebrates Local Artisanship With Revamped Florence’s Store

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What: Neiman Marcus partners with Affirm to give customers a new way to pay.

Why it is important: Offering a new flexible alternative for customers.

Neiman Marcus announced a partnership with Affirm that will bring a more flexible and transparent alternative to customers shopping for luxury products. Eligible shoppers can now access their favourite designer fashion or accessories online, and enjoy paying overtime on a schedule that best fits their needs and budget. When shopping online, eligible shoppers can select Affirm at checkout and split the total cost of any purchase over US$50 into simple payments with terms from six weeks to 36 months depending on the cart size.

Neiman Marcus joins more than 6 500 Affirm retail partners. In 2019, merchants using Affirm reported 85% higher average order values than other payment methods. And in the first half of 2020, nearly 70% of Affirm loans were from repeat customers.

Neiman Marcus and Affirm Give Customers a New Flexible Way to Pay for Luxury and Designer Fashion

What: Frasers Group Plc is in last-ditch talks to buy Debenhams.

Why it is important: Debenhams employs 12 000 people and has 124 stores, all rented.

Mike Ashley’s Frasers Group confirmed it was in negotiations to buy the ailing Debenhams department store in a move which could save thousands of jobs. News of Ashley’s interest comes just a few days after Debenhams said it could have to liquidate the business after talks with JD Sports Fashion Plc ended. Frasers already owns the House of Fraser chain, which it also bought out of administration, providing potential synergies if he were to merge the two.

Read IADS Exclusive article on Frasers Group to get insights on the group’s business model, on its opportunities and the risks it is facing.

Mike Ashley’s Frasers Group in Talks to Buy Debenhams

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What: Felix Capital Frederic Court’s view on the future of e-commerce.

Why it is important: Some major behavioral changes are on their way, which complement (not replace) physical retail.

Felix Capital has financially backed ventures such as Farfetch or Goop. Frederic Court thinks that the customer’s need for inspiration, once fuelled with perfect execution in-store, is still here, but is now delivered via a screen. Therefore, brands need to adapt by having the right approach to digital, the perfect product, and operational excellence.

Why is it important? Court mentions groups of young women, gathering to spend time together and visit stores. Now, they do the same, but digitally, by having lunch or dinner together and visiting sites on their phone at the same time. The new social shopping experience is delivered via a digital approach, but not at all costs: profitability must prevail. In addition, for Court, retail will come back, to deliver an elevated experience.

‘E-commerce as entertainment’: An investor behind Goop predicts the wild future of retail

What: Takashimaya chases new identity as developer, starting in Vietnam.

Why it is important: Expanding the property development business is a top priority for the company.

With its mainstay department store business foundering amid the coronavirus pandemic, Japan's Takashimaya has turned to property development overseas as the company's next engine for growth. Its department stores in Japan accounted for less than 20% of total operating profit in fiscal 2019, despite making 80% of total revenue, a sharp contrast to the property development business, which generated about 40% of operating profit on less than 10% of revenue.

Takashimaya chases new identity as developer, starting in Vietnam