YouTube is now testing shopping features in an intriguing scenario that could transform the video-sharing network into a major social commerce marketplace. So far much of the e-commerce momentum among tech giants has revolved around Amazon, Facebook and Facebook-owned Instagram. Google own offerings haven’t shaped the online retail environment as much as their rivals, but in the consumer-facing YouTube platform, the parent company may have been sitting on a potentially immense e-commerce contender all along.

YouTube’s Now Testing Shopping Features

What:  Available options for US Brands and Retailers entering the Black Friday and Cyber Monday week.

Why it is important: All department stores have been affected by overstocks this year, due to the lockdown closures (817 days cumulated for all IADS members). Looking at how the highly competitive, discount-driven US market (where most of the department stores played and lost) can give examples on how to address future promotional periods of time when giants like Amazon are able to play outside the calendar. Being extremely precise, making geolocalized or tailor-made promotions individualized could be a way to exit dangerous strategies based on heavily discounted at the end of the season for stock reasons.

Context is highly uncertain and volatile this year for retailers. In the US, Amazon Prime Days’ rescheduling to October reshuffled the promotion calendars and customers’ expectations, by taking over the landmark role Black Friday has played so far. For the rest of the retailers planning to start their promotion cycle this week, message clarity is key: customers need to understand that they will not get higher markdowns later in the season, otherwise this will affect their purchases.

In addition, customers are scared and tend to favour online shopping (all the more than new lockdowns might be decided in some countries or cities due to the virus’s second wave). Online competition is fierce and, as a consequence, not only increases the cost of operation and advertising but also questions the ability of the logistical networks to support the stress test of the coming holidays. Retailers need to be prepared to pay the price of it, affecting margins, and face angry customers too. This is a reason why alternatives to shipping like in-store pickup are more than ever solutions to be looked at.

Finally, the question of how to lure customers in without exclusively relying on discounts – not a novelty this year as many retailers had to let go of Spring stock – is key. Making sure promotions are well-targeted, either on the proper categories according to new trends (stay at home effect) or on overstocked merchandise (to limit the impact of overall margin) are two strategies explored by players on the market.

Overall, the key question of a discounting strategy remains as vivid as ever. Some brands are refusing to play this game (Patagonia, Allbirds) but the novelty is that doing so can be seen now as a part of a sustainability strategy (or properly marketed stance): “we do not do discounts, because we refuse to overstock our goods”.

This Is How Black Friday Works in a Pandemic

Bloomberg has reported that online retail giant Amazon has plans to open as many as 1,500 delivery hubs in American cities and suburbs.

The move marks a sharp turn in strategy for Amazon, whose warehouses have typically existed on the outskirts of exurban areas. But now that Walmart and Target are offering same-day delivery from their urban and suburban locations, Amazon’s once revolutionary two-day delivery guarantee has the company trailing its two distinctly uncool competitors.

Some commentators are speculating that failing or closed malls could be converted to Amazon DCs since they are often situated in suburbs with good transport links.

What: The successful sustainable trainer brand is launching apparel made of unusual materials and sold at a premium.

Why it is important: At a time when apparel sales are suffering, a new range of clothing would seem to be risky, especially as they are pricier than their direct competitors. However, if the brand values are strong, in this case originality and sustainability, then this is something we should consider.

The sustainable brand from San Francisco which has been such a success selling wool trainers is to launch apparel starting with four styles for men and women from XS to XXXL. Prices range from $ 50 to $ 250 and are intended to appeal to customers who shop at Uniqlo, Everlane or Lululemon. Although prices are relatively high, research has shown that customers are willing to pay quite a premium for goods made from sustainable materials.

Allbirds is valued at $ 1.7 bn and its growth is outpacing larger sneaker brands. According to commentators, their products have been successful because they are “simple, comfortable, but most importantly sustainable”. The founders recognise that producing more makes the company less sustainable. Nevertheless, they are uncovering the point that shoes and apparel can be successful if they give customers a strong reason to buy.

Allbirds, the billion-dolar sneaker Start-up, launches apparel 

What: learnings from this year’s Amazon prime days.

Why is it important: According to Digital Commerce 360, sales of the Prime Days grew +45% this year, for an estimated €8,9bn, however for the first time Amazon declined to give more detailed insights, contrary to its habits.

According to Forbes, the key learnings are:

• Prime Days, an Amazon self-organized promotion event, is now a key US shopping date, addressing an estimated customer base of 82m customers in the country (65% of US total households). This year, 350 retailers decided to join the event, a +17% increase vs. LY.
• In spite of having been rescheduled from its initial dates in July, the October event was understood by many customers as being the official date of the US holiday season, weeks ahead of the Black Friday. 29% of customers reportedly bought part of their holiday shopping during this event.
• In spite of Amazon having communicated on the increase of third-party sellers (+60% for a total value of €3bn), it still owns the operation as a whole, as 53% of shoppers only considered Amazon for their purchases, and 72% without even comparing prices at other retailers.
• Best selling products reflected that the fear of Coronavirus is still very much present: from detergent to toilet paper, cleaning wipes, and disinfectants, each and every country saw a strong impact on hygiene and cleaning staples across the board.

5 Takeaways From An Amazon Prime Day That Showed Subtle Signs Of Coronavirus Trouble

What: a reported joint-venture between Ali Baba and Dufry

Why is it important: at a time when international travel rebound is still a far sight and Chinese expected to keep on travel nationwide or regionally, this is a potentially mutual good bet for both players.

Alibaba is reported to take 10% of Swiss travel retail based Dufry, as well as to create together a joint venture in China. This comes at a good moment for Dufry, which has been particularly hit hard during the pandemic, and had to announce a drastic plan of layoffs up to a third of its workforce. According to the FT, its revenue is said to have dropped -70% this year, across its 2,500 locations worldwide. This new venture could prove mutually beneficial:

• For Dufry, having a privileged access to a 720m customer base, avid of duty free goods, and benefit from the digital-savvy platforms of Alibaba, including Alipay to be deployed at all Dufry’s locations
• For Alibaba, team up with an international company who has, by Chinese law, the right to sell goods online at a lower tax rate, as well as the access to a portfolio of international brands replacing unreliable intermediaries

Alibaba to take up to 10% of Dufry

Alibaba/Dufry: line of duty

Related item:

• Upswing for domestic travel retail in China

Shinsegae property and Taubman Asia have unveiled their new shopping mall Starfield Anseong in South Korea’s Gyeonggi Province; the second joint venture between the two. The 240,000sqm shopping complex houses more than 250 brands, including Shinsegae Factory Store, and several entertainment concepts (Aquafield, movie theatre […]). The mall has dedicated 10,500sqm to dining experiences.

Taubman Asia and Shinsegae Group Celebrate the Opening of Starfield Anseong in South Korea Today

What: a new service in order to reinforce proximity between customers and the retail brand

Why is it important: one can wonder how this translates into actual sales. If the real pitch is to give impartial advice, nothing could prevent customers from buying recommended products from a cheaper, online, provider. We believe at IADS that any initiative looking at reinforcing proximity should, at some stage, aim to generate traffic (especially instore).

John Lewis launches “All things baby”, a 30-mn consultation service with parents-to-be, to advise them on how to prepare the arrival of their baby with impartial advice. A virtual nursery service had already been launch in April during lockdown. Parents can also receive advise on what to buy to prepare the arrival of the baby.

John Lewis launches new All Things Baby nursery services 

Related item:

• John Lewis launches virtual experiences

What: a sports retailer turning its web shop into a marketplace

Why it is important: Competition online is harsh and opening a marketplace with a larger assortment will allow for retailers to gain a larger customer basis. It facilitates the transaction process for brands, and gives customers the possibility to purchase many items under one digital roof, which offers them the convenience they seek at the moment

Decathlon Belgium web shop will become a real 'Marketplace' that will feature products from more than a hundred other sports brands. Decathlon will coordinate transactions, while the partners themselves will be responsible for shipping and handling the ordered products; or can choose to outsource the logistics to Decathlon. The webstore also offer the possibility to buy services such as travel or workshops, in a way to strengthen Decathlon's offer and to lead it into becoming the 'best sports offer'.

The project will launch in Belgium at the end of the year and is expected to roll out to other European countries in 2021.

Decathlon turns web shop into marketplace

Related items:

• Can marketplace replace department stores?
• El Corte Inglés becomes logistician for 100 brands
• M&S launches 3rd-party brand for the first time
• IADS Exclusive | E-commerce & Department Stores: Becoming rich online: reality or illusion?

US department store chain Kohl’s will reduce its corporate workforce by 15% in order to cut costs and to save cash amid the coronavirus pandemic. The number of positions being eliminated has not been disclosed by the company. However, it said the cuts would likely save about $65 million in annual expenses.

Kohl’s Cuts Corporate Workforce by 15 Percent

Swiss department store Manor has announced a partnership with Fnac Switzerland, that will result in the opening of Fnac shop-in-shops in four Manor department stores from November 2020. The shop-in-shops, working as a concession model, will offer Manor’s clients a larger assortment in multimedia, culture and gaming among others, as well as professional advice. Fnac will benefit from the premium Manor’s locations in the country. The partnership continues online as instore Manor’s clients will have access to Fnac’s online assortment for more products; the physical locations will serve as Click-and-collect hubs. Should the partnership be a success, it will extend to more Manor’s stores.

Press release (in French) below

Fnac Suisse et Manor annoncent un partenariat pour le développement de shop-in-shops en Suisse

Department stores in Korea are adapting to younger demand, by integrating new brands at Hyundai, or giving fashion more space by moving cosmetics upwards at Lotte.

South Korean department stores refurbished to attract cashed-up MZ shoppers

El Corte Inglés announced on Sept 28th the launch of Decor Studio, a new service of decoration and interior design to give personalized advice to their customers. As reported by the company, "this new service involves a continuous and personal support, from making decisions on the decorative concept, to the selection of furniture, lighting, textiles, finishes, accessories and even small details that complement the desired environment. To this end, the company put together a team of over 240 professionals composed of decorators, interior designers, landscapers, stylists, architects, and highly qualified technicians. Decor Studio is already available in 17 El Corte Inglés stores and will gradually expand to other centers until reaching 30 establishments by the end of the year.

El Corte Inglés lanza Decor Studio, un servicio de decoración integral y a medida de cada cliente

The project running through Oct. 5 will provide visibility and business opportunities to 13 made in Italy brands. The fashion governing body has unveiled a partnership with Milan’s Rinascente to show its support to a range of 13 independent and young labels, as well as some established names, offering them the opportunity to link with final consumers. As part of the project, the eight windows of the department store facing the Duomo cathedral will showcase outfits from the selected brands through Oct. 5, while on the store’s online platform a series of mini videos will spotlight the stories and aesthetics behind each of them.

Performance luxury apparel Canada Goose opens its first store in Germany, in Berlin. The company, founded in 1957 in Canada, posted a turnover of €533m in 2019 and currently has 17 stores across the world in addition to their wholesale operations, including Breuninger in Germany. They are known for bringing unprecedented shopping experiences to customers.

Canada Goose to open first store in Germany

Macy’s is expecting sales to be down over the rest of the year as it continues to face “deep declines” in footfall in large US cities. Clothing was among several departments that performed weakly in August, and Macy’s said the back-to-school season had been “slow”. However, the company said luxury products, from diamonds to upmarket handbags, were selling better than mass-market items.

Full article below

Macy’s points to uneven recovery from lockdown

Alibaba’s Tmall Luxury launched three new features in a move to reach out to Chinese Gen Z customers. The goal is to “to educate, entertain and engage the new generation of luxury buyers”. The new features include:

• Soho Live: a daily livestreaming service focusing on luxury
• Soho Mag: a content-rich channel developed with fashion editors and trend-setting influencers
• an upgraded membership program offering personalized services to high-value customers

Tmall Luxury Connects High-End Brands with China’s “New Luxury” Gen Z Consumers

London department store Selfridges is hosting an Oxfam pop-up for secondhand items. Oxfam is a confederation of independent charitable organizations that fights again global poverty. The shop at Selfridges features a mix of seconhand accessories and clothing, ranging from GBP 3 to GPB 450. The pop-up is part of Oxfam’s second annual secondhand September campaign.

Oxfam Opens Pop-up at Selfridges, Styled by Bay Garnett

Related items:

• Sustainability engagements at Galeries Lafayette
• Focus on sustainability at Fondazione Prada
• French public consultation on sustainable fashion

In a bid to convince luxury brands of its credibility, and following Alibaba’s suit, Amazon just launched its Luxury Store, an on-invitation only, reserved to US prime members, app-in-the-app. Oscar de la Renta is the first brand available on the marketplace.

Full article below

Amazon Launches Luxury Store on App With Just One Brand So Far

According to the Buenos Aires Times, Falabella of Chile will close 4 stores in Argentina. Falabella, which has ten stores of various formats in the country will close two Falabella department stores and two Sodimac outlets in Buenos Aires. The newspaper quotes the company as saying that it is “evaluating profitability options in its subsidiaries in Argentina, which could include the entry of a strategic partner”. A number of companies have apparently been considering an exit from Argentina as the covid pandemic further deepens the challenging business environment in the country which has been in recession since 2018.

Falabella to close stores in Argentina

In a bid to dramatically reduce waste, the Berlin government has launched a state-run “department store” that both sells items that might otherwise get thrown away and acts as an education centre encouraging repair and re-use. Called B-Wa(h)renhaus (an apparently untranslatable pun meaning both department store and “conserving house”), the store covers over 700 sqm and sells used and upcycled clothing, furniture, phones and other electronics. In an attempt to reach beyond the usual people who already patronise second-hand shops, the store’s location is also significant: it’s not in an especially hip location, or a flea market known for knock-down prices, but within one of Berlin’s most established, middle-of-the-road department stores. It occupies the third floor of the Kreuzberg neighbourhood’s well-known Karstadt department store and has been planned to operate for a six-month pilot. The city says that it aims to open three or four re-use stores across Berlin in the near future. Its longer-term ambition, according to the city’s 2020-2030 waste master plan, is to launch a store in every one of Berlin’s 12 boroughs.

Harrods is opening mid-September its first beauty concept, H Beauty, in two malls located one hour drive from London, in Essex and Buckinghamshire. The fact that these locations are more mainstream than the Knightsbridge flagship might be a hint on how Harrods wants to connect with a younger clientele, based on its name and ability to bring a novel experience. Seen as a welcome vote of confidence in physical retail, going local and addressing communities is seen as a natural add-on to an omnichannel strategy.

Full article below

Harrods’s bold new bet: Suburbia

In India, Reliance Industries has agreed to pay $3.4bn for the retail assets of Future Group. The move boosts the plans of Mukesh Ambani, Reliance Industries chairman and currently the richest man in Asia, Walmart and Amazon for ecommerce dominance in India. Reliance Retail is already India’s largest bricks-and-mortar retailer but the acquisition of Future Group’s retail assets gives the company the control of about one-third of the bricks-and-mortar stores of India’s retail sector.

article: Reliance to pay $3.4bn for India’s second-largest retailer Future Group

Stockmann-owned retailer Lindex is to cut costs and jobs in a move to overcome the negative effect of the pandemic. As revenues declined by around 18% in Q2 (while e-tail had grown by 102% in Q2), the company launched a programme to cut €14.5 million in costs from the business, mainly from 2021 onwards. The plans include optimising the store network, restructuring the head office operations, cuting fixed costs related to the business premises, and streamlining the overall operations.

Lindex initiates a cost reduction program to future-proof the business