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

What: The store in X’ian was a pilot.

Why it is important: Many pure players are venturing into physical retail (see Amazon) but so far, they learn that physical retail is a job per se which can not be learnt along the way. Will it be different in China?

As we reported last year, JD.com has opened a department store in X’ian in September 2021 on a total surface of 42,000 sqm. It appears that this innovative venture, integrating all its existing business units (fashion, lifestyle, housewares). It appears that this is the first step in a national roll over, with new locations announced in Beijing and Chengdu, set to open this year.

Business is growing quite steadily, especially since the Chinese authorities have forced all retailers to open their platforms to all suppliers and not only approved ones.

JD.Com is expanding its department store network 

What: Neiman Marcus leverages its notoriety to launch emerging designers’ debut collections.

Why it is important: An astute way to create content by supporting creation (and take credit from it) without going into the hurdles of managing a whole private label.

Neiman Marcus has contributed to launching new labels for the past 115 years, by helping emerging designers. This year, they launch Salon 1884, a women’s RTW line designed by American artist Andrea Mary Marshall. The name is inspired by the title of a painting from John Singer Sargent and offers a retro look to customers.

Products are made in New York’s Garment district and made with environmentally friendly materials. The collection is sold in exclusivity at Neiman Marcus online and offline channels.

Neiman Marcus launches a new brand, Collection 1884 

What: Amazon launched a new mobile augmented reality tool called Virtual Try-On for Shoes.

Why is it important: Customers using the Amazon Shopping app can select the Virtual Try-On button on the product page for participating shoes, then use their camera to view the shoes on their feet. Users can also change the shoe colors without exiting the application.

The feature is currently available for iOS users in the U.S. and Canada, and is offered on thousands of shoes from brands such as Puma, Reebok, Adidas, New Balance and more. The retailer plans to add more brands and styles going forward, and will soon expand the feature to Android users.

Amazon launches virtual try-on for shoes

What: Chanel’s Global chief sustainability officer Kate Wylie offers some clarity on the French luxury brand’s latest sustainability report highlighting progress, areas for improvement, and challenges.

Why it is important: Although the privately-held luxury brand offered some insight into their sustainability initiatives, the information seems to offer few details as to how they will combat Scope 3 emissions, which accounts for 97 % of total emissions for the business.

As one of the most high-profile luxury brands globally, Chanel has been slow to open up about its sustainability emissions compared to rivals like Kering, Richemont and LVMH. A notoriously quiet company, the privately-held brand is able to choose what it shares publicly. The latest report marks a shift towards transparency, although at 13 pages, it offers only slight insight into the company’s climate plans at a time when government regulations and consumer scrutiny is growing.

The global chief sustainability officer, Kate Wylie, shared that the focus is to reduce the Scope 3 footprint associated with raw material sourcing, media, transportation, and distribution. But the brands’ silence has only raised more questions and concerns from regulators and advocacy groups as to how they will decrease their Scope 3 emissions.

Notoriously quiet Chanel offers glimpse into sustainability efforts

What: Lisa Aiken, senior vice president and fashion and lifestyle director at Neiman Marcus, is leaving the luxury retailer on July 1.

Why it is important: While disclosing Aiken’s departure, Neiman’s said it created a “strategic integration” between the fashion office and buying teams. Executives said Aiken’s departure was unrelated to the integration.

Under the reorganization, Paolo Riva, Neiman’s senior vice president and general manager for brand partnerships and merchandising, has expanded responsibilities to head up Neiman’s women’s fashion office.

Jodi Kahn has been elevated to vice president of women’s luxury fashion at Neiman’s. She was senior director, divisional merchandise manager of women’s designer ready-to-wear. Her new role gives her buying, merchandising and fashion director responsibilities over women’s. Kahn reports to Riva.

Similar to the women’s side of the business, Russ Patrick, senior vice president and general merchandising manager for men’s, will assume additional responsibilities for the men’s fashion office at Neiman’s.

Neiman’s plans to hire an editorial director to provide content across its different channels. Aiken’s role did have an editorial focus.

Neiman Marcus’ Lisa Aiken leaves

What: Neiman Marcus Group is transcending the volatile stock market and the nation’s sky-high inflation, and generating sales volumes and margin gains surpassing pre-covid-19 levels.

Why it is important: Neiman Marcus attributes their results largely to shoppers returning to stores, digital strength, robust full-price selling, adding luxury brands and exclusives to their offering, and a richer calendar of events “retail-tainment.”

Among the results that were made public, for their third fiscal quarter ended April 30, NMG reported:

• Comparable sales grew over 30 percent, beating pre-COVID-19 levels.
• Comparable gross merchandise value grew in the high 20 percent range compared to pre-pandemic 2019.
• Adjusted earnings before interest, taxes, depreciation and amortization margin expansion of over 300 basis points, compared to the 2019 quarter, and a 150-basis point expansion compared to last year’s quarter.
• Ample liquidity to invest in the business and no outstanding borrowings under the ABL facility.

Neiman Marcus is investing back in the business, including USD 300 million to renovate the Bal Harbour, Florida; Atlanta; White Plains, New York; St. Louis; Oak Brook, Illinois; Houston; Paramus, New Jersey; San Diego, and Tysons Galleria, Va. stores. The figure includes landlord and vendor contributions.

In several cases, men’s, shoe and handbag areas will be expanded, and several incoming brands require building dedicated shops. In some locations, bars and cafes will be added, and new restaurants in select stores are being considered. Food and beverage offerings encourage shoppers to stay longer in the store and buy more. In addition, beauty services will be enhanced, and fitting rooms will be enlarged.

Last year the company invested more than USD 200 million in technology initiatives such as Connect, a tool for associates to communicate with customers; the acquisition of Stylyze; the Neiman Marcus Stanley app, and Digital Labs. In addition, Neiman’s said it’s committed to spending more than USD 90 million to enhance its supply chain, including systems and fulfillment centers.

Neiman Marcus added over 600 new points of distribution with designers and brands in fiscal 2022, including over 200 brands for spring 2022, many of which were exclusive and had an ESG tie. He expects NMG to add another 140 points of distribution in fall 2022.

NGM’s performance reflects continued strong growth driven by their Revolutionizing Luxury Experiences strategy as well as a healthy U.S. luxury customer. They delivered comparable sales growth of over 30% and expanded EBITDA margin by over 150 basis points compared to this time last year, driven by strong full-price selling. While they continue to operate in a dynamic environment, they are well positioned for the future with their differentiated integrated luxury retail model, healthy balance sheet, and strong customer and luxury brand relationships.

Neiman Marcus Group tracks business above pre-covid-19 levels

What: Nordstrom talks about how the retailer is banking on a rebound in tourism to drive excitement in New York and the innovative new Asos space in Los Angeles.

Why it is important: Nordstrom continues to stand out thanks to its laser focus on customer service and a liberal return policy and the Rack chain is the primary vehicle for attracting new shoppers.

Nordstrom reported last month that its total company net sales increased 18.7% to $3.5 billion in Q1 of 2022, compared with the same period in fiscal 2021.

In the first quarter, core categories including men’s and women’s apparel, shoes and designer had the strongest growth against 2021 as customers stepped out again in full force for social events, travel and return to office.

Nordstrom explains, that as tourism picks back up in New York there were a lot of foreign-speaking customers in the stores. Hopefully, tourism continues to build as we slowly come out of the pandemic. Nordstrom is excited to start serving tourists again as there was a bit of a hiatus. They got the opportunity to grow the business with the local New York customer in a more organic way than they ever would have which they believe will serve them well over time.

It is important to have a constant flow of newness in the New York store as the New York customer both gives Nordstrom license and expects them to deliver something new. In the business of department stores, trends just as often start in Southern California and head East as they start East and go West. But the New York customer demands a unique offering. Nordstrom carries the big brands and categories like home where there’s potential to offer super unique brands.

Big cities are important to Nordstrom as young people like to live in cities. Nordstrom sticks to what they’re good at, which is running a great store. Their downtown stores are performing well and now that the world’s opened up, people need clothes that are going to be seen by other people. Customers are going out, going to events, and Nordstrom is here to serve them.

Nordstrom opened the first dedicated Asos in-store space at The Grove in Los Angeles in May, which is a location that has always punched its weight as a destination for influencers. When Nordstrom thought about how to make the introduction of Asos, it felt like the perfect place to do it. There was no prototype Asos store, so they have been making it up. So far, the customer is responding well.

Jamie Nordstrom on the tourist rebound in NYC, the future of cities, and bringing Asos to The Grove 

What: The Italian fashion house collected vintage items from customers in October in exchange for store credit. Now, it’s going to sell them in NY, LA, Milan and Tokyo.

Why is it important: Valentino is bringing vintage Valentino pieces to four global boutiques this month as part of an ongoing push into resale that’s designed to give past collections a new life.

Valentino first launched Valentino Vintage asking owners of vintage items to resell them to the brand in exchange for store credit. Now, those items are available for sale: for a two-week period this June at Madame Pauline Vintage in Milan; The Vintage Dress in Tokyo; New York Vintage; and Resurrection Vintage in Los Angeles, to sell off the vintage collection to new customers.

More luxury brands are getting directly involved in resale to recirculate old collections and gain new customers. Gucci’s Gucci Vault concept also resurfaces vintage house pieces. Other brands have worked directly with resale platforms such as the RealReal and Vestiaire Collective.

Valentino Vintage to take over four secondhand stores 

What: As subscription services shift their strategies, as many as 75% of DTC brands will have a subscription-based offering by 2023.

What it is important: The DTC subscription boom is attributed to Gen Z and millennial shoppers who have begun earning money, especially affluent consumers in urban areas that prefer automated purchasing. On the brand side, the report attributes the growth to platforms like Shopify, ReCharge or Rodeo making it easier for brands to establish their DTC subscription business.

Among the risks DTC brands face in providing subscription offerings are, customer acquisition cost, churning and cancellation, funding, and subscription fatigue.

DTC subscribers tend to be urban women, between 25 and 44 years of age, earning a salary between $50,000 and $100,000 and living on the East Coast. The typical subscriber also frequently shops with Amazon and relies on its product reviews.

The U.S. comprises 47% of DTC subscriptions, followed by Europe (21%) and China (14%). In 2020, the gross merchandise volume of the monthly subscription box segment spiked by 80% compared to the previous year, but the GMV of subscription boxes is expected to decline as the economy normalizes from the pandemic.

75% of DTC brands may offer subscriptions by 2023 

What: Neiman Marcus Group is committed to cultivating a culture of Belonging.

Why is it important: In honor of Pride Month, NMG is celebrating and honoring the LGBTQ+ community with several events, activations, and initiatives aimed at awareness, education, and support for the LGBTQ+ community. These include the Company's continued partnership with the Human Rights Campaign, honoring the LGBTQ+ community with local activations in stores and online, and celebrating Pride with internal virtual events.

As a platinum-level member, NMG will build on its continued partnership with the Human Rights Campaign this June and July to raise funds in support of the LGBTQ+ community through point-of-sale fundraising in all Neiman Marcus, Bergdorf Goodman, and Neiman Marcus Last Call stores. Neiman Marcus will also donate the net proceeds from the sale of exclusive Pride patches and the sale of the Neiman Marcus chocolate chip cookie in Neiman Marcus restaurants, supporting the organization's lobbying efforts for LGBTQ+ equality across the U.S., as well as its broad-reaching programs for youth, families, workplace equity, and health.

Throughout Pride Month, all Neiman Marcus stores will showcase special window installations, curated in-store runway displays, and other themed elements.

NMG will also promote a series of internal conversations, encouraging a more inclusive workplace for LGBTQ+ associates at Neiman Marcus Group.

Neiman Marcus Group emphasizes commitment to celebrating LGBTQ+ Pride

What: After reportedly considering a spinoff of its off-price Rack business, Nordstrom is now pinning its growth ambitions on it.

Why it is important: Nordstrom took steps to enlarge its Rack fleet, then hit the brakes. After internal research showed that off-price shoppers aren’t likely to drive more than about 15 to 20 minutes to access a Rack store, the company decided to resume that effort. Nordstrom which runs about 250 Rack stores, will open four new Rack locations next year, with plans for more.

Rack sales grew 10.3% year over year but fell 3.6% compared to 2019. The company is banking on continued improvement at Rack and taking steps to integrate it more fully into what it calls its market strategy. Some analysts see risk in that approach, warning that as Rack gets bigger and better, the full-line business loses its appeal.

Maximizing profits for the entire company depends on optimal pricing, especially at Rack, where there is more flexibility because it’s not beholden to the MSRP limits seen at full-line Nordstrom. There’s been little resistance from customers since the company began testing price bumps “on certain items and key categories”. That’s in part because the company — both its full-line and off-price business — enjoys the attention of a wealthier customer base that appears to be less rattled by inflation.

Rack’s improvements are essential and Nordstrom’s overall results of late have been encouraging, but “visibility [is] still challenging against macro pressures in the space.”

Nordstrom leans on off-price Rack for growth and profit

What: The John Lewis Partnership has announced the first three locations where it proposes to build new rental homes that would offer the trust, quality and service that people expect from John Lewis.

Why is it important: The homes would form part of the UK’s growing 'built-to-rent' property market as the Partnership seeks to raise standards in rental property, both through its role as developer and a commitment to manage the buildings themselves.

The three proposed sites include building over Waitrose shops in Bromley and West Ealing in Greater London, as well as replacing a vacant John Lewis warehouse in Mill Lane, Reading.

The three locations are the first sites to be announced after confirming the target to deliver 10,000 homes in the next ten years - 5,000 of these will come from schemes on the Partnership's own property portfolio. Moving into the rental homes market is part of our long-term plan for 40% of profits to come from outside of retail by 2030.

The homes would be built for different sized households and designed to our high standards. Residents would have options for short and long-term tenure and to have the homes furnished by John Lewis. Creating a sense of community through incorporating shared spaces and facilities such as roof gardens and fitness studios and exploring how schemes can play a role in the wider community would be integral to our approach.

John Lewis Partnership announces first proposed locations for rental homes

What: H&M will soon reveal its secret weapon to fight supply chain woes and unite the business, from front to back, with data: Google Cloud.

Why it is important: H&M and Google Cloud are on the verge of disclosing a strategic partnership that will inject more intelligence into the very core H&M.

Their connection isn’t brand new, as the companies have been working together for some time. But this will mark a new threshold in the partnership. The work includes a so-called “data mesh,” a system designed to offer more access to all types of data and events from multiple parts of the business spanning stores and e-commerce, as well as its brands’ ecosystem and suppliers.

H&M may be an ideal match as a partner, as the fashion retailer is no stranger to data intelligence. The company employs its own data engineers and analysts. Their work goes into everything from demand prediction and trend-spotting to optimizing for a more sustainable supply chain — an issue that Google Cloud also advocates.

H&M to go big with AI

What: Pinterest is set to purchase The Yes, an AI-powered shopping platform that enables users to shop a personalised feed.

Why it is important: The Yes raised USD 42 million in 2019 from NEA, True Ventures and Forerunner, valuing the company at USD 100 million.

Pinterests’ interest in The Yes comes from the innovative personalised technology and some of the additional features that they have been developing including checkout and brand integration technology, as well as more qualitative aspects including The Yes’ brand relationships and shopping expertise.

Pinterest to purchase “The Yes” shopping platform

What: Big Tech is developing tools to make real voice commerce, or ambient shopping, a reality.

Why it is important: The concept, which envisions people interacting with technology without chaining themselves to a phone or computer screen, once sounded far-fetched. But it’s becoming material through devices like smart speakers and voice-equipped smart displays from Google, Amazon and Apple.

Amazon, the market leader for smart speakers and displays, clocks billions of voice interactions a week from Alexa customers, more than half of whom use their Echoes to shop. The company is informed by its vast e-commerce efforts and its multitude of devices, from its previous Echo Look fashion selfie camera to the latest family of devices.

As voice commerce stands today, it’s most relevant for categories like groceries. That’s only logical, as people often use Alexa or Google Assistant devices to do things, like set cooking timers. But according to AWS, this footprint is expanding. Echo devices have landed in hotels and even surprising places, like gas stations.

Voice tech for retail became even more interesting during the pandemic, as it offered another route for contactless payments. Shopping for fashion by voice will likely take years to become a reality, at least in a meaningful way. But even so, it’s clear that the vision for it is already here.

Voice to commerce

What: This year, the best department store in the US is also the less known outside of the country.

Why it is important: This ranking is based on a survey of more than 10,000 US customer who actually shopped in-person in stores. It is therefore interesting to see that they favour a name which is less widely known internationally and even in the country itself.

In the 2022 edition of the annual Newsweek’s Best Retailers ranking (available here), Von Maur has been named the top department store in the country, before Neiman Marcus, Saks Fifth Avenue, Nordstrom and Bloomingdale’s.

Von Maur is a 150 years-old company, and started to grow out of Midwest, its original region, with stores in Georgia, Alabama, Wisconsin and Michigan states, for a total of 36 stores in 15 states.

They are regularly praised in the specialized press for their customer service (including an interest-free charge card, flexible return policy, free gift wrapping and shipping services), curation and merchandising, and HR policies.

Von Maur named top department store in the US 

What: Harrods has delayed its famed summer sale as the new season’s goods have been caught up in global supply-chain snags, according to the London luxury emporium’s managing director.

Why it is important: Harrods’ supply chain is running two to three weeks behind where it should be and a example of that is they’ve just delayed the summer sale for two weeks because they require another 10% of new-season stock to be able to function into the new year.

Harrods delays summer sale as new season’s goods slow to arrive