What: Chinese company Alibaba reported less than expected revenue results.

Why is it important: Due to the increase of competition and growth in e-commerce Alibaba Group Holding Ltd announced that this past year had the slowest-ever increase in their revenue since going public in 2014.

The company was expected to produce revenue of 246.37 billion yuan. However, they only reported a 10 percent increase in revenue as of the third quarter to finish off the quarter with 242.6 billion yuan.

Alibaba reports quarterly revenue growth

What: Macy’s takes on former Target designer, Emily Erusha-Hilleque, as a senior vice president leading the private brand strategy and overseeing the private brands’ design teams in apparel, center core, and home.

Why is it important: Private brands at Macy's account for 15% to 20% of the total volume and is seen growing to around 25% by 2025. It’s a critical role that Erusha-Hilleque will fill. The buildup of the private brand business is a core component of Macy’s “Polaris” strategy, which is the road map for taking the retailer into the future.

Erusha-Hilleque will report to the chief merchandising officer of Macy’s. In driving the private brand strategy, she will be working with Macy’s merchandising and sourcing teams.

Macy’s hires new designer for private brands

What: Kohl’s wants to pivot its business model from large department stores units to smaller and hyperlocal ones.

Why it is important: The strategy also aims taming down activist investors who are pushing hard to split online and offline, as already done by Saks and Hudson Bay.

Kohl’s is following suit with Bloomie’s and Nordstrom Local and plans to open 100 smaller and hyperlocal stores aiming at achieving USD $500 mn in sales, in addition to growing the Sephora business to USD $2bn with 650 new stores to be open by next year. The overall goal is to pivot from a department store model to a focused lifestyle concept.

Merchandising strategy is also revised and adapted to smaller locations, with active and athleisure assortments, especially on women’s.

Kohl’s is not a "department store” anymore 

What: Walmart is about to offer its Walmart Plus membership free of charge to all its full time and part time workers.

Why it is important: Walmart is increasingly working on its employer brand in order to make sure they remain attractive on a market where workforce is scarce.

Walmart, after having raised the salaries of 565,000 store workers and announced that they would cover 100% of college tuition and book costs, announced that the company would grand a free Walmart+ membership to its whole workforce.

The value of the membership is USD $98 a year and offers free delivery, fuel discount and priority check out lines, as well as a 6 month Spotify premium membership. It currently has 30 mn members and such an addition could include 1.6 mn additional members (the total workforce at Walmart).

Walmart gives free Walmart+ memberships to its employees 

What: Macy’s is increasingly making its customers loyal through its membership programme which represents now a sizeable portion of the business.

Why it is important: There is a race to increasing total numbers of memberships for all retailers of the world. This is the best way to combine customer knowledge and retention, by acquiring the data allowing to maintain customers’ loyalty through time.

The four-tiered Star Reward programme has become an important part of Macy’s business, as it represented 70% of the total transactions in 2021 (either by being already a member or becoming one while making the transaction). This represented an increase of 3.5m members for Q4 2021 alone and analysts believe that the main reason for enrolling is to guarantee a great instore experience (which is a different motivation than for Amazon, where customers enroll for fast delivery at no cost). This has important implications in terms of loyalty to the brand name.

The Start Reward project has been launched in 2017 and is opened to any customer, without any obligation to own a Macy’s credit card.

More than 70% of Macy’s 2021 transactions were tiered to its loyalty programme

What: Target is expanding the range of services offered at their curbside pickup stations.

Why it is important: While the possibility to order a Starbucks is clearly an incentive for customers to use the kerb side service, the additional option of being able to bring back undesired items could contribute, if well executed and managed, to reduce return rates via other channels and also the costs of processing.

Target is planning to introduce new features on its app, as it wants customers to be able to place a Starbucks order on the way to the curbside pickup station, and also enable them to bring back their returned purchases. This feature would not involve pickup times and membership fees.

The possibility to order a Starbuck coffee at the curbside pickup has been proposed following a survey to Target shoppers, where this appeared to be a top request. Adding up the possibility to return items would probably increase the return rate via this channel, and therefore ease with the associated processing costs.

Target to test Starbucks orders and returns processing at curbside pickup 

What: Target is furthering its partnership with Levi’s Red Tab products from 500 doors to 800 doors.

Why it is important: The strategic partnership further cements Target as a go-to place for denim.

In addition to adding more points of distribution, Target will increase the breadth of its assortment, now offering more than 180 pieces, spanning both men’s and women’s denim styles. Product offerings will vary by store, but the entire collection includes tops, dresses, jeans and jackets.

Target to increase distribution of Levi's Red Tab products 

What: Macy’s is now doing about four livestream programs per week.

Why is it important: Macy’s has created livestream programming across several categories, including lifestyle and beauty. Customers are super engaged in the chat box and Macy’s created a system where the hosts and stylists can respond to their questions and comments in real time.

They live on the company’s website, and the host guides viewers through different products, which helps foster a sense of community. The goal is to bring shopping experiences from the physical world into the digital world.

Macy’s adds more livestream events

What: Flannels is making space for a Barry’s fitness studio inside its new Liverpool store, a first for both companies.

Why is it important: Partnering with a gym club can represent a great opportunity to drive traffic while maximizing store space.

The Barry’s studio will offer classes, protein shakes, and a place to test drive clothing and equipment from brands including Lululemon Athletica. Flannels and Barry’s also plan to host joint events for their overlapping customer base, while Flannels will be treating its own staff to Barry’s classes.

Barry’s will be 7,000 sq. ft. and will sit in the “World of Active” conceptual space. Flannels believes this tie-up will appeal to “luxury consumers and fitness fanatics” who will now be able to shop for fashion, and do their HIIT workouts, all in one place.

The new studio will have high-tech Woodway treadmills alongside equipment including dumbbells, and benches, high-end changing facilities, including complimentary towel service, and luxury beauty and grooming products. A Barry’s Fuel Bar will offer a menu of post-workout shakes by the brand Hermosa.

Flannels flagship to open a Barry’s fitness studio

What: Frasers Group acquired the Studio Retail Group’s online retailer Studio Retail Limited.

Why is it important: Frasers has paid GBP 26.8 million for the business. It's certainly an interesting development and could be a good deal for Frasers given that Studio Retail had previously been on what appeared to be an upward trajectory. The company was increasingly upbeat last year until it was faced with issues such as over-optimistic ordering and supply chain problems.

Frasers Group buys Studio Retail Group

What: Central accelerates in the food retail innovation by opening a supermarket in the metaverse.

Why it is important: Even though the market might not be ready yet, launching such initiatives even in the early phase of the metaverse allows to make mistakes and trials before others, and therefore potentially acquire a strategic understanding of the best practices in virtual worlds.

Central Retail is teaming up with digital tech asset platform Zipmex to launch a supermarket in the metaverse, as part of the “CRC Retailligence Strategy” which focuses on technology and innovation in food retail.

This is not the first virtual initiative as Central already launched a virtual shopping mall in October.

Central Retail to roll out blockchain-powered supermarket in the metaverse 

What: Data from Placer.ai shows foot traffic rising above pre-pandemic levels in Ulta Beauty, Bath & Body Works and select Sephora locations.

Why is it important: Beauty is making a big comeback in the brick-and-mortar retail channel. Data from Placer.ai, which monitors foot traffic across the retail industry, reported steady growth across Ulta Beauty and Bath & Body Works‘ entire store fleets, as well as the four, tracked locations of Sephora in California, Colorado, Tennessee and Georgia.

Placer.ai’s vice president of marketing said the interest is reflective of the pandemic fading as well as a growing interest in beauty. Although all three retailers have robust store footprints, Sephora’s expansion beyond urban areas is pivotal for foot traffic.

For instance, Ulta Beauty increases in foot traffic by month, as compared to 2020, before the pandemic-related store closures.

Ulta Beauty:

• February 2022: +7.5 percent

• January 2022: +11.1 percent

• December 2022: +16.1 percent

Beauty’s physical store comeback

What: Selfridges has committed to making the shopping experience for autistic consumers more enjoyable with the launch of a ‘quiet' shopping hour in all its branches that will run once a week from 10 am until 11 am on Wednesdays.

Why it is important: The initiative was announced during Neurodiversity week to cater to various customers with specific needs.

Modern stores can be noisy environments with loud music and strong lighting, as well as large crowds of shoppers. This can be an extremely uncomfortable experience for anyone with autism and the introduction of quiet periods has become much more common in recent years in British shops and offices.

Selfridges adds 'quiet hour' for an inclusive shopping experience

What: Fashion wholesalers are joining forces in order to generate new opportunities.

Why it is important: Now that bigger brands have velleities of getting independent from department stores, is it a sign that agents coalition could also lead to a similar trend for smaller fashion brands?

Seiya Nakamura (representing brands such as Christopher Kane, Ganni, KNWLS, Marine Serre or Welldone) has made a business and capital alliance with 247 (Kenzo, APC, Missoni, Nanushka…), based in Milan. The goal is to reach a combined sales of $320 and $350 m in 2022.

Wholesale showrooms Seiya Nakamura and 247 to partner 

What: Alibaba invests USD 60 mn in augmented reality start-up, Nreal, an initiative seen as a first step into the metaverse for the Chinese e-commerce champion.

Why is it important: Nreal, the Chinese manufacturer of augmented reality glasses, receives an investment by Alibaba of USD 60 mn to be used for research and development. Virtual reality and augmented reality are considered key techniques for building the metaverse and like Alibaba, Nreal does not intend to stay on the sidelines of this new technology.

The internet steamroller Tencent is working on its metaverse platform, drawing on its experience in video games in which it is a major player. As for the Baidu search engine, it launched XiRang in December, presented as one of the first metaverse applications in China. Scalded by Beijing's takeover in the technology sector, the Chinese digital companies are fumbling their way into this niche.

Alibaba invests in augmented reality start-up 

What: Macy’s aims to launch a self-service marketplace in H2 2022.

Why it is important: Retail Media is the rage in the US, and while it was initially a low-end, bigger size and more grocery oriented kind of retailer which was launching this kind of initiative, Macy’s is the second high-end department store company in the US to venture in such an initiative, after Nordstrom which announced it earlier this month.

Macy’s, which unveiled its “own your style” customer-facing brand platform recently, is launching a retail media initiative and plans to launch a self-service marketplace in 2022, out of the existing Macy’s Media Network platform.

Macy’s Media Network was released in 2020 and generated in 2021 a net revenue of $105m. Advertisers count grew 2.8 times year on year in Q4 2021. According to the retailer, the most popular tools among advertisers are on-site, sponsored and display ads. Macy’s also proposes modular campaign landing pages with basic templates, style guides and shop the look initiatives, and fully customized packages for larger brands. Macy’s also leverages programmatic display, video-connected TV, online video, email advertising, instore screens, package inserts and the NYC Herald Square billboard.

Going beyond, Macy’s is working out on building a toolkit with automated features proposed to advertisers who can build themselves a set suiting their own needs.

The media group represents a team of 40 headcount, 90% of them coming from outside of the company.

Inside Macy’s plan to scale its retail media business 

What: With consumers prioritizing environmental sustainability, Amazon and Target unveiled stores that aim to use less energy than they produce.

Why it is important: The large retailers are committing to run their companies in a more environmentally sustainable manner, a commitment that could appeal to eco-conscious consumers.

Target's first net zero energy store located in Vista, California, will act as a testing site for innovations that will inform future store design. Target will also be designing all of its private label products for a circular future by 2040. In order to do this, Target will use more recyclable, durable, and sustainably-sourced materials.  From a facilities perspective, Target's store has solar carports, an electric HVAC system, CO2 refrigeration and LED lighting. Drawing from its experience, Target said it plans to add CO2 refrigeration to all of its stores by 2040.

The new Amazon Fresh store, which is pursuing net zero carbon certification, is located in Seattle. The store features a CO2-based refrigeration system, steel byproducts to reduce embodied carbon and electricity sourced from the company's renewable energy projects.  Amazon said that some of the upgrades will be used at all of its Amazon Fresh grocery stores going forward, such as the lower-carbon concrete flooring. Amazon will use an internal system created by Amazon Web Services' Professional Services Sustainability Practice to track its Seattle store's environmental impact.

Target and Amazon debut sustainable store concepts

What: Patrice Wagner on the exclusive exhibitions that Le Bon Marché is famous for in Paris.

Why it is important: For him, collaborations are not about prices or “milking” high end brands, but a part of the physical retail experience.

Patrice Wagner reflects on the current exhibition at Le Bon Marché, Exhibition X, which fosters exclusive collaborations between Le Bon Marché and its brands. For him, collaborations are crucial in retail because they can bring fun and when properly executed on site, are without comparison with digital experiences.

Patrice Wagner interview 

What: As part of Metaverse Fashion Week, Selfridges has unveiled a virtual department store in Decentraland.

Why it is important: Selfridges joins more than 70 brands, artists, and designers in creating a new experience, intersecting fashion and technology.

In a LinkedIn post, Selfridges said: “For the first time, you'll be able to view the exclusive UNIVERSE NFTs by Paco Rabanne and Fondation Vasarely in-situ in our flagship metaverse store.”

It added: “This is the first meta department store in the history of Web3 and anybody can visit. Interact as a guest or attach your crypto wallet to access all features, while keeping your in-world progress and digital assets safe.”

Selfridges launches ‘first meta department store in history of Web3’

What: Printemps has launched its first virtual store and NFT operation for its customers in partnership with Arianee.

Why it is important: Arianee is the leading web3 solutions platform for brands and is known for its previous collaboration with Paris Fashion Week and the Richemont Group.

This operation, running for the next 6 weeks, is realized in partnership with Arianee. Any customer who purchases a product eligible for the NFT selection on the Printemps virtual store can be drawn to win one of thirty NFT artworks by self-taught French artist Romain Froquet.

Each NFT contains a unique, animated digital artwork that is accessible from a link in an email sent by Printemps to the lucky winners. At the end of the 6-week period, a final winner will be drawn to receive the artwork in its physical form.

Arianee Press Release (in French)

What: Stockmann announced it will divest its department store in the heart of Helsinki to Keva, the leading pension provider for public sector employees in Finland.

Why it is important: Stockmann will use the proceeds of the divestment to fully repay the over 342 million euros in secured restructuring debt and almost 22 million euros in unsecured restructuring debt.

Stockmann will continue operating in the property under a long-term leaseback agreement signed as part of the sale.

Keva will pay the bulk of the price, over 390 million euros, in connection with the transaction and take the remainder into account in rent in the next couple of years. The transaction is expected to be closed by the end of April.

Stockmann sells iconic department store for EUR 400m to pay off debt

What: Aldi opens a one-of-a-kind store dedicated to its own brand.

Why it is important: Brand building and advertising is key for retailers if they want to remain attractive to customers and make them fell they are part of a community.

Aldi  has opened “Checkpoint Aldi” in Berlin city centre to sell exclusive Aldi-branded merchandise for hardcore fans. It is located a few minutes away from Checkpoint Charlie and uses the space to do some brand building with Aldi and give facts and figures about the company. It provides exclusive T-shirts, umbrellas, mugs, caps on 650 sqm and aims to become a touristic attraction in Berlin.

Aldi becomes a tourist attraction in Berlin 

What: After seven years as Group's Director of Operations at Galeries Lafayette, Olivier Bron is CEO of Central and Robinson's department store network in Thailand.

Why it is important: Besides acknowledging the fact that the department store model must reinvent itself, Olivier Bron explains the challenges his store network is facing. Competing with digital penetration, adapting department stores to new forms of consumption such as social commerce, and differentiating boosted services and experiences are key.

About the future of department stores

Whether in Europe or Asia the observation is the same: the department store model must reinvent itself. However, the Thai middle class is growing and the potential is great for the department stores. One of the main challenges is that international competition as well as the digital penetration are becoming stronger.

About the differences with the European market in terms of digital

The consumption via social networks is much more developed than in Europe. There are also very big online aggressive players with marketplaces like Zalada. The challenge is to update department stores to adapt them to new forms of consumption such as social commerce.

Also, consumers in South Asia are highly educated about discounts and promotions: the weight of gamification is very important, and the approach is often very sophisticated. Coupon collection and gambling are very important. With 85% of Central’s customers having a loyalty card, the influence of data is even bigger.

Behaviour evolution is going very fast with 20% of 25-50 year-olds having cryptocurrencies. A huge difference with Europe is also that 75% of digital activity goes through the app: it is more a service in which it is possible to buy than a direct path to purchase. “We have seen a 70% growth in our sales through this channel and we have doubled our sales through social commerce.”

About the differences in the product offer

European department stores have tended to organize their offer around fashion. In Asia, the categories are more balanced with a greater importance of home and living products, household appliance, and beauty.

In the fashion segment, there is a very affluent clientele that is very savvy about luxury products. Such customers are interested in major international brands and French luxury brands already have strong recognition. But they are also waiting for local brands to develop.

About the absence of Chinese tourists 

Chinese tourists did not return. Some Europeans are coming back but it is not like before. The traffic drops are significant. Under such circumstances, experience and service must bring differentiation: in Thailand, personal shopping strengthened the activity by 25 to 35%. Catering is also generating traffic.

Now 15% of the surfaces that are dedicated to services: rather than reducing store sizes, spaces are reallocated to complementary offerings. There is a big risk that below a certain size of store, department stores might lose their attractiveness.

An interview of Olivier Bron, CEO of Central and Robinson's

What: 'Our Journey to Revolutionise Impact,' Neiman Marcus’ first environmental social governance report, shares its progress to date, celebrating recent and upcoming investments, and outlining its 2025 ESG strategy.

Why is it important: NMG analysed data from multiple sources, including ESG ratings and rankings, research reports from industry media outlets and trade associations, disclosures from NMG's best-in-class peers, ESG reporting frameworks like Global Reporting Initiative (GRI) and Sustainability Accounting Standards Board (SASB), etc. to inform its strategy.

NMG formulated a strategy that is comprised of three components. First, “Advancing Sustainable Products & Services,” which focuses on climate change, increasing sustainable and ethical products, and implementing circular services, NMG aims to make an impact on environmental issues across the entire value chain.

NMG also aims to “Cultivate a Culture of Belonging” for its workforce, customers, and community by setting goals to increase racial diversity in leadership roles, advance workplace equity in line with prominent external standards, uplift and support women-founded fashion technology companies, and champion inclusive marketplaces by increasing spending with diverse retail and non-retail suppliers.

Finally, “Leading with Love in Our Communities,” by aligning its corporate giving strategy with its ESG strategy, ensures that the organisation's values and purpose guide the decision-making process of funding.

Neiman Marcus shares ESG report