What: Dark stores are increasingly part of the retailers’ strategies in order to fulfil e-commerce orders in a timely manner.

Why it is important: US operators also use this tool as a method to enter new markets or new states without opening traditional stores, a manner to maximize the brand equity and the website value by increasing its potential reach.

E-commerce sales are expected to reach $6,5 trillion by 2023, and new forms of fulfilment, including dark stores, are expected to support this increase. It is also expected that dark stores morph into new models, as retailers start to refine their approach to such a practice.

In the US, dark stores are for instance increasingly used by major retailers and F&B operators to cover territories where they are not physically implemented with stores (the strategy of “ghosting” the territory). Kroger for instance is entering new regions through a partnership with Ocado by building robotic warehouses and micro-fulfilment sites in American states where there are no stores. Thanks to this approach, customers in Florida can be served in 30 minutes.

Such an approach includes partnerships with companies involved in tech and logistics. For instance, Swisslog, a robotic company, equips automated e-commerce fulfilment centres for Giant Direct, the online division of Giant Food, while Instacart helps Kroger to offer a “virtual convenience store” available to 50m households.

Flexibility is key: for instance, in 2020 Whole Foods turned 6 stores into dark platforms, and turned back 4 of them into traditional stores.

Dark Stores: prepare to be ghosted 

What: The mall on Manhattan's West Side is changing its mix and converting some retail square footage into offices.

Why it is important: Despite Neiman Marcus closure and the Vessel tourist attraction still closed, Hudson Yards tries to keep its appeal by adding new retailers and widening its price range.

Louis Vuitton has returned to the mall with a freestanding store, after previously operating a shop inside the Neiman Marcus store. Several restaurants and services are also on their way, and Related Cos., the developer of Hudson Yards, is expected to soon reveal that an office tenant will move into the former Neiman’s space.

It appears the mall is adopting a broader appeal, widening its price range by adding new retailers and food and beverage offerings, in several cases filling vacated space, all the while maintaining a significant luxury component, but with less dependence on it. There is 390,000 square feet of gross leasable space for retail and restaurants, a figure that excludes the former Neiman’s as well as the Tak Room and Kawi restaurants and other businesses that closed and are being converted to offices. Elsewhere around the mall, there is space for five to 10 additional retailers, depending on how the available square footage gets allocated, though a luxury retailer would want to be on the ground floor.

Food and beverage openings in the past 12 months included Jibs; Magnolia Bakery; the Ana Bar and Eatery; Naked Tomato; Ladurée, and Peakaboo. Retail shops opened in the past year include Monica Rich Kosann, Venus et Fleur, Taft, Le Bella & Co., Levi’s, Messika, Marli and Herman Miller. Soon to open: Kamasu by Kissaki, an omakase experience from chef Edgar Valerio and executive chef Mark Garcia; Ana Wine; Fellow Barber; Calzedonia and Intimissimi.

Changes at Hudson Yards

What: Walmart is the leader in the US when it comes to BOPIS sales.

Why it is important: Even though the total amount of such sales has tripled in 2 years, it still represents 4% of its total turnover, suggesting that there is ample room for growth.

The value of orders sold through click & collect tripled, from $7,2 b in 2018 to $20,4 b in 2020. Such a scheme, dubbed “curbside pickup” in the US, is more efficient and profitable, and therefore considered as strategic for the company, which proposes it in 3,700 stores (out of 4,700 in total).

It also allows Walmart to have the highest market share in terms of click & collect sales, as it represents 25% of the total click and collect sales in the US. Total click & collect sales are expected to grow by 21% in 2022 and 20% in 2023.

Walmart tripled BOPIS sales in 2 years and represents 25% of total US click and collect sales 

What: Shinsegae reported USD 80.7 million in consolidated net profit, an increase of USD 54.4 million year-on-year.

Why is it important: This improvement helped convert a full-year loss of USD 57.8 million in 2020 to a profit of USD 327 million last year. Annual sales rose by 32.4 percent to USD 5.28 billion.

Sales at the company’s fashion and lifestyle division, Shinsegae International, rose by 9.7 percent in its latest quarter, driven by a 22 percent lift in apparel sales and 25 percent in cosmetic sales. Sales of luxury goods rose by 41.9 percent and of overseas fashion labels were up by 32.5 percent year-on-year./nbsp]

Shinsegae’s rise in quarterly profit

What: Costco is appointing a new leader coming from its own ranks.

Why it is important: The new president has a strong merchandising experience, which resonate as his appointment has been announced the same week when Walmart presents its new “store of the future” which aims to elevate the instore experience.

Costco has named Ron Vachris, 56, as president and COO of the company. He previously held the position of Merchandising COO at Costco which he joined in 2010, and before that, worked in the real estate industry.

The exiting president, W. Craig Jelinek, 69, will continue to serve as CEO and member of the company’s board of directors.

Costco increased sales by +18% in 2021, reaching a total turnover of $192bn and a net profit of $5bn. It currently operates 572 stores in the US and 828 globally.

Costco names new president and COO 

What: Harrods’ “luxury for life” empowers customers to invest in pre-loved products that stand the test of time.

Why is it important: Harrods’ ambition with this initiative is to build partnerships that support circularity in luxury retail and provide services to extend product lifespans.

They have 5 different partnerships for this initiative:

• My Wardrobe HQ: Service which allows UK customers to rent an edit of Harrods’ designers
• The Restory: An aftercare service that restores accessories to their original state.
• Bespoke services at the tailors: Bespoke alterations service that offers customers the opportunity to restore or reimagine garments anew. Now, in the comfort of their homes as long as it’s within two miles of the Knightsbridge store.
• Walpole: The official sector body for UK Luxury, an organisation working on the development of a sustainability manifesto that unites British luxury brands with a common cause to drive sustainable practice in the sector.
• Fashion re-told: A luxury pop-up store that raises funds for the NSPCC through retailing pre-loved fashion. The concept highlights the importance of lengthening product lifecycle and promoting circularity in luxury.

Harrods’ “luxury for life” 

What: For Amazon to keep cash flow, they will be raising prime subscriptions from USD 119 to USD 139 per year, making it their first price increase since 2018.

Why is it important: Amazon believes Prime offers more value now, with the rollout of Free Same-Day Delivery to more places, more Prime-eligible products in the marketplace and expansions across prescriptions, Amazon Music, Prime Reading and Prime Gaming.

Reason for excitement, however, include Amazon’s investment in electric vehicle company Rivian, which went public in November and Amazon’s ad business breaking out revenues for the first time reporting USD 9.7 billion for a growth of 32%.

The upcoming opening of Amazon Style is another reason to look forward. The physical apparel store in Los Angeles that plans to use machine learning for tailored recommendations as people shop also plans to give customers tech features, such as the ability to send items to a fitting room by tapping a button in the app.

Whether shoppers immediately flock to brick-and-mortar Amazon apparel stores Amazon has padding its wallet, like the Prime price increase.

Amazon to raise prime subscription in the US

What: Saks is organising its introduction on TikTok in parallel to the launch of its new stylist service.

Why it is important: TikTok is presented by Saks as a new media touchpoint for the customers, as the purpose is to attract attention, create engagement and generate purchases directly on the platform.

Saks Fifth Avenue is gathering a team of creatives, celebrities, and influencers to engage audience on TikTok. Saks presents it as a new touchpoint to discover the “on-demand style inspiration”. The target is to make the most of TikTok ascendent dynamic.

This move follows the launch of Saks Stylist, a redesigned personal stylist and shopping service on saks.com and mobile.

Saks Fifth Avenue takes on Tiktok 

What: Bloomingdale’s flagship and e-commerce will celebrate Bridgerton’s second season premiere with a pop-up inspired by the Netflix series.

Why is it important: Netflix shopping keeps going with Bridgerton. At Bloomingdales a pop-up store features a curation that embodies the series’ modern take on Regency London.

Set in the lavish and competitive world of Regency London high society, “Bridgerton” features the glittering ballrooms of Mayfair and aristocratic palaces of Park Lane. Bloomingdale’s Carousel shop will be an immersive retail experience that blends fashion and entertainment for a truly unique pop-up inspired by the cultural phenomenon.

The pop-up immerses visitors in an English garden party. The shop’s interior is inspired by the series’ lavish balls, with a checkerboard floor and chandeliers. Two large garden trellises at the shop entrance welcome guests with English roses and flowers inspired by the floral themes throughout the series. Along with this, there will be experiences such as the Wedgwood tea shop with tea tastings, and a live string quartet.

All 6 Lexington Avenue windows at Bloomingdale’s 59th Street flagship will feature “Bridgerton” inspired displays with seven one-of-a-kind original costumes from the first season exhibited for the first time in the U.S.

The pop-up will be in place from March 3rd-16th and the windows will be up from March 3rd-28th.

Bloomingdale’s new Bridgerton pop-up

What: Roblox, a digital space where young people play, learn and communicate in a world that is user-generated is gaining steam and a number of brands like Gucci, Nike and Forever 21 are on it.

Why is it important: The ability to purchase both digital and physical clothing creates different touchpoints for teen customers and can be an additional revenue opportunity to build brand recognition. Roblox is a means for companies to engage with the metaverse and get their brand identities in front of a younger audience.

The company has three major arms, roblox client, roblox studio and roblox cloud. Roblox Client, the application that allows users to explore 3D worlds, Roblox Studio, which allows developers and creators to build, publish and operate 3D experiences, and Roblox Cloud, which includes the services and infrastructure that powers the platform. Users create a unique avatar that can go across experiences, like games and events.

With 12 million daily active users on the platform in 2018 there were 31.1 million people were on the platform every day — and 54% of those users were under the age of 13 by 2020. When the company reported recent earnings, daily users increased to 45.5 million average daily users for fiscal 2021, an increase of 40% year over year.

Signing up for Roblox is free, along with most of the platform's experiences but users can use real-world currency to purchase Robux, the platform's digital currency. Robux allows people within the universe to purchase experiences and items for their avatar. If a retailer sells a digital hat with a logo, the user will wear the hat while visiting different experiences on the platform, and thereby show off the brand. Just like in the real world where people can sport labels and be influencers, avatars can wear items that are valuable within the digital world.

With so many young users on the platform every day, big brands are joining to create experiences for the plugged-in audience.

Jenn Szekely, managing partner at Coley Porter Bell says, “By getting to these younger audiences early, they are building affinity to brands they most likely would not be aware of yet. A presence on the platform demonstrates to existing audiences that a brand is on the pulse of immersive technologies.”

Retail is evolving, and as the metaverse moves forward, omnichannel is not only about physical retail and e-commerce. It’s now also the web 3.0, and a persistent digital world where millions upon millions of customers are spending significant time.

Retailers joining Roblox is a sure strategy to increase brand awareness and sales, as well as a great long-term plan that should be considered. Young consumers are no longer spending their time at the mall anymore, they are online and more and more in this digital space.

Roblox, an opportune marketing tool for retailers

What: Dillard’s posts its sales and earnings growth in their fourth quarter.

Why is it important: Retail sales increased 37% to 2.078 billion dollars, while comparable retail sales increased 12% compared to the fourth quarter of 2019.

The gross margin for the quarter improved 40.8% of sales compared to 31.1% for the prior year’s fourth quarter.

Net income was 862.5 million dollars compared to a net loss of 71.7 million.

Consolidated gross margin for the year improved to 42.3% of sales from 28.6% of sales for the prior year.

Dillard’s fourth-quarter results

What: CEO and chairman David Simon said 2022 will be about preparing for big things next year. That goes for both the landlord’s business leasing space to retailers and its own growing retail operations.

Why it is important: The real estate giant’s fourth-quarter net income increased 85% to USD 503.2 million, from the USD 271.5 million logged a year ago during retail’s first coronavirus Christmas. Occupancy rates at the firm’s U.S. malls and premium outlets advanced to 93.4% as of 31 December, up from 91.3% a year earlier. Retail sales at Simon properties rose 34% in the fourth quarter from a year earlier and were up 8% from the final quarter of 2019.

Simon told analysts that operating earnings at SPARC would be hit as the company becomes the operating platform for Reebok, once ABG closes on the acquisition of the brand this month. Rue Gilt is also going to see more investment while J.C. Penney is spending to build out its beauty business and its digital operation.

The Simon Property Group to develop its retail businesses

What: The excellent retail results announced in the UK during Q4 2021 must not be taken as a new reality, since dark clouds might await.

Why it is important: The UK is currently experiencing 2 changes, one being specific (the increasing cost of life related to Brexit), and one being also experienced by IADS members, the changes in terms of peak time and traffic in stores, forcing to adapt and change opening hours.

According to data, shoppers are back in the UK however with some disparities: regions enjoy more footfall than central cities such as London and Birmingham. It appears that in London, spending does not correlate with foot-traffic: spending is one fifth lower than pre-pandemic levels, but with half of shoppers only. This could be seen as a very good piece of news, as most of retail companies (be it from hight street fashion to food) reported higher LFL sales during Q4 2021.

However, the Financial Times points out at to elements that could become worrying:

• The growing cost of living in the UK, due to Brexit, could very well result in choices made when it comes to discretionary spending (as the data suggests that affluent customers are currently increasing their spendings using the savings made during the pandemic),
• The footfall has changed in terms of periodicity: for instance, London is now more crowded at night and during the weekends, and empty during the week, forcing retailers to adapt and, for instance, change their opening hours.

UK retail is sending warning signals 

What: A report released ahead of the official results due in March shows signs that the retailer’s profits are headed in the right direction.

Why it is important: Profits are being boosted both by higher sales and by the firm’s cost-cutting drive. The less good news is that much of the success seems to have been driven by Waitrose rather than by its department stores.

The report said that while Waitrose sales boomed, John Lewis sales fell short as product shortages due to supply chain issues and lower footfall dampened spending.

When its last set of results was released last September, they showed times were still tough for the retailer but that it had begun to recover from issues that had pre-dated the pandemic. For the first six months of the financial year, profit before exceptional items was a low GBP 69 million. But that was GBP 124 million up on the 2020/21 year, when it made a loss of GBP 55 million. Importantly it was also an improvement on a two-year basis as the first half of 2019/20 had seen it making a loss of GBP 52 million.

John Lewis profits are on recovery trail

What: The pandemic has changed corporate life as we know it, and while many companies are going all-in on a return to the office, others are embracing new hybrid or fully remote working models.

Why it is important: Neiman Marcus, which has allowed employees to work fully remotely for two years, says this flexible working policy has boosted employee retention and happiness. The department store said that its goal is to allow employees to determine their work schedules and office set-ups to maximise effectiveness.

Based on internal polling and assessments, Neiman Marcus found that flexibility was one of the top three drivers of employee happiness and productivity. Since implementing certain remote working policies, Neiman Marcus’ turnover rate is down 20% from 2019. The company, which filled 1,200 roles in 2021, also said its time-to-hire rate has gone down 32% compared to 2019. These boosted employee retention rates are even more salient, given a general work environment characterised by high levels of resignation./nbsp]

While encouraging whatever model works for an employee, Neiman Marcus is also gearing up to move to a new integrated office in Dallas, which will also foster an environment for hybrid work. Corporate employees will be able to work remotely from anywhere and come into the office when they want to collaborate in-person. For store associates, Neiman Marcus offers a remote selling tool called Connect, which helps some workers connect with customers remotely.

Neiman Marcus says remote work boosted retention rates

What: Nordstrom is releasing a merchandise collection by the popular K-pop group BTS.

Why is it important: The BTS collection with Nordstrom is the latest merchandise collection the band is releasing. BTS has been a formidable force in the fashion industry, known for their matching high-fashion style.

The fashion collection includes a range of apparel items such as T-shirts, fleece sweatpants, jackets, hoodies and other outerwear, as well as accessories like stickers, face masks, snow globes, key chains, and bags featuring BTS’ popular song titles, such as “Butter,” “Mic Drop” and “Boy With Luv.”

For apparel, the collection’s hoodies and sweaters are inspired by a collegiate style with the song lyrics featured on the garments to represent college names. Many of the hoodies are made with contrasting fabrics juxtaposed on each other.

Nordstrom will release the collection starting Feb. 25.

Nordstrom to release BTS collection

What: The first virtual fashion brand, launched by a retail company.

Why it is important: 96% of Korean citizens are equipped with a smartphone and the metaverse is already a reality in Seoul. Virtual fashion might therefore be extremely interesting for specific markets, but, in others, might very well result in a waste of time, capex and energy for a limited ROI.

The Korean conglomerate Lotte operates Lotte Home Shopping, a business unit which brands itself as the first media commerce company, allowing customers to understand what they want, with the right information, and purchase products at the right price.

In order to ride the Metaverse wave, Lotte home Shopping goes a step further by introducing a virtual fashion brand, presented online by a virtual model. It also plans to release a NFT marketplace in April 22 to buy and sell virtual fashion items.

Lotte Home Shopping introduces virtual fashion brand 

What: With the past year’s outbreak of tech-focused acquisitions, and partnerships, beauty brands are building their tech muscle.

Why is it important: Beauty brands are starting to look a lot more like tech companies, complete with their own tech incubators, artificial-intelligence capabilities, and more. Technology has the power to solve several challenges beauty consumers face, such as finding the right skincare or shade of foundation or trying on lipstick without having to buy a new tube.

Some beauty brands implementing tech include:

• Il Makiage bought hyperspectral imaging computer-vision startup Voyage81
• Ulta Beauty invested in AI retail tech company Adeptmind and launched a new virtual try-on    partnership with Google
• Estée Lauder rolled out AR try-on across its entire portfolio
• Clinique built on a beauty lab in the metaverse to promote a new serum

Beauty companies are growing their technology offerings, not just in product development, having the best gadgets, data, and interfaces but in the services and tools, they offer their consumers. The pandemic heightened the importance of digital channels and touch-free product trials, making technologies like virtual try-on table stakes. To win over consumers, beauty brands must build out technological expertise in everything surrounding the product as well as the product itself.

Certain significant developments have not yet trickled down to consumers due to factors such as mainstream hardware on mobile phones are not up to date, and gaps in knowledge between brand executives and tech developers. As technology becomes an increasingly important part of the industry, beauty executives will need to be more tech-literate.

Beauty industry slowly resembling Silicon Valley

What: Le Bon Marché gets brands to collaborate and invites radical French artist Philippe Katerine for their “X” exhibition.

Why is it important: Dozens of brands have partnered for the “X” exhibition, including Stella McCartney, Disney, Baccarat, Pokémon, Scholl, Erès, Veja, Marni and many more.

Displays of giant sculptures in bubblegum pink, a series of artworks for sale, and copies of Philippe Katerine’s book “Mignonisme.” Katerine will also lend his voice for store announcements and will perform twice as part of the “Frères Philippe” group he forms with composer and guitarist Philippe Eveno.

The collaborative assortment exposes the “Su” art installation by avant-garde Turkish artist Mehmet Ali Uysal, who highlights impact of climate crisis on water with large icebergs hanging around the escalators and a giant boat inspired by origami that give the effect of rising waters.

Le Bon Marché’s “X” exhibition

What: Beauty consumers are shopping for star ingredients rather than by product or brand names.

Why is it important: As brand names have served as indicators of quality, consumers are educating themselves on skincare ingredients and feel less of a need to buy specific brands.

The internet has transformed the shopping and research experience as consumers can quickly become experts on skincare ingredients, their skin type, and particular needs.

Some beauty brands and retailers are now helping their clients to filter by ingredients because research through search engines has become a vital part of the shopping journey. For instance, Net-a-Porter and Glow Recipe both launched an ingredients tab on their e-commerce pages in 2021.

As power brands continue to retain a high level of trust and customer loyalty, shoppers on Net-a-Porter are now searching for ingredients such as retinol, hyaluronic acid, niacinamide and vitamin C. They also noted that salicylic acid overtook niacinamide and hyaluronic acid for the first time, correlating with increased consumer concern for so-called “maskne.”

TikTok is also driving the rapid pace of trend change for the power that it has on beauty trends is undeniable. A single viral post on TikTok can translate into millions of views and thousands of followers. Marketing teams at beauty giants such as Estée Lauder now watch TikTok closely, to respond with appropriate ad strategies. For example, THG’s haircare brand Grow Gorgeous went viral on TikTok when a micro-influencer documented her hair growth, which taps into the science-backed haircare trend thanks to its use of niacinamide and hyaluronic acid, typically used in skincare.

The consumer enthusiasm for ingredients has paved the way for ingredient-led brands such as Deciem, acquired by the Estée Lauder Companies in 2021. Deciem, with its six brands: The Ordinary, Niod, Hylamide, the Chemistry Brand, Hif and Loopha, made about $460 million in revenue in the 12 months to the end of January 2021.

Beauty brands have developed their own formulas linked to star ingredients, but trust and authenticity remain paramount. Clinical trials should support marketing claims.

Beauty consumers prefer ingredients over brands

What: The owner of retail properties including The Dubai Mall and Dubai Marina Mall recorded sales of 4.9 billion dirham (USD 1.33 billion) with a net profit of 1.8 billion dirham last year, representing a year-on-year rise of 42% and 160%, respectively.

Why it is important: The business is likely to receive an additional boost in the short term due to the opening of Dubai Hills Mall in the first quarter of 2022.

Occupancy at Emaar Malls properties reached 87% in 2021.

Dubai’s Emaar Malls’ sales rise 42% in 2021

What: A new position designed to reinforce the appeal of the John Lewis Partnership at a moment when it is morphing into more than retail.

Why it is important: All retailers need to rethinK and redesign their branding strategy now that it is not possible anymore to rely on customer loyalty and historic weight to generate purchases.

The Jown Lewis partnership has created the first pan-Partnership customer director position, and recruited a veteran from Co-op and previously from the BBC and McCann.

She will be in charge of developing a customer strategy at the partnership level and develop the brand’s customer capability.

John Lewis creates the position of Customer Director 

What: Neiman Marcus intends to make hybrid working permanent, and a perk for new recruitments.

Why it is important: As a result, the company builds a new “office hub”, which is not specifically described in the article, but which replaces 2 office buildings that were closed during the pandemic. Hybrid working, in addition to being a competitive advantage, can also be a manner to limit structural costs.

Neiman Marcus is planning to open a new “office hub” in Dallas with the goal to foster creativity and cooperation. To do that, the projected hub will place hybrid working at its core in terms of workspace structuration.

According to Neiman Marcus, the ability of proposing hybrid working is a key feature and a competitive advantage for the company when it comes to attracting talents, and they want to keep it on the long run. This is a major change when compared to the company’s HR practices 4 years ago. According to the company, since the implementation of hybrid working, turnover rate has declined by -20%, time for recruitment decreased by -32% and 1,200 people were recruited in 2021.

Hybrid working is not limited to HQ positions, as a specific app, “Connect”, has been developed to enable sales persons to work with their customers whenever and from wherever then want.

Neiman Marcus is designing the new Dallas offices taking into account remote working 

What: Neiman Marcus is increasing the number of Fashionphile shop in shops in its stores.

Why it is important: They have created a strong connection between their own private shoppers and Fashionphile, leading the customers to naturally use the secondhand option to declutter their wardrobes, and, by the same incidence, create a virtuous and profitable circle for Neiman Marcus.

Neiman Marcus took stakes in Fashionphile in 2019 and since then, 43,000 items have been sold for a total value of $47m in Neiman Marcus stores. There are currently 10 Fashionphile shops in the Neiman Marcus stores, and 5 more are planned in 2022.

The business model is based on a voucher system, allowing customers to bring back luxury items and get Neiman Marcus gift cards. Neiman Marcus is encouraging its fashion stylists to orientate their customers to Fashionphile as this is bringing an additional proposition to customers, while also proving extremely lucrative in terms of sales.

Fashionphile has also teamed up with Neighborhood Goods last year, which also allows to access a different customer with another positioning.

Neiman Marcus is expanding Fashionphile in its stores