What: Japanese retail group J. Front Retailing, which operates Daimaru and Matsuzakaya department stores, will strengthen the development of luxury apartments and hotels.

Why it is important: The group aims to reduce its heavy reliance on department store and other retail operations.

J. Front plans to expand its real estate and financial operations so the sector will account for 40% of the company’s operating profit by fiscal 2030, up from 20% in fiscal 2019. The company hopes to develop facilities other than retail stores by using existing assets, such as department store annexes and land where a logistics centre used to stand.

J. Front to strengthen apartment and hotel business 

What: In 2020, Macy’s management announced it would close 125 stores over 3 to 5 years. That same year, Macy’s closed 29 stores. In 2021, 45 stores were supposed to be closed, but only 38 were. Macy’s announced that 7 stores will be closed in 2022 (belonging to the 45 stores batch).

Why it is important: That leaves another 51 stores that are still to be closed of the 125 that were announced in 2020. But while the US is overstored, Walter Loeb doubts they will close any time soon since Jeff Gennette has indicated that the online business deteriorated If there was no physical store in the area.

These stores will eventually close but the question is when. Late announcements of store closings are a smart management strategy. After all, sharing such news too soon may prompt a loss of sales staff and disrupt the closing sales by their absence.

Macy’s to close more stores 

What: After completing the corporate equality index, Neiman Marcus group unlocked a platinum-level membership with the HRC and was recognized as “best place to work for LGBTQ+ equality.”

Why is it important: Due to several newly incorporated benefits and policies, Neiman Marcus Group recently earned a 100 score on the Human Rights Campaign Corporate Equality Index, the United Sates’ leading benchmarking survey and report measuring corporate policies and practices for LGBTQ+ workplace equality.

The recent score was based on several new benefits and capabilities the company has adopted such as, enhanced policies and Code of Conduct to include protections for sexual orientation and gender identity and expression and gender transition guidelines. Also, NMG ensured equivalent benefits for same-and different-sex spouses and domestic partners, including health, dental, and vision insurance, and dependent coverage, as well as relocation/travel assistance, FMLA-like benefits, and employee discounts.

On top of this, NMG partnered with the HRC during Pride Month, implementing a point-of-sale fundraising campaign in Bergdorf Goodman, Neiman Marcus, and Neiman Marcus Last Call stores.

They presented a $250,000 donation to HRC leadership from their $150,000 Platinum membership level and $100,000 from customer donations. They will be used to support the HRC's broad-reaching programs, including Children, Youth & Families Program, Health & Aging Program, HIV & Health Equity Program, Religion & Faith Program, Workplace Equality Program, HRC Project One America, and Transgender Justice Initiative.

At Platinum level membership, NMG will have access to VIP policy briefings covering the latest developments within the community and overall LGBTQ equality movement, including public policy briefings, legislative briefings, and more. The Company will also have access to HRC subject matter experts on transgender inclusion in the workplace, LGBTQ self-identification best practices, being an ally, and much more.

Neiman Marcus new partnership with Human Rights campaign

Neiman Marcus on human rights campaign index

What: Boston-based company Urbx is working on a robotic fulfillment center that scales up to 150ft tall.

Why it is important: Automated fulfillment solutions are the way to go in the future as e-commerce demand continues to increase following the pandemic. Urbx’s solution of putting a large and automated fulfillment building in a city-centre is proof that the importance of fulfillment is being prioritized.

Urbx will work with third parties to integrate its automation into other stores. It will also eventually build thousands of Urbx-branded automated markets, unlike any grocery store seen before. The Urbx market won’t have aisles but will rather have kiosks where shoppers can order onsite or through a mobile phone. Once the order is made, robots will pack an order of 50 items in less than two minutes and deliver the items to the kiosk.

Urbx will also have curbside pickup, delivery via electric bikes, and eventually drone delivery.

Currently they have only raised seed funding, but the company hopes to have its first Urbx market developed by the end of next year.

Urbx’ Vertical Automated Grocery Fulfillment has High Ambitions

What:  The German department store is to receive a second time a relief from the German state in order to compensate for the losses due to the Covid-19 restrictions in December.

Why it is important:  On a budget-orthodox country such as Germany, such a support can raise questions and criticism, all the more that Galeria Karstadt Kaufhof was not in particular good shape pre-pandemic.

Galeria Karstadt Kaufhof has received a new German state aid of €220m, in addition to €30m towards the partial repayment of the financial aid that the group already received last year (for a total amount of €460m).

The group suffered from most of the German Covid measures, such as the cancellation of the Christmas markets, and this help raises questions and criticism from observers. So far, no one linked the fact that, while the German group is receiving state aid, its parent company, Signa, has teamed up with Thai-based Central Group to acquire Selfridges in the UK.

Galeria Karstadt Kaufhof receives €220m in aids from the German government 

What: JD.com opens 100% robotized stores in Europe for the first time.

Why it is important: This experiment might serve as sources of inspiration for other retailers, especially when it comes to the order fulfilment and home delivery. If the experiment proves popular, it might contribute to the quest of better margins, by removing the human component. But would that be accepted at a larger scale by the population?

JD.Com has opened its first physical stores in Europe, in Leiden and Rotterdam (Netherlands), while two more are planned in Amsterdam and Utrech.

All stores are trading under the name “Ochama” and sell fashion ranges for men, women, kids, as well as household goods, furniture, beauty and food.

The specificity of these stores is that they are almost fully robotized, from the online ordering processing, to the order fulfilment and home delivery steps. Robots are visible by customers when they come to stores. Cashdesks are also replaced by QR code payment, allowing to remove the need for cashiers.

JD.com launches new store concept in Europe in The Netherlands, staffed by robots

What: With a large increase in total volumes at the start of the pandemic as well as constraints on raw materials and transport limitations, ikea routed over 50% of their order fulfillment through their stores instead of customer distribution centers.

Why is it important: With many large retailers turning to operational investments to alleviate rising costs of transport, Ikea launched their own projects. This improved their e-commerce experience, customer delivery times and made their deliveries more sustainable.

Ikea plans on launching 80 projects in 2022 using robotics, automation and drones for better fulfillment in stores, as well as open more stores and expand their click-and-collect service, which will cost approximately one-fifth as much as home deliveries.

Ikea doubles automation projects as store fulfillment grows

What: Macellum Advisors sent a letter to shareholders criticizing Kohl’s market share loss, for failing to grow 2021 revenue versus their 2019 levels. They were also criticized for having insufficient expertise on their board, and describing 2021 as “a lost year” for the retailer. In addition, Macellum is pushing Kohl’s to consider splitting up its brick-and-mortar stores and e-commerce businesses into separate companies.

Why it is important: While the separation strategy is controversial, with some experts thinking it’s only good for short-term profits, Kohl’s has some strong words for the activist shareholders pressuring them.

Macellum Advisors, which owns nearly 5% of Kohl’s shares, called for Kohl’s to add more retail expertise to its board, explore strategic alternatives including selling to a financial sponsor, or cashing in on much of the USD 7 to 8 billion in its real estate assets with sale-leasebacks.

Kohl’s responded quickly, stating that its board has the right mix of expertise and fresh perspectives; that its strategy to be the leading omnichannel destination for the active and casual lifestyle continues to gain traction, and that Macellum’s letter is “filled with unfounded speculation.”

Last December, Engine Capital LP, which owns about 1% of Kohl’s stock, sent a letter to the Kohl’s board contending that a stand-alone e-commerce business could be “conservatively” valued at USD 12.4 billion or more, compared to the retailer’s market cap of about USD 6.7 billion. As an alternative to separating the dot-com and stores businesses, Engine Capital urged Kohl’s to consider a “market test” to see how much the company could be sold for to “well capitalized” financial sponsors.

Pressure for Change Mounting at Kohl’s

What: The deal is meant to help U.S. merchants sell online in the massive yet complicated Chinese market.

Why it is important: China has often remained inaccessible to independent businesses and upstart entrepreneurs abroad. Regulatory and logistical barriers as well as complexities related to pricing, duties and translations, can be daunting to deal with for all but the largest of brands. The new connection between JD and Shopify illustrates the importance of platforms and partnerships in the consumer industry and fashion.

With a population of 1.4 billion, China is home to the world’s largest e-commerce market, estimated to be worth USD 3.3 trillion by 2025. It’s more than five times larger than the U.S. e-commerce market (GlobalData and Statista).

The partnership will help U.S. brands using Shopify get started in China in as little as three weeks with JD offering end-to-end fulfillment. The partnership also offers price conversion to local currency, translation services and more.

Shopify Links With JD.com for China Partnership 

What:  The largest Beauty Hall in the world opens in Hainan

Why it is important: Such an opening clearly shows that for DFS and LVMH, the market is shifting, and Hainan is now a gravitational point in the international touristic economy.

DFS has teamed up with Shenzhen Duty Free Group to launch the world’s largest Beauty Hall, in Hainan, on 6,300 sqm and 2 floors. It will be home to 80 brands, and 20 will join them at the end of next year.

Such a location shows the importance given by DFS to the Chinese market and completes the experience with a WeChat e-shop which already includes 70 brands on offer.

DFS launches its largest Beauty Hall in Hainan, China 

What:  A Mexican retailer accepts payments in Bitcoins and grants 20% discounts when purchases are paid via this cryptocurrency

Why it is important:  Whatever their opinion on Crypto, retailers need to look at what is going on and adapt, including by seeing this method of payment as the latest one needed in the rooster of payment methods they offer to their customers.

Grupo Elektra, which retails a variety of goods in Mexico and Latin America including electronics and home appliances, announced last December that they were accepting payments in Bitcoin, through a US-based platform, BitPay.

Any payment made with Bitcoin will generate a 20% discount on the purchase amount.

Mexican-based retail group Grupo Elektra accepts payments in Bitcoin

What: Stockmann is increasingly getting disconnected from its real estate assets.

Why it is important: Even though such financial operations allow to reduce the burden of the debts, this also puts the company at risks in the future when it comes to paying rents in exceptional contexts such as the one we have been through for the past 2 years.

Finnish retail chain Stockmann has sold its department store properties in Tallinn and Riga for €87m, retaining the right to operate the stores through a lease-back agreement. The proceedings of the sale will be used to reduced guaranteed restructuring debts.

The department store company operates 6 units in Finland, in addition to the stores in Estonia and Latvia.

Stockmann sells department stores properties in Tallinn and Riga

What: Selfridges joins Paco Rabanne and Fondation Vasarely to create unprecedented store windows, in-store art exhibitions, pop-ups and NFTs.

Why is it important: This marks Selfridges’ first foray into the metaverse and it plans to simplify access for its customers, by making it possible to buy NFTs with a regular bank card over the counter, no need for crypto currency here.

Throughout the season, Paco Rabanne’s Spring 2022 range will be dropping throughout the store and be available to rent or buy. To embrace the store’s sustainability commitments Selfridges will also curate a mix of other products both new and pre-love featuring Vasarely-like designs.

The Corner Shop will also make available series of different items such as hand-painted Bamford watches, Globe Trotter luggage and “gift shop” items featuring Vasarely graphic artworks.

Selfridges enters the metaverse and NFTs

What: Inno is reinventing itself to remain central in the Belgian retail panorama

Why it is important:  New logo, new concept, new offer and new systems: it is a complete reinvention of the company that CEO Armin Devender, who joined in 2019, has led since his arrival.

Inno (a founding former member of the IADS and part of Karstadt Kaufhof) has been working on a new concept to better fit in today’s Belgian retail panorama, which has been revealed in 4 of its 16 points of sales (Liège, Louvain, Sint-Niklaas and the pilot project in Schoten).

The company also launched its marketplace and implemented a new ERP system, in addition to revamping its logo (new colours) and proposing new services.

It is reported that Inno went through a -25% loss in 2020 in terms of sales.

Belgian department store company Inno is upgrading itself (French)

What: Buy Now Pay Later (BNPL) finance platform Klarna has launched its own payments card in the UK.

Why it is important: The new physical card is set to bring a BNPL solution to in-store payments. Klarna claims there’s a waitlist of 400,000 consumers in the UK showing BNPL is still very appealing, especially with physical commerce rising again.

It launches with its ‘Pay in 30’ scheme, which allows consumers to pay any time up to 30 days after purchase, with plans to add additional payment options in the future.

It's an interesting development as some consumers hold back from using traditional credit cards that can be expensive in favour of the BNPL method that helps them spread out payments. And as footfall is stores is rising, it's clear that consumers are also seeking physical solutions similar to those that they have online.

Klarna launches physical payment card in UK

What: From 31 January 2022, Nordstrom will open a shop in its New York flagship store called “See You Tomorrow” where it will offer customers high fashion second-hand. It is supposed to be a six-month test in the New York store and on the internet.

Why it is important: There is a difference in the Nordstrom approach to second-hand compared to other retailers. The store will source garments from its own inventory: the merchandise will be the ones returned by customers and then cleaned and possibly repaired.

Nordstrom has a liberal return policy, and many of the brands have expressed interest in the test.

Resale garment sales were about USD 28 billion last year and are projected to be about USD 75 billion by the end of 2025. The resale market is growing very fast, but one has to wonder whether this will cannibalize sales from the traditional fashion departments but how much will it divert customer spending. Rent the Runway has captured a good portion of the rental market, and resale companies like RealReal, Fashionphile, ThredUp and Vesitaire are important resale vendors.

Nordstrom Starts Resale Of Luxury Brands January 31

What: Gap releases its premiere collection of limited-edition non-fungible tokens, in collaboration with Frank Ape artist Brandon Sines.

Why is it important: Gap fans can collect the brand’s hoodie digital art at Common and Rare levels and earn the opportunity to purchase Epic, limited-edition digital art by Frank Ape as well as a physical Gap x Frank Ape hoodie made from recycled materials.

Gap’s NFTs were built on Tezos, a blockchain platform known for energy efficiency and smart contracts. They promote low energy consumption and carbon footprint, allowing Gap to emphasize their commitment to do better for the planet.

While the consumer world focuses on NFTs, blockchain-based contracts have attracted intense interest across multiple sectors. The company’s work can now lay a foundation for other efforts, such as tokens that offer access to VIP events, exclusive products, new levels of clienteling and more.

Gap launches first NFTs 

What: Nordstrom is reported to be considering spinning-off its loss-making off-price Rack business

Why it is important: It is building on a strategy which has been previously used by other department stores to split between online and offline businesses but applied here to an entire division rather than a sales channel.

Nordstrom CEO Erik Nordstrom mentioned during the Q3 earning call that he was not satisfied at all with the recovery of Nordstrom Rack, which was not aligned with customers’ expectations in terms of number of premium brands and price point level of products sold there.

This is the reason why Alix Partners (who is also advising Saks Fifth Avenue, Hudson Bay and Macy’s on their e-commerce brand spin-off projects) has been appointed to help improve the overall performance and profitability.

According to Bloomberg, Alix Partners would be in fact exploring with Nordstrom the possibility to proceed with a spin-off of their Rack branch and consider what it would entail in terms of management team split and individual public reporting. This approach builds on Alix Partners’ management of similar but not identical business cases.

Nordstrom reported to consider a spin-off of Nordstrom Rack business 

What: Neiman Marcus Group promoted two senior leaders in order to drive Supply Chain and Technology Efforts.

Why is it important: NMG is making long-term investments in the business including, the enhancement of the company's systems and distribution facilities, the retailer's Connect platform, the acquisition of Stylyze, and new digital labs.

They have appointed Amanda Martin as Senior Vice President, Chief Supply Chain Officer. Martin will take over responsibility for all supply chain operations, including NMG's multi-year supply chain transformation as well as oversee the retailer's photo studio and customer care divisions.

Vijay Karthik has been promoted to Senior Vice President, Chief Technology Officer. Karthik will drive end-to-end customer facing IT development and architecture, in addition to leading a number of functions including omnichannel engineering, cloud platforms, operations and reliability, and architecture for the luxury retailer.

Neiman Marcus supports the organisation's growth roadmap 

What: The first store opens in Las Vegas. The digital lingerie brand will also open stores in Los Angeles, Houston, Philadelphia and Washington, D.C., later this year.

Why it is important: In its three-and-a-half year lifespan, the intimates business has continued to gain traction in the innerwear world, thanks in part to Rihanna’s star power, as well as her promise to deliver a bra and underwear brand for all body types at a time when lingerie giant Victoria’s Secret faced backlash for exclusive marketing messages.

Rihanna’s Savage x Fenty goes physical

What: Neiman Marcus has partnered with Balmain to create a special pop-up store displaying the luxury brand's collaboration with Barbie.

Why is it important: The exclusive experience is a celebration of Neiman Marcus' 10-year relationship with Balmain, being the luxury multi-brand retailer with the largest assortment of the French fashion house's collections worldwide.

Neiman Marcus customers will be able to enjoy weekend activities including a live DJ set, a custom cotton candy machine and photo opportunities in a life-sized Barbie doll box at the Neiman Marcus NorthPark location in Dallas, Texas.

The pop-up mimics the iconic Grand Palais in Paris, where customers can sit on Parisian benches and interact with the limited-edition collection in a garden similar to the famous Tuileries gardens.

The limited-edition collection plays with new spins on familiar Balmain signatures, including the house's iconic marinière and mesmerizing Labyrinth pattern. There will also be new takes on iconic designs recently introduced, each slightly adjusted to reflect the modern Barbie aesthetic, while never veering away from Balmain’s atelier standards.

The collection will be available online at Neimanmarcus.com and in select Neiman Marcus stores.

Neiman Marcus launches exclusive Balmain X Barbie pop up experience

What: Walmart is testing new features in their prototype store to improve the customer experience.

Why it is important:  Given their firepower (the first phase of tests and experiences is already being rolled over in 1,000 stores), any innovation made by Walmart has all chances to become a staple in their stores and therefore to become a bottom line expectation.

Walmart introduces a new in-store experience with an interactive approach allowing customers to touch, feel and try new items, through its innovation incubator called “Time well spent”. This project is the second phase of Walmart’s store redesign project, after a first phase which focused on navigation and wayfinding, now currently rolled over in 1,000 stores.

The Time Well Spent store (in Arkansas) includes the following features:

• Activated corners that can help customers feel products, such as pillows or blankets that can be touched and squeezed and then directly added to cart,
• Elevated brand stores including the possibility to test in real conditions the products for categories where it was not the case before (strollers, car seats, men’s cosmetics..),
• Digital touchpoints also helping to sell additional products and services such as insurance or delivery options.

In short, Walmart is testing new ways to elevate their stores and design them as destinations rather than competing solely on the price point.

Walmart brings the interactive store 

What: A selection of 10 brands (usually DTC) increasing their retail footprint in the US in 2022.

Why it is important:  For these brands, more stores mean more business and profit, through the right articulation with their online and digital offering and customer processing.

Placer Labs, an analytic firm that tracks customer foot traffic for retailers, hospitality groups and real estate companies, compiled a selection of top 10 US retail brands which are growing their retail footprints. In their specific case, brick & mortar expansion goers hand in hand with rising performances and profitability. The list includes several categories of varying importance for IADS:

• F&B businesses (Raising Cane’s chicken Fingers, Dutch Bros. Coffee,
• Health-related businesses (Blink Fitness clubs) or Sephora inside Kohl’s shop in shops.
• Retail: Warby Parker, which has pioneered into going from DTC to brick & mortar, and shows an impressive +70% September 21 to September 20 foot traffic increase, Allbirds (shoes), Arhaus (home improvement retailer), Burlington,
• Convenience stores : Gopuff, which operates on average 1,200 sqm stores,  pOpshelf (from Dollar General).

For all those players, it is all about raising the right stores footprint and adapting it to their online business so that they can provide a coherent and holistic experience to customers.

Top 10 US retail brands increasing traffic and performance in 2022