What: It’s not only gamers buying digital fashion, as technology and knowledge improve, so does the data-backed understanding of what people want to buy and wear virtually.

Why is it important: People who buy digital fashion aren’t all gamers or young male crypto enthusiasts, many are women, and many are interested in shopping virtual stores. With the broader fashion industry looking for opportunities in the metaverse, new data shows not only what people want to wear in other worlds, but also how much they are willing to pay.

Digital fashion is a key component to how people shape virtual identities, and while moving from niche to passionately hyped, experts say real uptake by brands depends on separating fact from fantasy, especially as brands evaluate if digital apparel can manifest into a potential revenue stream.

A survey conducted by The Dematerialised fashion marketplace included 3,000 people across eight global markets (US, UK, Germany, Mexico, Korea, Saudi Arabia, Egypt and UAE) and reached a mix of people who didn’t all identify as tech enthusiasts. Half are millennials and the others are Gen Z or Gen X, evenly split between men and women. Survey indicates that 82% have already purchased a virtual item and one-third had purchased digital fashion. 47% interested in digital fashion are not crypto users.

CEO of Geeiq, which analyses metaverse platforms based on social media followers, saw that Zepeto’s social media audience is two-thirds female and 70% are younger than 24. Most are interested in luxury fashion brands. Followers are 13 times more likely to follow brands like Prada, Gucci, Fendi and Balenciaga. Within Roblox’s various spaces, 70% of users are 24 or younger, and the majority are male. Aeropostale, Gap and Forever21 are among the brands with the most affinity.

Virtue found that one in five active Roblox users updated their avatars on any given day, including the body, face and accessories. People who are established in the metaverse, with cryptocurrency and have an avatar, are three times more likely to have purchased more than 30 virtual goods.

Digital fashion will become mainstream within five years, according to two-thirds of those Virtue studied. Respondents expect nearly half of their overall wardrobe to be digital in five years.

Metaverse fashion is taking shape 

What: Retail-as-a-service startup, B8ta, has shuttered its U.S. operations.

Why it is important: B8ta was hoping to reinvent brick-and-mortar retail, but ultimately its reliance on brick-and-mortar stores proved to be its downfall after the company failed to reach a deal with landlords that would allow them to stay afloat.

B8ta dubbed itself a retail-as-a-service platform, rather than a retailer. Brands paid a monthly fee to not only display their products at a B8ta store, but also to get access to the company’s software, through which they received information like how much time customers spent demoing a product. The thesis of B8ta was that brands would ultimately pay for the software because of the great in-store experience and foot traffic it provided.

The conflict with the landlords follows a decision last year made by the company to half its store count due to decreased foot traffic. International affiliate B8ta Japan, which operated three stores, acquired the brand’s licenses and is now a standalone, operational business. B8ta Mena also remains operational in the UAE.

B8ta shutters U.S. operations after failing to reach a deal with landlords

What: The fast fashion giant is launching a marketplace with a roster of 13 external brands.

Why it is important: For traditional retailers, competition is now coming from everywhere, including from brands themselves. The brands’ marketplace approach generates two opportunities for department stores: either team up with them (as shown by FNAC/Darty and Manor) or significantly work on the store’s offer differentiation.

Fast fashion giant is launching a “H&M with friends” marketplace in Sweden and Germany, where customers will be able to find the group’s own brands (Weekdat, &Other Stories, Monki, Arket) but also Lee, Fila, Superdry and Crocs, among others (a total of 13 external brands will be also present).

Sweden and Germany are test markets, and if the experience is successful, other countries will be included in the programme. As of today, more than 1/3 of H&M’s revenue comes from e-commerce.

H&M is not the first brand to venture in marketplace, as Decathlon or Maisons du Monde already launched such initiatives.

H&M becomes a marketplace

What: Despite a lack of tourists in Thailand, Siam Piwat reports surging sales.

Why is it important: Siam Piwat says sales at its part-owned IconSiam flagship in Bangkok soared 43% in the final quarter of last year, the strongest growth in the three years since the centre opened, as the impact of Covid-related movement restrictions eased.

Sales of luxury brands “skyrocketed” during the past two years after several high-profile brands increased their store space or partnered with Siam Piwat in pop-ups.

Their “OneSiam SuperApp” that launched in late 2021 helped drive sales from registered members by more than 45% year on year. The app connects with more than 1,000 tenant stores and 100 business partners across 13 industries.

Siam Piwat says it aims to boost sales to member customers by 30% this year.

Siam Piwat’s sales surge amid Covid 

What: British retailer, the John Lewis Partnership, reported sharply lower annual losses and restored its staff bonus in fiscal year 2021, saying its recovery plan was gaining momentum.

Why it is important: John Lewis department store was hit hard by Covid but achieved its highest ever sales of GBP 4.93bn, up 8% like-for-like on last year.

Here is a summary of the Partnership’s results:

• Profit before exceptional items rebounded to GBP 181m, up 38% from last year.
• Loss before tax was GBP 26m, GBP491m better than last year.
• A bonus of 3% was awarded to Partners, equivalent to 1.5 weeks’ pay.
• Partnership to pay voluntary Real Living Wage nationwide this year; 2% pay rise.
• Total Partnership sales of GBP 12.5bn, up 1%.
• John Lewis achieved its highest ever sales of GBP 4.93bn, up 8% like-for-like on last year.
• Waitrose sales hit GBP 7.54bn, up 1% like-for-like on last year.

John Lewis Partnership shares fiscal 2021 results

What: Neiman Marcus announces the appointment of Katie Anderson to Executive Vice President, Chief Financial Officer.

Why is it important: Anderson will drive all financial functions for the Company as well as risk management, real estate, supply chain, and track progress towards the luxury retailer's growth execution and strategy. Her appointment comes at a pivotal time for the Company as it continues to invest in digital-first, stores, data, technology, and supply chain.

She will join the group leadership team and report to Geoffroy van Raemdonck, Chief Executive Officer, Neiman Marcus Group.

Neiman Marcus names new executive vice president, CFO

What: Walmart and Space NK join forces in the battle for the prestige beauty shopper and will launch in early summer with 250 locations.

Why is it important: Walmart is the latest mass market giant to join in the market share battle for prestige beauty dollars. They are partnering with Space NK, a U.K.-based specialty retailer, to bring high-priced beauty to its shelves.

The concept will launch on Walmart’s website on March 15 and bow in 250 Walmart locations starting in early summer, with most locations consisting of a branded endcap and an adjacent aisle. Fifteen brands are participating at launch, and there will be more than 600 stock-keeping units, to begin with between brick-and-mortar and online extensions of the partnership.

Walmart teams up with Space NK

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