What:  A new app uses AR to guide customers to the items they want to purchase, in a pilot store located in London.

Why it is important:  This is a good example of reasonable usage of tech to improve the customer journey and bring them a true valuable service.

Marks&Spencer has launched a new app, “List & Go” which allows customers to know exactly where the items they plan to purchase are located in the White City (London) store. A real time navigation system guides them to the item and then proposes the fastest route to the next one.

This is an example of “test and learn” approach as the goal is to learn from this initiative in the White City store to then expand it to the rest of the “10x digital” stores network, i.e. stores fitted and equipped with adequate systems to support such services.

 Marks & Spencer trials in-store AR app 

What: Macy’s will temporarily shorten its store hours on some days at all of its stores for the rest of January. Hours are reduced to 11 am to 8 pm from Monday to Thursday, compared with 10 am to 9 pm earlier.

Why it is important: Walmart, which has more than 4,700 US locations, temporarily shut almost 60 stores in Covid hotspots in December to sanitise them against the virus. Apple also announced they will close their NYC locations.

Amid omicron surge, Apple closes all New York stores to retail customers

Macy’s Shortens Store Hours as COVID-19 Cases Surge 

What: Despite the Covid situation, retailers managed to break new sales records in 2021, with $1.14 trillion online worldwide and $257 billion in the U.S.

Why it’s important: As we enter a new year, retailers must push their brands to platforms such as social, gaming, messaging and the metaverse to engage shoppers where they discover and purchase products. They must also double their efforts to reimagine physical stores to support ever-changing digital experiences

Global online sales exceed $1 trillion during the holidays: Salesforce

What: The new owners of Selfridges are all about upgrading the food hall and making the most of the real estate by opening a new hotel in disused building

Why it is important:  It is all about creating an experiential hub, thought as an ecosystem, with a luxury hotel connected to a top end delicatessen and food hall, surrounded by a carefully curated selection of brands and luxury products.

Within the framework of the revamp of the flagship store in Oxford Street, Sigma and Central Group plan to upgrade the food hall, which is according to them underexploited so far (all the more that the consortium excels in this part of the business in KadeWe and Globus) and to open an hotel and apartments in a portion of the building that has not been in use since 2008.

Selfridges’ new owners plan to open a luxury hotel in the flagship location 

What:  Harvey Nichols released its fiscal results for 2021

Why it is important:  Numbers speak for themselves: -45% in turnover, which gives an insight of the extent of the situation for Harrods and Selfridges.

Harvey Nichols, owned by Dickson Pool, saw its sales dip and losses increase, from £222,1 m in 2020 to £ 121,3m in 2021 in terms of sales, and from -£1,1m in 2020 to -£28,1m in 2021 in terms of losses.

Such results are due to lockdown leading to store closures for 8 months out of 12, Brexit and a sharp decline in terms of tourist arrival. There is however no talk of closing any of the 8 stores in the UK and 6 overseas as they keep the support of their owner.

Revamp in terms of offer, IT systems and customer loyalty programme are underway in order to make sure the company remains competitive once the business reopens, also through partnerships with Farfetch and Ocado.

Harvey Nichols’ losses widen but remains well funded 

What: Saks Stylist is a complimentary personal stylist and shopping service that combines proprietary technology and real-life styling expertise.

Why is it important: This service focuses on making online luxury shopping exciting and easy. Stylists are from all over the country and work remotely allowing for a wide range of hours. It also helps cut down or eliminate returns. The combination of AI and a personal touch by a real-life stylist really pinpoint what somebody will like which reduces the amount of items a client will want to return.

Customers take a quiz on Saks.com giving details on their personal style and needs, such as favorite designers, colors and their body type. They will then be matched with a personal stylist who will provide curated recommendations within 24 hours. The customer can reengage their stylist for assistance at any time in the future once the initial relationship is established.

Saks Stylist Launches on Saks.com 

What: Next is to open a department store in all but name as it transforms its existing sites in the Atria centre in Watford in the UK.

Why it is important: The company will bring together its fashion, beauty and home ranges in a single store for the first time as it merges two locations in the Hertfordshire mall. It's unknown yet whether it will replicate this model elsewhere.

Opening in April, the new store will cover almost 95,000 sq ft across three floors. And next door, there will be a 4,500 sq ft Victoria's Secret branch that will be accessed from the Next location as well as having its own entrance.

Clearly, the converted and extended space will feature many categories found in a traditional department store. The retailer has developed and expanded on its business model in recent years to become a major seller of third-party brands, added categories and become an operator of stores for other labels, both physical and digital.

The evolution comes as M&S has also been pivoting to sell more third-party brands and to offer more categories in its existing stores. Such changes make good commercial sense for both businesses.

Next creates a 'department store' 

What: The UK department store is now part of the luxury department stores collection led by Central and Signa

Why it is important:  Canadian operations remain in the Weston family portfolio.

Central Group and Signa Holding have teamed up again to acquire Selfridges for a non-confirmed amount of GBP 4 bn. They already jointly own and operate la Rinascente, KaDeWe, Illum or Globus in Europe.

The agreement includes 18 stores out of the 25 stores owned by the Weston family, including Oxford Street, Manchester, Birmingham, the De Bijenkorf, Brown Thomas and Arnotts locations. Holt Renfrew, however, will remain the property of the Weston family.

The current leadership teams will remain in place and the consortium will represent a cumulated turnover estimated to €7 bn within 2024.

Central and Signa win Selfridges, Holt Renfrew not included

What: Surprising number of consumers purchased items in metaverse virtual store shopping.

Why is it important: Brands are racing to partner up, develop strategies and spearhead divisions in the metaverse.

The virtual e-commerce platform Obsess enlisted Kantar research firm to find out how people feel about e-commerce in the virtual worlds. Out of 1,001 U.S. consumers, Kantar found that this kind of shopping experience inspired a significant amount of enthusiasm and high rate of repeat customers.

Millennials topped the list, at 77 percent, then Gen Z at 69 percent and 67 percent of Gen X shoppers.

Nearly 74 percent of Gen Z participants purchased digital items in games (accessories, skins or garments for their avatar). 60 percent of these young consumers believe selling on metaverse platforms is a must for brands. 54 percent said they want to be able to shop anywhere they go online; 45 percent think virtual stores should work like online shopping malls, and 41 percent want brands to set up metaverse stores because it would be convenient for buying both physical products and digital goods like NFTs.

40 percent of Gen Zers and 40 percent of Millennials, want to shop for real or virtual products in the metaverse.

The enthusiasm goes beyond shopping and transactions. When researchers asked participants about exploring virtual experiences from their favorite brands in video games, 51 percent of Gen Zers and 44 percent of Millennials said they would be very interested.

Other companies launch their own virtual e-commerce stores, relying on tech partners to build them. These immersive environments can feel more familiar to shoppers.

Although skeptics remain uncertain about the metaverse, the fashion sector seems sold. Retailers and brands will need to hone their metaverse messaging and make the appeal clear. Many, including brands such as Gucci, Nike, OTB Group, Rebecca Minkoff and numerous others, have already started.

70 percent of Metaverse virtual store visitors purchased items

What: The Australian department store reported a 12.3% increase in sales during the five months to January 1, despite losing 27% of its brick-and-mortar trading days due to lockdowns.

Why it is important: Myer’s online trade rose 54.3% year-on-year in the five month period tracked and now accounts for 27.7% of overall sales, compared with 20.2% a year earlier.

Despite an improved gross profit, the company has been facing higher costs of doing business.

Myer records double-digit growth

What: The Bay, Hudson Bay’s e-commerce business, names Alexander Meyer as their Chief Customer Officer.

Why is it important: Alexander Meyer will oversee the brand strategy and other responsibilities such as customer insights, marketing and creative as well as loyalty and communications. Meyer’s focus is on high growth, brand and personalization.

He will lead the marketing at both The Bay e-commerce website and the Hudson’s Bay brick-and-mortar store chain.

The Bay hires a Chief Customer Officer

What: Luxury platform Farfetch agreed to buy Violet Grey for an undisclosed sum, bringing in some more beauty expertise ahead of its planned launch into the beauty market later this year.

Why it is important: Farfetch is approaching the market in its own fashion, leaning on its a high-tech operating system that connects merchants and consumers. The platform plans to inject its own technological savvy into Violet Grey and to learn as it moves to win over the category.

While brands in general have been cautious when it comes to selling on larger platforms, Farfetch has presented itself as more of a conduit to shoppers than a competitor. José Neves has become one of the industry’s leading bridge builders, bringing brands on the platform, buying brand house New Guards Group and Browns and threading the needle to put together a partnership with Alibaba and Compagnie Financière Richemont (with backing from Kering CEO François-Henri Pinault’s Artemis) in China. The CEO is also working with Richemont to build a broader luxury platform that would link Net-a-porter, Farfetch and perhaps other luxury groups.

Farfetch acquires Violet Grey beauty business

What: M&S.com is allowing customers to join live shopping series on Fridays with weekly episodes that are interactive and shoppable.

Why is it important: M&S has been working with the livestreaming software company LiSA on the service, that allows M&S’s 13.5 million online customers to join the broadcast. The episodes are streamed live, stored on the site and can be replayed at any time.

Live shopping trend is expected to account for 10 to 20 percent of global e-commerce by 2026. It added that the business is worth $170 billion in China and is projected to be worth $25 billion in the U.S. by 2023. M&S said it also sees live shopping as a new channel for communication with customers.

Mark & Spencer launches live series

What: Lotte department store's new CEO Jung Jun-ho is striving to change the company culture. To that end, Jung first introduced his "ABCD" policy, for "Agility," "Being proactive," "Creative" and "Design is everything, everywhere." The new chief asked for quick decision-making and horizontal communication between all employees.

Why it is important: Lotte is well-known for its authoritarian leadership style. Jung wants to establish a work culture and environment where people freely share their ideas, but the existing system is not used to it.

It will take time as the company is struggling to break down its vertically oriented corporate culture. Jung has been throwing out topics for discussion consistently on the company's intranet, but most employees only compliment his opinions, rather than actually sharing theirs.

Lotte Department Store employees are accustomed to following the "check-and-confirm" method, in which all details need to be confirmed with various levels of management, even when making minor decisions. This system has dropped Lotte into second place behind Shinsegae in sales since 2016.

Lotte department store CEO to change company culture

What: LVMH net profit soared 156% year-on-year in 2021, as a better-than-expected fourth quarter (+51% vs 2019) confirmed strong demand for its luxury products.

Why it is important: The luxury conglomerate net profit totaled EUR 12 billion last year, up 68% compared to 2019, beating a FactSet consensus estimate of EUR 10.9 billion.

The growth is reflecting the strength of Louis Vuitton and Dior, as well as a record year for Celine and Fendi.

LVMH net profit jumps 156% in 2021

What: British retailer Marks & Spencer nudged up its profit outlook after it reported a strong Christmas performance, with sales rising 18.6% year-on-year and 8.9% compared to two years ago.

Why it is important: The update provides evidence that one of Britain’s most elusive turnarounds could finally materialise. M&S’s shares have nearly doubled over the past year.

International sales rose 17.4% on the year and 5.1% on two years ago. Total group sales rose to GBP 3.272 billion — an 18.5% one-year rise and an 8.6% two-year jump. Online sales also continued to be strong, with growth of 50.8%. But store sales were down 10.8% on 2019/20, with retail parks up, continuing to outperform stores in city centres.

Food sales increased 12.4% against its pre-pandemic performance two years ago in the 13 weeks to 1 January, beating market forecasts of 10% growth. Clothing and home sales rose 3.2% on the same basis, also surprising on the upside. The market had expected a 0.9% fall.

M&S raises its outlook 

What: J.C. Penney is accelerating its digital transformation by appointing two technology executives to its C-suite.

Why it’s important: Sharmeelee Bala will serve as J.C. Penney's chief information officer and Katie Mullen will join J.C. Penney as the company's chief digital and transformation officer.

The top IT priority for now is supporting e-commerce, a vital component of operations in the context of changing consumer behaviour, as the pandemic has accelerated digitization plans by one to two years.

J.C. Penney targets IT, e-commerce overhaul with new executives

What: Frasers Group set to expand Flannels into Ireland for the first time with three new stores in Dublin, Cork and Blanchardstown.

Why is it important: Flannels will be the first to open outside of the UK, demonstrating a key expansion for the next generation luxury retailer.

The three locations are set to open in Winter 2022 / Spring 2023, with Frasers Newbridge and Cork, set to open late Summer 2022.

Flannels makes first foray in the Republic of Ireland

What: Pete Nordstrom discusses the latest developments and partnerships in evolving Nordstrom’s assortment and appeal.

Why is it important: Nordstrom’s merchandising strategy combines a mix of curiosity, openness to new types of vendor partnerships and expanding their assortment online. Along with those, there is 10% turnover of labels carried by the retailer that helps keep the assortments fresh.

Nordstrom strives to become more important to brands, particularly those desired by Nordstrom guests. They are doing this by extending the offer by merchandising more online.

With Nordstrom’s broadening online assortment, the search function, personalization, and data become even more important, so the experience for shoppers isn’t overwhelming.

Pete Nordstrom on Nordstrom Inc.’s Merchandising Philosophy 

What: Hedge funds are urging Kohl’s and Macy’s to consider radical changes to how they operate.

Why it is important: Some investors want to sell department stores in pieces as they see retailers’ true value in the land and buildings they occupy, or their brand name, rather than their ability to sell products.

After Saks split off their website last year and planned on a public offering that could value its e-commerce at USD 6 billion, activist investor Jana Partners took a stake in Macy’s in October and urged the chain to follow suit.

Two investment groups made moves to buy Kohl’s: a consortium of investors backed by hedge fund Starboard Value LP put in a USD 9 billion offer, and private equity firm Sycamore Partners is reportedly plotting a competing bid.

Even before the potential buyers emerged, Kohl’s was already the target of activist investors, Engine Capital and Macellum Advisors, which are pressuring the company to sell off its real estate and spin off e-commerce operations. The idea is that offloading some properties will generate cash flow for the company, and then the retailer would rent its most profitable stores instead. With digital separation, creating an independent online entity is a tactic to attract new capital.

Real estate transactions and e-commerce spin-offs can be lucrative for a retailer’s investors. What it means for the fashion industry is less clear as it might not be a long-term play to “save” the US department stores.

Why activist investors are targeting department stores?

What: Von Maur is a relatively important, albeit not so famous, department store chain in the US.

Why it is important: They have a capital structure which is similar to many IADS members’, as well as an approach which is quite different from the other US players from this market.

WWD interviews Jim Von Maur, CEO of the 150-years-old Von Maur US department store chain and representative of the fourth generation of the founding family. The company has had 4 CEOs over 150 years.

According to him, such a longevity is due to the avoidance of overexpansion, over-reliance on sales, and avoidance of debt. It represents today 36 department stores and 70 “Dry Goods” women’s specialty chain, and claims to achieve $1 bn in sales with $200 per square foot (i.e. $20 per square meter, on average), all in Midwest and South of the US.

The company relies on “good old recipes” to keep the business sustainable: sales associates nurturing a direct relationship to customers (in a low-tech mode), limited markdown policy (raising the question of the e-commerce competition), strong curated selection, and digital expansion (10% of sales, to be compared with 40% at Nordstrom).

Von Maur A Family Business With Tradition, Service and 150 Years of History

What: Tech investors are backing up ghost kitchens that they see as an uber-like natural expansion.

Why it is important: Given the low margins of the sector, disruption might not be around the corner.

Reef, a US-based ghost kitchen operator, is facing issues at a moment when it is expanding nationwide, with many incidents taking place in its points of production, while its business model is to build kitchen in warehouses or trailers, which are cheaper than storefronts. Other food operators, such as KFC, Wendy’s and others, are also looking at the concept.

However, while these models appeal to digital investors, they have to face real-world issues: logistics, people, supply chain. The most important issue is that the ROI can not, by definition, top up what tech investors are used to. Analyst Benedict Evans reminds that in such an industry with low margins, massive scaling is needed, which in turn requires investors’ patience.

Ghost Kitchens Are Proving to Be a Messy Business, as Reef Global Shows

What: Macy's is grappling with how to make its e-commerce business a standalone company without losing customers who rely on its department stores to pick up or return items they bought online, according to people familiar with the deliberations.

Why it is important: The e-commerce business could be worth USD 14 billion on its own, more than Macy's entire market capitalization of about USD 8 billion. But the split of e-commerce and stores, highlighting the critical importance of physical retail, is not comparable to Saks’ similar move earlier this year.

Macy’s asked consulting firm AlixPartners to review its business structure after Jana Partners urged it to separate its e-commerce arm. AlixPartners also advised HBC on the separation earlier this year of Saks’ e-commerce business from its department stores.

Macy's has close to 800 stores. It has said its online sales are two to three times higher per capita in regions where the stores are located, because of the convenience for customers of picking up and returning items at the stores. Saks, on the other hand, has only about 40 stores, and the privately held company's e-commerce business generates annual revenue of less than USD 1 billion. That is a fraction of Macy's e-commerce revenue, which is set to exceed USD 8 billion this year.

A separated Macy's online business will need to have extensive commercial agreements with the company holding the department stores. They would have to govern everything from merchandise distribution and storage to promotions and marketing, in order to provide Macy's customers a seamless experience in-store and online.

Jana Partners suggested that a benefit of separation could be a cash infusion in the online business that would help hire top talent and invest in new technology. It pointed to the case of Saks, which attracted a USD 500 million investment from private equity firm Insight Venture Partners at a USD 2 billion valuation for its online business.

Macy's reliance on stores for e-commerce weighs on mulled split 

What: Amazon harnesses the power of AI enabled products to offer an experiential and interactive Christmas window display.

Why it is important: Amazon's offering points to a potential role for customized experiences driven by smart technology.

Amazon has created the “world’s first smart holiday window” enabling visitors to ask Alexa to turn on holiday smart lights, call Santa, and play seasonal music. The window displays Amazon products such as Alexa, Echo, Fire TV, and Kindle.

Amazon's holiday window showcases Alexa-enabled experiences