What: Apple will let iPhones accept payments through a new Tap to Pay feature, turning anyone into a merchant.

Why is it important: A new update coming to the iPhone in the US, will turn the device into an always-on contactless payment terminal. Instead of asking people to bump a smartphone or credit card to a special terminal, sellers will be able to take payments using only their iPhones and an app.

The feature won’t be limited to just Apple Pay and other iPhones, contactless credit and debit cards, and other digital wallets are also accepted through a simple tap to the iPhone.

New iPhone update will turn anyone into a merchant

What: Chinese sales associates often go above and beyond and are key to brands hitting increasingly ambitious sales targets.

Why is it important: During the first lockdowns in China, sales assistants at luxury boutiques found ways to stay in close contact with their clients, mostly via WeChat, offering special services and promotions. Even as stores re-opened the initiative continued and their rapport with clients deepened. In some cases, luxury consumers in China now consider their sales associates to be someone with whom they have a meaningful relationship. Asking how beneficial it is for the luxury brand is complicated.

These communications aren’t limited to products and promotions but cover day-to-day topics. SAs are welcomed by consumers, who see it as a sign of how valued they are, by their SA and by the brand they are working for.

Luxury brands have recognised the growing importance of these staff members, and it’s difficult to overstate how important SAs have become as part of the Chinese luxury consumer journey over the past few years. Wages, in some cases bonuses, for frontline retail staff in China have risen significantly in recent years as a result.

It’s easy to see how the boom of China’s unique luxury service culture can be a win-win for both the sales assistants and customers.

These relationships are of course very beneficial to help boost sales, and for local management. However, this intimate customer service dynamic can present significant challenges as it places the relationship with the customer in the hands of the sales assistant, giving the brands less direct control.

Another headache for brands, an arguably more pressing and potentially contravenes some luxury companies’ ethics policies, is the gifting that goes on between customers and their SAs in order to seek favour.

The solution starts with added awareness of the problem and brands having the managers put a higher priority on the wellbeing of their SAs. They should provide more support for SAs and shift KPIs to consider the out-of-hours work sales assistants do, the conflict of interests that is sometimes inherent and the high expectations placed on them by consumers.

Sales Associates and China’s luxury retail boom

What: Following Louis Vuitton’s decision to progressively close all of its downtown duty-free stores in the country by March 2023, Chanel will also exit its downtown duty-free businesses outside Seoul, closing stores at the Busan Lotte Duty Free shop and the Shilla Duty Free Jeju Fashion Boutique by the end of next month.

Why it is important: The closures follow the decline in the Chinese daigou trade (a grey market in which surrogate shoppers buy lower-priced offshore products and resell them in China). Daigou shoppers accounted for more than 90% of sales at Korean duty-free stores in the years prior to the pandemic.

China overtook South Korea as the world’s largest duty-free market in 2020, with sales valued at close to USD 7 billion. GlobalData predicts the country’s duty-free sector will experience a constant annual growth rate (CAGR) of 17.4% from 2019 through 2025, largely driven by Chinese government policies promoting domestic duty-free consumption.

Chanel pulls back from Korean duty-free 

What: Seven & I Holdings plan to sell SOGO and Seibu as part of a strategy to shift its focus on, 7-Eleven Japan Co.

Why is it important: Sogo & Seibu was reported to have been struggling since the pandemic as consumers went online and operating hours of physical stores were impacted by regulations.

While Seven & I has not confirmed a sale process, it stated it was looking into all possibilities regarding changes to the business portfolio, including the sale of shares in Sogo & Seibu.

The sale of Sogo & Seibu follows campaigning by institutional investors who want to see the company focus on its core convenience-store business, but it comes in the midst of a moderate recovery in Japan’s department store market.

Seven & I Holdings to sell Sogo & Seibu 

What: Macy’s, beating expectations across several fronts, saw big fourth-quarter gains on the top and bottom lines, and increased its dividend.

Why it is important: The good Q4 results allow the retailer to stick to its Polaris strategy rather than separating its dot-com and brick-and-mortar stores into separate businesses. It involves growing digital, private label offerings and small-format stores Market by Macy’s and Bloomie’s.

For the quarter ended Jan. 29, net income rose to $742 million from $160 million in the year-ago period. Operating income rose to $1.02 billion, or 11.7% of sales, from $401 million, or 5.9% of sales, in the same period a year ago.

Net sales rose to $8.67 billion from $6.78 billion. Comparable sales rose 27.8% in the last quarter from the year-ago quarter, and 6.1% from the 2019 quarter.

For all of last year, Macy’s Inc. generated $1.43 billion in net income, versus a loss of $3.94 billion the year before. Net sales rose to $24.46 billion, from $17.35 billion in the prior year.

Digital sales increased 12% versus the fourth quarter of 2020 and increased 36% versus the fourth quarter of 2019. Digital penetration was 39% of net sales, a 5% point decline from the fourth quarter of 2020, but a 9-percentage point improvement over the fourth quarter of 2019.

About 7.2 million new customers shopped the Macy’s brand during the quarter, an 11% increase versus the fourth quarter of 2019. During the fourth quarter of 2021, 58% of new customers came through the digital channel.

Bloomingdale’s comparable sales rose 37.6% versus the fourth quarter of 2020, and 13% versus the fourth quarter of 2019. About 391,000 new customers shopped the Bloomingdale’s brand during the quarter, a 26% increase versus the fourth quarter of 2019 and spent 41% more.

Results were driven by strong sales of luxury handbags, fine jewelry, men’s shoes and contemporary fashions, fragrances and home.

Macy’s Press Release 

Macy’s soars in Q4, no dot-com spinoff

What: Walmart’s annual report shows that diversification pays. (well!)

Why it is important: Even though the new activities remain small in comparison with the overall retail-related numbers, their increase and marginal size are becoming so significant that they helped Walmart weathering the increased supply chain costs that were the consequence of a very exceptional year 2021.

Walmart announced that its overall sales increased +6,3% in 2021 to $393.2 billion for the US, and +2.4% to $572,8 billion globally. Interestingly, this growth (supported by the US market as Walmart international net sales decreased 16.8% due to divestments) came at the same time from stores, non-retail activities and from online (which experienced a growth slowdown to a +1% in Q4 2021).

Sam’s Club sales ended the year up +9.8% and membership revenue and other income were up +27% to about $5 billion. Advertising becomes a core business revenue stream as it reached $2.1 billion and helped to offset the unexpected increases in supply chain which were evaluated at $400 million over expectations.

This illustrates according to the retailer that a diversified business model is the new normal for retail as it allows to weather any kind of situation while also generating streams of revenue which are not dependent on traffic and footprint.

Walmart increasingly earns revenue from non-retail activities 

What: The group will continue to expand investments into its e-commerce businesses, including urban air mobility (UAM) services and the metaverse, despite its growing losses from online shopping.

Why it is important: While Lotte Shopping sales and operations profit dropped, the department store business put up a good defense.

Last year, Lotte Shopping marked sales worth KRW 15.58 trillion and an operating profit of KRW 215.6 billion, down respectively by 3.7% and 37.7% year-on-year. Its e-commerce revenue declined by 21.5% to show KRW 108 billion, while its operating loss increased by 64% to reach KRW 156 billion in the same period.

UAM is a transportation service using small aircraft, such as flying cars that can take off and land vertically. Lotte plans on utilizing its drones to deliver online orders to isolated areas that cannot be reached easily by road.

Lotte Group's convenience store brand, 7-Eleven, will also play a key role in strengthening its e-commerce. The retailer plans to utilize some 6,000 stores in the country as distribution centres for delivering online orders within an hour of purchase. It also recently acquired Mini Stop, which has 3,000 stores ― a move expected to boost Lotte Shopping's quick commerce initiative.

For its metaverse service, Lotte is almost finished developing its online platform. Lotte's goal is to connect all of its retail subsidiaries with its metaverse service. This connection will enable customers to try out various items in the virtual world prior to making purchases online.

Lotte continues investing in digital transformation 1

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