What: The Neiman Marcus Group has made three key changes at the senior level to reflect “a more modern growth mindset.”

Why it is important: The Dallas-based luxury retailer says women represent the majority of the board and more than 50% of those at the senior vice president level and above.

Natalie Lockhart has been named senior vice president of strategy and execution, responsible for coordinating all aspects of the luxury retailer’s growth roadmap. Lockhart is now also a member of NMG’s group leadership team and heads the new growth execution office.

Chris Demuth has been elevated to senior vice president, people services, environmental social governance, belonging and corporate philanthropy.

Tiffin Jernstedt has been named senior vice president, chief communications officer.

More women at Neiman Marcus

What: Amazon proposes to distant customers ultra-local store tours and experiences via local “hosts” equipped with cameras, able to buy products on behalf of the customer.

Why it is important: Take it in the other way: could Department Stores propose to distant customers such services, including of course their stores but also visits of the city where they are located?

Amazon has launched Amazon Explore, a new service for now only available to US customers, which allows them to engage in virtual travel experiences and shop local products during those visits.

The system is quite simple: a local “host” walks the streets or stores, equipped with a camera, and the shopper is able to guide him and ask the host to buy such and such product. Amazon then takes care of the shipment.

Service is charged by the minute, or total duration. For instance, a 40-mn session in Missisippi is priced at USD 10, while a 75-mn session in Kyoto is priced at USD 90.

Amazon launches shoppable virtual travel experiences

What: Masks are imposed again in the UK, in spite of many incidents during which customers assaulted retailers asking them to wear masks.

Why it is important: All European retailers are watching the outburst of Covid-19 this winter and expecting to be hit by new measures.

With the expansion of the new Omicron variant, Covid-19 is now pushing the UK government to control entries on the territory, by imposing a self-isolation, as well as the permanent wear of masks in retail spaces. Retailers are faced with the dilemma of being proactive, and facing customers’ anger, or waiting to be forced to impose masks, and facing official backslash.

New variant fears mean compulsory face masks are back for English stores

What: A retail veteran’s view on the current paradox between online retailers buying land and department stores being pushed to sell off real estate.

Why it is important: Warehouse space is the new gold rush in the US and elsewhere in the world, to allow smarter, faster, more efficient and less costly logistics.

Walter Loeb, who spent most of his career in retail (Macy’s, May Department Stores and Allied) reviews the current paradox and dichotomy between online players rushing to acquire real estate, while at the same time department stores are urged to divest in stores and switch to become 100% digital.

According to the retail veteran, major US retailers are currently buying a significant number of square metres dedicated to warehousing as a matter of control, both in terms of costs and operations. The top 25 US retailers bought 3,8 m square metres in 2020, a decade high. Owning the warehouse allows to operate more efficiently and save on logistics, but also to be able to tamper with global supply shortage, like the one we are going through this year. This allows for instance to anticipate orders and stock products well in advance, and limit reliance on just-in-time logistics. Amazon is currently the largest corporate land owner in the US, with 78 buildings and 8,36 m square metres.

In the meantime, other retail companies such as Macy’s are being urged to divest their real estate holdings by activist investors who want stores to be sold off. Saks Fifth Avenue is currently going in that direction, by its split between an online company and a real estate one. Loeb is currently in wait and see mode for what relates to this strategy.

Why Retailers Win Big By Owning Real Estate

What: Hermès has popped up in Brooklyn with a temporary gym that takes aesthetic cues from its signature accessory designs.

Why it is important: This is the HermèsFit concept’s first stop in the United States after an inaugural run in Chengdu, China, this past May. From here the concept will travel to Paris, Taipei and Shanghai. After the opening of a Bottega Veneta pop up store last June, Brooklyn has become a destination for luxury brands.

Fans and customers can book special exercise experiences featuring Hermès scarves, which have been applied to boxing bags and inspired new yoga sequences. Those with more of a taste for jewellery can participate in a “kickboxing with bracelets” class that incorporate Hermès’ classic enamel Clic Clac bangle designs.

There are Hermès-inspired barbells, a climbing wall, photobooth and juice bar. Interested participants can pre-register for classes on Hermès’ website or drop by the space at 60 North 6th Street for a peek at the experience. Proof of vaccination is required for entry.

Inside Hermès’ Temporary Gym Installation in Brooklyn

What: Walter Loeb shares his thoughts on how department stores and major retailers can succeed as digital retailing continues to advance.

Why it is important: In the post-pandemic era, most companies must use the internet as a tool to serve their customers and sell more merchandise profitably.

As digital shopping continues to increase, department stores and other large retailers will need to adapt. Walter Loeb gives suggestions on how these retail formats can win in the digital retail revolution.

Department stores need to:

• Take quick action on orders, ensuring all stock is up-to-date to not disappoint customers
• Equip the website with a live chat box
• Define the target audience so the buying team pulls together to allow more fluid complete looks
• Downsize store space to offer a more edited assortment

Chain stores need to:

• Buying teams will need to focus on innovative ideas and new fashion designs
• Services must be evident from the minute a customer contacts the store
• Delivery services will need to be updated to offer speedy delivery with attractive prices.

2022 Will Bring A Digital Revolution To Retail

What: Muji teams up with JD to enter new categories.

Why it is important: It is not the first time that both companies collaborate, as Muji already opened a store at JD headquarters dedicated to its employees, in Beijing.

Muji has entered the fresh food industry by launching a partnership with JD’s Seven Fresh in Shanghai under a joint-venture agreement. The collaboration gives birth to a hybrid format in Shanghai, with Muji products range including food products including ramen or oatmeal, alongside the more traditional home, fashion, and personal hygiene products, through a Seven Fresh shop in shop located within the store.

Muji launches fresh food concept

What: A successful series made fully shoppable through the parallel release of a dedicated collection.

Why it is important: IADS has identified this opportunity back in Q3 2020 and communicated it to relevant members. We believe very much in the parallel release of cultural content and related shoppable merchandise.

IADS partner Mint Group has finally released a collection in coordination with ViacomCBS for the second season of Emily in Paris, due to be aired mid-December. The collection will be released at the same time and will allow the audience to buy almost in real time the garments and accessories features in the series. Among the participating brands, there are Chanel, AZ Factory, Makri, Zeus+Dione, Goossens, Causse and others such as French chef Pierre Hermé. The collection will also be streamed on Netflix.com, Saks.com, and vendors e-commerce websites. Prices run from 30 euros for a box of macaroons to 7,430 euros for a pair of earrings.

 ‘Emily in Paris’ Will Have Shoppable Content for Season 2

What: Rents in three of Hong Kong’s prime shopping areas are near the lowest in more than a decade in the wake of 2019′s anti-government demonstrations and some of the world’s strictest Covid-19 travel restrictions.

Why it is important: While the city is in talks with Chinese officials about reopening their shared border, limited cross-border travel could resume as soon as the end of the year or in the first quarter of 2022. But rents are not expected to rebound quickly, but they may rise gradually.

Rents in three of the city’s prime shopping areas are near the lowest in more than a decade and owners are offering discounts of close to 80% from the peak about eight years ago in Hong Kong’s Russell Street, according to data from Cushman & Wakefield Plc. The strip in Causeway Bay on Hong Kong Island was ranked as the world’s most expensive for shop rentals until 2019, the last time that the firm released global numbers.

Shops that used to sell Swiss watches offer budget mobile phone gadgets after the 2019 anti-government demonstrations and some of the world’s strictest Covid-19 travel restrictions deterred China’s affluent travellers.

Prime shopping areas have been in chronic decline since late 2013, with pandemic-related travel restrictions dealing the latest blow. Rents at Causeway Bay’s premium shops fell by half in the third quarter from two years ago at the height of the protests, according to Cushman & Wakefield’s data.

As an example, Chow Tai Fook Jewellery Group Ltd. rented a shop in Central for HKD 500,000 (USD 64,200) a month, 50% lower than the previous tenant, Hong Kong Economic Times reported last week.

World’s Most Expensive Retail Rents Tumble to Decade Low in Hong Kong

What: Nike is increasingly going hyperlocal thanks to the insight it gains with its app and digital ecosystem.

Why it is important: Nike becomes a complex partner for department stores as it is growing increasingly demanding in terms of conditions and does not hesitate to exit to open free standing stores. However, there might be room for micro-partnership, with a hyper local approach, helping department stores to both continue to have Nike in the brand portfolio and also generate traffic on a given customer profile.

The goal of Nike is to “blur the lines between digital and stores”. To do so, the Nike’s membership program (300m members) is central as customers remain in the Nike’s environment and benefit from highly personalized experiences (through an intense data collection process).

This is the reason why Nike is increasingly opening super-specialized, highly local, small stores in the communities where it senses potential. For instance, it opened a workout and wellness-oriented store in Williamsburg, NY, as it noticed high engagement in the area with its training app, without any physical touchpoint yet. This also allowed them to strike deals with local gym clubs to intensify their presence in the area.

Nike is planning to open 200 stores with such an approach, at a global scale, in the coming years.

How Nike execs think through its digital ecosystem 

What: Gaming and NFTs represent a EUR 50 billion opportunity according to Morgan Stanley.

Why it is important: The metaverse can offer luxury brands exposure to teenage customers, and male customers, who currently account for only 30% of luxury purchases. It could represent 10% of luxury’s addressable market by 2030.

Morgan Stanley sees NFTs and social gaming, which includes concerts, as the most attractive near-term opportunities.

Gaming collaborations are “more advanced in their ability to generate revenue and a wider halo effect for the industry,” while NFTs are more profit-generating. The former is seen representing 40% of metaverse revenues, but only 20% of profits by 2030, the report says.

The Metaverse Is Seen as a Mega Opportunity for Luxury Brands

What: Walmart is making progress towards finding sustainable alternatives to single-use plastic bags.

Why it is important: Single-use plastic bags are an issue that almost all IADS mentioned that they are trying to reduce. Walmart offers some interesting programs to promotion reducing and reusing.

A Walmart store in Santa Clara, California piloted a solution called Fill It Forward that lets customers scan a tag on their reusable bags each time they use them to accumulate points, which then convert into monetary donations to a local organization.

Another store in Mountain View, California, piloted Goatote, which lets customers "check out" reusable bags via an app that are free if returned within 30 days or cost USD 2 if customers keep them.

Many cities and states in the US have started to ban single-use plastic bags, an ordinance that already exists in most of Europe and other parts of the world.

How Walmart is testing sustainable bags 

What: The design competition is open for creative thinkers up to the age of 15.

Why it is important: An interesting idea to foster fresh ideas as well as to better understand and attract younger customers.

Contestants can participate alone, but also together with friends, girlfriends, your whole class or your sports team. The designs of the finalists will be shown in the shop windows of de Bijenkorf in January 2022. The winner’s idea will be implemented in real life.

Design the store of the future

What: The retailer, improving on top and bottom lines, raises its full-year guidance ahead of the holidays.

Why it is important: Total revenues for the three-month period ending 30 October jumped nearly 16% to USD 4.36 billion, up from USD 3.78 billion the same time last year. Third-quarter comparable sales rose 14.7%, year-over-year. The company logged USD 243 million in profits as a result, compared with losses of USD 12 million during 2020’s third quarter.

Kohl’s now expects its full 2021 fiscal year revenues to increase in the mid-twenties percentage range, compared with prior estimates of an increase in the low-twenties range.

Categories of growth in the most recent quarter included activewear, which was up 25%, led by national brands such as Adidas, Nike and Under Armour.

The biggest tailwind comes from the newly launched and game changing partnership with Sephora. There are currently about 200 Sephora shops-in-shop in Kohl’s stores and the company anticipates there will be 850 by 2023. This is transforming the business, putting the retailer in the beauty business. The mini Sephora locations are also helping drive customer acquisition. More than 25% of Sephora shoppers are new to Kohl’s. Many of them are younger than existing Kohl’s consumers.

Headwinds include the women’s business as well as continued supply chain disruptions throughout the industry.

Sephora supports growth at Kohl’s – WWD

What: Ikea’s mall business is stable and was not durably affected by the pandemic.

Why it is important: With the strategy of acquiring smaller spaces located in city centres, to create mini-malls, this part of Ikea’s activity becomes a direct threat to department stores across the planet.

Ikea’s mall business company, Ingka Centres, which owns 47 malls across Europe, Russia and China, reports that while footfall remains more or less stable globally at +1% vs. LY (with discrepancies between regions as Europe fell 13%), its tenants’ sales increased +16% to €6,6 bn. Occupancy rate remains stable at 94%, with large scale tenants such as Zara.

Last year, footfall decreased globally by -16% due to lockdowns and restrictions across the globe. The company is now pursuing a similar strategy to mother company Ikea, by looking for smaller locations acquisitions located in city centres, as exemplified by the recent acquisition of the former Top Shop location in London, or plans to open in Toronto and San Francisco in 2022.

Tenants' sales at IKEA's shopping malls grow 16%

What: The CEO of Central Group gives an interview to lifestyle magazine Monocle.

Why it is important: The group does not have specific plans for further expansion outside Europe, however, they intend to maximize the usage and benefits from their digital platform, which has been launched in Thailand earlier this year.

Tos Chirathivat, CEO and grandson of the founder of Central, took the company into Europe in 2011 when he bought La Rinascente. Since then, the group acquired Illum, Kadewe, Globus. According to him, these opportunities arose due to the fact that the department store job is a tough one. They remain focus on creating destination stores, unique to the city where they belong. He confesses not having any plans to go to the US or Japan, as Europe is already quite a complex playground.

His next grand plan will be to expand the European business through Central’s existing digital platform, which already boasts 18m members within the loyalty program in Thailand.

The interview of Tos Chirathivat, CEO Central Group 

What: As Ikea pushes more environmental projects, it still faces problems in supply chains.

Why it is important: Ikea is one of the most advanced when it comes to tracing their raw materials, but even they are having difficulties ensuring wood is correctly sourced. This proves that a truly traceable supply chain is more difficult to achieve than meets the eye.

Ikea argues that wood is a sustainable and renewable material that is far better to use than plastics or metal. Others will claim that Ikea fuels disposable consumption by producing cheap furniture.

Either way, ensuring wood is sourced sustainably is not easy to decipher. Timber suppliers can have permits for certain areas, but then illegally log in neighbouring forests. Another issue is the misuse of sanitary felling, where all trees in an area are cut down to protect them from disease or after a calamity such as wind damage.

Ikea tries to protect its wood supply chain through audits, wood procurement plans from suppliers, and through a certification by Forest Stewardship Council. Even with these protocols in place, somehow illegal wood entered the supply chain in Russia.

Ikea shows the challenge of sustainability for companies

What: A Fintech mixes a bank account with a second-hand resale platform.

Why it is important: Now that all department stores are going into circularity, and some of them already have a payment card programme, should they consider adding specific perks such as this one?

GDR is a UK-based trend spotting company, partner of the IADS. They have recently spotted DIEM, a new UK-based banking start-up which wants to generalize circularity by taking care of its customers’ old products resale.

The principle is simple: customers upload a picture and enter key details. DIEM values the product and make an offer through a dedicated algorithm. If the offer is accepted, DIEM will attempt to sell the product. Of course, this is completely integrated into the customer bank account.

A UK bank takes care of products circularity on behalf of customers

What: The iconic US company is planning to significantly expand its retail footprint.

Why it is important: While he does not question the wholesale and retail mix model, the CEO wants to rebalance the business model to guarantee a proper presentation of the brand, often neglected by wholesales who are aware of its over-dependence on them.

Ralph Lauren aims at balancing its international stores footprint by finding the right mix between wholesale presence and retail sales, be them online or offline (as a whole, direct to customer sales grew +14% vs. LY).

According to analysts, the brand is over-reliant on wholesale partners (such as Macy’s in the US) and this leads to some issues in terms of brand presentation. This is the reason for its plan to open 90 stores in 2022, partly financed by the sale of Club Monaco to private equity. According to Ralph Lauren CEO Patrice Louvet, there is still a gap between the brand name and recognition, and its actual financial results.

Ralph Lauren is opening 90 new stores this year

What: Macy’s Inc. is raising its minimum wage to USD 15 across the organization and providing new educational benefits, costing the retailer approximately USD 35 million over the next four years.

Why it is important: The investments reflect efforts to attract and retain talents that are critical to the retailer’s continued growth. This will also be the topic of the IADS 2022 first Operation Meeting dedicated to HR and to be held on 2 December 2021.

Beginning February 2022, the USD 35 million four-year investment will provide a debt-free education benefit program to its colleagues. The program will be available for all U.S.-based, regular, salaried and hourly colleagues and cover 100% of tuition, books and fees. Macy’s partnered with an education and upskilling platform, Guild Education, to build the program.

The company has already phased in the USD 15 rate across several markets and expects to achieve this target nationally by May 2022. Last summer, Macy’s upped the minimum wage to USD 15 per hour for all distribution centre colleagues. The company said that the average base pay will eventually be above USD 17 hour and average total pay will be USD 20 hour. Minimum wages vary from state to state, and in certain cases, workers are entitled to commissions and overtime pay.

Other benefits were announced, including providing Macy’s corporate and hourly colleagues with one additional flexible paid holiday to support their well-being and provide further flexibility to take a day off on a holiday that is most important to them.

Macy’s Boosts Minimum Wage and Benefits to Workers 

What: Business turnover declined 51% to GBP 429.5 million (USD 585.9 million) for the year ending January 30, 2021. Harrods also reported a GBP 57.3 million loss, compared with a GBP 191.4 million profit the year previous.

Why it is important: Even as lockdowns have eased, challenges still remain. International travel is yet to return to pre-pandemic levels, a blow for Harrods, which depended heavily on high-spending oversees shopper’s pre-pandemic, in particular visiting Chinese consumers.

Meanwhile, a government decision earlier this year to abolish VAT-free shopping for international visitors — an important incentive for wealthy tourists to spend big — will likely have longer term implications, the retailer said in the filing.

Nevertheless, Harrods is optimistic about the year ahead, already seeing a huge return to demand for luxury. It also plans to forge ahead with new H beauty store openings across the UK, while also investing in strengthening its presence in the crucial China market. In June, the retailer debuted a second outpost in the region for its private shopping service, called The Residence.

Lockdowns hit Harrods’ bottom line

What: Marks & Spencer recently announced an undisclosed investment in Hirestreet’s parent Zoa Group through a joint venture with brand accelerator Founders Factory, as it launched its debut rental offering on the platform.

Why it’s important: This makes M&S the first major high street retailer in the UK to signal broader ambitions in the burgeoning clothing rental market.

Entering the apparel rental market is the latest in a series of efforts to reverse years of declining sales in the M&S apparel division.

Last year, the company began offering third-party brands on its website and launched an ongoing collaboration with Ghost. In January, it acquired British womenswear brand Jaeger after going into administration, which allowed it to expand its brand offerings on its platform.

These actions are part of a multi-year struggle to remain relevant in an increasingly volatile and competitive retail market.

Following Investment, M&S Launches on Rental Platform Hirestreet 

What: The Shein business model, dissected.

Why it is important: It is a Chinese-inspired business model, applied to the rest of the world. Given the volumes and distances, concerns are increasingly growing over environmental problems it contributes to.

Media are discovering Shein and its innovative business model: after The Economist article , the BBC also reviews what makes this Chinese brand so special, apart from its remarkably low prices which can not entirely explain its massive success over TikTok and YouTube.

The company, which earnings are estimated to top USD 10bn in 2020, proposes 600K products for sale at any given moment, relying on thousands of third-party suppliers and 200 contract manufacturers. They constantly analyse in real-time sales, and can identify, among new products (launched in batches of 50-100 units) which ones have the most potential, also thanks to Shein’s partneship with influencers. New products can be launched in as low as 25 days. They are then shipped from China (which can be a drag given the delivery delays) to one of their 250 m followers.

Such a business model obviously raises questions on sustainability, be it environmental or social, with the psychological impact it can have on teenagers and children.

The secretive Chinese brand dressing Gen Z 

What: US Retailers, who were supposed to be swept out by the pandemic, seem healthier than ever.

Why it is important: IADS members also took the hit of the 2020 lockdowns, which forced them to structurally change their ways of operations, which is also starting to be paying off.

The Covid-19 pandemic was supposed to be the final blow to stores, in the continuation of the Retail Apocalypse. On the contrary, retailers are bouncing back healthier, with many US companies exceeding their 2019 profits.

According to the newspaper, this is due to a better inventory management with fewer goods translated into less cluttered stores, leading to a better ins-store experience and less off-priced sales. What is more, the scarcity of goods due to the international logistic chain bottleneck allows them to charge products are full-price and rely less on discounts to maintain the top line. Finally, the race to online also allowed US retailers to reduce the number of stores and therefore also work on their operational expenses. The Wall Street Journal talks about the “Great Retail Reset”.

The Great Shopping Reset How the Pandemic Helped Fix the Retail Industry