What: Ikea’s international brick& mortar expansion is not limited to countries where it is already present.

Why it is important: Ikea follows different strategies at the same time but always in city centres: small stores, huge stores or conceptual experiences, apparently to the detriment of the suburban big boxes that used to be its trademark. Can this be an opportunity for department stores?

Ikea will open early next year its first location in Indonesia, in the Mall Taman Anggrej in West Jakarta. The store will span over 10,000 sqm and two stories and will allow customers to access the full product range.

In addition, the store will include pickup point to collect online purchases.

Ikea to open first mall store in Indonesia

What: After months of testing, Walmart has determined that autonomous trucks offer an "efficient, safe and sustainable solution" for transporting goods. Trucks are supplied by Gatik, a relatively new company for automated, self-driving trucks handling short-haul logistics.

Why it is important: The autonomous trucks are supposed to help meet the increasing online demand, keep delivery times short, and compensate for driver shortages.

Since July 2019, Walmart has been testing Gatik’s driverless truck with a safety driver in the vehicle. Last August, the safety driver was removed from the vehicle. The driverless trucks have been making repeated delivery runs per day, seven days a week on public roads.

At Walmart, B-to-b Deliveries Going Driverless 

What: Samsung has designed a new-gen type of selling space for its opening within Selfridges, entirely dedicated to experience and trial.

Why it is important: Consumer electronic has been a winning category in the past year, and Samsung is also a strong partner for some IADS members, such as El Corte Inglés, who also have deployed similar experiential points of sale.

Samsung has opened a shop in shop in Selfridges to display its full range of electronic lifestyle offer. The goal is to maximize discovery and interaction, thanks to an immersive point of sale designed by brand innovation studio Dalziel and Pow. Entirely designed in sustainable materials, the retail space conciliates innovation, tradition and well-being.

Inside Samsung Tech playground

What: Once considered fringe with audiences not interested in fashion or beauty, platforms like Reddit, Discord and Twitch are attracting the attention of digital marketers aiming to diversify their channel mix away from Instagram.

Why it is important: As frustrations grow over the rising costs and diminishing returns from advertising on the Facebook and Instagram, marketers are casting a wider net. Platforms including Reddit, Discord and Twitch, all of which once had a reputation as digital homes primarily for young men and gamers, are getting a closer look from fashion and beauty brands.

Reddit has long been a place for engaged digital communities to gather. But fashion and beauty brands are increasingly tapping its power, too. The platform says its top fashion and style communities have 20 million monthly visitors. Reddit users interested in fashion are 41% more likely to visit a retailer site weekly than the average internet user, according to internal Reddit data. Meanwhile, Reddit users make nine times faster purchase decisions and spend 15% more, according to a study Reddit commissioned with Vero Analytics.

Users on Twitch — the Amazon-owned livestreaming gaming and entertainment platform that counts 30 million daily users — are three times more likely than the average consumer to wear something they saw their favourite influencer or celebrities wearing, according to the platform’s Research Power Group.

Resale platform StockX advertises on Reddit and is a Twitch partner. “There’s just a more rich, emotional connection between us and some of the communities we engage with on some of these platforms,” said StockX vice president of customer acquisition Mitzi Emrich.

Discord is the platform that is perhaps the least familiar to fashion and beauty brands. It could be considered as the first toe in the metaverse for brands. There are no brand profiles or homepages, but instead “servers,” customisable digital spaces that offer a combination of voice, video, images and text. The goal of any Discord server is to bring together a community, and for brands, that means offering them discovery, education, customer service or experiences such as panels.

While brands like AllSaints, 1stDibs and Nars are active on Discord, there are no paid ad tools on the platform yet. Discord is testing influencer monetisation. Meanwhile, fashion brands can create digital goods that users can “purchase” using points they’ve redeemed on the platform (though they are not NFTs or tied to the blockchain).

Finding Fashion Consumers Beyond Instagram

What: Driven by the execution of the Polaris strategy and an improved economic environment, quarterly net sales and earnings exceeded expectations.

Why it is important: Considering the results on top and bottom lines, the department store is raising its full-year 2021 guidance. Net sales are expected to reach USD 24.12 billion instead of  USD 23.55 billion. Adjusted EBITDA as a percent of sales is expected to reach 12.5% instead of 11%.

Comparable sales are up 8.9% on an owned basis, and up 8.7% on an owned-plus-licensed basis respectively, versus 2019. Digital sales increased 19% versus third quarter 2020 and grew 49% versus third quarter 2019.

Approximately 4.4 million new customers shopped the Macy's brand, a 28% increase compared to third quarter 2019, with 41% of these customers coming through the digital channel in third quarter 2021.

Categories that were solid throughout the pandemic, including home, fragrances, jewellery, watches and sleepwear, continued to see strong sales performance. Occasion-based categories, such as dresses, men’s tailored and luggage, continued to recover. Emerging categories, such as toys and pets, showed encouraging results.

Bloomingdale’s comparable sales on an owned basis were up 9.1% and on an owned-plus-licensed basis were up 11.2% compared to the third quarter of 2019.

Gross margin for the quarter was 41.0%, up from 35.6% in third quarter 2020 and up 100 basis points from third quarter 2019.

Inventory was up 19.4% from third quarter 2020 but down 15.4% from third quarter 2019.

Macy's results

What: After raising capital for its digital transformation, Saks, the new stand-alone Saks Fifth Avenue e-commerce company, has unveiled its schedule of holiday events via Saks Live, its virtual events platform.

Why it is important: Saks is continuing to spruce up its digital offer and experiment with livestream commerce.

Event hosts include Saks Executive Pastry Chef Stephanie Oliveira; stylist and beauty, fashion and lifestyle blogger Chriselle Lim; and Nicky Hilton Rothschild and Stacey Bendet of Alice + Olivia, the company said.

During the events, shoppers can chat with hosts as they watch for fashion, lifestyle and shopping tips. The retailer said it will update its site with new event information and recordings of its livestream shows.

Saks debuts holiday livestream shopping shows 

What: After the completion of the Zurich's Bahnhofstrasse store renovation, Globus is betting on luxury to increase sales. The turnover of the 9 stores in Switzerland is to increase from CHF 540 to 700 million.

Why it is important: Ten luxury brands are moving into the store: Louis Vuitton, Dior, Valentino, Moncler, Balenciaga, Bucherer, Céline and Rimowa. Loewe and Off-White open their first Swiss shop-in-shops there.

In the newly renovated Zurich building on Bahnhofstrasse alone, sales are expected to grow by 30 to 40% from the current CHF 120 million, and the number of visitors is expected to grow by 20% from the current four million per year. In particular, the share of sales by tourists is expected to rise sharply – currently it is only 4%.

Globus Up to 40 percent more turnover after renovation

What: During the third quarter of its fiscal year, Lotte Shopping reported operating profit reached KRW 28.9 billion (USD 24.4 million), down 74% year-on-year.

Why it is important: While local retail competitors, like department store giant Shinsegae, forged alliances and made acquisitions to boost digital capabilities amid the pandemic, Lotte has lagged in the country’s e-commerce race.

Korea’s Economic Recovery Fails to Boost Lotte Shopping Earnings 

What: SPG is not only a mall management company, but a retail investor.

Why it is important: Controlling retailers and brands which are presented in their premises is both a way to improve the value of said premises, while at the same time generating scale economies. Is that so different from the private labels business in department stores?

David Simon, CEO and president of the Simon Property Group, argues that his group, a leading company in worldwide mall management, is also moving forward in pure retail, through its investments in Authentic Brands Group, SPARC (which owns Forever 21, Lucky Brand, Brooks Brothers) and J.C. Penney.

According to him, SPARC outperformed expectations, J.C. Penney (bought after ending up bankrupt) is now stabilized with a new CEO, Marc Rosen, and as a whole, these side activities contributed to 10% of the SPG share value.

David Simon insists on SPG being much more than just a mall company, and an astute investor too.

David Simon Looks at the Big Picture

What: Allbirds dropped ‘sustainable’ claim from IPO after the SEC objected.

Why it is important: The move by the SEC highlights how regulators are paying increasing attention to how companies report on climate- and sustainability-related issues.

In August, Allbirds announced that it would pursue a ‘sustainable public equity offering’ that would guarantee the company met various environmental, sustainability and governance standards. However, it repeatedly weakened the proposals in subsequent updates to its IPO prospectus.

In September it removed references to a sustainable “offering” and said it would instead follow a “sustainability principles and objectives” framework. In October it then removed half the references to the new framework, including suggestions that it could increase the cost of the IPO and that other companies could follow its “sustainable” approach.

Although the company has made eco-friendliness a key part of the branding for its wool- and eucalyptus-based shoes, they feel that existing ESG ratings are biased to companies with longer track records. Allbirds claims that the carbon impact of each pair is 30 per cent less than that of its rivals, though it has faced criticism from some activists over the way it calculates emissions.

Allbirds dropped ‘sustainable’ claim from IPO after SEC objection

What: Following two successful in-person events in Shanghai, Harrods is bringing some of China's most exciting fashion design talents to London’s Knightsbridge store.

Why it is important: The British retailer implemented a proactive approach to engage with affluent Chinese consumers who are unable to travel. Last month during Shanghai Fashion Week, the retailer hosted a three-day incubator program called The Harrods Hive. It included networking events and panel discussions with industry leaders, such as Kering, Labelhood, Tx Huaihai,and Xiaohongshu, that allowed for individuals from varied disciplines across the industry to join forces.

Running till mid-December, the space features playful puffer jackets from Chen Peng, the inaugural winner of the Yu Prize, which Harrods serves as a strategic partner, as well as pieces from Shushu/Tong, Ruohan, and WMWM, provided by the Shanghai-based fashion boutique and emerging designer support platform Labelhood.

This month, the company is due to open its first Harrods tea rooms concept in Shanghai, a space designed around bringing Harrods’ traditional British afternoon tea to Shanghai in a contemporary environment.

Harrods Spotlights Chinese Fashion Designers With New Pop-up

What: M&S will expand the rollout of its "M&S Opticians" service, following a successful trial.

Why it is important: As the heath and care market is expanding, retailers are trying new services to attract and retain customers in their physical stores. In France, Monoprix ‘variety store’ is also testing such a health service (see IADS Exclusive).

M&S is rolling out its M&S Opticians service, a shop-in-shop which provides sight and hearing tests in addition to selling glasses and contact lenses, across its UK estate.

The service will launch in 43 more stores over the next 18 months. Currently, the service operates across 12 UK M&S stores. The trial received a customer satisfaction rate of 96% and a customer recommendation rate of 96%. All 55 branches will be operated by optician and hearing provider Owl Optical. It will sell a range of M&S and third-party branded frames.

M&S to roll out optician offering

What: The new SoHo store will be changed on a monthly basis and partner with other local businesses.

Why it is important: The company did not say if this is a concept that it will replicate in other parts of the world, but it is designed to address consumer demand for more meaningful and unique retail experiences, especially since the start of the pandemic.

The store, at 265 Lafayette Street between Prince and Spring Streets, will highlight special collections, launches, capsules and exclusive products.

As a way to foster a sense of community in the new space, Zegna will partner with neighboring businesses to curate a selection of local experiences intended to celebrate the soul of SoHo. For the launch, that includes Sant Ambroeus, McNally Jackson Books and the Angelika Film Center. The store also features a rotating record collection of both vintage vinyls and playlists from local DJs selected by Sartori that will be updated monthly.

Zegna Lab, a New Retail Concept, Opens in SoHo 

What: The closure is part of H&M's ongoing plan to adapt its retail network in the wake of the coronavirus pandemic.

Why it is important: Last year, the fast-fashion giant announced changes in its 5,000-strong retail network, with 350 stores closing and 100 opening in 2021. In a statement, H&M France did not give a timeline for the Champs-Élysées closure. It said it has started consultations with labour unions and plans to offer jobs at its other stores to the workers impacted.

The 30,000-square-foot store opened in October 2010 after a five-year legal battle with Paris City Hall, which opposed the arrival of fast-fashion brands on the famous avenue.

Fashion retail in Paris continues to suffer from the compounded effects of a sector-wide structural crisis due to the rise of e-commerce, accentuated during the pandemic, and a lack of foot traffic, with tourists remaining largely absent and locals smart-working.

The news comes as staff at an H&M warehouse in Le Bourget, the retailer’s sole French logistics site, have been picketing to protest plans for the closure of this location, which would impact more than 150 jobs.

H&M to shut Champs-Élysées flagship in Paris

What: For the third quarter ended October 30, 2021, net sales increased 18% versus the same period in fiscal 2020 and decreased 1% versus the same period in fiscal 2019. During the quarter, Nordstrom banner net sales increased 3% versus the third quarter of fiscal 2019. Net sales for Nordstrom Rack decreased 8% versus the third quarter of fiscal 2019. Digital sales decreased 12% compared with the same period in fiscal 2020 and increased 20% compared with the same period in fiscal 2019.

Why it is important: The company is reaffirming its financial expectations for fiscal 2021. Revenue, including retail sales and credit card revenues, is expected to grow more than 35% versus fiscal 2020. EBIT margin is expected to be approximately 3.0 to 3.5% of sales.

Sales in the home, active, designer and beauty categories had the strongest growth compared with the third quarter of 2019. Comparable sales in suburban area stores continued to be stronger than urban stores in the third quarter, with both improving sequentially over the second quarter.

Gross profit increased compared with the same period in fiscal 2020 primarily due to fewer markdowns and leverage from higher net sales. Ending inventory increased 13% compared with the same period in fiscal 2019, versus a 1% decrease in sales. The change in inventory levels versus 2019 was due to the Company's actions to pull forward receipts to support early holiday sales and mitigate continuing supply chain backlogs.

EBIT was USD 127 million in the third quarter of 2021, compared with USD 106 million during the same period in fiscal 2020 primarily due to higher sales volume and improved merchandise margins, partially offset by labour cost pressure. EBIT was USD 66 million lower than the third quarter of fiscal 2019 due to fulfilment and labour cost pressures, partially offset by continued benefit from resetting the cost structure in 2020.

Nordstrom Reports Third Quarter 2021 Earnings 

What: Amazon is reported to initiate a European strategy of opening Fresh stores from its UK base.

Why it is important: This might impact relatively quickly IADS members who operate in the supermarket and convenience store categories.

Coresight reports that Amazon is planning to open 260 Fresh grocery stores in the UK by 2024, which would also be a base for further expansion in continental Europe. The analyst also points out that Amazon seems late in the execution of the plan, as in 2021, 9 stores were opened, to be compared with 25 planned.

The format is different from what is seen in the US, as the UK Fresh version is a small convenience store and not the full-range supermarket seen in the US. The UK market is extremely competitive when it comes to groceries: the grocery delivery market penetration (10%) is higher than in the US and all players are quite literate when it comes to home delivery or self-check-out. Furthermore, Europe is quite fragmented in terms of customer habits and national regulations. Blanketing the market with new stores will not be a piece of cake, but should Amazon manage to execute its plan, it will help to increase everyday retail spend share and customer loyalty, even though the growth of the grocery market itself might be more limited than in other categories.

Hundreds of Amazon Fresh stores in Europe? 

What: Klarna acquired Pricerunner, a Swedish comparison site.

Why it is important: The acquisition is a step towards ‘Google for shopping’ and offers a broader range of services to shoppers.

After launching its own price comparison feature earlier this year, the acquisition comes as a way to offer a broader range of services and as an alternative to Amazon, Google, and Facebook. This is Klarna’s fifth acquisition since July.

Klarna acquires comparison site Pricerunner for €930m 

What: Marks & Spencer has acquired a 25% stake in women's clothing brand Nobody's Child, in a bid to accelerate the revival of its clothing business.

Why it’s important: This investment is part of the group's "Brands at M&S" strategy, which uses a variety of models, including wholesale agreements, exclusive collaborations and strategic acquisitions.

Britain’s M&S Buys 25% Stake in Nobody’s Child 

What: Lotte Duty Free has announced the launch of Sogong 1st Avenue – the first online luxury duty free shop in the world.

Why it is important: It marks the next step in the retailer’s plans for the post-Covid era as well as a move to engage more with younger, Gen Z shoppers.

Lotte’s online sales increased from 25% of its business in 2016 to 45% in 2020 and the company expects the ratio to continue to grow going forward.

To tap into this shift, Sogong 1st Avenue will host more than 30 luxury brands and about 5,000 products, ranging from bags and clothes to accessories and including items which were not previously available in duty free. The company also plans to expand the offer further in the future with the launch of a wine and whiskey pavilion.

Lotte Duty Free opens first online luxury duty free store

What: The next annual report from Bain & Altagamma will be released early December. IADS will receive a copy in due time.

Why it is important: The Press release already circulated gives an idea of the main trends on the market this year.

Bain and Altagamma have announced the release early December of their annual report on Luxury. Numbers clearly show that 2020 was a pandemic blip, as the luxury personal goods market is following a V-shaped trajectory, reverting in 2021 to 2019 levels. Such a revival has been powered by local consumption, the US and Chinese dual engine, and online sales +50% between 2019 and 2020, +27% between 2020 and 2021). Growth is of course sustainable by younger customers.

Europe, Japan and the rest of Asia have, however, only partially recovered during 2021. Japan es expected to revert to 2019 levels by 2023 and Europe by 2024. The report also mentions an increasing concentration in terms of top players as leading brands now represent 33% of the market compared to 17% on 2000.

When it comes to Department Stores, Bain estimates that they represent 15% of the total luxury market in 2021, compared to 18% in 2019 and expected to fall to 10-12% within 2025.

Read the report here

Fall 2021 Luxury Report press release

What: The retailer has hired AlixPartners to review a potential separation of its dot-com and physical businesses à la Saks and Saks Fifth Avenue, with the goal of raising shareholder value.

Why it is important: In this context, the brick-and-mortar front sees positive outlooks with store closures delayed and the rolling out of smaller formats.

On the brick-and-mortar front, Macy’s said it’s delaying store closures and that only 10 stores, of the 60 left to be closed, will shut down in the beginning of 2022. The 60 stores are all cash flow positive, and the company has been noticing customers returning to stores in “C” and “D” malls, which are less productive, because shoppers feel safer there because they are less trafficked.

Next year the company will be rolling out more of its smaller store specialty formats, which include the five Market by Macy’s in Dallas and Atlanta, and one Bloomies store in Fairfax, Va. already operating.

Macy’s Results Top Expectations; Inventories ‘In a Good Place’

What: The French Fashion Institute (IFM) had its yearly “Fashion Reboot” conference, providing figures and perspectives on the French fashion market.

Why it is important: A small increase in clothing sales for 2022 (+3% compared to 2019, +13% compared to 2020) is planned. Such a growth reflects both the 15% drop that has happened in 2020 and the 17% decrease between 2007 and 2019. As a result, the market has lost 30% of its value since 2007.

49% of fashion brands and retailers surveyed by the IFM plan to increase their prices by 5% to 10% in 2022.

Comparing the first three quarters of 2021 to the same period in 2019, there is an overall drop of 11.7% in sales. It affects department stores and variety stores (-32.6%), independent multi-brand stores (-21.7%), hyper and supermarkets (-17.8%) and specialty chains (-14.9%). Mass-market posted a relative balance of -0.3%, while pure-players showed an acceleration of 20.6%.

All channels combined, online sales increased by 17.5%, compared to 3.2% for physical networks. For department stores, growth is 14.6% online, compared to 0.5% in stores. In the mass-market, online sales grew by 22.5%, compared to 12.6% for the physical network. And among specialty chains, the Internet is up 28.1%, against 4.3% in stores. In two years, the share of online has increased on average from 7 to 16% of the turnover.

Plus de la moitié des marques de mode vont relever leurs prix en 2022

Fashion Reboot 2021

What: Partnering with Facebook to offer shoppable livestreams and content for their “Joy.Fully” campaign launch.

Why it is important: The collaborations with Pinterest and Facebook are a continuation of the retailer's efforts to reach new consumers through livestreams and AR technology.

For the campaign, an AR lens allows customers to use their facial expressions to pick the products that spark joy for them. From that lends, shoppers can visit Walmart’s gift finder experience to purchase products.

As part of the campaign, the company is also introducing the first large-scale launch of shoppable recipes on Pinterest. The initiative allows consumers to seamlessly add ingredients to their Walmart carts for easy purchase.

Walmart to use AR, shoppable content to connect brands with consumers 

What: The new marketplace will significantly expand the company’s assortment in existing categories and brands, and introduce a range of new categories.

What is important: The digital business is targeted to generate USD 10 billion in sales by 2023. The marketplace is set to provide revenue on top of that target and expand the assortment at a low incremental cost.

Macy’s is partnering with Mirakl, the industry-leading enterprise marketplace technology company, to power the platform.

Macy's to launch a curated marketplace