What: Selfridges was hit hard by the pandemic due to the store closures, Brexit and lack of tourism.

Why it is important: The extent of the losses gives also an idea of what is going on for the rest of the London-based department stores (Harrods, Liberty, Harvey Nichols) and one can wonder if the shopping spree is over in the UK.

Selfridges filed its full accounts for the year 2020 until 31st of January 2021 and it was a tough year: revenue fell -40% to £508.5m due to the 8 month closure of stores in the UK during the year. As a consequence operating result was negative, at -£136.7m compared to a result of £113.8m the year before (leading to a net loss of -£163.2m compared to a profit of +£20.6m in 2019).

This led to a net cut of 500 jobs during 2021, prior to being sold to Central Group and Sigma at the end of the year.

Selfridges UK stores saw revenues falling 40% in first pandemic year

What: A New York coalition made waves last week with the proposal of the Fashion Act, which aims to hold all major brands accountable for their environmental and social impacts.

Why it’s important: The Fashion Sustainability and Social Accountability Act would require all fashion companies that do business in New York and generate more than $100 million in revenue to map at least 50% of their supply chains and disclose impacts such as greenhouse gas emissions, water footprint and chemical use.

The bill does not specify who these 50% are, but calls on brands to focus on areas of greatest social and environmental risk. Brands would be required to report the total volumes of materials they produce, a notable measure that will highlight the overall impact of the sector that is typically hidden; most brands boast about reducing the impact of individual materials while increasing their production and total footprint.

On the labour side, brands will also be required to disclose median worker wages and measures in place to integrate responsible conduct into policies and management systems.

This ambition could reshape the way fashion behaves given that it would affect virtually every recognizable fashion brand, from American companies such as Gap, Ralph Lauren and Tapestry to international mass market and luxury players such as Shein and H&M, Prada and LVMH.

California had passed a legislation that would hold brands accountable for wage violations occurring in their California-based supply chains. And while a growing number of fashion companies are setting science-based targets to align their emissions with the Paris agreement goals, this remains voluntary and lacks industry-wide participation, and comes with little oversight or enforcement to ensure compliance.

In whole, these laws need further refinement and strengthening. Much of the bill’s criticism stems from who was at the table when it was created.

Deconstructing New York’s Fashion Act 

What: The shop, unifying “fitness,” “health & nutrition,” "rest & relaxation” and “sexual wellness" goods.

Why it is important: As Sephora and Ulta Beauty duke it out for dominance in the specialty beauty sector, department stores are increasingly devoting more space and money to wellness in a bid to differentiate themselves and increase their relevance. The shift comes at a critical time for department stores, whose market share in many key areas of beauty has been eroding for the last years.

Data shows that the bet is well-placed. According to the Global Wellness Institute’s 2021 “Global Wellness Economy” report, wellness grew to be an estimated USD 4.4 trillion market in 2020. The sector is due to grow by 8.2% annual growth through 2025, to reach USD 1.4 trillion.

Wellness at Saks

Found under the newly added “wellness” category at the very top of the homepage (listed alongside options like clothing, beauty and home), the drop-down menu includes “fitness,” “health & nutrition,” “rest & relaxation” and “sexual wellness.” With over 1,000 products and 50 new brands, the online wellness shop combines categories and goods — traditionally merchandised separately — dedicated to self-care. So far, among the consumers that are shopping wellness, about 25% are new customers to Saks. Depending on the results online, the wellness store could become an in-person experience.

From bath products to a range of home goods, apparel and accessories including aroma diffusers, humidifiers and sound machines, the “Rest and Relaxation” section is a “favorite” with the highest traffic, with new customers penetrating around 30%. But to date, fitness has done “incredibly well,” as the largest area of product growth.

To showcase some of their new products, Saks has been hosting live digital events: fitness classes with a celebrity trainer and choreographer, online seminars with brands to discuss crystal charging and “energetic” fragrances for instance.

US department stores’ take on wellness

Bloomingdale’s, too, which kicked off the new year by partnering with digital fitness platform Obé for series as part of the retailer’s virtual “On Screen” events. Bloomingdale’s began selling workout related tools like the Theragun, the handheld massager, while also expanding clean beauty with the “Wellchemist”. Now, Bloomingdale’s latest focus is on “sexual wellness,” a largely online-only selection (found under “beauty”).

At nordstrom.com, “wellness” can be found under the “beauty” category, with items like silk pillowcases by Slip and body products by Nécessaire. But they also sell both female sexual wellness and menstrual health goods.

Macy’s strategy has been on unifying gadgets under what it calls “wellness at home” online, bringing together massagers, aromatherapy, men’s grooming, dental care, hair care and air purifiers at different price points.

Bergdorf Goodman is offering highly curated, luxe wellness.

JCPenney is unveiling its full beauty rollout (which currently includes the Thirteen Lune partnership — an online platform focused on Black and brown-owned beauty products) this fall. The chain (which currently has an “active & wellness” category online for activewear, healthy sleep and eating) is exploring how to restructure wellness merchandise online and in stores.

Saks opens a digital wellness shop 

Department Stores Ride the Wellness Wave

What: The ‘Style Not Size’ exclusive capsule for Jenni Collection is a +size loungewear collection designed by social media creators Denise Mercedes and Maria Castellanos.

Why it is important: The size 14 and size 6 friends have grown a large following for their body positive videos on TikTok and Instagram, where they show off the same outfit on two different body types, under the ‘Style Not Size’ motto.

Social Media Creators Partner With Jenni for Exclusive Macy’s Collection

What: Amazon is to open a physical clothing store called Amazon Style, where they will sell clothing, shoes and accessories in Los Angeles, next to Nordstrom and JC Penney.

Why is it important: Although Amazon has become the largest clothing retailer in America, they have decided to expand to a physical store since in-store purchases make up more than 85% of US retail sales.

Amazon Style, which is expected to span over 3,000 sqm, will allow their shoppers to physically see how clothes look, feel and fit before they buy. With a mix of hundreds of well-known brands (although the list is not disclosed yet) and its own private-label brands, Amazon will be able to reach customers who want to shop in person and also drive growth of Amazon's more profitable, lesser-known private labels.

Amazon hopes this will make shopping quicker and more personalized for customers. The clothing will be kept in the back of the store and a sample of each item will be displayed on the sales floor. To purchase items, customers can scan a QR code using a mobile Amazon shopping app and then pick them up at a special counter. If they want to try it on first, they can get it sent to a fitting room, which has touchscreens where customers can request different sizes or colors.

Concretely, this means that customers will be able to scan a QR code whenever they see a product in store, which will give them the sizes, colours, ratings and additional product details. This also means that the racks will not be displaying all sizes of the same clothes. Once the QR code is clicked, customers will have the possibility to try the selected item in the fitting room or pick it up directly at the sales counter for purchase.

Of course, this will also allow Amazon to gather even more data in terms of customers’ preferences and tastes, and therefore make more personalized recommendations, as Amazon's algorithms will recommend other items customers may be interested in as they browse the store and scan items.

Other advantages to the physical store are that customers can drop off their Amazon returns at the store, or order online and pick them up there.

This is not Amazon’s first venture in physical retail as they already operate brick and mortar stores, 4-star stores and Amazon Go convenience stores in the US and other markets. Analysts are cautious about this venture: even thought this will for sure alter customers’ behaviour and bring new technologies and new usages, the difficulty for Amazon will not lie in execution but in getting the right line up in terms of brands.

Amazon is opening a clothing store next to Nordstrom and JC Penney 

Amazon Style 

What: Walmart is reportedly considering launching its own cryptocurrency and NFT collection.

Why it is important: More than the move, which is bold (but with a ROI and scalability that remain to be verified), Walmart is also patenting names that could very well become extremely lucrative in the events these new brands become everyday words.

Walmart is preparing the launch of its own cryptocurrency and NFT collection, as shown by its recent filling of new trademarks patents. This follows a strategic initiative launched in August 2021 to explore the possibilities offered by the Metaverse, and which could, according to Bloomberg, lead into initiatives called “Verse to Store”, “Verse to Curb”, “Verse to Home”, which are self-explanatory.

It also follows prior, and lower-scale initiatives, such as the pilot program launched in October 21, allowing customers to buy Bitcoins at Coinstar counters located into Walmart stores.

Walmart Filings Reveal Plans to Create Cryptocurrency, NFTs

What: With the turmoil caused by Covid, will retail change in 2022 as we slowly return to a version of normalcy?

Why is it important: After reaching out to retail founders, we can conclude that physical stores aren't going anywhere. However, their purpose will change. It is also more important than ever to focus on community and developing closer client relationships.

Retail founders believe changes such as, physical stores being regarded less as just a distribution channel for products and more as a cost-effective experiential media channel for customer acquisition. As well as lessening their retail footprint, while deepening their investment into the functions and services that each space has to offer. Focusing on things like hosting events and encouraging community. Along with using more eco-friendly production and materials, upcycling, diversifying collections as well as many other changes.

The evolution we see this year is going to have a lasting impact.

Shilpa Shah, co-founder of Cuyana; Dan Schoening, Vice President Strategy at Nordstrom; Matt Alexander, co-founder and CEO of Neighborhood Goods; Alyssa Wasko, founder and designer of Donni; Tal Zvi Nathanel, co-founder and CEO of Showfields; Jennifer Bandier, founder of Bandier; Heath Wells, co-founder of NuOrder and general manager of NuOrder by Lightspeed;  Julie Bornstein, founder and CEO of The Yes; Max Bonbrest, co-founder of AYR and Doug Stephens, retail consultant are part of the article.

What will fashion retail look like in 2022? 

What: Japanese retail group J. Front Retailing, which operates Daimaru and Matsuzakaya department stores, will strengthen the development of luxury apartments and hotels.

Why it is important: The group aims to reduce its heavy reliance on department store and other retail operations.

J. Front plans to expand its real estate and financial operations so the sector will account for 40% of the company’s operating profit by fiscal 2030, up from 20% in fiscal 2019. The company hopes to develop facilities other than retail stores by using existing assets, such as department store annexes and land where a logistics centre used to stand.

J. Front to strengthen apartment and hotel business 

What: In 2020, Macy’s management announced it would close 125 stores over 3 to 5 years. That same year, Macy’s closed 29 stores. In 2021, 45 stores were supposed to be closed, but only 38 were. Macy’s announced that 7 stores will be closed in 2022 (belonging to the 45 stores batch).

Why it is important: That leaves another 51 stores that are still to be closed of the 125 that were announced in 2020. But while the US is overstored, Walter Loeb doubts they will close any time soon since Jeff Gennette has indicated that the online business deteriorated If there was no physical store in the area.

These stores will eventually close but the question is when. Late announcements of store closings are a smart management strategy. After all, sharing such news too soon may prompt a loss of sales staff and disrupt the closing sales by their absence.

Macy’s to close more stores 

What: After completing the corporate equality index, Neiman Marcus group unlocked a platinum-level membership with the HRC and was recognized as “best place to work for LGBTQ+ equality.”

Why is it important: Due to several newly incorporated benefits and policies, Neiman Marcus Group recently earned a 100 score on the Human Rights Campaign Corporate Equality Index, the United Sates’ leading benchmarking survey and report measuring corporate policies and practices for LGBTQ+ workplace equality.

The recent score was based on several new benefits and capabilities the company has adopted such as, enhanced policies and Code of Conduct to include protections for sexual orientation and gender identity and expression and gender transition guidelines. Also, NMG ensured equivalent benefits for same-and different-sex spouses and domestic partners, including health, dental, and vision insurance, and dependent coverage, as well as relocation/travel assistance, FMLA-like benefits, and employee discounts.

On top of this, NMG partnered with the HRC during Pride Month, implementing a point-of-sale fundraising campaign in Bergdorf Goodman, Neiman Marcus, and Neiman Marcus Last Call stores.

They presented a $250,000 donation to HRC leadership from their $150,000 Platinum membership level and $100,000 from customer donations. They will be used to support the HRC's broad-reaching programs, including Children, Youth & Families Program, Health & Aging Program, HIV & Health Equity Program, Religion & Faith Program, Workplace Equality Program, HRC Project One America, and Transgender Justice Initiative.

At Platinum level membership, NMG will have access to VIP policy briefings covering the latest developments within the community and overall LGBTQ equality movement, including public policy briefings, legislative briefings, and more. The Company will also have access to HRC subject matter experts on transgender inclusion in the workplace, LGBTQ self-identification best practices, being an ally, and much more.

Neiman Marcus new partnership with Human Rights campaign

Neiman Marcus on human rights campaign index

What: Boston-based company Urbx is working on a robotic fulfillment center that scales up to 150ft tall.

Why it is important: Automated fulfillment solutions are the way to go in the future as e-commerce demand continues to increase following the pandemic. Urbx’s solution of putting a large and automated fulfillment building in a city-centre is proof that the importance of fulfillment is being prioritized.

Urbx will work with third parties to integrate its automation into other stores. It will also eventually build thousands of Urbx-branded automated markets, unlike any grocery store seen before. The Urbx market won’t have aisles but will rather have kiosks where shoppers can order onsite or through a mobile phone. Once the order is made, robots will pack an order of 50 items in less than two minutes and deliver the items to the kiosk.

Urbx will also have curbside pickup, delivery via electric bikes, and eventually drone delivery.

Currently they have only raised seed funding, but the company hopes to have its first Urbx market developed by the end of next year.

Urbx’ Vertical Automated Grocery Fulfillment has High Ambitions

What:  The German department store is to receive a second time a relief from the German state in order to compensate for the losses due to the Covid-19 restrictions in December.

Why it is important:  On a budget-orthodox country such as Germany, such a support can raise questions and criticism, all the more that Galeria Karstadt Kaufhof was not in particular good shape pre-pandemic.

Galeria Karstadt Kaufhof has received a new German state aid of €220m, in addition to €30m towards the partial repayment of the financial aid that the group already received last year (for a total amount of €460m).

The group suffered from most of the German Covid measures, such as the cancellation of the Christmas markets, and this help raises questions and criticism from observers. So far, no one linked the fact that, while the German group is receiving state aid, its parent company, Signa, has teamed up with Thai-based Central Group to acquire Selfridges in the UK.

Galeria Karstadt Kaufhof receives €220m in aids from the German government 

What: JD.com opens 100% robotized stores in Europe for the first time.

Why it is important: This experiment might serve as sources of inspiration for other retailers, especially when it comes to the order fulfilment and home delivery. If the experiment proves popular, it might contribute to the quest of better margins, by removing the human component. But would that be accepted at a larger scale by the population?

JD.Com has opened its first physical stores in Europe, in Leiden and Rotterdam (Netherlands), while two more are planned in Amsterdam and Utrech.

All stores are trading under the name “Ochama” and sell fashion ranges for men, women, kids, as well as household goods, furniture, beauty and food.

The specificity of these stores is that they are almost fully robotized, from the online ordering processing, to the order fulfilment and home delivery steps. Robots are visible by customers when they come to stores. Cashdesks are also replaced by QR code payment, allowing to remove the need for cashiers.

JD.com launches new store concept in Europe in The Netherlands, staffed by robots

What: With a large increase in total volumes at the start of the pandemic as well as constraints on raw materials and transport limitations, ikea routed over 50% of their order fulfillment through their stores instead of customer distribution centers.

Why is it important: With many large retailers turning to operational investments to alleviate rising costs of transport, Ikea launched their own projects. This improved their e-commerce experience, customer delivery times and made their deliveries more sustainable.

Ikea plans on launching 80 projects in 2022 using robotics, automation and drones for better fulfillment in stores, as well as open more stores and expand their click-and-collect service, which will cost approximately one-fifth as much as home deliveries.

Ikea doubles automation projects as store fulfillment grows

What: Macellum Advisors sent a letter to shareholders criticizing Kohl’s market share loss, for failing to grow 2021 revenue versus their 2019 levels. They were also criticized for having insufficient expertise on their board, and describing 2021 as “a lost year” for the retailer. In addition, Macellum is pushing Kohl’s to consider splitting up its brick-and-mortar stores and e-commerce businesses into separate companies.

Why it is important: While the separation strategy is controversial, with some experts thinking it’s only good for short-term profits, Kohl’s has some strong words for the activist shareholders pressuring them.

Macellum Advisors, which owns nearly 5% of Kohl’s shares, called for Kohl’s to add more retail expertise to its board, explore strategic alternatives including selling to a financial sponsor, or cashing in on much of the USD 7 to 8 billion in its real estate assets with sale-leasebacks.

Kohl’s responded quickly, stating that its board has the right mix of expertise and fresh perspectives; that its strategy to be the leading omnichannel destination for the active and casual lifestyle continues to gain traction, and that Macellum’s letter is “filled with unfounded speculation.”

Last December, Engine Capital LP, which owns about 1% of Kohl’s stock, sent a letter to the Kohl’s board contending that a stand-alone e-commerce business could be “conservatively” valued at USD 12.4 billion or more, compared to the retailer’s market cap of about USD 6.7 billion. As an alternative to separating the dot-com and stores businesses, Engine Capital urged Kohl’s to consider a “market test” to see how much the company could be sold for to “well capitalized” financial sponsors.

Pressure for Change Mounting at Kohl’s

What: The deal is meant to help U.S. merchants sell online in the massive yet complicated Chinese market.

Why it is important: China has often remained inaccessible to independent businesses and upstart entrepreneurs abroad. Regulatory and logistical barriers as well as complexities related to pricing, duties and translations, can be daunting to deal with for all but the largest of brands. The new connection between JD and Shopify illustrates the importance of platforms and partnerships in the consumer industry and fashion.

With a population of 1.4 billion, China is home to the world’s largest e-commerce market, estimated to be worth USD 3.3 trillion by 2025. It’s more than five times larger than the U.S. e-commerce market (GlobalData and Statista).

The partnership will help U.S. brands using Shopify get started in China in as little as three weeks with JD offering end-to-end fulfillment. The partnership also offers price conversion to local currency, translation services and more.

Shopify Links With JD.com for China Partnership 

What:  The largest Beauty Hall in the world opens in Hainan

Why it is important: Such an opening clearly shows that for DFS and LVMH, the market is shifting, and Hainan is now a gravitational point in the international touristic economy.

DFS has teamed up with Shenzhen Duty Free Group to launch the world’s largest Beauty Hall, in Hainan, on 6,300 sqm and 2 floors. It will be home to 80 brands, and 20 will join them at the end of next year.

Such a location shows the importance given by DFS to the Chinese market and completes the experience with a WeChat e-shop which already includes 70 brands on offer.

DFS launches its largest Beauty Hall in Hainan, China 

What:  A Mexican retailer accepts payments in Bitcoins and grants 20% discounts when purchases are paid via this cryptocurrency

Why it is important:  Whatever their opinion on Crypto, retailers need to look at what is going on and adapt, including by seeing this method of payment as the latest one needed in the rooster of payment methods they offer to their customers.

Grupo Elektra, which retails a variety of goods in Mexico and Latin America including electronics and home appliances, announced last December that they were accepting payments in Bitcoin, through a US-based platform, BitPay.

Any payment made with Bitcoin will generate a 20% discount on the purchase amount.

Mexican-based retail group Grupo Elektra accepts payments in Bitcoin

What: Stockmann is increasingly getting disconnected from its real estate assets.

Why it is important: Even though such financial operations allow to reduce the burden of the debts, this also puts the company at risks in the future when it comes to paying rents in exceptional contexts such as the one we have been through for the past 2 years.

Finnish retail chain Stockmann has sold its department store properties in Tallinn and Riga for €87m, retaining the right to operate the stores through a lease-back agreement. The proceedings of the sale will be used to reduced guaranteed restructuring debts.

The department store company operates 6 units in Finland, in addition to the stores in Estonia and Latvia.

Stockmann sells department stores properties in Tallinn and Riga

What: Selfridges joins Paco Rabanne and Fondation Vasarely to create unprecedented store windows, in-store art exhibitions, pop-ups and NFTs.

Why is it important: This marks Selfridges’ first foray into the metaverse and it plans to simplify access for its customers, by making it possible to buy NFTs with a regular bank card over the counter, no need for crypto currency here.

Throughout the season, Paco Rabanne’s Spring 2022 range will be dropping throughout the store and be available to rent or buy. To embrace the store’s sustainability commitments Selfridges will also curate a mix of other products both new and pre-love featuring Vasarely-like designs.

The Corner Shop will also make available series of different items such as hand-painted Bamford watches, Globe Trotter luggage and “gift shop” items featuring Vasarely graphic artworks.

Selfridges enters the metaverse and NFTs

What: Inno is reinventing itself to remain central in the Belgian retail panorama

Why it is important:  New logo, new concept, new offer and new systems: it is a complete reinvention of the company that CEO Armin Devender, who joined in 2019, has led since his arrival.

Inno (a founding former member of the IADS and part of Karstadt Kaufhof) has been working on a new concept to better fit in today’s Belgian retail panorama, which has been revealed in 4 of its 16 points of sales (Liège, Louvain, Sint-Niklaas and the pilot project in Schoten).

The company also launched its marketplace and implemented a new ERP system, in addition to revamping its logo (new colours) and proposing new services.

It is reported that Inno went through a -25% loss in 2020 in terms of sales.

Belgian department store company Inno is upgrading itself (French)

What: Buy Now Pay Later (BNPL) finance platform Klarna has launched its own payments card in the UK.

Why it is important: The new physical card is set to bring a BNPL solution to in-store payments. Klarna claims there’s a waitlist of 400,000 consumers in the UK showing BNPL is still very appealing, especially with physical commerce rising again.

It launches with its ‘Pay in 30’ scheme, which allows consumers to pay any time up to 30 days after purchase, with plans to add additional payment options in the future.

It's an interesting development as some consumers hold back from using traditional credit cards that can be expensive in favour of the BNPL method that helps them spread out payments. And as footfall is stores is rising, it's clear that consumers are also seeking physical solutions similar to those that they have online.

Klarna launches physical payment card in UK

What: From 31 January 2022, Nordstrom will open a shop in its New York flagship store called “See You Tomorrow” where it will offer customers high fashion second-hand. It is supposed to be a six-month test in the New York store and on the internet.

Why it is important: There is a difference in the Nordstrom approach to second-hand compared to other retailers. The store will source garments from its own inventory: the merchandise will be the ones returned by customers and then cleaned and possibly repaired.

Nordstrom has a liberal return policy, and many of the brands have expressed interest in the test.

Resale garment sales were about USD 28 billion last year and are projected to be about USD 75 billion by the end of 2025. The resale market is growing very fast, but one has to wonder whether this will cannibalize sales from the traditional fashion departments but how much will it divert customer spending. Rent the Runway has captured a good portion of the rental market, and resale companies like RealReal, Fashionphile, ThredUp and Vesitaire are important resale vendors.

Nordstrom Starts Resale Of Luxury Brands January 31