What: After six years of renovations and a EUR 600 million investment, Berlin's grandest luxury department store, the KaDeWe, finally opened new fashion and beauty floors this week. The revamp comes alongside a more directional fashion buying philosophy.

Why it is important: With 700,000 square feet of floorspace and seen as the German equal of Galeries Lafayette in Paris or Harrods in London, KaDeWe is expected to generate more than EUR 1 billion in the next year.

Since 2015, the KaDeWe has been undergoing what local media have described as “once-in-an-era” renovations. This week the department store unveiled 150,000 square feet of the revamp, including the new men’s wear, women’s wear and beauty departments. The latter boasts lofty, 100-foot ceilings.

The building work was overseen by renowned Dutch architect Rem Koolhaas and his firm, OMA. According to Koolhaas’ plans, the department store would be roughly divided into four areas, with each getting a sculptural staircase.

Another factor that will make the KaDeWe fashion floors more enticing are the changes in fashion buying policies at the department store. More effort has gone into seeking out directional and new brands. Pop-ups are taken very seriously as another way of adding spice to the retail mix.

Before the pandemic, KaDeWe attracted a lot of tourists and customers were around half international and half local.

In Berlin, Spiral Staircase, Star Architect heralds New Era for KaDeWe 

What: The department store supports and develops talents through Printemps Académie, this time in partnership with Paris-Dauphine University.

Why it is important: As for fashion experts having received a certification from ESMOD fashion school, the retailer is making Printemps Académie a large talent development programme. The programme should both support talent and retain employees.

Retail Manager benefited from a training course giving them certification. They were evaluated by teachers at Paris-Dauphine University and Printemps Académie. In total, 29 Store Managers and Sales Managers have been awarded this certification. Six of them also received a special mention.

Printemps partners with Paris-Dauphine University 

What: The project, run in partnership with the Toy Project, is part of the store’s ongoing sustainability efforts.

Why it is important: Selfridges customers will be invited to donate toys at the pop-up in the run up to Christmas. Donations can be made every weekend from 23 October to 18 December. These toys will either be sold back through the Selfridges pop up or the Toy Project’s north London store or given a second life and donated to children through the charity.

Curated in partnership with Selfridges, the edit of toys includes recycled puzzles, games, toy figures and mixed bags of smaller pre-loved toys which can be used for children’s parties alongside a collection of vintage toys and collectables.

SELFRIDGES CELEBRATES A CIRCULAR CHRISTMAS WITH PRE-LOVED TOY POP-UP 

What:  The new concept is all about experience with a local market feeling

Why it is important:  Having the best offer is not enough anymore, customers must also be entertained and transported into new-generation experiences.

Wellcome, a HK-based supermarket chain, has introduced its new store concept, called “Wellcome Fresh”, on a 500 sqm surface (the largest supermarket in HK yet). The store features 23 zones displaying 15,000 products including ultra-fresh ones.

The concept is largely experiential, with a décor reproducing a local traditional market. The offer also includes a food street corner, local snacks and a gourmet food offer that can be consumed on site.

Hong Kong's Wellcome unveils new Fresh store format

What: The new Bloomie’s store starts attracting Gen Z customers.

Why it is important: It is all about test & learn process and careful expansion, instead of new stores rollout plan.

Bloomingdales has launched its new 2,200 sqm format Bloomie’s in Virginia at the end of summer 2021. Unlike Nordstrom local, which is purely a service hub, Bloomie’s aims at mixing services with a very strict curation of products due to its size. We already reported the 3 points of differentiation of the format:

• Multitasking sales force,
• Multiactivity cash and service desk,
• Ability to easily connect with larger stores to perform sales by distance.

The ability to effectively curate the merchandise and show the sales staff what will be received is enabled by a specific usage of a fashion platform, NuOrder, normally used for wholesale ordering.

Since the store opened its doors, it seems to appeal to Gen Z customers and to get traction in casual wear (especially denim), active wear and fine jewellery.

How Bloomingdale’s is targeting younger customers with boutique Bloomie's

What:  JD.com is the latest e-commerce giant to enter a competition already dominated by Alibaba and Tencent

Why it is important:  Chinese customers are starting to be accustomed to “instant” delivery services (1 hour or so). What will be their expectations when travelling, once international tourism opens up again?

JD.Com has launched its new initiative “shop now”, a new instant delivery retail brand, guaranteeing a delivery within 1 hours for every customer in a radius of 3 km from physical stores.

The goal is to compete with Alibaba and Meituan (Tencent). Alibaba launched a similar service back in 2015 with its supermarkets Hema.

JD.com opens ‘instant delivery’ retail service

What: The retailer is launching the new season Moncler collection with a virtual pop-up set inside the Timmelsjoch Museum in the Austrian alps.

Why it is important: Instead of simply dropping the product on Mytheresa’s “new in” section, the retailer and Moncler have gotten extra creative with a 360-degree virtual pop-up shopping experience that takes customers on a virtual tour of Austria’s Timmelsjoch Museum.

There are an array of features, from videos of the museum’s unique alpine location to information about individual products from the new winter collection, which can be purchased directly from the online museum-cum-store.

The range includes two exclusive products, the Cuvellier jacket and Cotonniere coat, building on an ongoing partnership between the two partners. Mytheresa’s focus is on timeless pieces and major brand names. Its new lifestyle categories, such as ski, have been part of its success recipe in the last year.

Mytheresa debuts virtual pop-up with Moncler

What: A dive deep into the new fast fashion darling Shein and its business model

Why it is important: Shein is so attractive as a brand that it pushes tweens to forget their commitments to sustainability and massively buy fast fashion items coming from the other side of the planet in the blink of an eye.

The Economist reviews the mechanisms and key success factors of Shein, the new fast fashion darling and “a new style of Chinese multinational”.

Contrary to the founders of Zara or H&M, Mr Xu, Shein’s founder, does not come from the clothing industry, but from search-engine optimisation.

This is the reason why this model is so different, as Shein is fully about social commerce when it comes to design and production:

• The product catalogue is rich and somehow overwhelming: while Zara launches 10,000 new products a year, Shein launches 6,000 skus every day, based on the algorithmic analysis of trends appearing across Internet.
• A real-time tracking system allows to kill the worst performers and capitalize on the best ones, relaunching production whenever needed. The catalogue has a permanent database of 600,000 references, each retailing between USD 8 and USD 30.
• Products are manufactured with a privileged group of Chinese manufacturers, who are overall better paid and faster than with other brands, allowing Shein to enjoy a higher level of commitment and loyalty. Also, a dedicated system allows to automatize the production launches in real time based on the market trends.

Shein is estimated to have reached a total gross merchandise value of USD 2,3 billion in 2019 and is expected to reach USD 20 billion in 2021. 40% of its sales are performed in the US, and another 35% in Europe.

Products are sold through a strong Instagram and other social media strategy, through the now familiar influencers’ strategy but not only: third party designers are also associated to the design process, allowing Shein to tap up their own communities as well. As a consequence, Shein has 250 million followers across Instagram, Tiktok and other social media platforms, and 70% of them shop through Shain’s mobile app (24% daily active users).

The Economist points out that Shein is a very specific Chinese multinational: the turnover is mostly achieved outside China, and is constantly trying to avoid any reference to its Chinese origins, in order not to be trapped into geopolitical controversy. Also, at home, by keeping under the radar (and also due to the fact that clothing is way less strategical than IT or electronic components), Shein is not under the same scrutiny than Alibaba and other internet groups with a large domestic business.

However, Shein’s strategy is not risk-free:

• Like other fast-fashion brands, Shein is increasingly criticized for its CSR impact.
• Product quality is not constant, affecting its reputation.
• Shein is amassing a considerable amount of data from American customers, which might, in the mid-term, be an issue just like it was for Tiktok recently.

Shein exemplifies a new style of Chinese multinational 

What: A new report indicates efforts ranging from saving energy through LED lighting to stepping up sourcing from minority-owned businesses.

Why it is important: Besides energy consumption reduction to restricted substance list for private brands, Macy’s also commits to being more diverse and inclusive.

By 2025 the retailer expects to reduce energy consumption by 10% from a 2018 baseline, and reduce water use by third-parties manufacturing Macy’s private brands by 25% against a 2019 baseline in areas of “high water stress.”

Macy’s is developing for the first time restricted substance lists for private brands. By 2025, Macy’s intends to have 40% of its private brand products made with preferred sustainable fibres. Also by 2025, all beauty, baby care, personal care and household cleaning products on Macy’s website will be required to disclose their ingredients.

Since 2010, Macy’s has reduced total energy consumption by more than 17.8% through LED lighting retrofits at many of its locations. On solar power, Macy’s has more than 100 active solar sites nationwide. Through a partnership with Volta Charging, the retailer has free electric vehicle charging stations at 37 store locations.

Aside from the environment, the Macy’s report covers the agenda to become more diverse and inclusive in its employee makeup and its matrix of suppliers.

Macy’s said that as of 2020, only 24% of those at the senior director level and above were ethnically or racially diverse, while 76% were White. Even as many companies set aggressive targets to increase racial diversity in their senior management, Macy’s said its goal is simply to reach 25% diversity at the senior director level and above this year, and 30% by 2025. With suppliers, Macy’s intends to achieve 5% spend penetration on diverse suppliers and triple its spend with Black-owned businesses by 2023.

Macy’s Elevates Sustainability and D&I Goals

Macy's Inc Sustainability Report 2020

What:  Immersive retailer Camp opens its first boutique in a mall

Why it is important:  “Less experiential, more retail”: what can department stores learn from their approach, more similar to what they can do (and expect in terms of profitability) than a Fifth-Avenue based flagship?

US-based toys retailer Camp, which we reported here, keeps on expanding in the US by entering the mall business, with a new store planned to open in one of the largest East Coast’s malls, Westfield Garden State Plaza in New Jersey. The store is 650 sqm and is, according to Forbes, “more retail and less experiential” compared to the flagship on Fifth Avenue.

The location used to be a Toys R Us store, and will feature a treehouse and slide in the centre of the space. 2 additional stores are planned in the West Coast and in New England, for a total count of 11 stores at the end of the year, and 18 by the end of 2022.

Immersive toys retailer Camp to continue US expansion 

What: Christian Dior has confirmed its sporting ambitions. After the singularly athletic looks that made up part of the Spring/Summer 2022 collection unveiled during Paris Fashion Week, the brand has announced a partnership with Italian gym equipment specialist Technogym.

Why it is important: After launching Dior Vibe, a line of athleisure wear including leggings, boxing shorts and sports bras, the brand intends to benefit even more from the increase of sport practice by venturing in a new (unexpected?) category.

Dior creative director Maria Grazia Chiuri has personalized a connected treadmill, a multifunctional weight bench including accessories such as dumbbells, and an exercise ball. The pieces are white and feature the Technogym logo, as well as the Christian Dior name between two horizontal black stripes. The collection will be available in Dior stores around the world starting January 2022.

Dior launches exercise equipment with Technogym

What: Nineteen new locations will open this holiday season.

Why it is important: The big-box retailer will increase the number of Apple shops-in-shop in Target stores from 17 to 36 this holiday shopping season.

Target launched Apple shops-in-shop at 17 locations in February after 15 years of selling select Apple products on target.com. The extended partnership will include new locations in Florida, Texas and Minnesota, an updated assortment of Apple products, both in stores and by way of Target’s e-commerce business, and Apple-trained Target Tech Consultants in stores to answer questions and conduct product demonstrations.

Target grows Apple shops-in-shop

What:  Saks Fifth Avenue has opened its 2 first SaksWorks in New York, in partnership with WeWork

Why it is important:  It is all about creating new sources of revenue out of deceiving spaces: a kids space in the Manhattan flagship, a former store which was shut down before the pandemic. The question which remains is to know how these spaces can be comparable in terms of profitability with what retailers are used to.

Based on the reasoning that in the post-covid world, living rooms are offices and offices need to look like living rooms, Saks Fifth Avenue announced the opening of Saksworks in partnership with WeWork last August (see our news here). Although it was imagined in 2019, and announced last August, the first two spaces opened in September 21, on the 10th floor of the flagship in Manhattan and another one in the Financial District outpost (that has been shut down in 2019 after 2 years of activity only). Other locations are planned in Long Island, Westchester and Greenwich.

Accessible with either USD 50 day passes or a USD 300 monthly subscription, the space is filled with memorabilia (candles with an exclusive scent), on-site incentives to eat, drink or buy products, as well as a gym equipped with Peloton bikes.

The journalist, by reminding that a paying semi-privacy is not the same than a free, full privacy, ponders how long this concept might take to fully catch on.

SaksWorks Is Part WeWork, Part Department Store. Can It Work

What: The U.S. is looking to move its supply chain to one that can operate 24/7 starting with the ports in LA and Long Beach.

Why it is important: President Biden thinks that this is going to speed up the delivery of goods across America.

The new schedule means that ports will now be open for 60 extra hours each week, allowing cargo to flow out of the port at a 25% faster pace than during the daytime as they will flow into highways at off-peak hours.

Walmart, Target, and The Home Depot are among the cargo owners and carriers that have committed to use the extended hours.

Walmart, Home Depot commit to use night hours at West Coast ports to smooth cargo flows 

What:  Walmart customers are happy to pay a membership to access first to seasonal discounts

Why it is important:  IADS believes in paying subscription models and this example shows that even a basic service such as access to sales can be an incentive to customers to apply.

Walmart+ customers, who pay a USD 98 annual fee to be part of this loyalty programme, will enjoy an early access to the Black Friday deals, as everyone is afraid of the potential out-of-stocks in stores due to the global logistical bottleneck.

Walmart also expects this move to boost membership registrations, as 1/3 of customers are worried about the end of the year supply issues. This early access to sales is coming on top of already existing perks: an app allowing to skip the checkout line, free unlimited grocery deliveries, fuel discounts. It is estimated that they currently have 32 million subscribers.

Holiday 2021 Walmart+ members get first dibs on Black Friday deals

What: Amazon will allow many tech and corporate workers to continue working remotely indefinitely, as long as they can commute to the office when necessary. It is a change from Amazon’s previous expectation that most employees would need to be in the office at least three days a week.

Why it is important: Company directors will have discretion to allow teams that they manage to continue working remotely.

Amazon’s update to its return-to-work policy followed similar moves from other big technology companies. Microsoft announced last month that it had postponed reopening its offices indefinitely.

Amazon will allow many employees to work remotely, indefinitely

What: Walmart has positioned Google’s cloud more deeply at the centre of its most critical initiatives. One of the main propositions of Google’s cloud business lies in artificial intelligence, machine learning and other data-driven services that are tailored for sectors like retail.

Why it is important: Google Cloud’s client list now ranges from established retailers like Macy’s or Sephora to partnerships with LVMH. When Macy’s used Google Cloud’s Retail Search, the department store saw a 2% jump in conversion and a 1.3% uptick in revenue per visit. Ikea’s adoption of the Recommendations AI tool led to a more than 30% boost in click-throughs and more than 2% gain in average order value.

Walmart runs its most data-intensive, critical “decisioning” processes on BigQuery (one of the Google cloud tools), an enterprise data warehouse that manages and analyses partner data using ML, geospatial analysis and business intelligence. It can act on practical insights and make its operation more efficient. Its rivalry with Amazon makes the initiatives fundamentally important, and so far, it has seen concrete results: BigQuery has had a direct impact on the business, improving Walmart’s processing time by 23%.

Across the whole operation, Google’s cloud has facilitated the retail behemoth’s ability to apply AI — from back-end issues like predicting demand, managing in-stock levels and optimizing the supply chain, to freeing up associates to better serve customers.

So far, the retailer has migrated the majority of its data tables, as much as 90%, to the cloud, and it has migrated 30% of the big data. It plans to nearly double that by the end of the fiscal year.

Walmart’s AI Push Drives Google Cloud Deeper Into Its Organization 

What: A chinese mall management giant is going public in Hong Kong.

Why it is important: This reflects both the need to “normalize” giant companies in China by no longer remaining fully private, as well as the maintained attractivity of Hong Kong for Chinese groups, in spite of the recent comments made by international banks.

Zhudai Wanda Commercial Management Group, part of the Dalian Wanda Group, has filed for a HK IPO listing, looking for a total valuation between USD 3 and USD 4 bn.

The company manages 380 malls in mainland China, 54.2 million share metres with an average occupancy rate of 98.8%. It went through a -8.8 decrease in 2020 due to Covid-19 (representing a loss of USD 172 m).

It is 69.9% owned by Dalian Wanda Commercial Management Group, a Chinese conglomerate.

Chinese Mall Management Giant Files for Hong Kong IPO

What: Retail veteran Walter Loeb is wondering what would be at stake should Macy’s follow the lead of Saks Fifth Avenue and the Hudson’s Bay Company, and split its offline and online activities into two specific companies.

Why it is important: It is all about what to do with stores and digital, and how to combine both of them in the most efficient manner possible. What works for a company might not work for others.

Financial activists call for Macy’s to spin off its e-commerce unit (USD 8,45 billion estimated sales in 2021, doubling in the past four years). Walter Loeb recalls that Macy’s and Bloomingdale’s have worked hard to maintain a business model properly blending e-commerce (a third of the business) and store business. Overall, the total merchandise sold generates a profit that allows the company to remain in business across both channels.

Splitting up activities might create unneeded problems:

• In a particular store is unprofitable, in the new scheme, it will have to be written off since the asset is no longer viable, and might generate a snowball effect putting the whole spin off company dedicated to stores under a considerable stress,
• Every resource (warehouses, trucks…), function (CFO, logistics…) and salary in the current Macy’s company will have to be reviewed and prorated across the brick & mortar and digital company. This will generate additional administrative workload which will not be contributing to profit.

For Mr Loeb, a well-managed organization could more smoothly ensure that seamless experience a customer would want. Macy’s being significantly bigger than Saks in terms of store count, he does not believe a split-up would benefit the company as a whole.

Why Macy’s Won’t Survive If It Sells Off Its Digital Business

What: The platform is betting that new womenswear essentials label There Was One (launched with New Guards Group) will capture anti-hype shoppers looking for sustainable wardrobe staples.

Why it is important: While the pandemic helped Farfetch cut back on the discounting and customer acquisition costs that have dogged its bottom line, it is still searching for ways to increase its margins and help convince investors that buying New Guards Group in August 2019 made strategic sense in a competitive luxury retail market.

The range offers minimalist closet staples for women priced under USD 2,000 with a sustainable angle, including a USD 95 organic cotton T-shirt and a USD 1,400 leather biker jacket made in a tannery certified by non-profit Leather Working Group for environmental best practices.

There Was One will be exclusively sold on Farfetch.com. To develop the line, Farfetch tapped the design and production capabilities of the New Guards Group, the firm behind hype-defining brands like Off-White and Palm Angels.

Farfetch’s chief brand officer Holli Rogers said the line was informed by consumer shopping data that showed that since the start of the pandemic, customers have been “investing in pieces that would last them possibly a lifetime” and preferring items made with some kind of sustainable element.

The label will be discoverable on Farfetch.com alongside the marketplace’s luxury offering and within its “Conscious Edit” of sustainable fashion. (Rogers said sales of Farfetch’s “conscious” pieces grew more than three times faster than the average item in 2020.)

Farfetch launches womenswear private label

What: Fashion may be preparing for a future in the metaverse, but retailers still need to attend to today’s business of selling to physical customers, often in physical stores. Selfridges, which has leaned heavily into creating engaging in-store experiences, is now looking to virtual ones as well.

Why it is important: The project is the latest example of how fashion companies and retailers are trying to bridge the divide between the real and digital worlds. Many brands are anticipating a future where they’ll meet more of their customers in video games and other virtual environments.

For the next two weeks, visitors to the designer floor at Selfridges’ London flagship will discover a portal into a virtual city. The space is a pop-up in collaboration with Charli Cohen, a London designer of physical and digital streetwear, and Yahoo Ryot Lab, Yahoo’s content studio. Pokémon also lent its characters to the project in celebration of its 25th anniversary. It’s mostly there, however, to prompt customers to explore “Electric/City,” an immersive virtual environment shoppers can access in the store by scanning a QR code or visit online through a dedicated website. The collaboration also includes an array of products for sale, both physical and virtual.

A screen on a stand offered visitors their first view ofthe virtual world, and on another stand nearby was the QR code shoppers scan to go to the Electric/City site. According to BoF, the in-store space is sparse, and the interactivity between digital and physical can feel limited without help from the store staff guiding customers through the experience. Where the collaboration comes to life is inside Electric/City.

The target audience for the project is all Selfridges’ customers, especially those who may be less familiar with immersive digital worlds. Designers also made sure the environment was accessible on mobile and in a regular browser window, without any sign-up or headset required.

Beyond the products for sale in Selfridges, there are spots in Electric/City where visitors can purchase clothes from the Pokémon tie-up to be delivered to their homes. A separate collection of digital Charli Cohen garments is available for sale inside Electric/City. They’re enabled by ReadyPlayerMe, which lets users create a digital avatar from a selfie to use across more than 300 compatible games and virtual spaces, such as VRChat. They’re also AR-ready. A shopper in Selfridges who buys a digital item and creates an avatar can project it on their phone into the middle of the shop floor.

How Selfridges Is Bringing Virtual Fashion to Stores

What: John Lewis experiences selling its new private label outside of its own stores.

Why it is important: It is all about brand equity, making sure that customers value the label for its quality, and then create the traffic towards the department store.

John Lewis has open a free standing store dedicated to ANYDAY, its homeware, tech and clothing private label, priced 20% lower than the other John Lewis brand ranges. It is strategically positioned to attract a new kind of clientele, according to Pippa Wicks, the CEO.

The objective of this store is to build brand awareness and direct traffic towards the nearby John Lewis department stores.

John Lewis opens ANYDAY experiential store at Highcross

What: John Lewis is retraining its department store customer service team following an increase in service-related complaints.

Why it is important: After cutting 1,00 jobs at John Lewis and Waitrose and losing its reputation of shining customer service, the retailer is trying to reinforce their principles to put customers at the heart of their business again.

John Lewis has opened a ‘school of service’ to retrain 500 staff before Christmas, in a bid to improve customer experience. Located within its John Lewis store in Stratford, east London, the school has four classrooms and one theatre.

If the voluntary programme proves effective, the retailer could expand the school to other parts of the country as well as to staff at its sister supermarket brand Waitrose.

John Lewis boosts staff training after customer service complaints 

What: Home to the world’s rarest sneakers, The Edit LDN arrives at Harrods in Men’s Shoes on the Second Floor.

Why it is important: Harrods enters the sneakers resale business with The Edit LDN. The online consignment store is a trusted authority on all things sneakers. Working to a drop schedule, the new boutique – the first of its kind – will release cult footwear and collectables on selected dates, in-store only.

The Edit LDN arrives at Harrods