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

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