What: Lotte department store is offering its first-ever voluntary retirement since first opening 42 years ago.

Why it is important: The operator of the department store chain, Lotte Shopping, told employees that it will be accepting voluntary retirement applications. Around 2,000 staff members meet this qualification, the company said.

The restructuring program is particularly for staff members who have worked for the firm for more than 20 years. Voluntary retirees will receive a severance pay equal to 24-months of wage, KRW 30 million (USD 25,576) in compensations and another KRW 32 million as children’s university tuition payments.

Lotte Department Store offers first-ever voluntary retirement

What: JD.com opens a department store format to make the most of its omnichannel capabilities

Why it is important: Along with Amazon, e-commerce giants need to have a physical interface to increase their interactions with their customers and make their ecosystem sensible.

JD.com, which presents itself as the “leading one-stop e-commerce platform and a technology enabler for retailers and brands”, has announced the launch of JD Mall, a brick & mortar department store to open in X’ian at the end of September 2021.

The store will span across 42,000 sqm and five floors, making the most of its omnichannel capabilities to sell 150+ brands. Customers will have the possibility to place orders through Wechat by scanning the products QR codes, and get their products delivered at home. It will also propose fully integrated services in areas such as home design (in the same spirit than what El Corte Inglés does) allowing customers to co-design their interiors and then buy the related products, delivered in 2 hours and installed in 24 hours. It will also feature immersive retail spaces, with 11 “experience zones” and 29 “product interaction zones” (beauty salon, audio experience, drone testing…).

This store format comes as a complement to the existing brick & mortar formats in JD.com’s offer, along with JD home appliance stores, JD computer and digital stores and retail experience shops.

JD launches five-storey JD Mall in China’s Xi’an Retail News Asia

JD.com Announces New Appointments for JD.com and JD Retail JD.Com, Inc.

What:  The Anyday value-focused brand from John Lewis is set to add fashion items following sales of almost GBP 60 million for the label since its launch in April.

Why it is important:  Prices on the offering will be much lower than the department store average to compete with some of the supermarket players.

The 2,400-product Anyday brand has included homeware/furniture, technology, and baby products, and now an additional 700 new products will be added spanning womenswear, menswear and kidswear.

John Lewis adds fashion items to Anyday value label

What: Playhouse, an emporium of gaming devices and content, will be located in the Oxford Street store basement.

Why it is important: Again emphasizing experiences, Selfridges will introduce new exclusives on a twice-monthly basis to create traffic and excitement. Lines are expected for some activities.

Almost two thirds of UK adults played video games over 2020, with every age category ticking upwards as people strove to fill all of those lockdown hours.

Playhouse borrows from the Apple handbook, with products displayed like objet d’art on glowing plinths, with everything from futuristic Rubix cubes to high-end gaming PCs treated with the same fetishistic reverence.

You’re encouraged to pick up and prod the products, and when you’re not browsing the merch, there are rows of old-school arcade machines (Street Fighter, Mortal Kombat, Pac-Man etcetera). Perhaps the biggest draw are the gaming installations: an Aston Martin car pod with a wrap-around screen to practice your racing skills; a VR headset; and, most spectacularly, a virtual reality gaming chair in which you can spin around and upside down taking on the Decepticons in a Transformers shoot-em-up.

Smartech (the biggest concession in the store), who spent two years developing the “retailtainment” concept, says the products will be constantly updated to include the latest hot gadgets.

Playhouse, a shrine to video games, launches at Selfridges as industry sales surge 

What: The department store has entered the resale/donation sector with initiatives for both womenswear and kidswear, the latter category being one that it has only recently added to its offer.

Why it is important: It has just opened The Drop Off, where consumers can drop off any pre-owned childrenswear. These items will then be collected and resold around the world via the peer-to-peer Kids O’Clock website. There’s an incentive for customers to take advantage of it with a GBP 20 voucher to spend in the store’s new kidswear department. It's only a three-month initiative for now.

It comes shortly after the store linked up with Reflaunt to allow customers to sell pre-loved adult clothing. Launched at the end of August, the service offers customers the opportunity to bring in pre-owned designer items, or have them picked up. Reflaunt is then responsible for the entire process including authentication of the items, creating and uploading imagery and pricing.

Harvey Nichols adds kidswear, adult resale initiatives 

What: Pete, Erik, Jamie and patriarch Bruce turned to WWD to reflect on Nordstrom’s past and discuss its future.

Why it is important: Nordstrom management team discusses the renewed relationship with partners and brands, the business model evolution, the customer’s expectations and journey, the necessary integrated approach to both online and physical retail and how good service is often invisible.

Pete Nordstrom: the brand builder

The retail veteran marveled at how little the strategy had to change during his first decades on the job. Under the leadership of his father, Bruce Nordstrom, and the third generation of family leaders, the company grew quickly, enjoying a period of brick-and-mortar expansion. More recently, everything got harder, digital changed the game entirely, and Pete — together with his brother Erik and cousin Jamie — has kept Nordstrom at the forefront of the online revolution.

Amid a period of great change and challenge, the tight-knit Nordstrom team forged ahead with a number of attention-grabbing moves, such as the company’s minority investment in Topshop. It’s just one example of how Pete and his team have re-examined the idea of partnership and also reflects Nordstrom’s efforts to appeal to younger shoppers.

Nordstrom’s strategy is to be less transactional in the relationship with partners and understand more about their goals. Relationships are key to brand management. Brands become more selective and Nordstrom has to be top of mind and clear about its value proposition.

About business models: “There are a lot of different ways — everything from drop ship to wholesale to revenue share to a hybrid concession model to a full concession, where the brand owns the inventory, the space, it’s their people managing it. We become more like a landlord. But there are versions of that. All of those discussions are easier to have because they’re relevant to our current issues. I feel like all the walls have gone down.”

The most important lessons learned during the pandemic are the ones relating to communication, as there’s not a lot of serendipity happening through a Zoom call, so you’ve got to be very intentional about how you communicate with people.

Erik Nordstrom on the stuff Nordstrom is made of

The retailer has always been customer-centric and sees its Nordstrom and Nordstrom Rack brands and digital expertise as opportunities for deepening engagement.

Now as chief executive officer, Erik’s guiding the family-run company through pivotal phase filled with opportunities cantered on Nordstrom’s new “Closer to You” long-term growth agenda: it calls for a massive expansion of the digital assortment from 300,000 items to potentially 1.5 million within three to five years; injecting lower price offerings into the Nordstrom Rack off-price matrix, and finessing the three-year-old market strategy, which revolves around linking Nordstrom full-line department stores, Rack off-price stores, Nordstrom Local locations and a variety of services.

Asked if it was important to have Nordstrom Locals in other major markets, Nordstrom replied that enabling Rack “gave us a lot more coverage, more quickly.…They still think there is a place for Locals as they’ve been very successful. There is still opportunity to add some more in the L.A. and New York markets, as well as in Seattle, the company’s third-largest volume market.

To dramatically ramp up the digital offering, to that 1.5 million item goal, “We think it’s going to take a different model with different products, different brands,” said Erik. “The traditional wholesale retail model won’t get us there. Drop ship has been the example we’ve had in the past. It’s a way of bringing more product choice and [complete] brand expression. We need to add flexibility.

Nordstrom said the company’s e-commerce operation is “moving to more of a hybrid commerce model,” though it wouldn’t be accurate to consider it a marketplace model. It’s generally believed that retailers make more money by selling an item in a store rather than online. But at Nordstrom, “It’s parity, profit-wise. Erik also said that sellers online don’t get commission, whereas store sales associates do, and that Nordstrom fulfills many of its online orders from stores, which makes deliveries faster and less expensive.

Some vendors and industry analysts have the perception that Nordstrom is investing in Rack, digital and technology at the expense of its full-line stores. “That is just not the case. Look at the investment in our Nordstrom stores, both in our remodels, in things like our pop-in shops, but you also have to look at our New York flagship store. It’s the biggest investment we have ever made. Having such a flagship reflects our belief in physical retail. We really feel great about the store. It’s a modern, world-class store.” It opened in October 2019, and cost well over the initial $500 million budgeted.

Jamie Nordstrom on service, synergies and the ‘Single View’

The cousin of Erik and Pete Nordstrom speaks to "the never-ending cycle" of listening to customers and delivering on their demands.

“There was a period of time for a lot of retailers like us when we were managing the dot-com and store businesses separately, with different teams and organizations. Across the company, in technology, accounting, finance, the supply chain, HR, we needed to transform our thinking,” said Jamie. “The real win would come from having a really integrated approach both online and in stores, for the merchandise, the messaging and all service touch points for our customers, be it buy online, pick up in stores, styling, alterations or returns.”

“It’s about getting our teams really focused on Nordstrom customers as opposed to the store customer or the internet customer,” said Jamie. “It’s one customer. Nobody exclusively shops in stores or online. More than 50% of customers who shop in store will have started their shopping journey online with us, and similarly a significant number of customers who buy from us online started their journey by seeing a product in-store.”

“Buy online, pick up in stores is one of the fastest growing parts of the company’s business,” said Jamie. “Having a big selection of merchandise ready for next-day pickup at local stores, using all the inventory available in that market, be it from local stores or from online, requires a lot of people to make that work.”

“Good service is not the absence of bad service,” Jamie continued. “Good service is often invisible. You don’t notice it. When we execute well the customer says, ‘that is just great.’ They don’t exactly know why we have been able to make it great. They don’t know all the tech and the people behind the scenes that deliver on this.”

In a broad sense, service is also about exposing customers to products other than those they may have come to the store or the website for. In the last 18 months or so, Nordstrom, as Jamie said, has been “unleashing the sales team through new tools and social media to engage with customers.” On the stylist chat, customers can ask a style question or get personalized outfit recommendations. More than 50% of Nordstrom’s salespeople are now utilizing these remote styling tools, a 10-point increase compared to the quarter before.

Nordstrom’s clienteling tools provide associates with stored information to keep track of what customers are asking for and buying. Through many surveys, “We have heard over and over again that shoppers want a salesperson who knows them, who can anticipate their needs.”

Bruce Nordstrom Untold Stories from the Patriarch

Erik Nordstrom on the Stuff Nordstrom Inc. Is Made Of 

Jamie Nordstrom on Service, Synergies and the ‘Single View’ 

Nordstrom through the years

Pete Nordstrom Nordstrom’s Brand Builder 

What: The new format, to be first tested in 10 stores, will sell an inclusive mix of more than 170 masstige, prestige and mass brands from new, emerging and established companies. The offer will be available on jcp.com from 15 October.

Why it is important: JC Penney’s had to remake its beauty business due to the phaseout of its 15-year-old partnership with Sephora that expires in late 2022. The department store will now compete with both Kohl’s-Sephora and Target-Ulta. These new partnerships were disclosed in December 2020, when JC Penney’s emerged from seven months in bankruptcy proceedings.

Beginning in fall 2022, Penney’s will roll out the beauty shops to the rest of the 650-unit department store chain. The project is expected to be completed sometime in 2023. More brands will be added in the future.

Penney’s beauty shops will average approximately 2,000 square feet in size and be situated in the space vacated by Sephora. The beauty space is completely reimagined to be hyper inclusive.

Prior to Sephora, JC Penney’s stabs at the beauty business were generally unsuccessful. JC Penney’s salon business, on the other hand, has been consistently strong over the long haul. Consequently, the retailer is creating a synergistic connection between beauty and the salons.

The Strategy Behind Penney’s Beauty Redux 

What:  Nike closed its corporate offices for one week so that staff could take time off to rest and recover.

Why it is important:  Senior management wants this to come as an acknowledgement that mental health prioritization is not counterproductive, but rather a way to let teams recharge.

Nike wanted to send a message that it is important to recognize the role mental health plays for workers and their well-being and that they should learn to focus on mental health in a preventative manner so they do not become ill.

Although the corporate teams received a week off, the retail stores remained open.

Nike closes offices for a week to give employees a mental health break 

What: The American Dream complex gives way to its luxury wing, The Avenue.

Why it’s important: After having encountered many problems and delays during the pandemic, the “street of dreams” comes back to life with Friday’s opening of Saks Fifth Avenue, Hermès, Dolce & Gabbana, Mulberry, Johnny Was and Carpaccio… and many more to come.

The luxury wing only awaits new names to be added so the dream becomes even bigger : In the days and weeks to come, Tiffany & Co., Saint Laurent, Anne Fontaine, Alexander Wang, Jonathan Adler, Gentle Monster, Zadig & Voltaire and a Brut Champagne bar will debut on the luxury site as well.

Noting that more moderate-priced retails like Zara, Uniqlo, H&M, Aritzia and Primark are also available.

Luxury at American Dream Gets Real 

What: According to Bloomberg, Walmart Inc. is issuing a USD 2 billion green bond, amid efforts to reduce carbon emissions, boost recycling and clean up its supply chain.

Why it is important: The bonds may help fund a range of green projects including solar and wind, energy efficient refrigeration, electric vehicles and waste reduction, according to its green financing framework.

Walmart is selling the USD 2 billion 10-year green bond as part of a five-part USD 7 billion sale to help fund a tender offer.

The retailer has a target of achieving zero emissions by 2040 and also aims for a 1 billion metric ton cut in emissions from its supply chain by 2030.

Walmart Breaks Green Bond Record With $2 Billion Debut Issuance 

What: For many retailers, particularly those selling "non-essentials," the outlook has been bleak, but 4,748 store closings are set for 2021, versus 4,616 openings.

Why it is important: A Coresight Research report indicates that, based on announcements so far this year from about five dozen U.S. retailers, closures are only 2.9% ahead of openings this year, compared to 142.1% ahead at the same time in 2020. But while the industry view toward brick-and-mortar is positive, the mood could quickly swing negative if business in the second half doesn’t meet expectations.

Coresight also indicated that major retailers have revealed 48.4% more openings and 37% fewer closures compared to 2020, and that U.S. store openings this year are tracking ahead of the pace in 2019 and 2018.

Sectors expanding most aggressively are dollar stores, offpricers, beauty chains, discounters and groceries. Categories seeing the greatest growth include home, athleisure, performance wear, plus sizes, sneakers, denim, fragrance and beauty. Lately, dresses, occasion and work-to-work styles have picked up. As sales strengthen, so does the inclination for brick-and-mortar growth.

Apparel is coming back. Specialty players like Aerie, American Eagle, Aritzia, Altered States and Madewell are growing. Rue21, currently with over 650 stores, set 15 openings by the end of 2021. The Aerie division of American Eagle Outfitters has targeted 76 store openings for 2021 and expects to have 500 to 600 units operating in 2023. Athleta, the fast-growing activewear division of Gap Inc., plans to open between 20 and 30 stores a year in the U.S. and will soon be opening stores in Toronto and Vancouver, Canada. And Fabletics, another active brand, sees opening two dozen stores this year, which will bring it to over 70 by the end of 2021.

Target continues to expand as well, most aggressively with its smaller urban format. The discounter has 1,909 brick-and-mortar locations, has opened 19 stores so far this year and 12 more are planned for the fall, in locations such as New York City, Hawaii and next to Disney World in Orlando, Fla. The company sees opening 30 to 40 stores annually for the foreseeable future.

Sephora has embarked on its biggest expansion ever, with 60 freestanding sites and 200 shops inside Kohl’s in the works this year. Among off-pricers, Ross Stores sees 60 openings this year; TJX plans 74, and Burlington, 92.

Other digitally native companies such as The RealReal, Bonobos, Rhone, Koio, Allbirds, Glossier and Warby Parker are also steadily opening stores. Camp, a summer camp-themed store with toys and activities such as crafts, story-telling, opened its first location in 2018 in Manhattan and has five locations now.

Dollar General sees opening 1,050 stores this year on top of the 17,000-plus units operating at the beginning of 2021 and potentially ultimately doubling its store count. Dollar Tree plans to open a total of about 600 stores this year under the Dollar Tree and Family Dollar banners.

Major retailers still downsizing include J.C. Penney, Sears, Kmart, Disney, Gap, Banana Republic, and Macy’s. Topping Coresight’s list of store closing announcements this year is Christopher & Banks with 449.

Retailers Rethink Brick-and-Mortar Potential 

What: While announcing the first quarter earnings (Q1) for fiscal year 2022 month ending August 31, 2021, the retailer also disclosed follow-ups on its strategy.

Why it is important: Taking supply chain issues into consideration, Nike will increase its prices.

Nike announced first quarter earnings (Q1) for fiscal year 2022 month ending August 31, 2021, with revenues up 16% compared to last year. Nike direct sales were up 28% and gross margin improved to 46.5% as compared to 44.8% in Q1 last year.

Digital sales for Q1 was 20% of total sales and the company is confident it will meet its goal of having digital represent 40% of total revenue by 2025.

Supply chain issues have been a challenge throughout the quarter with all footwear factories in Vietnam still closed. As a result of these issues, Nike has readjusted its forward looking statements for the second half of the year to single digit increases.

Price increases will be implemented in the second half of the year to offset transportation, logistics and air freight costs. The continued shift to direct to consumer will also help to offset anticipated added costs in the second half of the year.

Nike Prices To Rise Amid Supply Chain Issues While Profits Increase 23%

NIKE Reports Fiscal 2022 First Quarter Results - Press release

What: The annual Nordstrom Anniversary sale uses a scarcity strategy in order to strengthen customer excitement and engagement.

Why it’s important: By selling more brands but fewer items, offering new services and experiences and contributing to strengthening customer engagement, the luxury department has established compelling merchandise.

Every year, Nordstrom’s Anniversary event lasts about a month and is staged across the entire Nordstrom 100-unit department store fleet, and its website.

This year, one hundred brands were added to the assortment and discounts of 25 to 40 percent were given to Nordstrom’s most loyal customers.

However, designers and brands are selling much fewer items, creating a sense of urgency and exclusivity for everyone.

Nordstrom’s Perennial Blockbuster - The Anniversary Sale 

What: The British company said supply chain complexities after Brexit made getting fresh food from Britain to France each day too difficult.

Why it is important: The post-Brexit trading rules have frustrated many companies with significant added costs. Rules of origin requirement have forced clothing retailers to move distribution centers to the European Union, businesses of all sizes have increased customs payments and food producers have to pay for health certificates.

Marks & Spencer, the large British retailer that has been battling Brexit costs and delays for months, said on Thursday that it would close its 11 food stores in France.

The stores were supplied with products made in Northampton, near the middle of England, and shipped across the English Channel each day. At the start of the year, once Britain began its new trading relationship with the European Union, the stores’ shelves emptied out in Paris as new customs checks and tariffs upended the retailer’s supply chain.

The stores in France that are closing by the end of the year are run by a partner in a franchise agreement. Nine other stores in France, located in transport hubs and operated by a different partner, will stay open. The website, which sells mostly clothes and home products, will keep running.

Marks & Spencer Blames Brexit as It Closes French Stores

What: After five years, Saks 5th Avenue re-enters the New Jersey market with a two-level bright and modern store inside the American Dream complex.

Why it’s important: By closing down their previous stores and opening a new, bigger, better and better-positioned store, Saks met the wishes and expectations of its customers.

The store’s merchandising blends in with the 5th Avenue luxury shops, that is to say designer handbags and men’s and women’s shoes, which have been the top-selling categories lately. Cosmetics, fragrances and men’s, women’s and kids’ fashions are also available.

Among its innovative features, Saks now offers over 1,000 different styles of men’s and women’s sunglasses, advanced designer and contemporary women’s labels and much more.

To celebrate its opening, Saks at The Avenue will host a charity shopping weekend with a percentage of sales benefiting Women’s Rights Information Center all through Sunday.

Saks Fifth Avenue Returns to the Garden State 

What: Macy’s executives share their forecasts for the company at the Goldman Sachs 28th Annual Global Retailing Conference.

Why it is important: The leadership team shared their strategy going forward and give a positive outlook based on the current momentum.

For the quarter ending on 31 July, Macy’s reported a net income of USD 345 million. The executives revealed that Macy’s is being driven by data-centric loyalty and personalization efforts, pricing science, inventory management, and agility (through the luxury to off-price offer). There was also an effort to add categories previously not carried such as home fitness, pets, outdoor recreation — as well as expanding in toys through the new partnership with Toys ‘R’ Us.

Macy’s three-year strategy centers on personalization and the loyalty program, expanding assortments, accelerating digital growth, closing 125 department stores, opening smaller scale off-mall stores, boosting some private brands into billion-dollar businesses, and reducing costs.

Going forward, Macy’s wants to be a one-stop-shop for the Millennial mom through the expansion of its off-price business and through the partnership with Toys’R’Us. The retailer is also looking to become more advanced in in live video shopping, enhancing the beauty category with site-lits, adding a fragrance finder in the first quarter of 2022 and “more robust beauty adviser interface.”

Macy’s Execs Talk Momentum, Handling Headwinds and 2022

What: Xu Lei is the new president of JD.com and will lead the day-to-day operations of the company’s various business units. He has been replaced as CEO of JD Retail by Xin Liujin.

Why it is important: The changes allow more time to be devoted to formulating long-term strategies and contributing to the country’s call for revitalization of rural areas.

JD.com Has a New President, JD Retail Names New CEO

What: Lotte Group's retail unit, Lotte Shopping, has been selected as a de-facto strategic investor to acquire Hanssem, the country's largest furniture company, along with local private equity fund (PEF) IMM PE.

Why it is important: The retailer expects to create synergy with its department stores and Hanssem at a time when expenses for home improvement, home goods and furniture rose in the midst of the pandemic.

"Taking over Hanssem will help Lotte allocate space for furniture stores in our retail channels as well as create synergy at the group level in collaboration with Hi-Mart and Lotte Engineering and Construction," a Lotte Shopping official said.

Lotte to acquire Hanssem with IMM PE

What: With consumer experiences increasingly playing an important part in the retail landscape, Situ Live arrives at the Westfield London shopping centre this autumn.

Why it is important: Billed as “revolutionary” in retail and an “exciting and immersive consumer experience", it combines product discovery, innovation, theatre and demonstrations, “to reimagine the traditional commercial retail model”.

Spanning 7,500 sq ft, the debut venue “will be packed with products designed to inspire your everyday, across a series of specially curated, themed theatres, brought to life by live storytelling”. Visitors can explore the latest devices from a selection of cutting-edge brands in action and try them before they buy.

Westfield London to debut "revolutionary" Situ Live retail concept

What: the Parisian department store launches its “Concept Végétal” which offers a choice of plants and services to help customers creating green tailor-made spaces.

Why it is important:  After Selfridges and La Rinascente, Le Bon Marché is another department store surfing on the customers’ new-found post-Covid passion for nature.

The space is located on the ground floor event space. Customers can buy plants, pottery, learn how to develop outdoor spaces or indoor corners of greenery with the help of various architects and landscapers. Masterclasses are also on the menu.

Seen at The Cheap - Nature invites itself to the Cheap

What: Pre-loved Chanel, Gucci, Louis Vuitton accessories will be available at Neighborhood Goods stores.

Why it is important: Neighborhood Goods said success for the long-term partnership will be measured in terms of new customers, sales and in identifying new brands and products that resonate with its core customer markets.

The retailer, carving a hyper-localized, rotating assortment of contemporary brands, counts three stores in Austin and Plano, Texas, as well as in New York City. Fashionphile marks the latest chapter of growth, following Neighborhood Goods’ launch of The Marketplace, which sports a hand-picked selection of consumer packaged goods like trendy plant-based meats and sparkling water.

According to Sarah Davis, Fashionphile founder and president, the physical retail space has its perks for Fashionphile sellers. “As more and more brands compete for the same customers online, organic reach becomes more difficult and hashtags less effective. All of that competition drives the cost of digital acquisition up, so we are motivated to get creative,” she said.

Noting Fashionphile customers love the “ease of coming in to sell, process returns or pick up online orders,” Davis said the company strategically operates eight selling studios in “nontraditional” retail settings. Neiman Marcus is one such physical touchpoint that materializes just some of the 45,000 unique items on Fashionphile’s website.

Pre-loved Chanel, Gucci, Louis Vuitton En Route to Neighborhood Goods 

What: The collection will be sold by trunk show in Bloomingdale’s and Neiman Marcus.

Why it is important: Bridal market is booming as large swaths of the world emerge from pandemic lockdowns, and travel restrictions ease, allowing weddings postponed over the past year to go ahead.

Dubbed “Love,” the capsule is to be sold via trunk shows in the U.S. starting 9 September at Bloomingdale’s in New York, followed by Capitol in Charlotte (N.C.) and Brentwood (California), and Neiman Marcus in Dallas.

The collection is also scheduled to head to Europe, the Middle East and Asia in the coming months, although it’s unknown if Vali will partner with other department stores. Dresses start at USD 9,000 and run up to USD 29,000, with separates starting at USD 3,000.

Valli opted for the small scale of trunk shows to sell the Love collection, rather than wholesale distribution. Each trunk show runs for three or four days. He said he plans to do one bridal collection a year, allowing sufficient time to perfect the silhouettes, fabrics and embellishments.

Giambattista Valli partners with US department stores

What: After a test in Poland, Ikea also runs a test in Shanghai.

Why it is important: The major innovation is the abandonment of the signposted and imposed customer path.

After four months of renovation, Ikea reopened its Shanghai Xuhui store on 12 August. It has been transformed into a Home Experience of Tomorrow. The store includes 30,200 sq.m of sales area spread on two levels, 9,000 products, 63 exhibition spaces, a 700-seat restaurant and a number of play areas for children. Open areas dedicated to the bedroom, the living room, the kitchen and the office, a repair zone dedicated to “makers”, in which customers and employees share their knowledge in a circular economy perspective, plus an event space, and areas dedicated to large families will be available to customers.

If the rooted customer path has been a pillar of Ikea’s concept for years, current consumers expectations in the Covid context have deeply changed. In Europe, Ikea stores in London and Vienna will also adopt the free flow by the end of the year 2021. As a reminder, the end of the arrowed in-store path has already been successfully tested in Poland (in Szczecin) but Ikea has not indicated its impact on the average basket.

Ikea new store concept

What: The CEO of Simon Property Group held court on a conference call with analysts after turning in stronger second-quarter results.

Why is it important: In the company’s U.S. malls and premium outlets, occupancy stood at 91.8% at the end of the quarter, down from 94.4% two years earlier.

“We continue to see demand for space across our portfolio from healthy local, regional and national tenants, entrepreneurs, restaurateurs — and mixed-use demand [is] ever so increasing day by day,” Simon said. “Physical retail is here to stay. And people really like to shop in the physical world.”

“We still have a hole to dig out of because of the bankruptcies that we had to confront with the pandemic,” he said. “But I’m very pleased with the activity, the mojo that we have in leasing, the work that our personnel are doing there, the creativity. It’s pretty encouraging.”

So far this year, the company has signed leases for 3 million more square feet of space — more than 800 more deals compared with the first six months of 2019. And retail sales for June were on par with June 2019 and up 5% from May.

For the three months ended June 30, the group’s net income increased to USD 617.3 million from USD 254.2 million a year earlier. Funds from operations — the standard yardstick for real estate firms — rose to USD 1.2 billion from USD 746.5 million a year earlier.

Mall Giant David Simon ‘Physical Retail Is Here to Stay’