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

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

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

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

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

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

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

Lotte Duty Free opens first online luxury duty free store

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

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

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

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

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

Read the report here

Fall 2021 Luxury Report press release

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

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

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

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

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

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

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

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

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

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

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

Fashion Reboot 2021

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

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

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

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

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

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

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

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

Macy's to launch a curated marketplace

What: Richemont is in “advanced” discussions to merge its YNAP platform with Farfetch, building on a neutral, industry-wide platform, built on the latest omnichannel retail technologies, to support the digitization of the luxury industry.

Why it is important: The merger would result in an acceleration of luxury e-commerce, making this part of the business even more difficult for department stores.

YNAP would leverage Farfetch Platform Solutions to support its ongoing transition to a hybrid business model, the Richemont brands would leverage Farfetch technology to accelerate their online developments and Richemont brands would join the Farfetch marketplace.

Richemont also reported a strong set of first half results, revealing the pent-up demand for luxury watches and jewelry during the pandemic. Richemont has also learned from its partnership with Alibaba. It was initially meant to promote the Net-a-porter and Mr Porter in the region – and to the traveling Chinese consumer – and has since expanded to include partners Artemis and Farfetch. Richemont gained a better understanding of Alibaba’s approach to digital marketing in China, including ‘shoppertainment,’ and of their operating model cantered around a network of Tmall partners.

Richemont, Farfetch in ‘Advanced’ Discussions to Merge Platforms 

What: The retailer has partnered with Vaiv Company, a domestic artificial intelligence to create the metaverse version of the department store's online commerce platform. Starting in the first half of 2022, customers will be able to shop and try on different products as they would do in the real world.

Why it is important: The move comes as an attempt to develop digital business, which is lagging behind when compared to local competitors.

Lotte Department Store to create metaverse commerce platform

What: After a successful pilot in Philadelphia, Ikea is bringing its “Buy Back & Resell” service to 33 US stores from 1 Nov to 5 Dec.

Why it is important: The program allows loyalty members to get store credit for gently used Ikea furniture which is sold through an “As-Is” section at the store.

This is one of the many moves Ikea is taking towards sustainability during the holiday season. For the Black Friday weekend, Ikea Is having “Green Friday” where they will have a dedicated section called the Sustainable Living Shop that features sustainable products and solution to making green living easier and more affordable. Loyalty members can also get discounts on sustainable home solutions and Ikea food products with sustainability certifications.

Ikea expands resale program across 33 US stores for the holidays 

What: The retailer is looking for environmental “innovators” and has launched a GBP 1 million ‘Circular Future Fund’ to challenge the “make… use… throw away” model.

Why it is important: Part funded by the sale of 10p plastic bags in stores, John Lewis hoped to unearth “scalable” ideas “helping to accelerate the transition towards a more circular economy”.

The fund will offer individual grants of GBP 150,000-GBP 300,000. Participants are invited from academia, charities, social enterprises, and businesses that are less than five years old. An independent panel will review the projects.

John Lewis launches £1 million product sustainability challenge 

What: House of Fraser is to close its flagship store on London’s Oxford Street in January, in the latest blow to the UK’s prime high street.

Why it’s important: The building’s owners, the German Conle family, will be redeveloping the site into six floors of offices with retail on the ground floor, a pool and gym in the basement, and a rooftop restaurant. However, it is understood House of Fraser will go back into a smaller part of the building once the revamp is complete.

House of Fraser to close London flagship store 

What: Balenciaga, Nensi Dojaka, Christopher John Rogers, I.Am.Gia, The Attico, Christopher Esber, Coperni, Area NYC and Mach & Mac have been named most influential fashion brands of 2021.

Why it’s important: The pandemic has accelerated some changes in the brands ecosystem. The new trends cycle has created opportunities for smaller, independent brands, as new social media platforms favor authenticity and entertainment.

Who Had the Biggest Influence in Fashion in 2021

What: Geoffroy van Raemdonck says the company is rebounding and supported by remote selling "scaling" relationships with customers.

Why it is important: The executive discusses remote selling development and changing the compensation structure.

“That’s something that existed in an unstructured way, where sales associates were texting to their customers. But in 2019 we built Connect, which is a clienteling tool, and in March 2020 we rolled it out to 50 associates as a beta test for two weeks and then the pandemic hit, and we accelerated that rollout. Those tools have done so well for us that we have continued to invest and it’s agile. It releases new features.”

With this third channel, the goal is “to scale the relationship” with customers, said van Raemdonck. It involves utilizing artificial intelligence machine learning, through Stylyze, a Seattle-based, women-founded SaaS platform that Neiman’s acquired last June. “It basically tells the sales associate; these are the customers you should call, and these are the looks you should provide.”

According to van Raemdonck, NMG has had eight million client interactions since launching Connect and sales associates interact with 50 to 100 customers via Connect each week, leading to significantly more conversion.

With the onset of Connect, NMG changed its compensation structure. “We reward sales associates for every interaction they’ve had so if you engage on Connect, but a transaction doesn’t happen immediately, the sales associate still gets credit,” provided the products discussed are subsequently bought online or in the store, van Raemdonck explained. “As long as we can track that there was an interaction, we give credit to the sales associate.”

Inside Neiman Marcus’ Post-Bankruptcy Playbook

What: The French luxury behemoth is thinking about opening Louis Vuitton’s first Chinese duty free location in tourism hotspot, Hainan.

Why it is important: As Chinese people won’t be travelling abroad very soon, Louis Vuitton is considering a partnership with state-owned operator, China Duty Free Group, to benefit from the local travel opportunity.

It would also represent a U-turn for the Louis Vuitton brand, which is known for avoiding mark-downs.

LVMH Mulls First Louis Vuitton Duty Free Store in China

What: The buy now, pay later platform unveiled an experiential “physi-digital” retail space called the Edit Collection at Sydney’s Chatswood Chase shopping mall, in partnership with the Australian Fashion Council and Vicinity Centres.

Why it is important: The space is primarily a pilot for new retail technology that has been developed and will be rolled out in stages by eTale, with some of the products developed in collaboration with Melbourne-based retail tech start-up ShopExp.

eTale has developed a Bluetooth chip that will be tagged in every garment merchandised in store. The tags allow every item to be tracked in real time across the store and interact with Smart Mirror technology in the fitting rooms, helping customers gain further insights into the products, and immediately delivering data on the most engaged, most tried and most sold pieces back to the businesses.

The fitting rooms will also feature gesture-controlled screens equipped with cameras that allow customers to shoot and share selfies.

eTale ambitions to be the backbone of brick-and-mortar retail across the world. They want every decision that that physical retailer makes to be using our technology to make that decision. It’s about creating as many data points as possible for retailers so that they can really work and operate at maximum efficiency to achieve the best results possible.

Afterpay Unveils a Phygital Retail Concept in Sydney 

What: a fact sheet about what we need to know today about last mile delivery.

Why it is important: the last mile delivery defines the customer experience, so a perfect execution is needed. At the same time, the notion of profitability and CSR are also impacting the options chosen by retailers to define their services.

Global Retail News compiles an interesting fact sheet about the issues raised by last mile deliveries. They represent 30% of the total product’s transportation cost, and, last year, 30% of total deliveries did not reach their right recipients at first attempt (which is an issue : 60% of customers would not return to a website following a failed delivery).

There are many solutions at hand, answering to critical questions : shall retailers opt for an integrated or outsourced fleet ? What about delivery platforms (25% to 30% fee taken by operators), personal shoppers or collaborative delivery?

The most critical topics are CSR (how to make deliveries green and sustainable) combined with the need to be profitable by encouraging customers to opt for instore pickup as often as possible.

Faster, greener, more cost-effective. The last mile challenges

What: Much-anticipated logistic crunch led US retailers to stock items earlier than last year to make sure they would not be in a bottleneck at Christmas.

Why it is important: Many of them are either tempted, or forced, to launch seasonal sales way earlier than last year, to respond to a structural need in terms of capital and space.

The post pandemic retail scene is affected by two factors combining themselves to make things worse: a renewed customer hunger for purchases (Deloitte expects a +7 to +9% surge compared to 2020 during holidays) weighing in on disrupted supply chains, which were halted during Covid-19 lockdowns. As a consequence, many retailers anticipated a global shortage of goods (which might happen anyways for those of them who are late in restocking) and increased their inventory level significantly earlier in the year than in 2020.

As a consequence, retailers are also tempted to offer deals and discounts ahead of the season, in order to free up capital and space. Amazon for instance will start promotions 8 weeks before Black Friday and 11 days earlier than in 2020, while Target will also start deal days on October 10. As a consequence, many analysists are worried that this leads to a price war ahead of the traditional weeks when customers are offered discounts, leading to another major Post-Covid-19 change in retail practices.

US Christmas retail crush comes early as supply chains buckle

What: The department store’s two new directors, Ashley Buchanan and Tracey Zhen, have experiences steeped in innovation and technology.

Why it’s important: Tracey and Ashley will be strong additions to the board, bringing skills and experience that directly align with Macy’s strategy and ensure the company’s growth.

Ashley will be bringing decades of experience in retail and a history of overseeing omnichannel transformations, while Tracey’s global consumer technology background and track record of fueling innovation and applying technology will deliver profitable growth.

Macy’s inc. pumps up the board

What: Korea's retail giants are accelerating measures to improve their business structures and cope with online shopping trends.

Why it is important: Korean retail is rapidly changing from Lotte deciding to make its staff younger to Shinsegae acquiring eBay and developing its fulfilment centres.

Lotte Department Store, in particular, is well-known for keeping its employees for years. Maintaining its staff for a long time without deliberately changing the organizational culture has led to the creation of a rigid work environment and a hierarchical corporate culture. Lotte Group Chairman has ordered the company to develop a young and communicative work culture. At the same time, Lotte Group's retail unit, Lotte Shopping, is currently closing down its stores in order to reduce the rental costs for supermarkets and specific stores that have been suffering consecutive years of sales declines.

Shinsegae needs to increase the number of its fulfilment centres in the country in order to increase its sales volume. It has already secured KRW 3.5 trillion (USD 2.96 billion) by selling real estate in Seoul, and it plans to reinvest the funds in eBay Korea and SSG.com. Shinsegae is also preparing for the initial public offering of SSG.com.

Major changes at Korean retail giants 

What: In her first feature interview as Macy's chief merchant, Nata Dvir discusses category changes and addresses past criticisms of the business.

Why it is important: Like many retailers capitalizing on the current financial health of consumers and their eagerness to shop, Macy’s sales volumes this year are exceeding 2020 and 2019 levels.

Strategies to diversify the offering, experiment with smaller formats, and to capture market share in younger segments where the retailer has long fallen short seem to be kicking in, and despite continuing store closings, Covid, inventory and labour shortages, perceptions on the business are changing for the positive.

Nata Dvir, a Macy’s veteran stepped up to the role of chief merchandising officer of the Macy’s brand last February, after serving as senior vice president and general business manager for beauty and centre core merchandise. She reports to Jeff Gennette, Macy’s chairman and chief executive officer.

When asked if the expansive scope make it hard to have a clear identity, the executive says “one thing I always ask my team is ‘why would a customer buy this at Macy’s?’ Why Macy’s for a specific category? Sometimes it’s about service and experience. Sometimes it’s about broad assortments.

Sometimes it’s about price. So being really definitive for each one of our categories, around the role they play at Macy’s, that’s been the focus.”

Dvir is in charge of bringing younger customers to the forefront, in all categories. “I actually think of the 28- to 45-year-old customer” she said. Among the 5 million new customers attracted last quarter, many of them are coming from the online business and in store, and also thanks to new categories: contemporary and beauty. “We are also seeing a lot of new customers in home. We are a department store. We carry many categories, so it’s about getting us all focused on getting the right assortments, simplifying our pricing, being more relevant for a younger customer that increases the customers’ basket.”

Macy’s has always been strong in special occasion, tailored clothing, dresses, shoes and the gifting category like fine jewelry and fragrance. Those categories will continue to be important. In order to expand the assortment, more casual in apparel, like outfit completers, whether that’s fashion jewelry or handbags will develop. Macy’s also develops new categories: “That’s why we are so excited about toys around this Millennial mom. We will have all the toys that sit under the Toys “R” Us name, and everything from Mattel, Barbie, Fisher-Price. And then in 2022 will come to see that come to life in store.”

When asked about further adding new categories, Macy’s will continue to test new ones. “It’s how we learned about the demand for toys. We launched toys two years ago and now we’re scaling it. We will always test new categories, primarily starting online. So if you think of pets, you will see fashion for pets. At this point technology is not a big growth category for us. What you are really starting to see is a focus on categories we’re good at and expanding them, such as textiles. So it’s not only about adding new categories. It’s taking the categories we are really good at and making sure we continue the dominance by expanding the assortment.”

Amid a Season of Progress, Macy’s Top Merchant Talks Strategy 

What: The usually record-breaking golden week fell short of last year’s level.

Why it is important: Post-pandemic consumption recovery is a reality, however it might not be as fast as needed by worldwide retailers.

Tourism revenue fell by 5% year on year during the last seven-day holidays from Oct 1-7 marking National Day. Normally the busiest travel period, domestic tourism revenue totalled USD 60.36 billion, the equivalent of 60% of the same week before the pandemic. According to Citi bank, this sluggish recovery is due to the soft prices of travel products as well as a shift towards short-haul trips. However, even on that front things are not yet settled: domestic trips are down -1.5% compared to last year, and represent only 70% of pre-pandemic levels.

While China has largely been successful in containing the Covid-19 multiple waves, including Delta variant, analysts are worried about potential new outbreaks.

China's soft Golden Week data bode ill for retail sales

What: The retailer announces its collaboration with Lablaco, a specialist in circular fashion. to propose rental options to customers. Such pieces will be traced thanks to blockchain technology.

Why it is important: The initiative, only implemented in its Berlin flagship of Mitte Gart for now, will last until the end of the year for H&M to try a combination of two current trends, blockchain and rental.

Twelve pieces are available to customers to be rented for a period ranging from 5 days to 3 weeks. Each piece will bear a label giving access to its own history, stored in a dedicated blockchain. Customer renting it can also contribute to the information chain by uploading the looks obtained with these pieces. Upon their return to the store, the pieces will be checked, cleaned and prepared for a new tenant.

H&M puts blockchain at the service of rental

What:  Amazon is using data that should remain private to sellers to fine-tune its own private-label products, and then promote them over the original ones

Why it is important:  The worrying point is not that Amazon engages in such practices, which are finally common practices for any retailer with private labels business, but that it also uses data taken from third-parties selling on its marketplace.

Reuters reports that Amazon has secretly exploited internal data from Amazon India to copy products sold by other companies and then offered them on its platform. They also rigged the search results in order to make the private label products appear in the top tier results.

After identifying the most interesting or promising brands, the Amazon India team partnered with them and sold them on the website, in order to learn from the data gathered and replicate their key success factors, with products sold 10 to 15% cheaper. Amazon started operating in India in 2013 and soon recorded significant losses, leading to setting up a target of 40% of total sales achieved through private labels.

We already reported Benedict Evans’ thoughts on Amazon’s approach to private labels here. He points out that retailers have watched what they sold and copied their suppliers since the 19th century, and this is a basic part of how the industry works (private labels represent 20-30% of retailers’ revenue, vs. 1-2% for Amazon).

He mentions that such an approach on the marketplace (60% of Amazon’s business) is more worrying: marketplace vendors are not just Amazon’s suppliers but also its customers, and Amazon has always promised that it would not look at this kind of data. So far, there is no technical nor legal framework guaranteeing Amazon’s promise.

Amazon copied products and rigged search results, documents show