What: The technology-enabled “store of the future” is developing now, in several different directions.

Why is it important: The brick-and-mortar store is evolving, customer needs changing and technology advancements blurring the lines between channels.

Here are three store of the future concepts that customers don’t have to wait to experience.

• 21st-century vending machine

Travel retailer Hudson is rolling out an automated airport store concept it envisions as a miniature shopping mall. Interactive touchscreens showcase merchandise images and provide product information, while personalized augmented reality (AR) technology provides eyewear customers with a fully-immersive, virtual try-on experience.

It is also worth mentioning the eight-story automated “car vending machines” offered in at least 29 locations across the U.S. by online used auto retailer Carvana. Customers receive a commemorative, oversized Carvana coin to insert into the machine, activating the automated vending process, and then watch their vehicle descend.

• Digital-only stores

Taco Bell just opened its first digital-only U.S. location in New York, where customers can use one of 10 self-service digital menu kiosks or order ahead digitally. Meanwhile, Chipotle is piloting a store concept called “Chipotle Digital Kitchen. Customers must order in advance via the Chipotle website, app, or third-party delivery partners, and pick up their food from a lobby.

Starbucks was a pioneer in digital-only stores, opening its first-ever Starbucks Pickup store in New York City’s Penn Plaza in late 2019. This location uses the mobile order & pay feature of the Starbucks app as the primary ordering and payment method for customers.

• The store comes to you

Another interesting future store concept comes from Northeast grocer Stop & Shop (an Ahold Delhaize USA banner), which has piloted driverless vehicles that act as stores on wheels. Shoppers summon the vehicles with a smartphone app, head outside, unlock its doors, then personally select the grocery products they would like to purchase.

Three ‘store of the future’ formats you can visit today 

What: The department stores want to better collaborate with younger generations thanks to simplification and paper consumption decrease.

Why is it important: The company introduced the new system knowing that 80% of its employees are Millennials and Gen Z people.

Hyundai Department Store has taken the initiative to change its reporting system as part of efforts to transform into a better workplace for the M-Z generation, which refers to those born between 1980 and the early 2000s as a combination of millennials and Generation Z.

The company introduced a simplified electronic reporting system that is available not only on PCs but also on mobile devices. Employees can now report to senior colleagues simply by sending notes through a messenger app. The company also introduced a group chat function.

In a survey it conducted last year with its employees, 67.4% said that reports were the most difficult part of their work.

Hyundai Department Store Upgrades Reporting System in Favor of MZ Generation

What: Brookfield Asset Management buys out the full control of Brookfield Property Partners for USD 6,5 bn.

Why it is important: Mall management is getting under the full control of owners, who have in mind selling a part of their assets once the economy bounces back.

Last year, Simon Property Group bought Taubman Centers in a scaling move. Brookfield Asset Management just announced the purchase of the remaining shares in Brookfield Property Partners (including Brookfield Place mixed-use real estate project in Manhattan) for USD 6,5 bn. Their project is to position themselves on the market, control the brand proposition within each of their malls, as well as be in the best position to sell a part of their locations once the opportunity arises, in a similar posture to Unibail-Rodamco-Westield who announced to be getting ready to do so next year.

Brookfield’s $6.5 Billion Buyout Approved

What: Fast-fashion sees a decline as consumers become more sustainably aware.

Why it is important: Apparel companies seen as bad for the environment face "reputational risk."

According to a UBS survey, fast-fashion retailers could face revenue declines of 10% to 30% over the next 5 to 10 years as more consumers become aware of the environmental and human costs of apparel production.

Apparel companies in fast fashion, like H&M, are addressing consumer concerns through experimentation with textiles and releasing eco-minded collections.These siloed efforts might not be enough. Consumers are becoming more aware about the impact their clothing choices have on the environment. This has resulted in a change of buying behaviour to focus on buying less and invest in more sustainable pieces.

Fast fashion faces steep declines in the next decade or sooner

What:  A new partnership with a fashion retailer for the iconic American department store

Why it is important: The approach is very different from the previous (and failed) partnership with Jeffrey’s, as Nordstrom is positioning itself as a platform for new brands, rather than using Dover Street Market as a way to emphasize its fashionable positioning.

Nordstrom has announced a new partnership with fashion retailer Dover Street Market and will present seven brands belonging to the DSM incubator in stores and online. Said brands cover Men’s and Women’s RTW, accessories and shoes areas.

Dover Street Market has never partnered with another retailer before and uses Nordstrom as a way to leverage the visibility and exposure of the brands belonging to its incubator.

Nordstrom on the other hand sees this partnership as a way to support newcomers to fashion, as well as to bring unusually and never seen before products and brands to its customers. Very interestingly, this new approach is quite different from Nordstrom’s previous (and failed) buyout of Jeffrey’s, which had the delegated task to bring fashion sense back to Nordstrom. Here, the partnership is all about collaboration for the sake of new brands, without any delegation of any sort.

Nordstrom Space to Offer Dover Street Market Incubator Brands 

What:  Now that there is light at the end of the tunnel, customers are back in stores, which changed significantly in the course of a year

Why it is important:  Since customers grew accustomed to many of the strategies listed here, the basis playbook changed with the addition of many must-haves (which used to be considered as gadgets prior to the crisis).

Retailers and brands had to rethink their operations during the Covid crisis and the consequent lockdowns. Now that there is light at the end of the tunnel, with some countries already experiencing a back to normal kind of situation, customers go back to stores, only to find that they have changed and massively adopted new features:

• Frictionless payment options: contactless, self-checkout,
• The store as a part of the digital ecosystem: kerb side pick up options, BOPI, store inventory available online,
• Safety protections considered as a must-have (gel, social distancing, new ways of displaying products) including when redesigning stores,
• Addressing local customers with a carefully curated product offer and marketing strategy,
• Reviewing the set up of the stores: since they are also here to serve as a local fulfilment platform, the net retail space is not king anymore, as back rooms increase to be able to serve that strategy,
• Private shopping increased in quantity and quality during the pandemic, and customers are now expecting this as a basic service,
• Stores are also ‘social hub’: since they had to find ways to stay open during lockdowns, including creative reasons not always linked to their primary activity, they acquired new savoir-faire and techniques that will prove key in making sure customers are coming in, and returning. Therefore, the store is confirming its central position in the digital ecosystems retailers and brands have built.

Take a Look Inside The Post-Pandemic Store

What: Hainan is growing fast and taking the share of the lion in terms of international luxury market shares

Why it is important: the Chinese authorities keep this growth under a very close watch, this Eldorado might not be risk-free for international brands.

To boost domestic consumption and increase the recuperation rate, China turned the island of Hainan into a duty-free shopping hub. Combined with the international borders closure, this results into Hainan being the epicentre of international luxury spending, with total sales amount expected to grow sevenfold by 2030. For now, 50% of sales are in beauty and cosmetic products, however hard luxury is growing strongly as well, from a third of sales now.

This is obviously fuelling international luxury players such as LVMH which announced that the Chinese market helped it not only overcome the 2020 difficulties, but post a growth in comparison with pre-pandemic levels of 2019.

However, the structure of the market, and the permanent control enforced by the Chinese authorities fuel worries within brands that they might loose control of their distribution, and encourage, unwillingly, the expansion of Daigous (parallel resellers).

Hainan ‘on fire’ as luxury’s centre of gravity tilts to China

What: During lockdown, U.K. businesses were rethinking commercial spaces and preparing for a surge in post-pandemic demand.

Why is it important: London high streets’ predicted shift to smaller, hyper-local and new commercial formats should be observed as an example of what might happen in capitals in the future.

The British economy is estimated to grow by 4% this year — and by 7.3% in 2022 — and much of that growth will be powered by British tourists, returning office workers, and the international rich who already own homes in the U.K., and are planning to spend their summer here.

Interestingly, Matt Farrell, managing director of Trophaeum, said that his company has not lost any retail tenants over the past 12 months, and it has been seeing demand from high-end restaurants seeking space.

Grosvenor Britain & Ireland is landlord to about 500 retailers. The company is willing to “selectively invest in tenants to help them pivot their businesses and grow post-pandemic”, showing confidence in the future of physical retail.

Anita Balchandani, partner at McKinsey, said that fashion and luxury sales will recover more quickly in the U.K. than in Europe due to the country’s rapid vaccine rollout. Balchandani believes that physical stores that know how to create a “relevant experience” will thrive. She added that “hyper-local” shopping will also be “a very dynamic and interesting space”.

Diane Wehrle, marketing and insights director at Springboard Research, believes that smaller high streets will benefit from the new hybrid working model that’s emerging, with people engaging more with their local neighbourhoods on the days they spend at home. She believes that once rental rates are “rebalanced” in traditional retail neighbourhoods, there will be ample room for new commercial formats, experiential and community spaces.

U.K. Businesses Lay Groundwork for Recovery 

What: The pandemic stifled many fashion retailers, but some brands and merchants seized upon opportunities that opened up during the crisis.

Why is it important: Retailers are negotiating discounts on store lease as well as marketing support from landlords.

It’s less risky for big, long-standing retailers to open stores in the current economic climate, given their clout with landlords, their rapidly growing digital businesses that support brick-and-mortar operations, and the familiarity shoppers already have with them. Burlington Stores, Ulta Beauty, Urban Outfitters, Sephora, Athleta, Aerie, TJX Cos., Old Navy and Dollar General are among the retailers opening significant numbers of stores this year. They’re taking advantage of mall vacancies, landlords loosening up on rent and lease terms, and forecasts for the second half of 2021 that predict higher levels of shopper traffic. Malls already are seeing increased foot traffic as a result of all of those factors.

Pinko, the privately owned Italian fashion brand with about 260 freestanding stores and 1 500 shops-in-shop inside department stores around the world, opened a 5,000-square-foot in Manhattan’s SoHo district. It’s a playful, airy, three-story environment with a huge glass window for a full view into the store, exposed brick walls, open sales floors, lilac and fuchsia carpets, and an inflated purple man known as Peter Dance.

According to the company, 2020 was its first negative performance in 30 years. In 2019 Pinko generated sales of 220 million euros. “Then we obviously took a hit in 2020, but we are now aiming at 240 million euros for 2021, and we are confident we can achieve it,” said Emanuel Bianchi, Pinko’s chief marketing officer.

The Carini Group, a real estate brokerage, represented Pinko on the real estate deal. “We have negotiated lease terms for Pinko that are at a very significant discount from the overtenant’s lease, indicating continuing real estate savings opportunities for retailers planning expansions in New York City and in other major U.S. markets,” said Alex Carini, president and founder of the Carini Group. He said the yearlong agreement calls for USD 30 000 in monthly rent or 15% of sales value, whichever is greater.

In mid-March, designer Adam Lippes opened a “flagship” in Brookfield Place, the mixed-use complex for retail, dining, offices and events, situated by the Hudson River in lower Manhattan. “There was a lot of deliberation and conversations about the calculated risks,” Jeannie Yoo, the president of Adam Lippes. Yoo declined to divulge any details about the lease at Brookfield, though she did say, “It was not only about the financials. It was about the marketing support, the Brookfield name. They have a lot of experienced marketing and PR professionals.

Gene Spiegelman, vice chairman and principle of Ripko Real Estate, said that over the last year, Ripko has been in discussions with six to nine direct-to-consumer brands looking to have a brick-and-mortar location, but not ready to commit to traditional 10-year leases. More likely, they would go for three-to-five year leases with options to get out of the lease on a six-month notice, according to Spiegelman. “Some of these brands were showcased in Barneys or Saks, or hoping to be in Nordstrom,” he said.

Independents Open Shops Despite 

What: BoF sits down with Klarna CEO Sebastian Siemiatkowski to discover innovations in the path to purchase.

Why is it important: Buy Now, Pay Later options, which are set to grow at a 28% compound annual growth rate globally over the next five years.

The below news is a condensed version of a sponsored feature paid for by Klarna as part of a BoF partnership.

Founded in 2005 with a mission to offer a more flexible payment solution for shoppers online, Swedish tech company Klarna has rapidly evolved its scope and strategy to become a leading global retail bank, payments and shopping service. Today, it serves 90 million active consumers partnering with over 250 000. It counts H&M, Ganni, Charlotte Tilbury, Macy’s, Acne Studios and Sephora among its roster of clients.

BoF: What insights can you share on evolving consumer attitudes to payments?

Sebastian Siemiatkowski: The ongoing shift away from traditional credit cards and towards debit has been accelerated and further amplified by the pandemic. Credit card applications have dropped 50% while over USD 100 billion worth of credit card debt has been paid off.

Additionally, we’re tracking how the pandemic has accelerated the shift to contactless. Shoppers really love the Apple Pay and Google Pay experience, and we have launched a number of in-store initiatives, including virtual cards for digital wallets. This has facilitated alternative payment options within physical stores while also [answering] consumer demand for access to contactless solutions.

BoF: How is the relationship between Klarna and its merchant partners evolving?

Sebastian Siemiatkowski: I generally think about retail in two different pieces. One is around discovery and curation, while the other piece is purely the product and brand. When we are trying to help retailers, it’s about presenting their customers with useful, curated options. Historically, if you think about the Amex Platinum Card, part of the idea was the [customer] would go into a restaurant and the owner would think, “It’s a Platinum Card, so I need to ensure I offer my best wines and food.” At Klarna, we can help our retail partners curate more efficiently with the consent and interest of the consumer in mind.

BoF: How is customer data shared and actioned between Klarna and its partners?

Sebastian Siemiatkowski: At Klarna, data must be approached from a customer-centric perspective first, which then benefits our retail partners. When we process a transaction today, Klarna sees the SKU (stock keeping unit) data and full digital receipts, which allow us to create a much richer experience for consumers post-purchase. We can provide customers with additional value, such as target offers relevant to past purchases. It can [translate] into an increase in sales for our partners.

One further data aspect is our Wish List functionality on the Klarna app, where we allow customers to save their favourite items from across the internet. If a shopper has saved a pair of shoes, they will be linked to offers on the item or an indication on where to purchase if it has gone out of stock. The customers feel like their data is working on their behalf and that is valuable to our retailers.

BoF: What payment solutions and technologies should luxury brands prioritise?

Sebastian Siemiatkowski: In luxury fashion, we are seeing the most traction with our product offerings that allow customers to pay in three or four interest-free instalments, depending on the market they are in. Where we see a big opportunity is with our Try Before You Buy offering, where consumers pay nothing at the time of purchase and pay everything 30 days later. We’re seeing it in China, with Buy Now Pay Later accounting for 50% of Alipay’s total volume, and we have seen Amazon already beginning to experiment with [this solution] as part of the Amazon Prime Wardrobe offering.

Klarna’s New Growth Levers for Retailers 

What: 88% of shoppers saying they are more likely to shop with a beauty brand that offers a BNPL option.

Why is it important: As beauty is a critical business for department stores, data shows all age groups have increased their orders during the pandemic.

“Klarna’s beauty survey has uncovered new consumer insights and trends that beauty brands should keep in mind as they plan their strategies for the rest of the year,” said David Sykes, head of U.S. at Klarna. “For example, a key learning is that shoppers across all generations agree that brand values play a significant role in their purchasing decisions when shopping their favourite beauty items.”

More consumers in the Baby Boomer generation said sustainability values were most important when shopping for beauty products (31%) than Gen Z (19%). Instead, diversity and inclusion was named the most important value by both Gen Z at 40% and Millennials at 31%. When asked what items beauty shoppers want most, skin care came out as the top beauty category shopped during the pandemic.

As vaccines become available, Klarna’s survey found many young shoppers plan to return to stores to shop for beauty — 30% of Gen Z and 24% of Millennials. However, while 67% of respondents said they preferred shopping in-store for beauty pre-pandemic, 42% said they plan to continue to shop as they currently are even after the vaccine rolls out.

Over the past year, the survey shows that Millennials were the top generation to prefer mobile shopping at 42.5% while all other generations preferred shopping on a desktop. Overall, the option to buy now, pay later was found to be the “biggest factor in improving the online shopping experience” during the pandemic in all age groups. 88% of shoppers saying they are “more likely to shop with a beauty brand that offers a BNPL option.”

“A lot of our partners are looking for new customer-centric strategies to drive customers back to store,” said Alex Fisher, Afterpay VP of retail, adding that there has been “massive demand” for Afterpay to be at beauty retail stores.

According to a BareMinerals spokesperson, in-store locations typically see an average order value of USD 42, but this has increased to USD 96 since the start of its Afterpay partnership. Additionally, the repeat purchase rate for Afterpay customers is over 20%, which is higher compared to other payment methods, the spokesperson said.

Klarna Survey Reveals Changing Consumer Behaviors in the Beauty Sector

Buy Now Pay Later platforms are catching on in beauty stores

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What: Anil Patel, CEO of HotWax Commerce, describes how a "store crediting framework" can bolster omnichannel sales.

Why it is important: A majority of retailers still view different shopping channels as completely separate departments in their organization.

As retailers and brands continue to accelerate their digitalization strategies, Anil Patel, CEO of HotWax Commerce, says they’re missing a key component to success: properly crediting and incentivizing physical stores at the unit level. Indeed, Patel found that very few brands have considered changing their store crediting policies to incentivize a company-wide adoption of their omnichannel vision, starting at the associate level.

Associates may view online sales as a threat to their job security and will likely attempt to sabotage the company’s initiatives unless they are brought into the strategy. Instead of reacting to that reality, retailers should anticipate that tension and create frameworks to eliminate it.

Most retailers aren’t deeply aware of their customer’s shopping journeys. Without the right technology in place, you won’t have the visibility into whether your online shoppers browsed in-store and vice versa. Studies also show that brands see an increase in online sales from regions where they’ve recently opened a physical location, which means your stores should be credited for participating in that revenue creation.

A store crediting framework is a policy intended to reward stores and its associates for driving or assisting sales (whether online or in-store). In the past, store crediting frameworks have been very straightforward and based on the assumption that online shoppers shop online and offline shoppers shop in-store. The first step to achieving a truly omnichannel approach is to eliminate channel-based performance reporting. Shopping channels should be irrelevant to compensation because it is ultimately irrelevant to the customer.

Studies have shown that a majority of retailers still view different shopping channels as completely separate departments in their organization, with their own P&Ls. For many retailers, implementing an omnichannel solution requires a paradigm shift and significant organizational change to eliminate or bridge channel silos and unify all staff members around the customer.

Why Store-Level Incentives Can Be Key to Omnichannel Success 

What: Three years after opening, Shinsegae Duty Free is a victim of the collapse in inbound and outbound tourism driven by the pandemic.

Why is it important: The premises will be converted to expand Shinsegae Department Store.

Shinsegae Duty Free’s full-year revenues in 2020 slumped -45.9% to KRW 1 693 billion (USD 1 53 billion). While downtown duty free sales held up better than the disastrous airport business (down by just -22%  year-on-year in Q4 compared with an overall -47.5% fall), that result was spurred almost entirely by a resilient group daigou (Chinese personal shoppers) channel. Shinsegae Duty Free’s flagship store in Myeong-dong will continue to serve that business.

Shinsegae invested around KRW 75 billion (USD 69 million at the time) in opening the 13 350 sqm store in 2018 amid buoyant times for South Korea’s duty free industry.

Shinsegae Duty Free to close Gangnam store in July

What: The athleisure giant is the latest brand to launch resale.

Why is it important: The initiative will allow Lululemon to better control the market, collect data and benefit from the resale profits.

A resale program called “Lululemon Like New” will first be tested in Texas and California.

Shoppers can trade in like-new Lululemon products starting in May and will receive a USD 5 to USD 25 gift card. The company will be cleaning and reselling the used garments starting in June, piloting the program in about 80 stores in same markets.

Lululemon joins a slew of brands that are launching resale. As for Nike with its “Nike Refurbished” program, it’s a way to see some of the profits that have gone to marketplaces like Poshmark, Tradesy, and Thredup. Lululemon fans also have dozens of buy-sell-trade groups on Facebook, where shoppers hunt and splurge on their favourite gear.

Lululemon Is the Latest Brand to Launch Resale 

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What: Hudson’s Bay is embarking on an ambitious plan to upgrade its flagship properties in its home country of Canada.

Why is it important: The retail group announced that it will build a 25-story office tower, as well as “transform” its existing retail space in downtown Montreal.

The mixed-use real estate project is expected to be underway by 2023, with its completion targeted for 2027. According to president and CEO Iain Nairn, the development will include a “curated assortment” of merchandise in a “digitally connected store with elevated service.”

The office tower will align with LEED standards. “This project presents an opportunity to establish a multi-functional store that continues to offer the brands and services that Canadians trust us to deliver, while developing new uses for space, such as showrooms or concierge services, that reflect the modern lifestyles of our customers and the vibrancy of downtown Montreal,” Nairn said.

Hudson’s Bay Flagship in Downtown Montreal to Undergo Transformation

What: It’s the third such convenience store to feature Just Walk Out Shopping tech in the UK.

Why is it important: Amazon Fresh looks like a store, but really it’s an online shop guarantying 100% data capture.

Shoppers use the Amazon app to enter the store (no Prime membership required) and buy items, bagging them as they go. At the end, they don’t need to stand in queue or check out. They are automatically billed as they leave. The store will offer the private food brand, ‘by Amazon’, Customers will also find a range of hot food throughout the day and on-the-go meals for breakfast, lunch and dinner.

Amazon Fresh isn't a physical store, it's an online shop, according to Jonathan Haywood, Head of Operating Model Redesign, Loyalty & CRM at Holland & Barrett. Haywood notes that Amazon Fresh is doing a good job at disrupting some of the classic problems retailers face, including customer identity and data.

Amazon, therefore, has created a bricks and mortar proposition that looks and acts like a shop, with some differential customer propositions that draw people to it (no queuing etc).  But underneath all that, it’s an online shop that guarantees 100% customer data capture.

Haywood bets we will see a rapid rotation of inventory, not only predicated on top sellers, but on repeat rate, basket expansion and anchor/destination SKUs for some of the smaller customer cohorts.

Amazon opens third London Amazon Fresh store, in White City 

What: Selfridges strategy for reopening on 12 April.

Why is it important: The famous department stores bets on sustainability.

Last year, Selfridges “Project Earth” was launched when the store opened between lockdowns. It’s an on-going, five-year move towards greater sustainability including only using PVC-free vinyl, signage for the project will be from recyclable and sustainably-sourced materials. As part of “Good Nature”, the creative theme for Selfridges that will run through 2021, and while the shop waits to reopen, a weekly podcast examines the relationship between pleasure and nature.

The shop’s windows, rather than having merchandise, will feature a single image commissioned from artists, and will be shown across the stores, both London, Manchester and Birmingham. Independent stores within Selfridges will feature vintage and upcycled products from iconic outdoor brands including the North Face “Nuptse”. Other sections will be devoted to rental rather than purchase, a repair concierge will be on hand.

There will also be an “experience concierge” who will be able to put together opportunities, from skate sessions to a collection of treatments in the beauty studios and meals, including the new restaurant concept Hive, where specially built beehives will also receive their first colonies.

How One London Department Store Is Planning To Thrive In 2021

What: Iconic California retailer opens a flagship store in Seoul at the Galleria Luxury Hall.

Why is it important: This opening is part of a partnership with Hanwha Group to expand stores internationally.

Fred Segal has leaned into a retail expansion strategy for several years. As a pioneer of the shop-in-shop concept, the brand’s stores have popped up around the world with stores currently operating in Taipei and Bern, Switzerland.

Brand licensing company, Global Icons, purchased the Fred Segal brand in 2019 and has closed a number of the chain’s international locations. Still, it recently revealed plans to open new Fred Segal flagship in Las Vegas this summer.

Fred Segal opens in Seoul

What: Macy's has begun opening new Backstage locations, with plans for 45 shops within Macy's stores in 10 states this year, on the way to its target of 270 nationwide.

Why is it important: What may look like a good tactical move based on current trending could be a strategic misstep.

Macy's launched Backstage in 2015, as retailers in the segment consistently took market share from department stores. Macy’s is new to off price, and it's unclear how much the effort is taking away from full-line sales. The company is also facing competition from the more mature operations at Nordstrom Rack, TJX Cos., Ross and Burlington.

Being the largest tenant in U.S. retail malls, with 6.2% of total existing square footage, what does the move mean to Macy’s brand value or long-term sustainability? Some hard facts are summarized by Ameritrade Network:

• UBS is estimating 80 000 retail units (mostly clothing and accessories), or 9% of total stores, will shut across the country by 2026,
• E-commerce sales are expected to represent 27% of total retail sales by 2026, up from 18% today,
• Among the 1000 malls existing today, only a third are likely to have long-term viability and they are the most upscale properties,
• The 300 surviving malls will be up-market, experiential, and brand driven (undifferentiated products contributing to mall-fall), essentially the place occupied by the best department stores more than a century ago.

If some points ring true, Macy’s should leave the discounting to the discounters and improve the customer experience, presentation, visual merchandising, and service instead.

Retailers’ future also depends on appealing to Millennials, Generations Z, and the soon to be talked about Gen-Alphas: this represents even more reason for Macy’s to move to higher ground. Transparency, sustainability, humanity, and social justice are their target customer’s core beliefs.

Macy's Backstage opening 45 shop-in-shops 

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What:  The largest fine in Chinese history of market regulation

Why it is important:   With these fine, Chinese regulators allow Alibaba to exit the crisis and save the face at the same time, which will allow public opinion to focus on the person of Jack Ma himself instead. It is also a signal that the Chinese government is ready to sanction even the largest and most successful companies if they start taking too much space.

Alibaba has been fined 4% of its total 2019 revenue for having abused its dominant position to force its suppliers to use its own technologies and platforms. This is the largest penalties ever issued in China.

Alibaba Fined $2.78 Billion for Monopolistic Behaviors in China 

What: A new fashion casualty of the Covid-19 pandemic

Why it is important: The group owns several contemporary brands that are represented both in their own stores and in department stores. The Covid-19 crisis consequences are already impacting mid-sized fashion groups, which will ultimately reverberate on department stores’ offer and their ability to sell fashion (one of their biggest contributor to margins).

The Collected Group, owner of fashion brands such as Joie, Equipment, Current/Elliott, filed for Chapter 11 Monday 6th April 2021. While it successfully overcame a first restructuring in 2018, due to a failed implementation of a business management system leading to disruptions in sales, this year’s Covid-19 crisis was a blow to the company. Retail revenue fell by 85% and wholesale by 70%, and the situation was worsened by the bankruptcy of sizeable vendors in the US and UK.

The restructuring plan comes after a failed attempt to sell the contemporary fashion group.

Fashion brand owner The Collected Group files for bankruptcy

What: Platforms such as Zalando, Asos, and Amazon are stepping up their sustainability game.

Why it is important: E-commerce giants are dropping brands that are not sustainable and that don’t respect labour laws.

Boohoo has been dropped from multiple e-commerce platforms included Asos and Zalando due to exploitative conditions for ferment workers. This has led to a third of Boohoo’s market value to be lost in just two days.

Zalando became the first platform to start using an online measurement tool called the Higg Brand and Retail Module, and it taking it seriously as they have already “offboarded” five brands from being able to use their platform. Zalando believes that only sustainable businesses will exist in the future, and they are trying to collaborate with player that are doing their part.

Online Giants such as Facebook, Google, and Amazon have been criticized for their monopolistic behaviours. As e-commerce is growing, Amazon is trying to appeal to sustainably aware shoppers through its Climate Pledge Friendly shopping programme.

According to a PwC customer insights survey from March 2021, 55% of people from 22 countries claimed they "shop from businesses that are supportive or protecting the environment". Many shoppers have become healthier and more safety conscious during the pandemic, and this integrity has expanded  how their habits impact the environment and society.

Could Platforms Force Badly Behaved Brands to Be More Sustainable

What: J.C. Penny added Loom + Forge, a home brand, to its assortment of private labels.

Why is it important: The department store is returning its focus to the home sector through adding another private label to its portfolio.

J.C. Penny is adding Loom + Forge to its portfolio of private home brands including Fieldcrest and Linden Street. The home sector emerged as a big winner this past year as many consumers shifted to remote work and school.

The department store had originally shifted away from home and appliances in 2019 when the categories had underperformed. But under the guidance of new owners, the importance of private label launches in home indicate that the department store is looking to differentiate itself and create value for its customers.

According to Wlazlo, J.C. Penney’s executive vice president and chief merchant, 2020 was “a big year of strategic investment in our home portfolio.”  While Penney’s has long been known for soft bedding and bath products, Loom + Forge brings a bigger tabletop and decor dimension to the store. Penney’s did carry some of these products but not as expansively as it does now.

J.C. Penney debuts private home brand, Loom + Forge 

J.C. Penney’s Michelle Wlazlo Talks Private Brands and Fall Plans 

What:  Zalando is accelerating on sustainability with several strategic initiatives

Why it is important:  They are giving customers the option to browse the site by values (water consumption, animal welfare…). It might translate into customers expecting this approach in other stores in the near future.

Zalando aims at generating 25% of its Gross Merchandise Volume through sustainable products by 2023. To achieve this, they have launched a series of initiatives:

• Take part to global events such as the Copenhagen Fashion Week (one of the most “green” fashion weeks in the world) with the Zalando Sustainability Award,
• Push the do.MORE initiative launched in 2019, with a plan to reduce carbon emissions by 80% and have 90% sustainable suppliers within 2025
• Invest in pre-owned market, with such an offer now available in Poland, Crez Republic, Austria, Denmark, Finland, Italy, Sweden and Germany,
• Make all those commitments visible: customers are now able to browse the site by values (water conservation, animal welfare…)

It is estimated that Zalando’s GMV increased by between 54.5% and 56.5%, to USD 3.8bn during the first quarter of 2021, and its revenue by between 46% and 48%, to USD 2.73 bn.

Zalando Lets Consumers Shop By Values And Expands Pre-Owned Markets