What: Nike allow students to analyse its digital data to improve website and customer’s engagement.

Why it is important: Getting advice from the generation they will be depending on to drive future sales.

Global consumer brand Nike made a bold move this year to up its digital game. It allowed college students from around the world to analyse its digital data and look for ways to improve its website and customer engagement.

Nike agreed to be the corporate partner for this year’s Adobe Analytics Challenge, a 15-year-old competition that gives student teams access to data from the corporate partner’s digital sites that lets them evaluate things like bounce rates, return visits, buyers vs. browsers.

The winning Indian Institute of Technology team had suggestions for how Nike could redesign its website, improve engagement on social media, and focus better on likely buyers. The details of their presentation shared by Adobe contain some good Gen-Z advice on a “Journey Tour” feature, how to incentivise users to create an account, and driving more engagement.

Nike Gets Next-Generation Advice On How To Improve Its Digital Experience

What: Department stores transform outlets into culture spaces.

Why it is important: Exploring new ways to differentiate.

As the shopping experience itself is becoming not enough to lure consumers, department store operators are looking for ways to differentiate themselves by transforming their stores into cultural attractions where visitors can enjoy not only shopping but also a variety of culture and art.

Lotte Department Store started setting up experience-focused cultural facilities within its outlets across the country last year. Hyundai Department Store also built a cultural space at its Pangyo branch, south of Seoul. And Shinsegae Department Store is running professional galleries at its flagship location in Seoul and as well as stores in Busan, Gwangju and Daegu.

Department Stores Transform Outlets from Shopping Centers to Culture Spaces

What: a US department store partnering with a successful DTC brand

Why it is important: the home category has been expending fast since the beginning of the pandemic and it is important for department stores to keep developing this category in order to respond to consumers’ needs. It is also a demonstration that department stores are still a relevant marketplace for digital players

US department store Nordstrom is partnering with direct-to-consumer sleep company Casper Sleep. The brand will be available at selected Nordstrom store and at nordstrom.com. Casper already operates its own stores and ecommerce, and has partnerships with divers retailers.

The home category has been expanding rapidly in retail given the new consuming habits speeded up by the pandemic and the new stay-at-home reality, and retailers need to bet on this category to stay relevant and answer to their costumers’ needs.

Emilie Arel, President and Chief Commercial Officer at Casper, said: “Partnering with a premier retailer like Nordstrom is another step towards advancing our multi-channel distribution strategy to reach more customers wherever they prefer to shop […] As we are spending more time at home, people are seeking out a better sleep experience more than ever. The combination of these two loved, trusted and authentic brands is a win for both partners and customers alike.”

“As we redefine our Home category, we’re excited to be partnering with Casper to bring their award-winning assortment of bedding to Nordstrom,” said Olivia Kim, Vice President of Creative Projects and Home at Nordstrom.

Casper Partners With Nordstrom to Bring Its Mattresses and Sleep Products to Customers [...]

Related item:

• IADS Exclusive - Adapting to new consuming habits

What: Walmart, Kohl’s And big drug chains look for wealth from health.

Why it is important: health and wellness is growing as a strong trend.

More and more retailers are expanding their efforts in providing goods and services to keep both their customers and their bottom lines healthy. While CVS may have been the first to discover this hook years ago more recently big national chains like Walmart, Kohl’s, Rite-Aid, Walgreens are upping their game in this area.

Of course, the pandemic is the new driver of this movement as infections reach record numbers in what is stretching into the ninth month of the pandemic in the U.S., but this has been building for years. Both the aging baby boomers and the now largest demographic in the country, the millennials, are increasingly focusing on their health.

Walmart, Kohl’s And Big Drug Chains Look For Wealth From Health

What: a new step toward diversity.

Why is it important: by collaborating with black-owned brands, the department store helps them grow to scale with limited-edition seasonal collections throughout 2021.

The retailer has been working to increase diversity for years especially now given the different factors happening in the USA environment such as protests against police brutality and racial wealth gap.

By introducing more diverse designs not only will raise awareness about the situation and bring Black representation to a known platform but will also offer customers an elevated fashion experience.

Macy's chairman, Gennette, has witnessed a shift with its consumer base in the department store: "We had about 4 million new customers come into our brand this quarter alone and when you look at the profile of these customers, they were younger and they were more diverse […] they were looking for content and experience that more related to their lives and so that was another impetus for us to get busy on this."

The retailer will also implement the 15 Percent Pledge:  allocating 15% of their shelf space to Black-owned businesses.

The first capsule will launch in March 2021. In collaboration with several brands found only at Macy’s, each collection will feature these creatives:

• Zerina Akers: current costume designer for Beyoncé Knowles-Carter.
• Misa Hylton: known for reshaping the fundamentals of style within R&B and hip-hop culture with clients such as Lil Kim and Missy Elliott.
• Aminah Abdul Jillil: luxury shoe brand, known for being bold and feminine. They have worked with Britney Spears and Janet Jackson.
• Allen Onyia: multifaceted style powerhouse, co-founder of UpscaleHype.
• Ouigi Theodore: founder of The Brooklyn Circus.

Macy’s Celebrates Black Creatives with Exclusive Collections Launching in Spring

Related items:

• IADS Exclusive - Diversity: a strategy of silence
• Hudson's Bay’s support to Canadian and BIPOC designers

What: a new company called Unified Commerce Group seeks to acquire brands to develop them globally on and offline.

Why it is important: might this be an interesting model for department stores to look at? Whatever it may be, it is acquiring already existing brands which is one way to ensure exclusivity without having to build them from scratch.

A new operating company has been formed called Unified Commerce Group with the ambition to acquire brands and scale them for the Asian market. Co-founded by an ex-Fung and Macy’s executive and a former managing director of Société Générale and Credit Suisse, acting as CEO and CFO respectively, the group aims to acquire around six or more brands and develop them in store and online. The advisory board includes Terry Lundgren, formerly Macy’s CEO as well as a mixture of business executives, influencers and “global celebrities”.

It has already acquired the bankrupt Canadian Frank and Oak brand with an online business and 16 stores of which 11 have been reopened. Also Radley, Lisa von Tang and Velveteen. It describes itself as a “tech-enabled platform which drives scale for our brands through unified services”. These include supply chain, marketing and digitisation, HR and finance, distribution, tech and stores.

Betting On Next-Generation Retail: New Company Is Shopping For Brands To Buy

What: convenience store should have profited from the pandemic. But only some did. Others have been facing competition.

Why it is important: convenience is very attractive to customers. But the idea of convenience is evolving. Formats other than classic “convenience stores” can offer convenient shopping and attract customers. Imagine a “convenient” department store.

Although many convenient stores have benefited from the crisis. Some have not.

Thus sales have grown in South Korea and in Mexico, but in Japan, home to the three biggest convenience store chains, they have been in decline. Rivals (such as supermarkets) are offering the same goods for less, as well as delivery, often to customers’ home. Deliveroo is being used in the UK, DoorDash the US delivery app has opened its own virtual DashMart. Wawa also from the US has started drive-through stores. Others are reporting a surge in deliveries, including US 7-Eleven. It shows that convenience is less a store format and more a customer service which other formats can emulate … including department stores.

Convenience stores may benefit from covid-19—if they adapt

What: Shinsegae eyes on taking over Hanjin's logistics unit.

Why it is important: Access to logistics is becoming key for retailers.

Shinsegae is looking to buy Hanjin Group's logistics unit to bolster its delivery service infrastructure to cope with the rapidly growing e-commerce business.

The company, which is focusing on expanding its online business through SSG.com, showed interest in purchasing Logen Logistics when it was put up for sale last year, but decided its 7 percent market share was too low. Hanjin Logistics, on the other hand, has a 13.2% share of the parcel delivery market, just 0.6% smaller than that of No. 2 player Lotte Global Logistics.

Shinsegae's main rivals in the online business are Naver, Coupang and Lotte, which have either their own delivery service firms or strategic partnerships with local logistics companies.

 Shinsegae eyes on taking over Hanjin's logistics unit

What: a new partnership between the Royal Mail in-store service at Selfridge.

Why is it important: In order to offer a “one-stop shop and ship service” for customers, these two companies’ collaboration allows shoppers to ship their Selfridges purchases and letters to Santa while in the store.

Launching on 12 November 2020 until January 2021, customers will have their gifts wrapped and shipped by Royal Mail at Selfridges. “We are excited to team up with Royal Mail and to bring such a bespoke postal service and offer to our customers right in time for the busy holiday season,” Selfridges Store Director Meave Wall said.

Selfridges Oxford Street store will have a special Royal Mail pop-up room to make it as convenient as possible to buy and deliver Selfridges orders for Christmas. “Doing this in partnership with Selfridges is guaranteed to add the Christmas sparkle to top this off. From everyone at Royal Mail, stay safe and get ready for a very merry Christmas with Royal Mail at Selfridges,” said Royal Mail chief commercial officer Nick Landon.

Selfridges and Royal Mail announce post office pop-up for Christmas

What: international survey shows the advantages of remote work.

Why it is important: most department stores have instituted forms of remote work for a least some of their staff during lockdowns. We will perhaps choose to maintain some people on remote work (or at least a hybrid version) for longer than the pandemic if, as it would appear, there are many advantages to doing so.

According to an article in The Economist and an international survey by Slack (messaging company), flexible working including working from home was viewed very positively, improving both people’s work-life balance and their productivity. One of the main points is that remote working allows greater time flexibility, liberating workers from the “tyranny of the clock”.

As mentioned by the IADS Academy in their recent presentation, certain functions may not need to be present in a headquarters office for 8 hours a day every day. Evidence suggests that, for some, remote work increases productivity. We should perhaps be looking at least at hybrid solutions mixing remote and office-based work.

Countering the tyranny of the clock

Moving beyond remote: Workplace transformation in the wake of Covid-19

What: Walmart keeps improving its omnichannel capability.

Why it is important: Assets that used to serve a single purpose have to transform into flexible, scalable assets that can be used in multiple ways.

Walmart keeps moving on quickly to use their physical retail stores to not only serve in-store shoppers, but to flex to meet the needs of online shoppers, too. The company has identified four of their stores across the U.S. to serve as test centers where they will continuously rotate new technology, digital tools and physical enhancements in and out of the stores all with the intention of helping associates better and more easily serve customers. Among other examples, they will be testing:

• Omni-assortment to learn what it takes to make all eligible items in the store truly omni.
• Inventory speed to get product on the shelf faster.
• First time pick-rate to help associates navigate to the right locations when picking items for an online order.
• Check-out experience to help transform a transactional experience into a relational one

In This New Era of Retail, We’re Testing New Ways to Operate, and It’s the Customer Who Wins

Related item:

• Walmart: thinking outside the (big) box

What: The Bain Altagamma 2020 luxury report.

Why it is important: The pandemic pushes luxury to sharpest fall ever but catalyses industry’s ability to transform.

The core personal luxury goods market contracted for the first time this year since 2009, falling by 23% at current exchange rates to hit EUR217 billion. The drop is the largest recorded since we have been tracking the industry. The overall luxury market shrunk at a similar pace and now is estimated at approximately EUR1 trillion.

Scenarios for 2021 are varied and Bain forecasts growth that ranges from +10/12% to +17/19% depending on macroeconomic conditions, the evolution of Covid-19 and the speed of return to travel globally as well as the resilience and confidence of local customers.

The decline in revenue is taking a disproportionate toll on profitability – Bain expects operating profit to decline by 60% in 2020 vs. 2019 level (i.e. from an average of 21% margin to 12% margin). According to the study, in 2021 the market is expected to recover 50% of the profit loss of 2020 – still below 2019 levels.

Key takeaways:

• Bain expects the recovery to gather pace over the next three years, with the market returning to 2019 levels by the end of 2022/early 2023.
• Mainland China has been the only region globally to end the year on a positive note, growing by 45% at current exchange rates to reach EUR44 billion.
• The regional shifts mark an acceleration of a rebalancing of where luxury purchases  are made as tourists shift to buy in their home markets.
• In the luxury market, online sales made up EUR49 billion in 2020, up from EUR33 billion in 2019. The share of purchases made online nearly doubled from 12 percent in 2019 to 23 percent in 2020.
• Bain expects no growth in the number of stores operated directly by brands in 2020 and possible decline in store networks in 2021.
• Younger generations – who are set to drive 180% of the growth in the market from 2019 to 2025 – place an unprecedented emphasis on tackling social and racial injustice. These “activist” consumers seek brands that align with their vision and desire for purpose.

“By 2030, this industry will be drastically transformed. We will not talk about luxury industry anymore, but of the market for insurgent cultural and creative excellence. In this new enlarged space, the winning brands will be those that build on their existing excellence while reimagining the future with an insurgent mindset. Luxury players will need to think boldly to rewrite the rules of the game,” said Federica Levato, a Bain & Company partner and co-author of the study.

Covid-19 crisis pushes luxury to sharpest fall ever but catalyses industry’s ability to transform

What: Jelmoli will be present with two new stores in the Circle at Zurich Airport

Why it is important: It still makes sense to expend brick-and-mortar presence when significant potential of foot traffic remains.

The company’s boss Nina Müller explains why she is not afraid of opening new stores in spite of covid-19. According to her, the Circle has great potential as a new district of Zurich. Originally planned to open in September and finally delayed, each of the two new houses (one with a focus on sport, the other with a focus on lifestyle) has four floors. In total, they will have 2,000 sqm of additional sales area to use.

Jelmoli-Eröffnung im «The Circle»: «Wir sind im Schlussspurt»

What: looking at a pandemic-proof solution with new eyes for the long-term.

Why it is important: at a moment when we need to adapt and think prospectively, critical thinking is key to really assess the need to permanently implement the emergency solutions deployed during lockdowns.

Ship from store was, for many retailers, a lifeline during the lockdown period, and allowed to leverage inventory, make the most of logistics and sometimes alleviate the strain on e-commerce operations. Post-lockdown, it seems to be a long lasting trend: Best buy in the US has equipped 250 of its stores with such capability, as well as Apple for all its retail network.

However, it comes at a cost: the retailer pays for the shipping costs while the price stays the same, not even mentioning the risk of returns. Furthermore, a long lasting trend from last decades led to a reduction of backrooms in store, which means that, to optimize a store and transform it into an efficient fulfilment centre, some structural investments are needed.

The need to re-train, or think differently, the staff, is also crucial and potentially a hurting process.

Ship from store makes sense in a pandemic. Does it make sense long term?

What: Third quarter results reported to the press

Why it is important: Macy’s, while dealing with a difficult market in a country impacted by the third wave of Covid-19, is actually doing better than expected.

While sales are dropping by more than 20% for the third quarter, the net loss of USD 60 million (to be compared to earnings of USD 21 million last year on the same period) equates to a loss of 19 cents per share, when analysts were expecting a 79 cents loss. Macy’s reports that digital sales grew 27% compared to last year, to reach 38% of total sales, and that inventory is down 29% compared to last year on the same period.

Macy’s, Inc. Reports Third Quarter 2020 Results

What: Three different approaches to the upcoming promotional season.

Why it is important: reviewing the options taken in a competitive FMCG segment can be sources of inspiration for department stores while some of them are currently closed due to forced lockdown.

Black Friday is usually a traditional shopping experience in the US across a weekend, with long lines outside stores. This year will be different:

• Walmart is expanding its promotional period over four weeks, with deals centred on toys, electronics and home products (one category per week).  A limitation of customers in store will be implemented, as the goal remains to have them come to the retailer
• Best Buy is sprinkling promotions over four weeks, with an all-category promotion after that period. There will be a limitation of customers instore, however Best Buy is insisting on its curb side pickup options, as well as a free next day delivery (read out article aboutthe cost of free shipping here).
• Target will be announcing each Thursday the deals for the following week, with a promotional period extended over four weeks as well. A focus on curb side delivery will be emphasized, as well as the lowest-price-guarantee for all items on promotion.

The three retail giants are all extending the promotional period over four weeks, and not a week end, but with a different approach when it comes to dealing with welcoming the customers and how.

Walmart, Target, and Best Buy have revealed their Black Friday plans [...]

What: a new private label for the US department store who just exited bankruptcy

Why it is important: JCPenney is entering a new phase with its recent buyout and responds to new recent consumers’ needs with a new stylish and comfortable collection

The department store launches a private brand called Stylus, which mixes style with comfort to suit the new living habits of customers. The retailer insists that it is not an athleisure brand, but a “styleisure™ apparel line […] designed to comfortably elevate your everyday”. It reflects on how the consumers live today, mixing working from home and working from office, physical meeting with virtual gathering. It is a fashionable collection that offers also comfort thanks to ultra-soft fabrics. The affordable inclusive label ranges from XS to 3X, with pricing from USD 26 to USD 89.

With the new living habits (see IADS Exclusive article on the new consuming habits), accelerated by the pandemic, people want to spend time in casual, comfortable yet stylish clothing for the new hybrid lifestyles that are emerging: riding, biking, remote working … US rival Kohl’s recently launched a new casual private label and has opened several shop-in-shops dedicated to wellness, also following that trend.

All-New Styleisure™ Brand at JCPenney Promotes Equal Parts Style and Comfort [...]

Related items:

• IADS Exclusive - Adapting to new consuming habits
• Kohl’s bets on athleisure; launches new private brand
• Kohl’s continues its shift with new Wellness Market

What: Retailers are editing the choices down.

Why it is important: The wider the assortment, the more confused the customer is.

Retailers ramped up choices in recent decades as the internet created a so-called endless aisle that freed them from the space constraints of physical stores, according to analysts and industry executives. They tried to capitalize on the shift toward personalization with a desire to please everyone and added variety to tempt people to buy items they didn’t need.

Now, with choices overwhelming shoppers and clogging supply chains, some brands are moving in the opposite direction. They are trimming styles and colors in the hope that by eliminating the decision paralysis that grips customers when they are faced with too many options, they can boost sales and reduce end-of-season markdowns.

Retailers Cut Back on Choices; ‘We Don’t Need Three Types of Red’

What: holiday initiatives at the US department store

Why it is important: despite a particular season organised around sanitary measures and restrictions, retailers are determined to celebrate the Holidays and find new ways to bring joy and cheer to customers

Nordstrom is re-imagining the season offering festive experiences in-store and online, with Virtual Santa Chats, letters to Santa, Holiday breakfasts and fun DIY activities for the whole family. Customers can book sessions via Nordstrom website.

The personalised,  private, virtual 15-minute video call with Santa is charged USD 20 and 100% of the proceeds benefit Operation Warm (which provides new winter coats to kids in need), as well as Big Brothers Big Sisters of America and Canada. Nordstrom will also host holiday-inspired breakfast in select store restaurants, completed with kids' activities and merry music.

Nordstrom offers virtual Santa chats, holiday breakfasts and fun DIY activities for the whole family

What: a top nomination at the British department store

Why it is important: the industry is moving fast, and corporate nominations are strategic in this time of crisis

Andrew Keith, former President of Hong Kong luxe department store Lane Crawford, has been appointed Managing Director of UK Selfridges starting February 2021. He will report to Anne Pitcher, managing director of Selfridges Group. Keith spent 25 years in the Hong Kong area and was President of Lane Crawford since 2011.

Blondie Tsang will become the new President of Lane Crawford and Joyce, starting next January.

Andrew Keith Named Managing Director of Selfridges & Co.

Related item:

• New president at Lane Crawford, Joyce

What: Looking back at how the pandemic has forced speeding up innovation.

Why it is important: It is now key to give customers the choice on how, when and where they want to be served.

John Furner discusses key milestones and learnings from his first year at the helm of Walmart U.S. and what’s in store for the future of shopping.

From his perspective, Walmart has been able of reinventing the way they serve customers in a much quicker way thanks to the pandemic, which has basically helped the company speed up innovation and transformation.

He recalls his experience serving Walmart in China from 2012 to 2015, and the fast change he has seen there in the consumers' habits with going from analogue to digital in only a couple of years, because they had built their entire ecosystem on mobile technology.

According to him, that illustrates how fast things can happen without the constraint of legacy infrastructure that we are trying to adapt as we move. Furner estimates that, in the U.S., Walmart has probably skipped 3 or 4 years adapting one channel using other channels to enable it.

Asked about what will change for the supply chain in the future, he forecasts that a dynamic supply chain with inventory flow in different directions, based on where the customer sits, and those which can do that creatively and effectively are going to be the winners.

Walmart’s forward-thinking test and learn corporate culture, its 100% client-centred approach and the pandemic effects are pushing the company fast forward into a fully omnichannel offer where the store remains central, as both a local distribution platform and a place for local customers to keep engaging with the brand. With their stores, network and local anchorage, department stores seem to have key assets to stay main players of their local business.

video: NRF Retail Leadership Series: John Furner, President and CEO, Walmart U.S.

Related items:

• IADS Exclusive - Walmart: Thinking outside the (big) box
• Walmart is testing new ways to operate

What: Target keep exploring and investing in local small-format stores.

Why it is important: Dense urban neighbourhoods continue to perform.

Coronavirus may have driven people to move out of dense urban markets like New York, but Target still sees great opportunities across all the different trade areas. The company will continue to open small formats in many of the same areas that it’s opened them in historically, and plans to eventually open 40 new stores a year.

These small stores have been the fastest growing format of the company’s nearly 1 900 store fleet—mostly much larger stores. They have alone generated US$1 billion in sales last year and Target said it will also begin to explore sites for stores that are roughly half the size of its smallest small-format store, so that the company can reach even more consumers in urban neighbourhoods.

Target Bets On Small City Stores Despite People Fleeing To The Suburbs

What: the major US player, which has been under protection law for months, entered into an asset purchase agreement to exit bankruptcy

Why it is important: department stores, especially in the US, were already struggling before the pandemic. Several filed for bankruptcy amid the covid crisis, including JC Penney. The latter has been acquired by mall operators to pave its way out bankruptcy.

JCPenney filed for Chapter 11 bankruptcy protection on 15 May and closed 154 stores this summer. Now it has entered into an asset purchase agreement with retail real estate giants Brookfield Asset Management Inc., Simon Property Group and other lenders. The deal will allow the retailer to move forward towards the completion of the financial restructuring plan ahead of the holiday season.

JCPenney Signs Asset Purchase Agreement, Charting Course for the Future

What: Saks Fifth Avenue has remodelled its online store

Why it is important: the race to online shopping has sped up since the pandemic and even luxury retailers are concerned. With many brick-and-mortar stores suffering the lack of customers, Saks offers a better digital experience to boost sales. Easiest accesses, personalisation and focus on fashion are the motto on the new ecommerce.

The project to redesign the webstore was on the way before the pandemic, in order to make it a better, more personalised experience for shoppers. Indeed, saks.com re-platformed with Salesforce Commerce Cloud, allowing for better data gathering on users. The new website now has two homepages: one for women and one for men, giving an easiest access to content. Among the other new features are a “New Arrivals” section updated every week, an expanded “Edit” section with shoppable looks and content presented in a magazine-style, and new filtering options such as items available for same-day delivery in New York City. The enhanced search functionality allows for shoppers to view recent searches, the most popular searches, and bestsellers.

Saks Fifth Avenue chief marketing officer Emily Essner said : “I really do think the site sets the standard for luxury e-commerce, particularly in the way it engages in a personalized, easy way, and is very much centered on fashion.”

Saks Fifth Avenue Reconstructs Its E-commerce Experience