What: A virtual series replaces in-store events.

Why it is important: Virtual events become part of a longer-term hybrid event strategy going forward.

With the pandemic forcing stores to close for months and shoppers reluctant to return when they did reopen, it required the marketing team to come up with an alternative. In the case of Bloomingdale’s, it’s called On Screen, a series of virtual events that are intended to mimic the “buzz and animation” the in-store events had evoked among customers.

Around 80% of the events are limited to the store’s top customers. When shoppers on this “curated list” express interest in participating, they are sent a package in advance that they can use during the event. The other 20 percent of the events are more inclusive and offered to a larger audience. That includes the beauty tutorials and makeup lessons where 800 RSVPs a day are not uncommon.

Bloomingdale’s Engages Shoppers Through ‘On Screen’ Series

Nordstrom is the latest retailer to announce that it will stop selling products that are made with animal fur or exotic animal skins by end of 2021. It will impact all the chain’s outlet from namesake department stores to off-price banners Nordstrom Rack and Last Chance, and to the website. The commitment was done in partnership with the nonprofit organisation Humane Society of the United States, which focuses on animal welfare.

This news comes at the same time as French government announces the end of mink fur farming in France. The country’s last four remaining fur farms will have to close no later than 2025.

This information follows the lead of several retailers that already took that commitment: a year ago, Macy’s and Bloomingdale’s said they will stop selling fur by February 2021; and Selfridges has ended the sale of exotic skins, and sells only leather derived from agricultural livestock.

Nordstrom Bans Fur and Exotic Animal Skins

Related items:

• Macy's & Bloomingdale's to stop selling fur
• Selfridges will ban exotic skins in 2020

H&M are launching a “virtual popup” (i.e. a 2 months long e-commerce initiative) with Zalora Philippines, a mid-priced marketplace and retailer. Numerical details on the partnership have not been shared, however this operation seems like a temperature test for H&M, which would explain why this partnership is only for 2 months, while being the biggest brand launch for Zalora this year.

H&M launches E-commerce initiative on Zalora Philippines

What: Two new Nordstrom Local service hubs are opening in the Los Angeles area.

Why is it important: Nordstrom launched its first Nordstrom Local store in 2017 in Los Angeles in order to bring convenience to its community. Now more than ever retailers need to rely on convenience, local, and community.

The Local hubs, much smaller than regular Nordstrom locations, serve as supportive units for the full-line stores. Different services such as custom alterations, online ordering for in-store pick-up, easy drop-off returns, and more, makes this store attractive to new and returning customers. The pickup at a Nordstrom Local is deeply appreciated, especially in the L.A. area where distance is huge, and even more appreciated in times of pandemic.

The new stores will be located in Newport Beach (a 110sqm store at 2043 Westcliff Drive opening on 6 November)  and in Manhattan Beach (175sqm at 451 Manhattan Beach Blvd, opening in the coming month).  These expansions prove that even in competitive times, the right format can make the physical store concept successful.

"Opening Nordstrom Local service hubs in the Los Angeles area is part of the continuation of our market strategy in one of our largest markets to provide customers with greater access to merchandise selection and faster delivery while increasing convenience and connection through our services," said Ken Worzel, chief operating officer at Nordstrom.

Now Nordstrom Local service hubs count with five locations in Los Angeles area, which include Melrose, Downtown Los Angeles, and Brentwood. There are also two Nordstrom Local's in New York City, on the Upper East Side and in the West Village.

Nordstrom Expands Convenience for Los Angeles Customers with Two New Nordstrom Local Service Hubs

Related items:

• Nordstrom opens merchandise-free concept
• Nordstrom plots 2 more Local concepts
• Nordstrom to introduce two local hubs in New York
• Nordstrom Local debuts in NYC, to accept returns from Macy’s and Kohl’s

Macy’s CEO Jeff Genette was interviewed by NRF CEO Matthew Shay who asked him about the impacts of Covid-19 on the business as well as about the future.

He emphasised the private label role in the assortment and how they have been increasing variability in the supply chain. Macy’s has reduced its suppliers by 50% in a year and is now sharing fabrics between genders, brands and age-groups. Changes are also being made in packaging to make it more sustainable.

One surprise that Macy’s experienced apparently was the fact that it was the neighbourhood stores which did well – it might have been a mistake to concentrate so much effort on the flagships suffering from the lack of travel and tourism.

The group will also further develop its off-price Back Stage format.

For the future, the big challenge is to perfect and develop the omnichannel model to offer convenience, speed and price to customers.

watch macy's ceo interview

Takeaway:

While the measures mentioned by Macy’s CEO are important, they are all things which department stores should be doing (and indeed were doing) anyway. Cost-savings in the supply chain and perfecting omnichannel are basic. It is just further improving the old department store model in preparation for what is likely to be a very different world.

It is comparable to the huge investments being planned by KaDeWe owners to create yet more stores, albeit lovely ones, (see report of GDI conference presentation by KaDeWe CEO) when what is needed is “a new approach to managing business that will satisfy a changing consumer”, as put by Walter Loeb in Forbes.

article: Macy’s CEO Jeff Gennette Talks About The Future

Shinsegae of Korea has announced a shift in shareholding within the owner family:
Chairwoman Lee, 77, handed down an 8.22 % stake in E-Mart to her 52-year-old son Chung Yong-jin, vice chairman of Shinsegae Group, and an equal share in Shinsegae to her 48-year-old daughter Chung Yoo-kyung, president of Shinsegae Department Store.
The gift raises Yong-jin’s share in E-Mart from 10.33 % to 18.55 % and Yoo-kyung’s share in Shinsegae from 10.34 % to 18.56 % to make them the single largest shareholder in each retail entity. The second-biggest shareholder is National Pension Service that owns 13.15 % shares in E-Mart and 13.05 % share in Shinsegae. Ownership structure in Shinsegae is relatively simpler than other family-owned chaebol names in Korea.

The group separated E-Mart and Shinsegae in 2011 by putting the son and daughter in charge of different business units. According to commentators, the equal inheritance reflects Lee’s will to prevent sibling feud over management by splitting their roles and responsibilities.

Despite this year’s bumpy road for retailers, Inter Ikea Group has announced stable retail performance with EUR 39.6 billion of sales by franchisees (compared to EUR 41.3 billion in FY 2019). The group benefits the consumers spending more time home with online retail sales that have increased 45% this year, while the Ikea website has welcome 4 billion visits, expanding to three new markets this year (including China). Ikea plans to expand in new markets like Mexico and the Philippines during FY21 and will keep opening new locations in existing markets.

“The Ikea website, stores and other locations complement each other to create a great customer experience all the way around. We’re pleased about online sales growth, but also very happy that customers still love our stores. People want to touch and try our products or get personal help. As a result, we welcomed 825 million visitors to stores and opened 33 new locations this year,” says Inter Ikea Group CEO Jon Abrahamsson Ring.

Ikea delivers stable retail performance in a year of homecoming

Related item:

• IADS Exclusive - Ikea: How to keep growing and thriving at the same time

What: implementing ship-from-store was a necessary test and try implementation during pandemic and lockdowns.

Why it is important: A Global Tranz survey shows that 41% of retailers were not prepared to shift store locations into fulfillment hubs, however, most of them had to do so to make the most of their closed stores and blocked inventory. The difficulties and costs associated with such an operation might not make it the ideal recipe for every retailer, or every location.

In the US, retailers were faced during the pandemic to a double challenge: what to do with goods blocked in closed stores, and how to fulfill orders from e-commerce channel when it is equally affected? As shown in the IADS White Paper (Global Pandemic and local department stores: learnings from Covid-19, released 2020), all retailers had to quickly adapt to ship-from-store operations, just like our members did. This created a bottleneck at two levels:

• How to manage the store and allocate needed resource to the ship-from-store operations: staffing, inventory technology, space, and apparently simple staples such as packaging (SM Stores got around this with their “Call to Deliver” initiative by simply using the store packaging and not the dedicated e-commerce one)
• How to manage logistics: according to Supply Chain diver, 74% of respondents to their study mentioned that they would be willing to externalise the outbound deliveries, as this is entirely different from inbound inventory management.

However, the right recipe remains to be found, as costs of operation in Ship-from-store is still today higher than other omnichannel or regular instore proceedings. For that reason, it might not be a path to be taken by all retailers, or for all their stores.

 Retailers face operational, logistical hurdles in pandemic-driven switch to ship from store

Kim Dong-kwan, the eldest son of Hanwha Group Chairman Kim Seung-youn and vice president and head of strategy at Hanwha Solutions Corp., was promoted to president in an unusually early group-wide executive reshuffle, moving a step closer to taking over the helm of South Korea’s 7th largest conglomerate from his father. Hanwha Group announced the younger Kim, 37, was promoted to president of Hanwha Solutions less than a year after he was promoted to vice president. Kim ascended to executive director position in 2015 before he was promoted to vice president after four years.

The Hanwha group operates department store Galleria.

One of the few companies able to develop and manufacture its own corporate face masks for staff, El Corte Inglés is rolling out an updated new version of it, improved based on the feedback from the users. These masks are safer and more comfortable. They are also reusable and sterilisable, making them a sustainable and environmentally friendly product.

Ya están aquí las nuevas mascarillas corporativas

Related items:

• El Corte Inglés is launching its new home application
• El Corte Inglés launches a home design advisory service

The US supermarket giant is optimising its activity portfolio by selling 71 the 71-year-old UK supermarket group Asda to UK entrepreneurs involved in the petrol station business. Walmart bought the group in 1999 for a €7,39bn value, and is now selling it 21 years later for a total amount of €7,5bn. It had previously looked at merging it with Sainsbury, but this move was blocked on competition grounds. The new owners expect to invest €1bn over the next 3 years into revamping Asda and upgrading it to directly compete with German supermarkets Lidl and Aldi in the UK and continental Europe.

Walmart Sells U.K. Arm Asda To Britain’s Issa Brothers And Private Equity For $8.8 Billion

Asda bought by billionaire Issa brothers in £6.8bn deal

What: John Lewis Partnership is presenting a comprehensive plan, including many various proposals put together: retail, non-retail, e-commerce.

Why is it important: In spite of an ambitious plan to reach 60 to 70% of the business online, JLP did not present a plan including a massive restructuring of its retail network, which baffles specialists. In spite of closing down 8 units, there will be still 46 stores to cater to and make profits as well. We believe at IADS that some department stores will need to learn downsizing their retail network, in order to sell less but earn more money at the end of the day.

UK retail group John Lewis is planning to triple its previous saving plan until 2022, to €330m annually, in order to fund a €1.1bn investment plan split between e-commerce and stores, aiming at increasing profit from  €160m last year to €440m in 2025. In parallel, there is a plan to develop non-retail activities (housing, horticulture…), with a target of reaching 2/5 of total turnover within 2030. Observers are noting that the plan, ambitious on the e-commerce section (target: 60 to 70% of the total retail business) does not include a massive restructuring of the stores’ network, which raises questions. To date, only 8 stores are to be closed, with the layoff of 1,400 associates (out of 80,000).

WAITROSE AND JOHN LEWIS SET OUT BOLD PLANS TO REACH MORE CUSTOMERS

John Lewis To Build And Rent Homes, And Retail To Be 70% Online By 2025

John Lewis triples cost-cutting target

DoorDash, the delivery platform best known for delivering takeout from restaurants, has announced it would be working with Macy's to offer same-day and next-day delivery for the department store. The service will be available at 500 Macy's and Bloomingdale's stores across the U.S. Orders placed by noon at Macy's and by 1 p.m. at Bloomingdale's are eligible for same-day delivery, while orders placed after that will be delivered by DoorDash's driver fleet the next day. There are no minimum order requirements or time slots for the service, which is being run through DoorDash Drive, the company's last-mile delivery platform. It can be accessed on Macy's website and app. Being able to offer shoppers convenient options will likely be key to this holiday season, which is looking to be unlike any other before due to disruptions caused by the coronavirus pandemic. The announcement comes as the retail industry gets the holiday shopping season started, weeks ahead of its usual schedule.

DoorDash Partners with Macy’s to Power Same-Day Shopping Nationwide [...]

YouTube is now testing shopping features in an intriguing scenario that could transform the video-sharing network into a major social commerce marketplace. So far much of the e-commerce momentum among tech giants has revolved around Amazon, Facebook and Facebook-owned Instagram. Google own offerings haven’t shaped the online retail environment as much as their rivals, but in the consumer-facing YouTube platform, the parent company may have been sitting on a potentially immense e-commerce contender all along.

YouTube’s Now Testing Shopping Features

Alibaba is spending $3.6bn to buy a controlling stake in one of China’s top supermarket operators as it doubles down on grocery delivery, a key growth engine for the ecommerce group during the pandemic. Alibaba is purchasing the shares from France’s Auchan Retail International.

Grocery and fresh produce delivery have become key revenue drivers for China’s ecommerce giants including Meituan, Pinduoduo and JD.com as shoppers avoid physical stores due to the coronavirus outbreak. Last year, Sun Art was the first traditional grocer in China to make its online delivery business profitable, according to Bernstein Research.

“Alibaba’s core ecommerce business is under pressure; its profit hasn’t grown much this year, [and] this will help,” said Li Chengdong of ecommerce think-tank Haitun.

Alibaba to pay $3.6bn to take control of Chinese supermarket chain Sun Art

For the 2020 edition of Pink October, a month dedicated to breast cancer, the Parisian department store teams up with the Pink Ribbon organisation through a partnership with its two founding members Marie-Claire and the Estée Lauder group. A special interactive space decorated in the colours of the organisation is open until the end of October, with the aim of raising awareness and funds for the research. The 350m2 space, located on the 1st floor of the store, welcomes event, talks and workshops given by brands.

Pink October at Le Bon Marché

What: a new business unit for Canadian HBC

Why it is important: an investment in property to create new opportunities for the group

Canada’s Hudson’s Bay Corp. has launched HBC Properties and Investments (“HBCPI”), a dedicated real estate and investments business. The aim is to capitalise on the company’s robust portfolio of assets, and to eventually convert some of Hudson’s Bay’s real estate into mixed-use developments combining workplace, retail, residential and entertainment categories.

HBC controls 40 million square feet (approx. 37 square meters) of gross leasable area across North America; which includes retail banners Hudson’s Bay, Saks Fifth Avenue and Saks Off 5TH.

This is the latest step forward for the company to “shift to a […] structure with distinct portfolio businesses that operate at the intersection of retail and real estate.”

HBC Unveils HBC Properties and Investments

What: two major brands entering the resale market, with two different methods

Why is it important: what you get with the resale model is not a margin, but traffic instore and customer data.

Both Gucci and Levi’s announced on the same week they were entering into the resale market, following other brands with take back programs such as Patagonia (2017) or North Face (2018). They have however a different approach. Levi’s is proposing its customers to bring back second-hand products in its own stores in exchange for a voucher, and resell the pieces in a new dedicated online store. Gucci however is not setting up such a complex process, as they are partnering with The Realreal, a second-hand marketplace. Teaming up with a brand is a way for the Realreal to escape accusations of selling counterfeit products, while this association provides Gucci a smart marketing angle (millennials, sustainability) with very low investments. The Business of Fashion notes that, more than the (low) margins that will be proceeding from these operations, the data collected, i.e. the consumption pattern for each product, will prove quite useful for real-time adjustments of instore merchandising for both brands.

Why Gucci Is Getting Into Resale

Levi's wants your old jeans back

Related item:

• IADS Exclusive article - Sustainability: department stores’ destiny

What: The Harrods Residence project due to open in Shanghai in December.

Why it is important: Harrods is experimenting with a new format in China, which aims at increasing brand recognition while limiting risks. It is smart especially in the way they plan to build personal relationships with local Chinese affluent customers, without even engaging in a physical stock supply process.

Harrods tested for the first time a physical presence in China during the Fashion Week by opening the Harrods Studio, a 3 days showroom,  during the Fashion Week dates by invitation-only. It was a smart way to address local high net worth customers, unable to travel to the UK, and provide them the Harrods feeling. The Residence project takes things even further by literally opening permanent stockless VIP lounges and showrooms, including personal stylists and communal areas for VIPs to invite and meeting their friends. Harrods has projects in Shenzhen, Chengdu, and Beijing as well.

The reason for such a strategy, in addition to the Outlet, opened in London Westfield and H-Beauty: they anticipate that, with the degrading relationship between the US and China, the UK will become a nicer destination for affluent Chinese in the future. Harrods wants to take a step ahead and make sure its brand is recognized even before tourists come back. The MD Michael Ward is even planning to host local dinner parties on a monthly basis. The economical catch? There will be no physical stock in the VIP lounges: the department store counts on its relationships with brands to locally supply the sold products.

Harrods Shares The Residence Shanghai Details, Eyes Further Chinese Cities

Ten years after it opened its first store in Dubai, Bloomingdale’s will now let you shop online. The platform is available in the UAE, Saudi Arabia and Kuwait. Customers in the UAE will get same-day delivery within the Emirates, while customers in Kuwait and KSA will get express shipping. Alternatively, customers in the UAE and Kuwait can skip the wait and click and collect from physical stores. Bloomingdale’s has also introduced an iOS app for the region, letting you shop on the go.

Bloomingdale’s Middle East launches online store

Since its debut on the high street, British department store Marks & Spencer has only been selling its own fashion brands. Now the retailer has announced a partnership with eco-conscious fashion label Nobody’s Child; it is the first time in M&S history that it partners with an external brand. Available on the website, the goal is to broaden appeal. M&S had previously announced that it would open its website to complementary brands, and Nobody’s Child is the first brand to test this model, selecting a curated range from its wider offer for M&S.

What: A study jointly coordinated by McKinsey and mobile solution provider, to draw lessons from current Chinese retail recovery

Why is it important: As expected, there is a post-pandemic shift in China to online, but not as massive as once predicted as convenience shopping is still here, contributing to a slow recovering of offline shopping. Combined with a confirmed appetite for health and fitness, it suggests that successful retailers will be the ones following consumer trends: healthy (or sustainable), local, and delivering value.

Retail news Asia is drawing lessons from the latest study from McKinsey regarding chine recovery. Their conclusions are:

• Offline shopping recovers only for the convenience part. Discretionary spend is lagging
• Offline convenience and convenience stores are still performing well, even compared with online
• Category-wise, customers favor health and fitness products, including local food

Among the many pieces of advice the newspaper is providing, they insist on the fact that selling online is not enough: customers have to be engaged digitally end-to-end, which sums up all the difficulty of the exercise.

China retail is rapidly changing, brands need to adapt

What: the traditional Santa Claus meet-and-greets at Macy’s in going virtual this year

Why it is important: for the first time in 159 years the department store won’t be able to let children meet Santa instore so it reinvents tradition

No miracle on 34th Street this year, as Santa Claus won’t be visiting Macy’s. The tradition, which started in 1861, won’t be taking place in 2020 for safety reasons. Instead, Macy’s is launching an interactive virtual experience for kids: Santaland.

It starts in Santa's village and workshops with a greeting from virtual elves where you can see the sights and play interactive games. Then children will meet Santa virtually, being able to share their holiday wish list, and take a selfie to be downloaded. The experience is limited to three children at a time.

The pandemic is forcing a change on many things and it’s not the first tradition that Macy’s had to shift: last month the department store announced a reinvented Thanksgiving parade, to suit the safety measures imposed by the pandemic.

Macy’s Santaland Comes Home for the Holidays

Macy's Santaland at Home website

Related items:

• Macy’s “reimagines” Thanksgiving Parade

Bed Bath & Beyond Inc. is looking at fewer stores stocked with less stuff as a way to limit the amount of cash trapped in its operations. The company is in the process of reducing the number of stores, bringing down its inventory and building out its distribution channels.

Bed Bath & Beyond wants to close 63 stores by the end of its fiscal year in February 2021, for a total of 200 over the course of the next two years. The home-goods retailer has been struggling with falling sales for years and had to temporarily close about 90% of its stores in the early days of the pandemic.

Its stores have since reopened, and digital sales are up 89% in the three months ended Aug. 29. Still, revenue in its fiscal second quarter fell to $2.69 billion from $2.72 billion in the prior-year period, Bed Bath Beyond said earlier this month.

The retailer plans to reduce the range of items in some categories and a new store format will be unveiled at the end of October, with less inventory.

Bed Bath & Beyond CFO Looks to Declutter Shelves, Reduce Working Capital