What: a major expansion with the department store adding 50 new brands across fashion and beauty to its portfolio in order to respond to the new trends

Why it is important: consumers lifestyle and habits have dramatically changed this past year, and retailers’ assortments needs to evolve with this shift. The trend for ‘casualisation’ accelerated, with a demand for more comfortable and casual styles

To respond to the new consuming habits of customers, John Lewis will be adding 50 brands across fashion and beauty; for women, men and children. Additions include established brands (such as Mango or New Balance) and emerging, independent and predominantly online brands. The new brands will offer contemporary styles for a casual day working or relaxing from home, as well as athleisure styles as the population has gotten more active since the pandemic. Conscious shopping will also continue to be a priority with new sustainable brands.

John Lewis is not the first retailer to adapt to the new consuming trends (see IADS exclusive on the new consuming habits): this month, Rinascente launched a pop-up store dedicated to sports and fitness in Turin. Kohl’s is also expanding its athleisure and lifestyle offer with a new private label, the launch of a wellness market and a partnership with outdoor brand Eddie Bauer. Target saw excellent results for its athleisure private label All in Motion generated USD 1 billion in its first year.

IADS next Merchandise meeting will focus on Sports & Lifestyle and will take place on 21 April 2021.

JOHN LEWIS BRINGS TOGETHER 50 NEW FASHION AND BEAUTY BRANDS [...]

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• Kohl’s continues its shift with new Wellness Market
• Kohl’s bets on athleisure; launches new private brand

What: a partnership with resale platform Goodfair to sell vintage clothing online

Why it is important: Nordstrom has set for itself sustainability goals for 2025, and one way to achieve it is through resale. With this partnership with Goodfair, the retailer will drop new items every month; a way to attract younger shopper thanks to the limited-edition collections

Monthly drops initially consist of over 50 vintage items sourced from Goodfair’s supply stream. The majority of pieces are considered true vintage, meaning they were made before 2000 and follow certain guidelines dictated by Nordstrom with some pieces even bearing the “Made in the USA” moniker. The first instalment of the monthly Goodfair shop went live on 28 January, selling out within hours. The vintage picks are merchandised into Nordstrom’s existing website under its Sustainable Style vertical, the department store online shop dedicated to environmentally friendly products launched in 2019.

This is not the first time Nordstrom plays in the resale market: last year it launched See You Tomorrow, a resale pop-up store available online and at the New York flagship store.

Behind Nordstrom’s Online Vintage Shop With Goodfair

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• Nordstrom launches resale shop
• Nordstrom sets sustainability goals for 2025

What: a new mall in Chongqing, the Oval, mixing art and retail

Why it is important: following the steps of SKP and K11, operators realise that enhance retail is key to generate and maintain traffic in store

IADS partner GDR UK reports the opening of The Oval, a new mall in Chongqing, China. Its specificity is that art is mixed in the retail experience: when visiting the premises, customers can see artwork displayed on their smartphone, and the centre of the mall, the OR, is a “multi-dimensional fashion complex”, half store, half gallery.

Interestingly, a significant part of the retail space is also dedicated to sport and fitness: running track, skate par, shooting club, indoor sports playground, bowling alley. We explore this trend in the upcoming Merchandising Meeting #2 on sport & lifestyle in April 2021.

Multi-purpose mall brings art and retail together in Chongqing

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• SKP-S
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What: Walmart's membership program could already account for 7.4 to 8.2 million members

Why is it important: 30% of online grocery transactions come from Walmart while Amazon accounts for about 27%, down from 33% in 2019

Five months after Walmart's membership program was released, Consumer Intelligence Research Partners analysis indicates that it has garnered between 7.4 million and 8.2 million members. On the other hand, Cowen analysts estimate 12 million U.S. households have Walmart+ memberships and 69.6% use them at least once per week. Despite economic uncertainty, it seems Walmart shoppers are willing to spend the USD 98 annual subscription service (or USD 12.95 per month).

Members currently account for about 13% to 14% of total Walmart.com. Consumers that shop for groceries at Walmart.com spend almost double the average online Walmart shopper per year, the CIRP survey shows, at USD 1 900.

Walmart+ program gains traction 5 months after launch

What: After acquiring Debenhams, Boohoo takes over the remains of Arcadia Group.

Why it is important: Boohoo has become an opportunistic acquirer of faded brands.

Boohoo has agreed to buy Burton, Dorothy Perkins and Wallis out of administration, marking the final stage in the break-up of Sir Philip Green’s Arcadia Group. The online retailer said it was set to acquire the digital assets and intellectual property of the brands for GBP 25.2 million.

The transaction will lead to the closure of 216 shops across the UK occupied by the three brands which made about GBP 428 million in revenues last year.

John Lyttle, Boohoo’s chief executive, said the deal ensured that the brands’ “heritage is sustained, while our investment aims to transform them into brands that are fit for the current market environment”.

The acquisition of the final parts of Arcadia — after Asos last week announced it would buy Topshop — closes a chapter for UK high streets. When Green in 2002 acquired Arcadia for GBP 850 million, Asos’s revenues were just GBP 4.1 million and Boohoo did not exist.

Boohoo to buy Burton, Dorothy Perkins and Wallis brands for £25m 

What: new wave of lay-off as a result of the impact of the crisis on retail

Why it is important: The pandemic has a significant impact on non-essential retailers which have been facing forced store closures for months, and they are exploring ways to save costs, sometimes at the expense of workers

The permanent lay off of more than 600 workers across Canada represents less than five per cent of the HBC’s total workforce; and the decision was made while nearly half the company's department stores remain temporarily closed. Workers concerned, both part-time and full-time, have worked for the retailer for between 10 and 30 years, predominantly in sales and middle management. "The pandemic continues to have a significant impact on non-essential retailers," said Tiffany Bourre, a spokeswoman. "Due to these circumstances beyond our control, the company has had to make adjustments which have resulted in a reduction in workforce."

Hudson's Bay permanently laying off more than 600 workers across Canada

What: SFW postponed from March to April, due to resurgence of Covid in China.

Why it is important: it is one of the few offline events scheduled this year. Due to its rescheduling, international brands with an offline planned activity decided to move it online.

Due to new outbreaks in Liaoning and Hebei, massive test and vaccine campaigns are carried out, in addition to partial lockdowns and safety measures, including rescheduling public events. This is the reason why SFW was rescheduled. International brands planning to have events during this week decided to move it online, such as Canada Goose, Cartier, while local retailers such as Lane Crawford and K11 are increasing safety measures.

Shanghai Fashion Week postponed amid new Covid-19 outbreaks 

What: China has become a showcase for the Geneva-based group’s online offerings.

Why is it important: China is expected to account for half of the group sales by 2025.

China has become a showcase for the Geneva-based group’s online offerings. For the overall luxury sector, China is expected to account for half of global sales by 2025. Many of Richemont’s businesses have been the first to experiment with the newest digital engagement tools on Tmall Luxury Pavilion, Alibaba’s dedicated platform for high-end goods.

Alibaba is the preferred online shopping destination in China today. The collaboration between the two companies started with a joint venture, aiming to develop the Net-a-Porter and Mr Porter’s business in China. Net-a-Porter’s flagship store on Tmall Luxury Pavilion launched in September. The success has proven the value of the platform in extending the presence of Richemont’s businesses in China, including Cartier, Montblanc, Piaget, IWC Schaffhausen and Jaeger-LeCoultre. Nine houses were launched on the platform, which shows a strong willingness to grow quickly and scale the collaboration.

Chinese clients are sophisticated and increasingly demanding, which is why some of the best experiences today are first introduced in China. Clients there are very tech-savvy and open to new technologies, which allows Richemont to elevate the level of interaction. They are also younger than the rest of the world, which requires an adaptation of communication tools and approach to the specificities of a younger generation. Chinese consumers also have a strong appetite for new experiences. This curiosity and capability to adapt constantly raise the bar for all brands. Innovative features can be quickly developed and tested in the market, also at a large scale.

Richemont’s idea is also to make greater use of ecosystem resources within the Alibaba Business Operating System, which offers a fantastic opportunity to elevate omnichannel experiences. Also, TimeVallée (Richemont’s innovative multibrand watch retail concept open to all high-end watchmakers) has signed a partnership with Intime, Alibaba’s department store chain. This provides access to Intime’s physical and mobile shelf space and offers an experience to more consumers, both online and offline.

Working with Alibaba allows a time contraction. What usually takes twelve months to bring a new experience, now condensed to one month because of the intensity and the scale of the network that Alibaba offers. Partnering with Alibaba also revealed the immense possibilities beyond tier-one and tier-two cities. Relying on brick-and-mortar is limiting consumers’ access to brands, and the partnership helped confirm a good amount of interest and opportunities in tier-three and tier-four cities as well.

Richemont CEO Jérôme Lambert Talks Refining Digital with Alibaba

What: after announcing a partnership with Shopify last June, Walmart.com opens to more third-party sellers

Why is it important: this partnership signals a heavy push towards growing its online presence

After reporting a 79% growth in e-commerce sale in the past year, Walmart's partnership with BigCommerce signals a heavy push towards growing its online presence and crowd of third-party sellers. Walmart's head-on competition with Amazon means that it is increasingly making moves beyond brick-and-mortar retail.

Walmart also teamed up with Shopify last June to bring 1 200 third-party sellers to its marketplace by the end of the year. Shopify merchants won't pay to list their products on Walmart.com, but once they make a sale, the retailer will charge a "referral fee."

While Walmart doesn't outline how much it makes from its other business ventures, Amazon's net sales through third-party commission, fulfilment and shipping fees nearly doubled since 2018. Amazon's third-party seller services account for 20.8% or USD 80.5 billion of its net sales in the fiscal year 2020.

Walmart opens its marketplace to BigCommerce merchants

What: major beauty brands increased their 2020 turnover thanks to digital marketing innovations.

Why it is important:  La Mer realised 50% of its 2020 turnover thanks to live streaming, leading to 200% increase.

La Mer, Lancome and Estée Lauder each surpassed USD 15,5 million turnover at Ali Baba’s own Intime department store, in spite of store closures. Intime, with its own e-commerce app Miaojie, encouraged its sales staff to become livestreamers, recommending and selling products via platforms. La Mer increased sales by 200% thanks to this strategy.

Beauty Brands See 2020 Sales Grow at Alibaba’s ‘New Retail’ Department Stores 

What: The department store announced a plan to grow its activewear sales from 20% of its business to at least 30%

Why it is important: Kohl’s aims to become the retailer of choice for active and casual lifestyle

Kohl's on Monday announced a tie-up with Eddie Bauer to launch this coming fall.

An assortment of the outdoor brand's seasonal gear and year-round products for women, men and kids will be sold "in as many as 500 stores" and online, according to a company press release.

The partnership furthers the retailer's strategy, announced last year, to grow activewear from 20% to at least 30% of its sales, "which includes driving growth in the outdoor category," per the release.

Kohl's turns to Eddie Bauer as outdoor sales surge 

Kohls Announces Partnership with Eddie Bauer 2021

What: the reduction of office spaces

Why it is important: with the pandemic and the emergence of remote working, Nordstrom sees opportunities to rethink its office work post-pandemic

The department store will leave the offices on Seventh Avenue in Seattle, reducing office space to two downtown Seattle buildings. “As we think about returning to our corporate offices later this year, we find ourselves with the rare opportunity to reimagine how these teams will work and collaborate in the future,” the company said. “While we will not be a fully remote headquarters, it’s clear remote work can and should continue to play a part in how we operate […]”

Working from home is one of the trend that was forced to emerge during the pandemic and that is here to stay; now workers, even in retail, need to adapt to this new reality.

Nordstrom to move out of one downtown Seattle office tower

Related item:

• IADS Exclusive: Adapting to new consuming habits

What: new sustainability standards for denim

Why is it important: sustainability is an essential part of the business for retailers, in terms of processes and in terms of merchandise. By taking a new step toward more sustainability, M&S commits to more transparency and to offer more sustainable solutions for customers, across a timeless and essential category: denim

The three key aspects of Marks & Spencer new sustainability standards are:

• Sourcing: 100% of the cotton used is always responsibly sourced, through the Better Cotton Initiative for the major part
• Washing: thanks to a partnership with Jeanologia -the leader in sustainable finishing technologies– M&S jeans are now made with 86% less water compared to the industry standard
• Dying: the switch toward indigo dyes with cleaner alternatives that are kinder the planet and require less water and chemicals to produce

M&S CLOTHING SETS NEW SUSTAINABLITY STANDARDS FOR DENIM

What: Working from home is not new.

Why is it important: We need to look closely and imaginatively at the advantages and disadvantages of remote work, and we can use some lessons from history to do so.

Contrary to first reactions as companies around the world went into lockdown and instituted remote working schemes, working from home used to be the norm until the early 20th century in today’s industrial countries. The Economist looks at remote working from a historical perspective. In spite of the abuses and hardships involved, it also allowed workers control over time.

The beginning of factories (and offices) around the 1800s increased the time spent at work and crucially allowed employers to control workers’ time. On the other hand, the development of the factory system also allowed workers to join together in trade unions to demand higher wages for their higher productivity. Wages were some 10-20% higher in factories.

How permanent is the shift to remote working from home today? And will it have the same far-reaching consequences as the shift away from home had in the process of industrialisation?

Home-working had its advantages

What: a severe consequence of the recent Brexit in UK

Why it is important: amid the current health crisis, UK is also experiencing a significant economic change due to the recent Brexit and its exit from the European Union trade agreements

UK department store chain Debenhams might be bankrupt, its website is still operating in the wait of news of a possible acquisition and save. Yet the British retailer has been forced to stop taking online orders coming from the Republic of Ireland due to complications linked to Brexit. The Irish webstore is temporarily closed over the Brexit ‘rule of origin’ clause. The news comes in the same week that several European retailers said they could no longer ship to the UK due to similar issues.

As early as 9 December 2020 John Lewis & Partners decided to close its international business and put a stop to international online orders to avoid the increase in shipment costs due to the new Brexit regulations.

Debenhams shuts Irish webstore on Brexit issues

Related item:

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What: the first large-scale commercial complex opening in Wuhan since Covid-19.

Why it is important: K11 is introducing 35% of new brands in its art-meets-entertainment-meets-retail concept, and enlarges its footprint in China, with a target of 38 new locations within 2025.

K11 is a concept that mixes art with retail and entertainment. Store zoning often mixes F&B with stores in order to create modern malls where it is easy, and fun, to spend time. K11 is opening a new location in Wuhan, on 247,000 square metres (of which 86,000 will be dedicated to retail). They will be introducing 30 new brands, such as Marionnaud (perfumes), Nars (cosmetics), Atelier Cologne. This mall is the first of 2 units projects, the second one being opened next year.

K11 Concepts unveils K11 Art Mall II in Wuhan 

What: Walmart is launching a fintech start-up dedicated to designing innovative and affordable financial solutions.

Why it is important: Walmart boasts a large customers base with a strong level of loyalty, which could help to a massive adoption of the solutions they could provide them

Walmart teamed up with a fintech investment firm to create a strategic partnership on payment solutions (reminding the strategy of Falabella for the latest years). The goal is to deliver tech-driven financial experiences both to Walmart employees and customers, with a focus on lowering the costs of the service.

Walmart to create fintech start-up

What: another acquisition for the UK retail group

Why it is important: Frasers Group has been making many purchases across the retail scene lately, extending its footprints both in UK and worldwide.

The purchase of Psyche include a 3700 sqm multi-brand store and a webstore, featuring high-end brands such as Barbour, Belstaff and Boss.

The operations have been affected by lockdown-driven closures, and the sale to Frasers Group helps to face the huge pressure the sector is under.

Former Psyche boss Steve Cochrane, who run the business for 38 years, will become CEO of the store. He said it will carry out an appraisal over the next six to 12 months to decide "where Psyche fits into its retail offer. We sit between Flannels and House of Fraser with the brands we sell. Hopefully there will be a space for us."

Read IADS exclusive case study on Frasers Group to learn more on the business and on the group’s ambition.

Mike Ashley's Frasers Group buys Psyche

Frasers buys Psyche, founder to stay at helm

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What: Walmart is setting up small, local, robot-staffed warehouses.

Why it is important: Fulfilment is a real competitive advantage. Best practices include speed and convenience. Could department stores use stores for fulfilment?

Walmart is planning to set up small local warehouses staffed with robots to handle surging online orders. The warehouses will be in or close to existing stores and will use robots to pick boxed items. More complex items will be picked by humans. The orders can then be picked up at the store by customers or by delivery workers.

Walmart also plans to experiment with automated pick-up systems that would present the goods at a hatch once a customer scanned a code on their smartphone. This effectively turns stores into micro-fulfilment centres which will cut the cost of the “last mile” delivery, the most expensive part of fulfilment. The move is seen as part of Walmart’s competition with Amazon which itself introduced a chain of grocery stores last year esigned to work as micro-fulfilment centres.

Walmart Presses Into Stores as Fulfillment Center Strategy 

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What: a second location for Macy’s newest concept “Market by Macy’s” launched last year.

Why it is important: department stores have been declining and in need of reinvention, even before the covid crisis. Last year Macy’s launched a new model, smaller than traditional spaces, with a major focus on community -a trend that has been strengthened by the pandemic

The Market by Macy’s is a community-centric, flexible retail store format with community-driven events. Following the opening of a first outpost in Texas in February 2020, Macy’s said it has “maximized learnings from the initial Market by Macy’s national debut to create a scalable store format” for the second outpost, also located in Texas. The store features items across fashion, beauty, home and gifts; it is a selected assortment of what’s available at full-line Macy’s stores.

Since the pandemic, big retailers such as department stores have been suffering from the loss of clients (Macy's is actually reducing is department store network), while the demand for community and local retail has been increasing (read about it in our exclusive article: The Rebirth of Local Retail) and retailers have been rethinking their models in order to cater to their local customers.

Macy’s is not the first retailer to develop local concepts: Nordstrom launched its Nordstrom Local concept in 2017 and continues to expand it; not to mention Neighborhood Goods, a “new type of department store” that offer a curated ever-rotating assortment based on the local-community needs  Sports retailers Nike and Foot Locker both recently launched community-centric concept: Nike Unite and Foot Locker Community Power Store.

Macy’s Latest Format Gets a Second Site 

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What: a major gain for Qatar Investment Authority.

Why it is important: the owner of luxury department store Harrods sold its shares in Tiffany & Co as part of LVMH’s acquisition of the U.S. jeweller.

QIA had acquired a 5.2% stake in Tiffany & Co in late 2011 and had since then increased its stake up to 9.3%. QIA made a gain of around USD 892 million, as part of LVMH’s $15.8 billion acquisition of Tiffany & Co. “It represents a very good return for a listed equity in any environment,” said Diego López, Global SWF managing director.

Harrods Owner Nets $892 Million Gain From Tiffany & Co Sale

What: the possible IPO of Saks Fifth Avenue digital operation

Why it is important: the IPO would establish Saks.com and the Saks Fifth Avenue bricks-and-mortar stores as separate companies.

The rumour of HBC taking Saks.com public comes out just days after luxury online retail Mytheresa went public and saw its stock price quickly soar. The manoeuvre would make the physical operations and the digital operations two freestanding companies, which would be a first in the retail industry.

Saks relaunched its webstore last October, offering a more curated offer and a user-friendly navigation based on an enhanced data gathering process.

Hudson’s Bay Co. Planning to Take Saks.com Public

What: a tiny shophouse opened on the site of the original.

Why is it important: the converted space pays homage to The roots of the Chirathivat family, owners of Central Group, offering a glimpse of Bangkok’s past

Last October, Central Group opened the doors to a converted five-storey shophouse on the site of the original Charoen Krung shop. Dubbed Central: The Original Store, the building houses a concept store that sells vintage magazines and memorabilia, as well as a live-music venue and a cafe. The top-floor restaurant highlights forgotten recipes from mid-20th-century Bangkok, delving into cookery books of the 1940s and 1950s.

Learn more about the Chirathivat family and the origins of Central group below:

Thai-Chinese family’s rise from shophouse to conglomerate is a slice of Bangkok history

What: another department store launching a small format concept

Why it is important: department stores are at a pivotal time where they need to reinvent themselves to cope with the crisis and stay relevant in the future. Many retailers are now betting on smaller and more local store format to reach the local clientele

Bloomingdale’s is reportedly launching a small-store concept which will be called "Bloomie’s," the long-time nickname of the retailer. The 2040sqm store should open near Washington DC in fall 2021, with the goal to support the full-line Bloomingdale’s locations in the area by providing consumers with an alternative destination to shop, make returns or pick up packages ordered online. The Bloomie’s concept is part of parent’s Macy’s Inc three-year "Polaris" strategy which include closing stores to open new off-mall formats. Bloomie’s is likely to carry a limited assortment of some of Bloomingdale’s most successful categories such as women’s fashion, beauty and accessories.

Macy’s last year launch a small format store dubbed Market at Macy’s, with a second location opened earlier this month. This is a community-centric, flexible retail store format with community-driven events.

Seattle-based chain Nordstrom was one of the first to enter that segment when it launched its Nordstrom Local concept in 2017. The Local hubs are much smaller than regular Nordstrom locations and serve as supportive units for the full-line stores. There are no merchandise instore, but it features different services such as custom alterations, online ordering for in-store pick-up and easy drop-off returns.

With the pandemic, retailers, and especially department stores, realised how local retail and communities are important and essential to keep a business running. The theme of local retail was explored in our IADS Exclusive piece: "The rebirth of local retail" and in IADS White Paper: "Global pandemic, local department stores".

Bloomingdale’s Sets Bloomie’s Strategy

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