What: a partnership between a department store operator and a delivery service.

Why it is important: might be a way to reach out to more customers.

In September, John Lewis & Partners operator for food Waitrose launched a trial with food delivery service Deliveroo available in five shops. It has now expanded this partnership to twenty-five locations. The trial is very successful and is expected to last at least until November, to evaluate the potential benefit of a long term partnership. The launch on Deliveroo gives to Waitrose customers easy and convenient access to products, and will potentially draw new customers in.

WAITROSE AND DELIVEROO EXPAND TRIAL EARLY TO MEET HIGH DEMAND

Related items:

• John Lewis finalised its strategic review and comes with a new plan
• John Lewis Partnership progress report

What: After 19 months of contraction, September seems to be inverting the trend

Why is it important: The market is sensing light at the end of the tunnel, and all local players are imagining new promotion systems, including Sogo, to seduce local customers. There might be some of these systems that could be worth watching for other markets.

Due to low national tourism (-99% in August) and pandemic, adding up to political issues, Hong Kong has gone through difficult times in terms of retail sale this summer (YTD sales until August were 30% behind last year at €23.4bn vs. €33.5bn last year). However, it seems that there is light at the end of the tunnel, with a rebound sensed in September (also confirmed by IADS member Sogo) thanks to promotion actions led by almost all players on the market. There is currently an agility and creativity into addressing local customers in new ways that are the direct consequences and learnings from the crisis.

Hong Kong retail sales fall again in August

Hong Kong Footfall Soars: How The City’s Retailers Witnessed A ‘Christmas’ Miracle, And Why Shopping Malls Aren’t Dying

Related item:

• Luxury new focus is HK hight net locals

Although the dramatic decline in sales compared to the previous year was due in part to last year’s rush in purchasing before a tax hike, it is nevertheless significant: Japan has lived through two clear peaks in Covid-19 cases.

In spite of stores remaining open, customers are wary of shopping when Covid cases fluctuate.

Takeaway:

We cannot assume that the pandemic is over yet so it is more urgent than ever to initiate new services and new ideas for customers to continue shopping and to feel comfortable and protected through the coming months which include the Christmas period.

Brookfield Property Partners wants to redevelop 100 of the 125 malls in its recently acquired GGP portfolio into what it calls mixed-use “mini cities.” Brookfield estimates that it will invest between $800 million and $1 billion annually over the next few years as it adds on office and residential space to the properties. The firm will redevelop and sell the remaining 25 malls.

Deprived of rental receipts, Brookfield has for months been struggling to stay on top of the debt owned on its retail properties. At least seven of its malls had defaulted on their mortgages by the end of June. Some 20% of jobs will be cut by the group. According to management, the job cuts and property divestitures as part of a long-term strategy to reduce the size of its retail portfolio.

IADS member Magasin du Nord implemented an interesting initiative to ensure customers were safe when navigating the floors, and respecting the legal distance imposed by Danish health department: “Distancing Guides”. In addition to the entrance staff dedicated to welcoming customers while reminding them about procedures (mask, gel and distance) the Distancing Guides are here to enforce customers dispersion on all floors of the stores and avoid unwanted gathering. 54 of them have been deployed so far (more to come for Christmas period) and this was noted by the Danish government: the Danish Minister for Commerce spent 30 mn instore in the Copenhaguen Kongens Nytorv flagship, and this generated a TV coverage. Magasin du Nord kindly shared with us their guidelines as we do believe this initiative could be interesting for other IADS members.

Magasin du Nord distance guidelines

Bloomberg has reported that online retail giant Amazon has plans to open as many as 1,500 delivery hubs in American cities and suburbs.

The move marks a sharp turn in strategy for Amazon, whose warehouses have typically existed on the outskirts of exurban areas. But now that Walmart and Target are offering same-day delivery from their urban and suburban locations, Amazon’s once revolutionary two-day delivery guarantee has the company trailing its two distinctly uncool competitors.

Some commentators are speculating that failing or closed malls could be converted to Amazon DCs since they are often situated in suburbs with good transport links.

What: a reported joint-venture between Ali Baba and Dufry

Why is it important: at a time when international travel rebound is still a far sight and Chinese expected to keep on travel nationwide or regionally, this is a potentially mutual good bet for both players.

Alibaba is reported to take 10% of Swiss travel retail based Dufry, as well as to create together a joint venture in China. This comes at a good moment for Dufry, which has been particularly hit hard during the pandemic, and had to announce a drastic plan of layoffs up to a third of its workforce. According to the FT, its revenue is said to have dropped -70% this year, across its 2,500 locations worldwide. This new venture could prove mutually beneficial:

• For Dufry, having a privileged access to a 720m customer base, avid of duty free goods, and benefit from the digital-savvy platforms of Alibaba, including Alipay to be deployed at all Dufry’s locations
• For Alibaba, team up with an international company who has, by Chinese law, the right to sell goods online at a lower tax rate, as well as the access to a portfolio of international brands replacing unreliable intermediaries

Alibaba to take up to 10% of Dufry

Alibaba/Dufry: line of duty

Related item:

• Upswing for domestic travel retail in China

What: the pitch this year is not the timing, but the claim: sustainability.

Why is it important: by being the first to launch its Christmas campaign, and by stressing the fact that the brands, decorations, and products sold are all sustainable, it is at the same time pre-empting this positioning, and commoditising sustainability in customers’ minds (by making it a basic expectation). All this at a moment when IADS members are also thinking to launch in advance their Christmas season.

Selfridges claims that this year’s Christmas range is the largest and most sustainable to date. It includes local brands (UK-based), recycled decorations, and eco-friendly produced items, in addition to a customisation workshop. All wrapping material is either FSC or recycled. The selection is available on Oxford Street, online as well as in Manchester and Birmingham stores.

SELFRIDGES BRINGS ‘ONCE UPON A CHRISTMAS’ TO LIFE WITH EXCITING DESTINATIONS IN STORE AND ON SELFRIDGES.COM

Shinsegae property and Taubman Asia have unveiled their new shopping mall Starfield Anseong in South Korea’s Gyeonggi Province; the second joint venture between the two. The 240,000sqm shopping complex houses more than 250 brands, including Shinsegae Factory Store, and several entertainment concepts (Aquafield, movie theatre […]). The mall has dedicated 10,500sqm to dining experiences.

Taubman Asia and Shinsegae Group Celebrate the Opening of Starfield Anseong in South Korea Today

Nordstrom is launching a sustainable program named ‘BeutyCycle’ in partnership with TerraCycle, allowing customers to bring their empty beauty product packaging to be recycled at any of Nordstrom's full-line stores or Nordstrom Local service hubs in the U.S. Nordstrom will send the recyclable goods to TerraCycle where they are cleaned and separated into metals, glass and plastics, to be then recycled.

Nordstrom Launches BEAUTYCYCLE Nationwide

Related items:

• IADS Exclusive - Sustainability: department stores’ destiny
• Nordstrom sets sustainability goals for 2025
• The end of fur?

What: a focus on casual assortment and a new private brand for a US department store.

Why is it important: with more brands rethinking their relationship with department stores, betting on a private label could be the next option for them; especially in a category that performs well at the moment.

US department store chain has announced that it will review its stores’ assortment to become a “destination for active, casual, and beauty for the entire family”. Thus it will extend its active and outdoor categories, and building a bigger beauty business.

On the same day, the brand announced the launch of a new athleisure private label. Dubbed FLX, it will launch online and in selected stores in March 2021 and will cater to both women and men.

Kohl’s Outlines New Strategic Vision with Heightened Focus on Active and Casual Lifestyle

Kohl’s Announces Launch of New Private Label, Specialty Athleisure Brand

What: following the spring lockdown, Harvey Nichols finally reopens store in Birmingham

Why it is important: one of the biggest player in UK decided to put on hold the reopening of one of the flagship located inside Birmingham’s Mailbox mall, even when it was allowed by the government and reopens just in time for the Christmas shopping season

Following the national lockdown in UK, Harvey Nichols closed all stores in March. But since stores got cleared to reopen in May, the retailer decided to keep its Birmingham store’s doors closed. People were sceptical about this long pause and fear was that the store would never reopen -especially after John Lewis announced it would permanently shut its Birmingham store.

Harvey Nichols COO Manju Malhotra said the company will now be “focusing on what we do best, which is providing a high level of personal service and an exceptional shopping experience, within a safe and comfortable environment”.

Harvey Nichols Mailbox store finally reopens

Related item:

• John Lewis closes 8 stores

What: The successful sustainable trainer brand is launching apparel made of unusual materials and sold at a premium.

Why it is important: At a time when apparel sales are suffering, a new range of clothing would seem to be risky, especially as they are pricier than their direct competitors. However, if the brand values are strong, in this case originality and sustainability, then this is something we should consider.

The sustainable brand from San Francisco which has been such a success selling wool trainers is to launch apparel starting with four styles for men and women from XS to XXXL. Prices range from $ 50 to $ 250 and are intended to appeal to customers who shop at Uniqlo, Everlane or Lululemon. Although prices are relatively high, research has shown that customers are willing to pay quite a premium for goods made from sustainable materials.

Allbirds is valued at $ 1.7 bn and its growth is outpacing larger sneaker brands. According to commentators, their products have been successful because they are “simple, comfortable, but most importantly sustainable”. The founders recognise that producing more makes the company less sustainable. Nevertheless, they are uncovering the point that shoes and apparel can be successful if they give customers a strong reason to buy.

Allbirds, the billion-dolar sneaker Start-up, launches apparel 

What: Ikea is disrupting its own business model before it is disrupted.

Why it is important: In the face of competition, as well as crises, retailers need to experiment and test, even if this challenges their traditional business model. Ikea is doing it, Walmart is doing it, Amazon is doing it, as is Alibaba; department stores need to do more of it.

The Financial Times looks at the Ikea city centre Planning Studio format as one example of the relentless experimenting taking place at the company. It argues that Ikea is disrupting itself before being disrupted. A lesson for all retailers. The last of the Studio formats to open in Oslo is taken as a case: apart from allowing customers to plan their rooms while seeing the total range of materials and furniture, seminars and events will be hosted at the shop, for example, while the Studio will also offer inspiration through product news and season-related products. The customers can receive help with planning rooms and homes and get inspired by the solutions on display.

Ikea faces increasing competition from online retailers and the Covid pandemic closed up to three-quarters of the stores with group sales falling 4% in the year ending August 2020.

Ikea seeks to disrupt itself before it is disrupted

Related items:

• Ikea: How to keep growing and thriving at the same time
• Responding to Disruption

Hideyuki Murakami has been appointed as the new chairman of Shin Kong Mitsukoshi Department Store Co. of Taiwan. Murakami, the company's vice chairman, will be moved up to fill the position, which became vacant when its founding chairman Wu Tung-hsing died on 20 August, according to Shin Kong Mitsukoshi. The board also appointed Wu's son Richard Wu, currently the company's president, to double as its vice chairman.

The department store chain, which posted sales of NT$ 80.7 billion (US$ 20.78 billion) in 2019, is a joint venture established by Taiwan's Shin Kong Group and Japan's Isetan Mitsukoshi Ltd. in 1989. In the Shin Kong Mitsukoshi chain, there are 15 stores in Taiwan.

What: events and initiatives on stores parking lots.

Why is it interesting: one way for retailers and landlords to respond to the decreasing store traffic in the wake of the pandemic.

A parking lot has never been a great attraction, but amid the pandemic, with the emphasis on outdoor space to remain safe, shopping malls and garages are sharing their parking lots to tenants and vendors for open-air stores and events. Brick-and-mortar retail has been hit hard and landlords are happy with any solution that can bring some foot traffic.

Happenings on parking lots can go from shops to distribution centers or even Covid-19 test stations. Ahead of Halloween, some are setting up haunted houses or hosting shows for people to enjoy from their cars.

This summer, IADS member Breuninger organised a live theatrical show in the parking lot of their Stuttgart store, for customers to watch directly from their cars. The night included dinner, served directly in the clients’ car.

Parking Lots See More Action Than Adjoining Shops

Related items:

• Breuninger gives the lead to Walmart for entertainment
• IADS Exclusive - Walmart: thinking outside the (big) box

South Korea’s retail giant Shinsegae Group will open a new mega shopping mall complex Starfield in the country despite the growing demand for non-face-to-face shopping trend. Starfield Anseong, that is jointly invested by Shinsegae Property and U.S. shopping mall developer Taubman Centers commands a total floor area of 240,000 square meters, significantly larger than other rival shopping centers nearby. The three-story complex with two underground floors has parking capacity of 5,000 cars. The mall offers visitors not only extensive shopping experiences but also a wide range of cultural experiences with diverse eatery locations, cinema, culture centers and library.

What: The e-commerce giant launches its Swedish website.

Why is it important: Amazon continues its expansion in Europe with a new webstore opening on the Sweden territory, with a selection from big European brands as well as local Swedish brands, confirming the importance of digital retail.

It is a great opportunity for Swedish businesses to sell on Amazon in order to reach more customers and expand. More than 30 categories can be found on the platform such as Consumer Electronics, Tools and Home Improvement, Sports and Outdoor, Toys, and Baby.

The opening follows one of Amazon’s largest investments in renewable energy outside the US, in Sweden.  Indeed, Amazon launched a project in Western Sweden that is expected to deliver 280,000-megawatt hours of clean energy annually and that will support Amazon Web Services (AWS) data centres in the country among others. A second renewable energy project, an onshore wind farm in Sweden, will begin operations in 2022. “These launches take Amazon one step closer to meeting its Climate Pledge commitments of achieving net-zero carbon emissions by 2040, ten years ahead of the Paris Agreement.” said the company in a press release.

Amazon.se launches in Sweden

The Monoprix supermarket chain has built an automated distribution centre just outside Paris to deal with its online orders. It is a robotic system made of cubes which circulate on a grid and allow 50 articles to be picked in 6 minutes. The system is part of a deal with UK firm Ocado which has been expanding its DC service offer around the world. It uses the Autostore technology from Norway to automate warehouse operations and cut down considerably on human numbers. The Autostore group is currently suing Ocado for wrongful appropriation of its technology.

Department store Manor in Switzerland has been using Autostore in two of its warehouses for several years now and has benefited from considerable cost savings as a result.

See IADS Exclusive piece on Monoprix here

What:  A new organization at travel retail giant Lagardère.

Why is it important: Lagardère is restructuring, by promoting in-house seasoned veterans to key positions, designing a new ad hoc Asia Pacific management structure, and frontally addressing key business model topics

Lagardère Travel Retail is reshaping following the departure of Ambroise Fondeur, former Chief Business Officer (26 years in the company), triggering a domino restructuring: former CEO of the Italy BU Lucio Rossetto takes over, with direct report to the CEO. Emmanuel de Place, currently COO of Asia Pacific, takes over the role of Chief Transformation Officer, in charge of reviewing the concession business model, to make it more efficient & flexible, with a shorter-term approach, adapted to the current troubled times. His position is being split in two: former Chief Development and Strategy officer Severine Lanthier becomes COO Greater China, Japan, Singapore, and Malaysia, while Singapore CFO Ann Pang becomes CEO of Singapore and Malaysia. This split has been designed to address the different dynamics in the region: aggressive growth in China, stabilization in the rest of the region.

Lagardere Travel Retail posted a turnover of €5,5bn through 4,800 stores in 39 countries. Its revenue fell by 55% in the first half of 2020 YoY.

Lagardère Sets Course For Retail Recovery With Top Executive Changes And Split Focus In Asia

What: 520sqm dedicated to retail cosmetics and skincare in an enhanced way

Why is it important: such a surface needs strong novelties to be profitable and more than a gadget. Many attempts have already been done by L’Oreal (owner of Lancome) across the years and on various brands, but the fact that they are launching these new technologies on their top brand, within the top location of Lotte Duty-Free, aiming at the only customers that will support growth, Chinese travelers, says it all on the degree of maturity of such a reflection and might be inspirations for department stores.

In addition to virtual cataloging and browsing, Lancome is proposing an augmented reality make up try-on service, Modiface (call Dream face in Korea), following the acquisition of a same-name startup in 2018. It allows us to use screens as virtual mirrors and try in very realistic manner shades and colors without actually touching the products. In these times of restricted interactions, it is a time-saving, potentially sales-enhancing move.

Lotte Duty-Free posted a turnover of €7.7bn in 2019 (+25% vs. 2018) and the Myeongdong location where this new store opened is its flagship, located near the town hall of Seoul, with 3 entire floors dedicated to duty-free business. The L’Oreal luxury division, to which belongs Lancome, posted a turnover of €11bn in 2019. Almost a quarter of it is performed by Lancome itself.

Lancôme takes centre stage with Smart Store at Lotte Duty Free Myeongdong

What: a sports retailer turning its web shop into a marketplace

Why it is important: Competition online is harsh and opening a marketplace with a larger assortment will allow for retailers to gain a larger customer basis. It facilitates the transaction process for brands, and gives customers the possibility to purchase many items under one digital roof, which offers them the convenience they seek at the moment

Decathlon Belgium web shop will become a real 'Marketplace' that will feature products from more than a hundred other sports brands. Decathlon will coordinate transactions, while the partners themselves will be responsible for shipping and handling the ordered products; or can choose to outsource the logistics to Decathlon. The webstore also offer the possibility to buy services such as travel or workshops, in a way to strengthen Decathlon's offer and to lead it into becoming the 'best sports offer'.

The project will launch in Belgium at the end of the year and is expected to roll out to other European countries in 2021.

Decathlon turns web shop into marketplace

Related items:

• Can marketplace replace department stores?
• El Corte Inglés becomes logistician for 100 brands
• M&S launches 3rd-party brand for the first time
• IADS Exclusive | E-commerce & Department Stores: Becoming rich online: reality or illusion?

In a bid to encourage its customers to recycle used garments, Swedish fast fashion retailer H&M is showing garment-to-garment recycling system Looop in their Drottninggatan stores in Stockholm. Shown for the first time, the container-sized machine recycles old textiles into something new in front of customers. Old garments are dissembled and assembled into new ones, and then cleaned, shredded into fibres and spun into new yarn that will eventually be knitted into new clothing. The system uses no water and nochemicals.

H&M also offer the possibility to their customers to use the Looop system to turn their old clothes into new ones with a fee of SEK 100 for members of the loyalty program (approx. EUR 10), and SEK 150 for non-members (approx. EUR 15). All proceeds go to projects related to research on materials.

Recycling System ’Looop’ Helps H&M Transform Unwanted Garments into New Fashion Favourites

Macy’s is to take a stake in Swedish buy-now pay-later group Klarna as part of a partnership under which the US department store chain will offer its customers the possibility to split up online purchases into four interest-free payments. The US department store chain has struggled to cope with the rise of online shopping and is hoping for a boost from its partnership with Klarna, which is popular with younger shoppers because it allows them to receive goods and return them before paying for them.

Macy’s and Klarna announce new five-year partnership to provide more payment options