What: Shipping fees are the lifeline of online profitability.

Why it is important: Customers are increasingly accepting to pay for shipping fees, but it needs to come with perks

The challenge of abandoned shopping carts in e-commerce remains significant, with many customers leaving their carts due to unexpected shipping costs. Recent surveys reveal that attitudes towards shipping are changing: a growing number of consumers are willing to pay for shipping, with a third of respondents indicating a willingness to pay at least $10 and older generations (Gen X and Boomers) are okay with paying $20 or more. Additionally, there's a shift in delivery expectations, with most customers now comfortable with a three to five-day delivery window, rather than two days.

Despite this, the desire for discounts persists, with only 30% of customers willing to pay full price for gifts and many expecting substantial discounts. The notion of 'free shipping' is being re-evaluated as customers recognize it’s often included in product prices. Around 75% of e-commerce businesses offer free shipping, but strategies are evolving. For example, Amazon increased its Prime membership fee and introduced surcharges for small orders to manage growing fulfillment costs.

Returns also pose a logistical challenge, with three-quarters of customers deterred by return fees. Overall, the e-commerce sector continues to evolve, balancing consumer expectations with profitability and logistical realities.

Shoppers getting used to shipping fees – as long as they get a good deal

What: Central Group has acquired majority control of Selfridges, following the restructuring of its joint venture partner Signa Holdings.

Why it is important: Central Group exercised its right to convert a loan into equity, subject to regulatory approvals. This move solidifies Central Group's position as the owner-operator of the largest European luxury department store group, including Selfridges in the UK, Brown Thomas and Arnotts in Ireland, and De Bijenkorf in the Netherlands.

The company is also continuing the support of the properties it owns with Signa: the Selfridges group of stores in the UK, Ireland and the Netherlands, as well as KaDeWe in Germany, and Globus in Switzerland.

The deal for Selfridges was made in partnership with Signa two years ago, with each company taking a 50% stake in the retailer. Central Group's focus now remains on obtaining regulatory approval and completing the takeover.

Central Group takes control of Selfridges following Signa restructuring 

What: The situation in Chile is tense for all retailers.

Why it is important: In many markets, we should expect large players selling off family jewels in order to maintain finances in the black.

Chilean retailer Falabella is initiating an asset sale valued between USD 800 million and USD 1 billion. This move, announced during a call discussing third-quarter results, is designed to strengthen the company's financial position. Falabella recently reported a reduction in net losses for the quarter, although it still operated at a loss, primarily due to decreased sales in its stores. The sale will focus on non-core assets, predominantly real estate, but specific details were not provided due to market regulations. The asset sale process is expected to take 12 to 15 months. Falabella has been facing challenges due to high inflation and reduced consumer spending, which have impacted earnings, especially in its largest market, Chile.

Chile’s Falabella has started a $800m asset sale to consolidate finances

What: Live streaming is a life saver for Space NK.

Why it is important: Harrods has equipped a full room allowing customers to test products advertised on a screen by an influencer streaming live from the other side of the planet

The CEO of Space NK, Andy Lightfoot, reports an unexpected increase in makeup sales, contradicting the assumption that the work-from-home era would lead to a decline in cosmetic use. Despite fewer in-person office interactions, the rise of video calls on platforms like Zoom has made people more conscious about their appearance, driving them to wear makeup more frequently. This trend, combined with the influence of TikTok beauty trends and the return of social events, has led to a 39% increase in makeup sales in the six months leading up to September. This surge contrasts with the pandemic period when makeup sales struggled. Space NK, known for carrying exclusive brands, anticipates continued growth with a projected 37% increase in turnover to £185 million by the end of March. The company plans to expand rapidly, opening 8-10 new stores annually over the next few years, focusing on untapped areas in London, the Midlands, and northern cities.

Space NK sales boom, make-up boosted by Zoom use, more stores coming

What: Macy's, Inc. has announced the appointment of Sharon Otterman as the new Chief Marketing Officer, effective from December 11.

Why it is important: With over 25 years of experience in marketing and brand transformation, Otterman brings a diverse background in media, entertainment, and digital transformation to enhance Macy's shopping experiences.

Otterman will be responsible for leading Macy's marketing efforts, focusing on brand evolution, customer engagement, and loyalty across all segments. She will oversee brand activation, advertising, visual merchandising, and media strategy for the Macy's brand. Additionally, Otterman will lead and expand Macy's signature events, including the Thanksgiving Day Parade, July 4 fireworks, and Spring Flower Show.

Macy's appoints new chief marketing officer

What: Zalando has introduced a new ChatGPT-powered feature called Fashion Assistant for UK and Ireland shoppers.

Why it is important: The Fashion Assistant allows logged-in consumers to explore Zalando's assortment using their own words and expressions.

The Fashion Assistant adapts results in real-time based on the questions asked by the users. It may still have some initial teething issues due to being in the beta stage of development.

Zalando adds ChatGPT Fashion Assistant to UK offer

What: Ingka group, Ikea’s owner, bought a shopping centre in the UK and plans to open Ikea in the former Debenhams location.

Why it is important: Crisis times are bargain times for cash-rich companies.

Ingka Group, the owner of Ikea, has acquired Churchill Square in Brighton, UK, for an estimated £145m, marking its second shopping centre purchase in the country. This follows their earlier acquisition of Kings Mall in Hammersmith, London.

In both cases, Ikea is converting former Debenhams outlets into Ikea stores, aligning with their strategy to establish a presence in city centres.

The Brighton mall acquisition is part of Ingka's global expansion plan to transform traditional retail spaces into community meeting places that offer more than just shopping. Ikea is also converting the Grade II listed former Topshop flagship on Oxford Street in central London into a new store, with an opening date pushed to Autumn 2024 to preserve the building optimally.

Ikea acquires a UK shopping centre and opens in former Debenhams 

What: M&S has reported a significant rise in first-half profit, exceeding expectations with a 75% increase to GBP 360m.

Why it is important: The rise in M&S's first-half profit and sales demonstrates the success of their growth strategy and resilience in challenging market conditions.

The company's sales also saw a boost of 10.8% to GBP 6.2bn during the six months ending on September 30th. They achieved growth in both food (almost 15%) and clothing and home (5.7%), despite unseasonably warm weather. M&S was successful in becoming the leading brand in womenswear in the UK, capturing a 9.5% market share.

The company credited its partnership with Ocado for contributing to a 6.9% increase in Ocado Retail sales. However, Ocado Retail itself experienced losses of GBP 23.4m, primarily due to the closure of its Hatfield site. M&S remains cautious about the second half of the year due to economic uncertainty, but is optimistic about the upcoming festive season and plans for a good Christmas.

M&S reported better-than-expected 75% rise in first-half profit

What: Selfridges could be put up for sale as co-owner Signa Group faces a cash crunch.

Why it is important: The potential sale of Selfridges due to co-owner Signa Group's financial crisis highlights the significance of economic challenges faced by retail businesses and the potential impact on iconic department stores.

Signa, which acquired Selfridges along with Central Group last year, has called in restructuring experts to raise money amid a financial crisis. It is believed that Signa's stake in Selfridges might be auctioned, with Central Group being the most likely buyer. Signa and Central Group jointly own department store businesses such as Rinascente in Italy and KaDeWe in Germany.

Signa's expansion plans have been hindered by rising borrowing costs and falling property valuations, leading to the halting of construction on the Elbtower in Hamburg. Frasers Group's acquisition of SportScheck from Signa is also in question as the retailer teeters on the brink of collapse.

Selfridges, however, states that its operations are independent of any support from shareholders and remains focused on providing an exceptional Christmas shopping experience.

Selfridges co-owner Signa faces financial crisis

What: Geoffroy van Raemdonck, CEO of the Neiman Marcus Group, discusses his perspective on the importance of emotions and relationships in the luxury retail industry.

Why it is important: Emotions and relationships in the luxury retail industry play a crucial role in building strong customer connections and delivering personalised experiences.

He highlights the focus on building strong customer relationships and delivering what's best for them. While there is speculation about a potential bid from Saks Fifth Avenue to acquire Neiman Marcus Group, van Raemdonck states that the company's owners are looking to monetize their investment through an IPO or sale eventually. He acknowledges the challenges faced by the fashion retail industry, such as continuing volatility and increased promotionality. To navigate these challenges, Neiman Marcus Group emphasizes remote selling, special events, and multisensory activations to provide unique and exclusive experiences for customers.

Van Raemdonck also emphasizes the importance of building a strong company culture based on love, authenticity, and embracing diversity. Overall, he believes that Neiman Marcus Group's focus on love, emotions, and experiences will drive its success and differentiate it in the market.

Neiman Marcus Group CEO on interaction and retail’s volatility

What: Hyundai is renewing 3 CEOs within its retail subsidiaries including the department store one.

Why it is important: Hyundai feels the urge to inject fresh blood in their structure in order to adapt faster to new market conditions.

Hyundai Department Store Group has undertaken a significant leadership reshuffle, affecting 40 high-ranking executives across its subsidiaries, including appointing Jeoung Ji-young as the new President and CEO of its department store division.

The changes, which are smaller in scale than the previous year's, are aimed at introducing change within a stable framework, focusing on areas essential for future growth.

This move comes after a two-year period without major changes in subsidiary leadership. The reshuffle reflects the broader sense of urgency within Korea's "Big 3" retailers to adapt to a retail landscape transformed by the rise of e-commerce and altered consumer behaviours post-Covid. Shinsegae Group has already made substantial changes in September, and Lotte Group is anticipated to follow suit with its own executive changes to tackle performance issues.

Hyundai retail division reshuffles its leadership

What: The new WOW Concept store, located on Madrid's prestigious Serrano Street, opened during the Christmas campaign.

Why it is important: This is the second location for the WOW Concept, with the first store opening on Madrid's Gran Vía in 2022.

Dimas Gimeno, the former president of El Corte Inglés and the executive president of WOW Concept, described the location as ideal due to its prime position and high footfall.

The store occupies the space formerly used by El Corte Inglés and spreads across seven floors, covering 6,400 square meters. The store focuses on contemporaneity and showcases premium brands, complementing the local fashion landscape. It offers a wide range of women's and men's fashion, including sneakers and urban fashion. The store also features dedicated areas for beauty, home, tech, and sportswear brands.

WOW Concept on Serrano Street opened in the middle of the Christmas campaign

What: The role of Chief Digital Officer (CDO) in fashion companies is evolving as every part of the organization now has a digital element and the lines between online and offline are blurring.

Why it is important: The CDO role is becoming more strategic and focused on generating profitable growth rather than just managing digital presence.

Many fashion companies are reevaluating and reassigning the responsibilities and title associated with the CDO position. Some companies, like Tapestry, have eliminated the role altogether after achieving their digital goals. The majority of large fashion players now have a CDO, but they are now working to integrate digital responsibilities into other departments.

The title of CDO may decline in the future as the role evolves into something new, but the need for individuals with business and technology expertise won't disappear. Successful CDOs have strong business acumen, understand consumer behaviour, and possess leadership and communication skills to drive digital transformation.

Do brands need Chief Digital Officers?

What: Inflation is pinching custolmers’ morale in the UK.

Why it is important: Retailers are faced with the dilemma to offload their stocks at the expense of their margins, or to lose customers.

UK consumer spending on gifts and festivities is projected to decrease, with PwC estimating a fall from £23bn in 2022 to £20bn this year. There's a notable divergence in consumer confidence across age groups and income levels.

Retailers have also adapted to changing consumer behavior, noticing customers making more considered purchases and seeking greater value. Despite offering significant discounts, interest in Black Friday has waned, with PwC reporting a drop in consumer interest from 61% in 2022 to 44% in 2023. This decline is partly attributed to consumers spreading out their savings over the year and growing skepticism about the real value of Black Friday deals.

However, there's a slight improvement in consumer confidence in November, despite ongoing cost of living concerns. Analysts expect certain retail categories, like groceries, to perform better than others during the festive season. Online retailers offering a wide range of deals are predicted to remain popular among consumers. eBay UK has observed that shoppers are becoming savvier, selling items to fund their Christmas purchases and showing interest in refurbished products from well-known brands as a cost-effective alternative to buying new.

UK retailers increase Black Friday discounts while customers cut spending

What: Urban Outfitters' clothing rental service, Nuuly, is surpassing Rent the Runway in subscribers and is on track to profitability, capitalizing on the demand for casual wear and a broad size range.

Why it is important: Urban Outfitters Inc. has spent at least USD 100 million on Nuuly, making a bet that an affordable, more laid back option in rental will bring in younger, less-affluent customers. With the backing of a billion-dollar parent company and an emphasis on everyday dressing, Nuuly has been well poised for success in a post-pandemic world.

Urban Outfitters has invested over USD 100 million in Nuuly, its own clothing rental service, which is proving to be a strong competitor to Rent the Runway by focusing on casual, everyday wear. With over 190,000 subscribers, Nuuly is outpacing Rent the Runway's user base and is expected to become profitable soon.

Nuuly's success is attributed to its single, affordable membership option, a wide selection of casual and dressier options from Urban's brands and other contemporary labels, and larger inventory purchases that keep popular items in stock. Nuuly also caters to a broader range of sizes, including plus sizes, which has been well-received by customers.

Despite the challenges of the rental market, such as customer turnover and rental fatigue, Nuuly's growth indicates a strong potential for the rental model in the fashion industry, with Urban Outfitters aiming to make it their next billion-dollar brand.

Urban Outfitters invests in rental service

What: Beymen is celebrating its 50th anniversary with a special exhibition which explores the 500 years of Turkish luxury and pays tribute to Istanbul's multicultural heritage.

Why it is important: The exhibition showcases the rich cultural heritage of Istanbul and highlights the significance of fashion and design in preserving and inspiring cultural legacies. It wwill also travel to other fashion capitals after Istanbul.

It took two years of planning and involved experts in history and fashion to create a collection of historical silk embroidered caftans and contemporary designs inspired by the region's history. The exhibition showcases collaborations with 50 international brands, each interpreting Anatolian references with their own unique style. Notable contributions include a Valentino pink maxi cape and gown by Pierpaolo Piccioli and a Turkish-inspired collection by Olivier Rousteing for Balmain.

Beymen celebrates its 50th anniversary with exhibit 

What:  Neiman Marcus Group reported a decline in both revenues and profitability in Q1 compared to the previous year.

Why it is important: Neiman Marcus’s financial decline in its fiscal first quarter highlights the challenges in the luxury sector.

EBITDA dropped to USD 95 million from USD 112 million in the prior-year period. Sales also decreased to USD 948 million from USD 1.034 billion in the previous year. Same-store sales fell by 8% in the last quarter. The company attributes the decline in cash to working capital needs and deliberate investments in store improvements, digital upgrades, and strategic initiatives. Neiman Marcus Group remains profitable and has a healthy inventory position.

The CEO of Neiman Marcus Group expects a steady Black Friday weekend and acknowledges the challenges of a volatile macro environment and increased promotional activities in the luxury sector.

Neiman Marcus Group cites slowdown and cautious luxury consumers in Q1

What: Real estate giant SPG is investing in AI tools in order to enhance visitors’ experience and ability to find what they are looking for.

Why it is important: The benefits for all / needed investment to achieve this might be extremely good for SPG, especially if it eases the life of the retailers leasing space in its malls. For that reason, department stores should look at these initiatives.

Simon Property Group has launched "HolidAI," an AI-based tool to assist shoppers in finding gifts at its properties, starting at Roosevelt Field in New York and Del Amo Fashion Center in California. This tool, powered by ChatGPT 4.0, will be operated by staff, known as "HolidAI helper elves," using tablets to ask AI-generated questions to help customers locate items in the shopping centers. Besides assisting shoppers, these helpers will also entertain with impromptu dances and songs every weekend until December 23.

Simon is expanding its use of technology in retail, having previously introduced the Simon Search tool for locating in-stock items across its properties. This initiative is part of a broader trend of retailers like eBay, Amazon, Google, and Walmart integrating AI into retail. The National Retail Federation has released principles to guide retailers in the ethical and effective use of AI technology.

Simon Property Group introduced AI in malls

What: Farfetch is reportedly in talks to go private, as CEO José Neves is discussing the possibility with major shareholders, including Richemont, Alibaba, and JP Morgan since the company's stock price has fallen over 80% since its 2018 IPO.

Why it is important: Taking the company private may allow Farfetch to address its issue of declining sales and revenue without the scrutiny of institutional investors. This move would follow a trend of publicly traded e-commerce companies going private, such as Casper and Poshmark.

Details of the potential buyout entity remain unclear. Despite this uncertainty, investors seem optimistic, as Farfetch's stock rose over 22% following the news.

Farfetch in talks to take company private

What: John Lewis is teaming up with Randox Health to launch health clinics inside its stores.

Why it is important: John Lewis believes that offering healthcare and wellness services will make its stores more convenient and accessible to customers. The partnership with Randox Health will provide expertise and innovation in expanding the range of in-store services.

The clinics will offer comprehensive health checks, including tests for hormone imbalances, vitamin deficiencies, and other key health concerns.

The first clinic will open in John Lewis's High Wycombe store on December 18th, with additional clinics in Bluewater shopping centre, Cheltenham, and Gloucestershire scheduled to open in the following months. Prices for Randox Health programs will start at GBP 295.

John Lewis launches health clinics inside stores

What: IKEA is discontinuing its in-store discount for loyalty members as part of its new pricing strategy.

Why it is important: The change is a result of Ikea's efforts to create more value for its customers and provide a low-price shopping experience.

Starting from February 1, 2024, members of the Ikea Family loyalty program will no longer receive a 5% discount on in-store purchases of furniture and décor. However, they will still enjoy benefits such as exclusive offers, discounts on delivery options, and a free hot drink when visiting the store.

The retailer will introduce new lower-price offers on hundreds of products and plans to create new exciting offers for customers in 2024. However by delaying the cancellation of the membership discount until after the holidays, it may benefit from consumers relying on loyalty programs to save money during this period.

Ikea is discontinuing in-store discount for loyalty members

What: Marks & Spencer is planning to open nine new stores in November, which they claim will be their "biggest ever store opening month.”

Why it is important: The retailer's ongoing store rotation program aims to transition from 247 stores to 180 higher quality, higher productivity full line stores as well as maintain their competitive advantage with the right locations.

The company will invest £80 million into sustainable physical locations, beginning with a 65,000 square foot store in Birmingham's Bullring on November 7. Marks & Spencer will open at least one store per week throughout the month, creating over 2,200 local jobs. This includes two additional store openings, three new M&S Foodhalls, and three store renewals.

Marks & Spencer to open nine stores in November

What: Amazon is shutting down its two high-tech specialty apparel stores, known as Amazon Style. The company plans to focus on its online fashion shopping experience instead.

Why it is important: The closure of Amazon Style stores shows the company's shift towards prioritizing its online fashion shopping experience.

The stores, which opened in 2022, offered a unique retail approach, allowing customers to personalize their shopping experience using the Amazon app. However, the stores struggled to attract regular customers and faced challenges with their complex automated fitting room system. Despite the closure of the physical stores, Amazon remains committed to its retail ambitions and will continue to invest in its grocery stores business.

Amazon's fashion business, which includes both first-party and third-party sales, is estimated to be worth USD 67 billion. The company is looking to enhance its fashion offering with services like virtual try-ons and fit recommendations.

Amazon is closing its high-tech fashion specialty stores

What: Knightsbridge, home to Harrods and Harvey Nichols, is expected to surpass pre-pandemic footfall numbers during the upcoming festive season.

Why it is important: The forecasted increase in footfall and total spend during the festive season in Knightsbridge signifies a recovery for the luxury retail sector and the return of high-spending international shoppers.

The Knightsbridge Partnership, a business improvement body representing firms in the area, reports that footfall from January to October has been rising by an average of 27.7% each month compared to the same period in 2022. They anticipate a 2.8% increase in footfall in November and a 3.3% increase in December, compared to the same months last year, and a significant increase of 20% and 55%, respectively, compared to the last two months of 2019.

The CEO of the Knightsbridge Partnership attributes the increase in footfall to the return of high-spending international shoppers, supported by a weaker pound. He also emphasizes the need to reintroduce tax-free shopping to further attract tourists to the neighbourhood.

Knightsbridge festive footfall to top pre-pandemic numbers for first time