What: The Robin Report examines to what extent Black Friday has become a longer promotional event and the consequences of such an extension.

Why it is important: Black Friday has become a must-have for online and offline retailers, but at what cost?

Over recent years, there has been a significant shift in Pre-Black Friday sales strategies. Retailers have moved from major one-day promotions to more extended periods of deals, a trend referred to as the "Black Friday drip." This change is evident when comparing the pre-Black Friday landscape of 2017, where deals were limited and focused on in-store shopping on Thanksgiving Day, to more recent years where promotions are spread over weeks.

The pandemic served as a major disruptor, accelerating this shift as consumer shopping habits increasingly leaned towards online purchases. Retailers, including specialty stores, began offering promotions much earlier, with some starting as early as October to compete with events like Amazon's Prime Days.

In 2021, this trend intensified, with deals beginning in early November and even late October. The strategy appears successful, as a significant portion of consumers now plan to start holiday shopping before November. However, there's concern that the constant stream of deals might overwhelm some customers, especially if promotions are perceived as less significant.

Retailers now face the challenge of balancing the allure of early and frequent promotions with the risk of deal fatigue among consumers. Success in this new landscape is measured not just by sales, but by customer engagement metrics like email open rates and click-throughs. The shift towards early promotions has transformed the shopping experience into a more transactional one, potentially affecting the traditional holiday shopping spirit. The final impact of these strategies will become clearer post-Black Friday, shedding light on the effectiveness of these early promotional tactics.

Is pre-Black Friday a winning strategy?

What: KaDeWe Group is strengthening its top management team following the departure of its CEO, André Maeder.

Why it is important: Strengthening the top management team of the KaDeWe Group is important for the company's success and strategic direction.

Timo Weber, the Chief Retail Officer, and Simone Heift, the Chief Merchandising Officer, have both joined the board of directors. The new CEO, Michael Peterseim, expressed his satisfaction and highlighted the valuable contributions of Weber and Heift in shaping the success of the KaDeWe Group. Alexandra Bagehorn will take over as the general manager of the KaDeWe store in Berlin. In addition to the trio of board members, KaDeWe Group management also includes Janina Schüßler as director of marketing and communications; Julia Lehmann as director of merchandise management; Lars Globisch as director of IT and process management and Karin Bergmann as director people.

KaDeWe Group expands its top management

What: HBC, the parent company of Saks Fifth Avenue and Hudson's Bay, has generated USD 340 million in cash from the sale of real estate properties.

Why it is important: The CEO, Richard Baker, emphasized that HBC is primarily a real estate company, owning USD 7 billion worth of real estate assets. The company regularly monetizes its real estate assets to support and grow its retail businesses.

The recent cash infusion came from the sale of undisclosed properties in Canada and the U.S. HBC sells USD 300 million to USD 500 million in real estate assets annually, strengthening its balance sheet but not factoring into earnings.

Saks parent HBC raises USD 340M through ‘real estate monetizations’

What: Amazon has launched its own AI chatbot called "Q" for businesses.

Why it is important: The chatbot is entering into direct competition with OpenAI's ChatGPT, Google's Bard, and Microsoft's copilots.

"Q" is exclusively available to Amazon's AWS cloud computing customers at a monthly cost of $20 per user. It aims to perform various tasks such as summarizing uploaded documents and answering specific data-related queries.

Amazon CEO, Andy Jassy, emphasizes that "Q" offers a more secure version of an AI chatbot with controlled access to content. This is meant to address concerns about the technology's tendency to provide incorrect or inappropriate answers. AWS CEO, Andrew Selipsky, highlights that cloud customers using "Q" can restrict their chatbots to a limited and predetermined data source.

Amazon releases AI chatbot called 'Q'

What: The fashion chain Aachener, which recently occupied six abandoned Galeria locations, has filed for insolvency due to financial difficulties.

Why it is important: The insolvency raises concerns about the potential for empty buildings in the city centre and the negative impact on the city's image and attraction.

The company has 355 employees and seven locations, including six former Galeria houses. These locations, which were already rented but not yet opened, are in Frankfurt, Saarbrücken, Cottbus, Coburg, Nürnberg, and Leverkusen.

The company's existing stores will continue to operate, and the management is considering a possible timely opening of the former Galeria locations in order to restore the company's financial viability. The provisional insolvency administrator is optimistic about the possibility of restructuring and ensuring the continuation of operations.

Galeria's new tenant, Modehaus Aachener, files for insolvency

What: Decathalon has opened an official store through Mercardo Libre in Mexico and aims to reach over 15,000 Mexicans by 2024 through this new digital sales channel.

Why it is important: Mercado Libre's experience and knowledge of the Mexican market will help Decathlon build a robust sales platform that meets consumer demands.

The selection of products available on the e-commerce platform was carefully curated by Decathlon to align with current consumer preferences. With the Mercado Libre alliance, Decathlon aims to provide same-day delivery in 24 cities and deliver products within 48 hours to the rest of the country.

Decathlon opens official store in Mercado Libre Mexico

What: Shein has reportedly filed for an initial public offering and is expected to become publicly traded in the U.S.

Why it is important: The filing for an IPO indicates the company's intention to go public and provides insight into its financial valuation and market strategies that made the fast fashion company grow so quickly.

The IPO is anticipated to take place in 2024. Shein reached a valuation of USD 66 billion this year, following a USD 2 billion funding round. While the company does not usually disclose financial figures, it generated approximately USD 1.38 billion in the U.K. from September 2021 to December 2022, strengthening its market share in the region.

Shein has faced scrutiny from U.S. lawmakers over its supply chain practices, prompting a congressional call to the Securities and Exchange Commission to investigate allegations of forced labour. In response to these concerns, Shein has boosted its spending on lobbying in the U.S. and formed partnerships with companies like Forever 21 and Missguided to establish credibility and expand its market presence.

Shein reportedly files for IPO

What: The WSJ has a look at the Executive Order issued by the US about AI and how it should be interpreted by companies.

Why it is important: AI can be either used as a painkiller (to reduce costs) or a vitamin (to enter new markets) - it is only a question of approach.

The White House has issued an executive order involving artificial intelligence, using the Defense Production Act, which has raised some eyebrows. This move is part of an effort to address the rapid evolution and potential impacts of AI, which has seen significant growth and development since OpenAI's ChatGPT was released 11 months ago. There is a mix of excitement and concern over AI's capabilities, with discussions on whether it will lead to job displacement, human obsolescence, wealth creation, or stringent regulation.

AI is viewed as a tool that could potentially automate a large portion of current jobs, with predictions suggesting it could take over 80% of the tasks within 80% of jobs. However, it's also expected to create new and better jobs. To understand AI's impact, it is likened to either a painkiller that reduces costs by eliminating lower-end jobs, or a vitamin that generates revenue by creating new markets and services.

The AI industry is at a stage where its capabilities and future impact are still uncertain, but it's expected to significantly reshape productivity and the workplace. The advice given is to approach AI with fundamental analysis, categorizing each application as either a painkiller or vitamin, while being cautious of overhyped expectations that could lead to disappointment.

Is AI a painkiller or a vitamin for companies?

What: US antitrust regulators allege that Amazon generated over USD 1 billion in extra profit through a secret algorithm called "Project Nessie”, according to the FTC.

Why it is important: The lawsuit is part of the Biden administration's efforts to challenge Big Tech's market power and represents a crucial test for FTC Chair Lina Khan's approach to antitrust enforcement.

The algorithm was used to control pricing on Amazon's platform and across the market. When other online stores tried to match Amazon's prices, the algorithm would raise the prices of certain goods and keep them higher even after other platforms followed suit.

The Federal Trade Commission also accused Amazon of strategically deactivating the algorithm during periods of heightened scrutiny. The FTC complaint further states that Amazon founder Jeff Bezos directed executives to increase "pay to play advertisements" on the platform, including less relevant ads known as "defects," which harmed consumers. Amazon's advertising revenue has since increased to USD 37.8 billion globally in 2022.

Amazon earned USD 1bn from secret pricing algorithm, FTC alleges

What: The tourist boom, which has stopped in Europe this summer, is still flying high in Japan.

Why it is important: Department stores in Japan are taking the lion’s share with an uninterrupted growth for 20 months.

In October, tax-free sales in Japanese department stores reached a record high of approximately 257 million dollars (38.3 billion yen), the highest since 2014 and a 178.9% increase from the previous year. This surge is attributed to spending by foreign tourists. Officials anticipate continued growth in duty-free sales towards the year-end, fueled by robust inbound tourism spending. Overall, department store sales in Japan last month amounted to about 3 billion dollars (453.1 billion yen), marking a 6.1% year-on-year increase and the 20th consecutive month of growth.

Tax-free department-store sales in Japan hit record in October

What: Chinese customers are now looking for discounts and local brands in order to sustain an otherwise morose consumption.

Why it is important: The gap between Western and Chinese customers is slowly disappearing.

In China, the economic slowdown and changing consumer sentiments are impacting the Singles' Day shopping festival, the world's largest online shopping event. Shen Ling, a 48-year-old government employee, exemplifies the trend of Chinese consumers cutting back on big-ticket purchases and shifting from international to domestic brands for items like cosmetics. A survey by Bain & Co indicates that over three-quarters of shoppers plan to spend less or maintain their 2022 expenditure levels.

China's economy grew by 1.3% in the third quarter and by 4.9% year on year, but consumer confidence is weak, particularly due to concerns over the property market. E-commerce giants like Alibaba and JD.com, facing these headwinds, are focusing on value-for-money products and heavy discounting to attract cautious consumers. This year, live-streaming e-commerce, known for its low prices, is also gaining popularity.

The shift is also seen in the types of products being purchased. While luxury and international brands were once highly sought after, there's now a growing preference for domestic brands, especially among younger consumers and those in lower-tier cities. Categories like beauty products, home appliances, and digital products are seeing a shift toward local brands.

Despite the economic challenges, some segments like the affluent senior shoppers are still spending on premium products. Retail sales in mainland China showed some improvement in the third quarter, suggesting potential areas of growth amidst the general trend of reduced spending.

Overall, Chinese consumers are adapting to the economic climate, with a focus on more economical choices and a lean towards local brands over foreign ones. This shift is evident in Shen Ling's decision to downgrade her premium membership with Estee Lauder, reflecting a broader trend of changing consumer priorities in China.

Chinese consumers on the hunt for low prices, local brands on Singles’ Day

What: Luxury hotel chain Taj is under siege.

Why it is important: No market and no industry is safe from these risks.

Taj hotel, an Indian luxury hotel chain, has suffered a cyber attack leading to the leaking of 15M people’s data including addresses, membership ID, mobile numbers and other personal information.

Taj Hotels sees data breach

What: Saks Fifth Avenue plans to lay off 90 employees and shut down its fulfillment center in Wilkes-Barre, Pennsylvania next year.

Why it is important: The closure of the fulfillment center will not impact the operations of Saks Fifth Avenue and Saks Off 5th stores.

According to a Worker Adjustment and Retraining Notification (WARN) Act notice, the job cuts will begin on January 6 and continue with a second round on March 26. Saks will transfer the center's workload to other locations within its fulfillment network, as the Wilkes-Barre facility has become redundant. Employees were notified about the impending layoffs in September.

Saks to lay off 90 employees at Pennsylvania fulfillment center

What: Galeria Karstadt Kaufhuf has reached an agreement with the United Services Union (Verdi) to secure a special payment for about 12,000 employees before Christmas.

Why it is important: The Verdi labour union has made significant progress in their lengthy negotiations with Galeria management.

The terms of the agreement includes a EUR 500 bonus in November, comprising a EUR 400 inflation compensation and a EUR 100  goods voucher. Part-time employees will receive these bonuses proportionally. Additionally, 50% of 2023's time credits will be converted into a one-off payment, with the rest turning into extra vacation days.

Further negotiations on wages and collective bargaining are set to continue in January 2024.

Galeria and Verdi reach special agreement before Christmas

What: WWD takes stock of the WDSS in Dubai that the IADS attended early  October.

Why it is important: The WDSS is a yearly meeting point for department store leaders and a must-do for anyone interested in department stores

At the World Department Store Summit, it was evident that post-COVID-19 consumer behavior has undergone a permanent shift, with higher expectations for speed, convenience, and flexible payment and delivery options. Retail and brand executives are adapting to this new landscape, emphasizing the need to understand and cater to these evolving demands.

Holger Blecker of German department store Breuninger highlighted the rapid change in customer behavior, which has accelerated since the pandemic. Similarly, Dimas Gimeno of El Corte Ingles, now leading Wow Concept, is focusing on merging digital with physical retail experiences.

The summit revealed a trend towards more online engagement, with Khalid Al Tayer of Al Tayer Insignia noting a significant shift to e-commerce in the Middle East. His company's luxury e-commerce platform, Ounass, has become a dominant force in the region by focusing on luxury convenience.

Technology and data analytics are key components in understanding and enhancing customer relationships. Brands like Zegna are investing in data science and AI to create personalized experiences for clients, aiming for a "share of life" rather than just "share of wallet."

Physical stores are still seen as valuable, with new approaches like exclusive 'secret stores' and experiential offerings. Pete Nordstrom of Nordstrom highlighted the value of leveraging website data for brand partnerships and advertising, creating a symbiotic relationship between brands and department stores.

In summary, the retail landscape is rapidly evolving with a greater emphasis on digital integration, personalized customer experiences, and leveraging technology to stay connected and relevant to consumers' changing lifestyles and preferences.

Retailers invest in innovative ways to drive customer loyalty

What: This Black Friday should expose US customers’ fatigue with inflation, as the hunt for bargains has increased

Why it is important: The US market is not specific when it comes to price issues, and it might mean that all retailers across the planet are facing the same dilemma: more promotions and price decreases, less margins.

Amid inflation and economic strain, American consumers, fatigued by higher prices, are expected to turn out in record numbers for the US holiday season, particularly during Black Friday. The National Retail Federation predicts a significant increase in shoppers, with average spending also expected to rise. However, this season's spending is only anticipated to match inflation rates, reflecting consumers' cautious approach.

Retailers are responding to this shift by offering more substantial discounts, especially in categories like apparel and electronics. Despite easing inflation, the pandemic's savings buffer is dwindling for many households, influencing purchasing decisions. Large retailers like Home Depot, Lowe’s, Kohl’s, and Best Buy have reported a drop in spending on non-essential items and large projects, indicating a more cautious consumer attitude.

Walmart, the nation's largest retailer, foresees a potential period of deflation, and nearly 80% of consumers are considering trading down for cheaper alternatives or forgoing purchases altogether. This year has also seen a rise in the use of flexible payment options like buy now, pay later, especially among younger shoppers.

Retailers are focusing more on affordable private label brands to cater to the price-sensitive market. Consumers are adapting by becoming more selective and value-conscious in their shopping, seeking substantial discounts and prioritizing necessary items over luxury goods. The mood in shopping centers reflects this cautious approach, with many adjusting their holiday budgets due to increased everyday expenses.

Inflation puts US Black Friday crowds in a bargain-hunting mood

What: Fitch Ratings has downgraded Falabella S.A.'s Long-Term Foreign and Local Currency Issuer Default Ratings (IDRs) to 'BB+' from 'BBB-', with a negative outlook.

Why it is important: The downgrade of Falabella's credit ratings reflects the company's current debt position and financial health.

The downgrade reflects Falabella's sustained deterioration in credit profile due to high leverage and operational challenges. Fitch believes there is a high execution risk in Falabella's announced deleveraging plan, which includes real estate asset monetisation. The company's leverage is expected to remain above 6x in 2024, reaching low 5x in 2025, indicating a more consistent 'BB' rating category.

Falabella's operational metrics are likely to remain constrained by slow retail sector recovery and changing consumer behaviour. Sodimac S.A.'s ratings have also been downgraded, reflecting its strong linkage with Falabella.

Falabella’s IDR gets downgraded to BB+ by Fitch 

What: KaDeWe successfully defended against a cyber attack from the Russian hacker collective, Play.

Why it is important: The recent cyber attack KaDeWe highlights the importance of robust cybersecurity measures and the need for constant vigilance against potential threats.

The attack occurred on November 2, prompting KaDeWe to implement emergency measures and take certain operations offline. However, the store reassured customers that credit card payment systems remained secure.

KaDeWe is currently working with German cybercrime authorities to assess the extent of the attack and determine if customer information systems were breached. The department store group already had security measures in place, which helped contain the attack. Investigations are ongoing to determine if any data was stolen.

The attack comes at a time when KaDeWe Group is facing challenges, including the decline in real estate values and the potential collapse of Austrian property developer Signa, which owns a minority stake in KaDeWe.

KaDeWe attacked by Russian hackers

What: Nordstrom Inc. reported a net earnings of USD 67 million for Q3, a significant improvement from a net loss of USD 20 million in Q3 2022.

Why it is important: The profiitable Q3 report provides insights into Nordstrom’s strategies, challenges, and priorities for improvement in the retail industry.

This was attributed to improved execution and a positive impact from the timing of their Anniversary Sale. Net sales decreased by 6.8% and GMV decreased by 7.1%, with a negative impact from the wind-down of Canadian operations.

Nordstrom's priorities include improving Rack, increasing inventory productivity, and optimizing the supply chain. They see opportunities for growth in their Rack stores and plan to enhance the assortment of great brands at great prices. The company aims to curate the offer using data capabilities and deliver a strong holiday season with a relevant assortment of brands and products. Nordstrom's women's business is a focus area for improvement, with investments in their own label program.

Nordstrom Inc. goes into black for Q3

What: Falabella has reported progress in reducing its losses during the third quarter of 2023.

Why it is important: Falabella has made efforts to improve its savings, reducing its inventories by 23% and achieving efficiencies of USD 60 million in the third quarter.

Despite a challenging consumer environment, the company has managed to decrease its losses from USD 19 million in the same period of 2022 to just USD 5 million in 2023. Revenues reached USD 3,001 million which is a 10% decline compared to Q2 of 2022. Gross profit also fell by 6% to USD 994 million. The decrease in income is due to declines in the "Home Improvement" and "Department Stores" divisions in Chile and retail businesses in Peru.

The company also plans to raise between USD 800 and USD 1 billion by monetizing non-core assets, mainly real estate.

Falabella releases its Q3 financial report 

What: A US asset management company foresees that Hong Kong will recover in the next 5 years.

Why it is important: Hong Kong has many strategic assets as a shopping destination which explains why there is still a lot of room for clever retailers there.

Hong Kong's prime retail rents are expected to grow by at least 3% annually over the next five years, the second-highest increase in the Asia-Pacific region, according to a PGIM Real Estate report. This growth, led only by Tokyo's projected 4% increase, is anticipated due to a rebound in tourism and steady economic growth in Hong Kong. In the first nine months of the year, retail sales in Hong Kong surged by 18.6%, and tourist arrivals skyrocketed, with a significant portion coming from mainland China and a growing number from Southeast Asia.

Despite this growth, the recovery in tourist spending lags behind arrivals, with spending in the first half of the year only at 55% and 18% of 2018 levels for overnight and same-day visitors, respectively. This lag contributes to Hong Kong's main shopping districts falling in global retail rent rankings. Tsim Sha Tsui remains the most expensive retail destination in Asia-Pacific but has dropped to third globally.

The report suggests that the recovery in mainland China's economy will positively impact Hong Kong's retail sector. However, risks such as a potential slowdown in China's economy and geopolitical tensions could impede the sector's growth. The strength of the US dollar, to which the Hong Kong dollar is pegged, also affects tourist spending patterns.

Hong Kong retail rents to see one of the highest increases in Asia over next five years

What: Marks and Spencer has announced its plan to pay a dividend for the first time since the start of the pandemic.

Why it is important: Marks and Spencer's decision to pay its first post-pandemic dividend reflects the company's strong financial performance and confidence in the market.

The company reported pre-tax profits of GBP 326mn in the first half of the year, a 56.2% increase from the same period last year. The surge in profits was driven by a nearly 15% rise in food sales, reaching GBP 3.8bn. The company declared an interim dividend of 1p per share, signalling its confidence in its financial position and market performance. Following the announcement, the retailer's shares surged by 9%.

Marks and Spencer attributes its success to several factors, including favourable market conditions and resilient consumer demand. The company also benefited from the exit of competitors from the market, further strengthening its position. However, despite these positive developments, the company remains cautious about potential challenges in the future. It anticipates issues such as higher interest rates, deflation, geopolitical events, and erratic weather, which may impact its operations.

Marks and Spencer to pay first post-pandemic dividend

What: The latest Q3 figures from Stockmann, the owner of the Lindex womenswear brand, show that Lindex continues to perform strongly.

Why it is important: The strong performance of Lindex and the repositioning efforts of the Stockmann division is important as the company made considerable investments in improving digitalisation, profitability, and customer experience.

Despite a 7% decline in group revenue to EUR 226.9 million and a 1.7% fall in local currencies, Lindex managed to grow its revenue by 4.9% in local currencies. However, reported revenue for Lindex fell to EUR 162.3 million from EUR 166.9 million. In contrast, Stockmann's division saw a worse performance, with revenue falling to EUR 64.7 million from EUR 77.1 million, largely due to the timing of its promotional campaign.

The group's overall gross margin improved to 58.5% from 56.8%, but its adjusted operating profit decreased to EUR 20.6 million from EUR 22 million. Meanwhile, Lindex's adjusted operating profit increased to EUR 26.2 million from EUR 22.5 million. Stockmann expects its revenue to be in the range of EUR 940 million- EUR 1 billion for the year, with an adjusted operating profit of EUR 65 million-EUR 85 million, subject to currency fluctuations.

The company plans to focus on improving profitability and growing Lindex, while repositioning the Stockmann division towards luxury and affordable luxury. Both divisions are also investing in digitalization to enhance customer experience and cost efficiency.

Lindex continues to outperform Stockmann in latest quarter 

What: A review of how Black Friday became a worldwide phenomenon.

Why it is important: The promotional campaign is strategically located in the calendar in terms of timing for retailers, both offline and online

Thanksgiving, a uniquely American holiday, has its post-celebration shopping spree, Black Friday, now recognized globally as a major retail event. Initially confined to the US, Black Friday has spread worldwide, reaching Canada in 2008, the UK in 2010, and Australia and New Zealand by 2013. It has even gained traction in culturally protective France and is popular in countries like Germany and Brazil.

This global adoption can be attributed to two main factors: globalization, particularly with the rise of social media, making consumers globally aware of trends and events, and its convenient timing for retailers, intentionally placed to boost holiday sales. The concept has been adapted locally in places like Mexico with "El Buen Fin" and the Middle East with "White Friday."

The phenomenon of Black Friday has expanded beyond a single day to a month-long "sale-a-bration," starting with pre-sales in late October and extending to Cyber Monday and beyond. This evolution helps retailers by pulling sales forward and easing last-minute delivery pressures for online shopping.

Black Friday isn't the only event to cross borders. China's "Singles' Day," initially an anti-Valentine's celebration, has become the world's largest retail event under Alibaba's influence. Meanwhile, Halloween, another American tradition, is rapidly becoming a global commercial holiday, with significant spending increases in countries like the UK and Australia.

‘Le Black Friday’: How an American tradition spread around the world