What Barney's bankruptcy means for luxury retail. Barney’s department store has been synonymous with luxury brands since it was founded nearly a century ago, but last week the US retailer announced it is in the midst of a potential bankruptcy filing. The cost of renting retail space in prime locations (in this case New York City’s Madison Avenue) is a contributing factor to the American retail conglomerate’s downfall, which has struggled to keep up with changing consumer shopping trends in the luxury goods market. But although Barney’s is the most recent victim to the retail downturn, it’s not the first. Earlier this year, Sears, another well-known department store giant, announced the closure of over a third of its 700 US stores following a file for bankruptcy.
So what does this mean for the broader luxury goods market, especially for the Australian market? With the cost of rent rising exponentially, retailers are under pressure to prove the worth of their physical stores and make them work harder. Brand experiences at your fingertips. "No lazy retailing" drives record half-year profit for Accent Group. The relationship between online and physical retail? It's complicated. Officeworks. Capital - Making a six-figure sum in a single weekend. China’s booming middle class is an enormously lucrative market for any Western brand – but it can be really tough to break in to the market.
Fashion entrepreneur Sandy Friesen has found a unique solution. Normally, it would take her weeks to sell 100 bags in the US – but by live-streaming her products to 20,000 people at once, she can drum up that kind of demand in a matter of minutes. She uses a service provided by Chinese-American company And Luxe, which connects companies in the US to Chinese consumers through Taobao Global, an online shopping platform. Repeat Buyers Favor Marketplaces Over Retailers. According to a 2018 Salesforce survey, merchants have reason to be concerned. Online buyers are starting their hunt for products on marketplaces with increased frequency. In 2018, 28% started their searches on platforms like eBay or Amazon, up from 22% in 2017. When internet users worldwide were asked where they would go to buy an item the first time, half said a retailer while 31% cited a marketplace. But when going to buy the same item a second time, the channels were reversed: 47% said they would purchase on a marketplace and retailers received 34% of subsequent buys.
Brands had lower levels in both scenarios. Marketplaces won first and foremost on price (56%). Price was also the leading factor for shopping on a marketplace instead of a retailer or brand in an April 2018 UPS and comScore study of five regions and countries. What can retailers offer that marketplaces don't? How APAC’s Biggest Retailers Have Responded To Disruption. Digital disruption is a retail reality in Asia Pacific. Indeed, the physical marketplace as we know it is changing, and this couldn’t be truer for its matriarch: the department store. “Department stores in their current form have had their day,” explained Deakin University retail academic Steve Ogden.
“The kudos attached to the department store shopping experience for consumers has slipped.” This “slip” ultimately reflects a change in consumer behaviour, caused largely by advances in technology, according to Adobe Digital Insights. How can retailers address—and evolve with—this tech-driven customer journey? Online Leads To Offline British retailer Debenhams provides an example of how early technology adoption leads to an expansion as a bricks-and-mortar outfit. After developing a global e-commerce offering based on its U.K. “The store opening is an evolution of our success in the Australian market,” according to Graham Dean, managing director of Debenhams Australia.
Unveils Industry-First Innovations for Retailers in Adobe Experience Cloud. Nordstrom Innovation Lab: Sunglass iPad App Case Study. Airtasker partners with Coles on personalised grocery service. Airtasker has teamed up with Coles in a bid to help time-poor consumers tap into personalised grocery shopping and delivery services. The 12-month ‘Airtasker Shop and Deliver’ service is based around the new Coles@Airtasker website, and allows consumers to specify delivery times, customise shopping lists and substitute missing items through real-time preferences.
This is achieved via one-to-one communications between the shopper and Airtasker’s team. Users post a task, specify their Coles grocery items, preferred delivery location and time and set a budget. Once they receive and select an offer from an Airtasker, that individual does the shopping for them. The site is being supported by a team of Airtasker contractors who must earn a ‘Coles Badge’ to participate. The trial commences this week across 64 Coles stores in the Sydney region. Airtasker co-founder and CEO, Tim King, said the ambition was to help consumers to spend more time on other tasks. Diageo DC enables 'one-touch' supply chain strategy. Coles MD confident of second-half lift. Lidl tops Waitrose to become UK's seventh biggest grocer. Image copyright AFP Lidl has beaten Waitrose to become the UK's seventh largest supermarket chain, according to latest grocery market share figures. The German discount food retailer has increased its market share to 5.2%, up by 0.7% year-on-year, Kantar Worldpanel reports.
Families are driving its sales as they tend to buy more items in one supermarket visit, Kantar said. With 5.1% market share, Waitrose has been pushed into eighth place. "Ten million households visited [Lidl's] expanding network of stores during the past 12 weeks, with alcohol and fresh produce performing particularly well as the retailer increased sales by 18.9% overall," said Fraser McKevitt, head of retailer and consumer insight at Kantar Worldpanel. "Lidl is growing sales 40% faster with families than with households without children. " The biggest supermarket chains in the UK, by market share are:
Deep Dive: The Future Customer Experience—AI and IoT in Retail - Coresight Research. Executive Summary Many retailers are struggling to devise the perfect cross-channel experience for their customers—one that takes advantage of digitalization to provide targeted, just-in-time product or service information in an effective and seamless way. The key internal capabilities needed to ensure a successful digital shopping experience are personalization, automation and the unique identification of the customer across shopping channels. In this report, we discuss how AI and IoT are impacting the retail industry. We explore how these technologies are changing the way retailers operate and provide examples of how major industry players are using AI and IoT to increase operational efficiency and unlock new revenue opportunities. Retailers that aim to remain competitive cannot afford to ignore the potential benefits of these technologies.
AI in Retail: Offering Data-Driven Personalization and Customer Service IoT in Retail: Digitalizing Brick-and-Mortar Stores Introduction to AI. Retail Reworked, Part 1: Quantifying the Heightened Competition for Retail Dollars - Coresight Research. Introduction: Digitally Enabled Spending Is Stealing Share from Retail In our three-part Retail Reworked series, we look at changes in spending trends, consumer demand and channel adoption. In this first report in the series, we quantify some of the competing segments that are pulling spending away from traditional retailers.
We note that digital connectivity has impacted retailing in many more ways than just through conventional e-commerce. It is not simply a matter of Amazon versus brick-and-mortar stores: connectivity has enabled new business models such as platforms where consumers can rent or resell products and specialized firms that dispatch products to shoppers’ doorsteps on a subscription basis. In this report, we focus on four challenges to retail spending: Our report includes proprietary FGRT estimates of US spending on segments such as meal kits, beauty and personal care subscription services, and online fashion resale. 1. 2. 3. 4.
Key Takeaways. Retail Reworked, Part 2: Shifting Consumer Demands and Behaviors - Coresight Research. Executive Summary: Pick-and-Mix Shopping This is the second report in our Retail Reworked series. Here, we discuss three prominent trends in shopper behavior and consider the drivers behind them: “I want convenience and immediacy.” Today’s shoppers commonly expect retailers to deliver greater convenience and immediacy than in the past, such as through ultrafast delivery of online purchases. “I am willing to sacrifice convenience for savings.” Shoppers have flocked to stores that seemingly offer the antithesis of convenience, such as off-price stores, grocery discount stores, warehouse clubs and dollar stores. These types of stores typically offer no, or very limited, e-commerce options and their in-store environments and services are usually more basic than those offered by other types of retailers.
We summarize these trends, their drivers and their likely beneficiaries in the table below. Introduction: Consumer Behavior Is the Push Factor Reworking Retail “I want convenience and immediacy.” What Retail Apocalypse? Reviewing Trends in US Brick-and-Mortar Retail - Coresight Research. Executive Summary The “retail apocalypse” narrative in the US has been driven by closures of apparel specialty stores and apparel-focused department stores. These closures have heavily impacted regional malls, which tend to skew toward apparel and, so, have been where many closures have been concentrated. But to see the fuller picture of brick-and-mortar performance, we must look beyond apparel and regional malls, as it reveals that the retail landscape is more resilient than recent coverage has suggested. In terms of occupancy rates, open-air shopping centers and superregional malls far outperformed regional malls in the US in 2017.
Many of the retailers that are actively opening stores—from Aldi to T.J.Maxx—are opening in off-mall locations such as strip malls. Below, we summarize key metrics that reflect the diversity of US brick-and-mortar performance. Introduction Readers may also be interested in our Mall Is Not Dead reports. The Bad News The Good News Key Takeaways 3Q17David E. Home - Coresight Research. Get to grips with grocery retail. DEEP DIVE: Online grocery series: The UK – a battle for profitability - Coresight Research.
The UK is the most developed online grocery market in the world. Brits spent £9.8 billion buying groceries online in 2015, an increase of 13% year over year, according to research firm Mintel. However, even in this comparatively well-developed market, online sales represented only 6% of total grocery sales of £163 billion. As at June 2016, some 6.9% of all sales of fast-moving consumer goods (FMCGs) were online, according to Kantar Worldpanel. Mintel expects UK online grocery sales to grow at a five-year compound annual growth rate (CAGR) of 9% and reach £15 billion by 2020.
We think the disparity between the substantial numbers of people shopping online and e-grocery’s still-minor share of total grocery sales suggests opportunities for sustained and substantial gains in share: with a large number of Brits now buying groceries online, the market can be grown by increasing their frequency of purchase. The arrival of AmazonFresh in the UK in June 2016 has only intensified the competition. Ocado Is Building A Robot Army To Shop For Your Groceries. Neiman Marcus Turns to Technology to Solve Home-Delivery ‘Exceptions’
Neiman Marcus Group Ltd. is trying to remove the pain from growing online sales that trigger big, bulky items and high financial stakes for the retailer. More shoppers are turning to online retailers for customized couches, new shelving or large appliances—items that can’t simply be dropped at the door by a mail or parcel carrier. For Neiman, whose stores specialize in high-end home goods and designer furniture along with its other luxury brands, getting the goods to homes in a way that reflects the retailer’s high-end branding presents “continual challenges,” said Willis Weirich, the group’s senior vice president of supply chain and operations. Of the thousands of “white glove” deliveries happening each month for Neiman Marcus and other retailers, at least one in 10 faces a delivery problem, such as an incorrect address or phone number, or a scheduling conflict with the carrier. Mr. Write to Erica E.
Phillips at firstname.lastname@example.org. How Nike Is Reinventing the Great Sneaker Scavenger Hunt. Why Mastercard Hasn’t Been ‘Disrupted’ Mastercard has had an incredible run this year, along with other tech-focused companies in the financial services industry including Visa and PayPal. The company’s earnings report on Tuesday blew away Wall Street expectations, with revenue jumping 18%.
The stock was slightly down on Tuesday, probably because it’s already risen 44% this year. It’s a remarkable achievement given that Mastercard operates in two industries that have had an uneasy few years -- finance and “old” tech. Financial companies like big banks have been slowed by new regulations. And many tech companies that -- like Mastercard -- came of age decades ago have often been disrupted by newer tech companies.
IBM and Oracle are still powerful operators, but they’re nowhere near what they once were. But Mastercard has mostly avoided new regulations since the financial crisis, aside from the impact of an amendment to cap fees on debit card transactions. Nordstrom Tries On a New Look: Stores Without Merchandise - WSJ. It's not the End of Retail, It’s the End of Retail As We Know It. Retail, like every industry, faces digital Darwinism as technology and markets evolve and disrupt. This isn’t new. But what is clear, executives are not prioritizing bold strategies and investments that save them from their “Kodak Moment,” that moment when consumer behaviors and values evolve beyond brand recognition.
If you read about the state of retail today, you’ll see dramatic descriptors such as “apocalypse,” “the end…,” “dying,” you get the picture. While doom and gloom and disruption is inherent in every industry, not everything is lost or hopeless. Those who recognize the gap between today’s value proposition and the evolution of what consumers value and why, will learn exactly how to not only close it but also ways to innovate and introduce new value. I recently spent time with Hal Conick of the AMA (American Marketing Association) to explore the state and future of retail. I hope it helps you… The Mobile Revolution The Experience when Business meets Design About Brian.
Parts Suppliers Take a Hit From the Amazon Effect - WSJ. Sears vs. Amazon: A Tale of Two Retailers. Nike Thought It Didn’t Need Amazon—Then the Ground Shifted - WSJ. Department Store Woes Show No Sign of Letting Up | eMarketer Retail. “Very few raise their hands,” said Cohen, a 32-year retail industry veteran and a former executive at retailers from former parent of Macy’s to Sears. “They look at me as if I’m nuts.” But it’s a different story when it comes to his question about their favorite store. “I’ve had students this past year talking about their favorite store being TJ Maxx or Marshalls or Nordstrom Rack or Amazon as opposed to Bloomingdale’s, Macy’s or Nordstrom,” Cohen, who is also the school’s Director of Retail Studies, said in an interview.
“The outlook is grim for the sector.” The story from Cohen about the exchange he’s had with his students, who are in the coveted millennial age range, is a telling sign of the deep troubles facing the department store sector. Macy’s early Thursday reported worse-than-expected fiscal first-quarter profit and sales drop. Department stores face structural changes that simply do not bode well for them.
Department stores are doing a variety of things to respond. Businessinsider.com. 5 lessons for companies that plan to survive Amazon's retail. The Changing Face of American Malls | eMarketer Retail. The Market Is Underestimating Amazon. Businessinsider. Businessinsider.com. The data lifeboat heading for Aussie retail. Amazon in Australia: Company distances itself from ‘destroy Australian retail’ comments. Scentre Group maintains guidance despite retail gloom.
Amazon in Australia: Shopping centres living in fear of online giant’s arrival. Online retail sales top $20 billion. NAB Online Retail Sales Index: Indepth report - December 2016 | Business Research and Insights. Digital uptake in Australian retail - still early days - Inside Retail. Lower dollar does little to stop surge in online sales. Australian retailers are losing the online race - The Drum. Retail Trends 2017: What is digital’s impact on the retail sector? - Digital Pulse. Amazon Is Coming To Australia In 2018 | Gizmodo Australia. AUSTRALIAN RETAIL SALES MISS | Business Insider. Amazon is coming to Australia with 'low prices, vast selection, and fast delivery' Amazon to launch in Australia, local retailers vow to fight multinational threat. The Business - 20/4/2017. Retail Sales Worldwide Will Top $22 Trillion This Year. Herringbone, Rhodes & Beckett join retail carnage. Shopkick | Grocery Infographic. The Changing Role of Retail Stores | eMarketer Retail.
As Sales Decline Again, Neiman Marcus Says It Is Exploring a Sale | eMarketer Retail. The Line Between Tech and Retail Blurs Even More | eMarketer Retail. Upping Its Tech Game, Neiman Marcus Learned a Lesson or Two | eMarketer Retail. Coca-Cola Targets Small Retailers With Coke on Demand App - CIO Journal. 3 In-store Digital Experiences Changing Fashion Retail | photospireblog. 10 brands using digital to create great in-store experiences. Best Buy Shares Jump as Online Sales Climb. eMarketer. Case Study: Facebook’s impact on Country Road in-store. Country Road's path to programmatic. Kellogg’s Cereal as Dining Event? Welcome to the Experience Economy. Amazon the Only Retailer Clicking in Sinking Sector. Nordstrom Innovation Lab: Sunglass iPad App Case Study. How Nordstrom uses Facebook, Pinterest, Twitter and Google+ Open Forum - How can we understand the digital transformation of business? - Nordstrom: Adapting Customer Service in a Digital World.
Case Study: How You Can Copy Nordstrom’s Secrets to Massive Retail Success. Nordstrom: A case study in connecting in-store and online experiences | Sensis. David Jones CEO out to revolutionise 'mundane' grocery shop. Surfstitch delivers maiden profit as sales soar 40pc. Long voyage ahead for weary Woolworths shareholders as chairman seeks captain of industry. Rebecca Minkoff debuts first interactive store. Sephora Turns Smartphones Into Local Store Magnets.