Industry Sep 6, 2020 6 min read

The current retail industry landscape

From Nike's foray into the maternity market to Target's stellar Q2 sales and Nordstom's Anniversary sale we unpack what's been shaping the industry.

retail landscape

How has the retail landscape evolved over the past six weeks? Here’s the lowdown on what’s defining the industry and shaping the market.

We highlight how retailers are growing or slowing, digital and brick & mortar strategies, product or category line expansions and industry happenings.

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Target’s bumper quarter

Despite the pandemic wreaking havoc on retail, Target shared exceptional results for the quarter ending Aug 1st. Sales online and at stores opened for at least a year saw a record 24.3% increase and double-digit growth within apparel.

Breaking down category performance YoY reveal tops to be the star category. Leveraging off the success of dressing for Zoom and making up 10% more of the sellout assortment than in 2019. Sleepwear also saw an uptick, equaling 5.5% of sell outs vs. 4.6% last year, while footwear fell from nearly 10% to less than 5% of the total.

retail landscape

Overall, the average selling price was 30 cents higher than in 2019. Except for swimwear and all-in-ones, the top product categories sold through at a higher average selling price.

retail landscape

Nordstrom’s Anniversary sale

Nordstrom’s Anniversary sale wrapped up on Aug 30th with the department store boasting heavier markdowns than last year’s sale and Black Friday 2019 reductions.

On average, 27% of products were advertised as discounted each day with an average reduction rate of 42%. That’s more aggressive than last year when the sale started earlier and ran for longer. From Jul 19th to Aug 4th, 18% of products were advertised as discounted with an average reduction of 37%.

In comparison to Black Friday 2019, a higher proportion of products were reduced (30%), yet discounts weren’t as steep, averaging at 38%.

retail landscape
Nordstrom Email US – Aug 29, 2020

Tech round up

  • Black-owned businesses are now more discoverable on Facebook in the US through the Businesses Nearby function. The aim is to make it easier for users to discover and support Black or minority-owned businesses.
  • As online shopping continues to surge amid the pandemic, Japan has reported credit card numbers are running out with companies considering adding a 17th digit.
  • E-tailer Hypeach has launched a platform to offer a shopping experience to empower women and social causes. A portion of every purchase on the site supports GlobalGirl Media, a non-profit supporting young underrepresented women with equipment and training for a digital journalism career.
  • Intermix launched a virtual styling program to connect shoppers with online in real-time.
  • Pinterest is currently testing new shopping features including ratings, “Popular” and “Best-seller” labels on Product Pins to help users discover trending items based on what others are buying.
  • eBay cites its increase in sales from modernizing its platform and introducing personalization and features such as Dark Mode, local pick-up, video integrations and Best Match, which shows the most relevant listings.
  • From August, Montblanc announced Yoox Net-a-Porter would operate its e-commerce platform, enhancing its site to offer a seamless shopping experience connecting the new site with its physical locations.
retail landscape

Industry happenings

Market expansions and shifts

  • Nike has announced its venture into maternitywear with the Sept 17th launch of its four-piece collection Nike M, designed to help pregnant women feel comfortable participating in sports. The timing for this venture is ideal as the number of maternity activewear styles available online in the US has increased by 58% compared to five years ago. Despite this, it is still a relatively untapped market. Maternity products only make up 0.5% of the total activewear market available in the US over the past three months.
  • In more Nike news, the footwear giant will cut ties with nine multi-branded wholesalers, including Zappos and Dillard’s, to double down on its own store and digital strategies.
  • Australia’s answer to Sephora, Mecca made its debut in the Chinese market, launching a Tmall partnership with an initial offering of 22 brands – one third being local.
  • A new e-tail site called APOC Store has been launched, rethinking the wholesale model and giving independent designers a platform to sell their product on their own terms. APOC Store operates with no order minimums or delivery windows, giving the power back to designers to sell, promote and display their range as they see fit.
  • John Lewis & Partners has added more than 30 new third-party brands, including The Fold, Sosandar, les girls les boys and Ganni footwear, to its online and in-store portfolio for FW21.
  • Amazon is moving ahead with its luxury platform, adding the first international designers in September to coincide with Fall 2021 shows. Sources report the brands will have control of their discounting and pricing, and access to Amazon’s speedy delivery and customer service.
retail landscape
Instagram @apocstore

Performance & people moves

  • Walmart reported stellar Q2 results, citing the government stimulus package aiding a 97% increase in e-commerce sales driven by food and general merchandise.
  • LVMH has named Corey Smith their new vice president of diversity and inclusion.
  • Shares at boohoo Group Plc have dropped as much as 17% after suspending businesses with suppliers that may be using factories paying less than minimum wage to workers.
  • J.Crew won approval for its reorganization plan that would convert some $1.6 billion in debt into equity with the company formally exiting bankruptcy proceedings in early September.
  • PVH Corp reported a 33% sales drop for Q2 and expects a 25% decline in the second half of the fiscal year. Revenue through its own digital channels grew 87%.
  • Foot Locker beat Q2 earnings estimates, reporting revenue of 2.08 billion dollars, up 17% on last year.
  • Guess Inc. announced total net revenue for Q2 declined by nearly 42%.
  • Dick’s Sporting Goods Inc reported “highest-ever quarterly sales and earnings” with revenues up 20.1% to $2.71 billion. E-commerce sales were up 194% while same-store sales rose 20.7% even with 15% of locations temporarily closed.
  • After more than two decades at the company, Jeff Wilke, Worldwide Consumer Chief Executive at Amazon announced plans to retire.
  • The CFDA appointed CaSandra Diggs as the first woman and the Black president of the organization since it was founded in 1962.
  • UK brand Long Tall Sally, set to cease trade in August, has been bought out by AK Retail Holdings, which owns Yours Clothing. It will start developing the brand from September with a focus on the North American market.
retial landscape
Dick’s Sporting Goods Email US – Aug 30, 2020

Brick & mortar update

  • Throughout September, Galeries Lafayette’s Champs-Élysées department store is hosting sneaker resale platform Wethenew, stocking limited editions and rare styles from Air Jordan and Yeezy.
  • The UK reports the highest store vacancies since 2014 on the high street with two-thirds in London.
  • On Aug 28th, streetwear label Kith closed all flagship stores, transforming them into voter registration hubs, enlisting sales staff to facilitate the process.
  • Tommy Hilfiger Kids has opened a new London store in the O2’s ICON Outlet.
  • Rixo is opening its second store this September in London, UK – it’s not confirmed if this will be a permanent or pop-up space.
  • Belstaff returned to the US after closing stores in early 2019 with the opening of a space in the Meatpacking District, including a customization service as well as offering restorations and repairs.
  • Primark opened its first Poland location is Warsaw’s Galeria Młociny shopping center.
  • Marks & Spencer is trialing an in-store contactless collection at Hempstead Valley, Camberley and Longbridge, and a drive-up collection at Camberley as part of its Never the Same Again program.
retail landscape

Sustainability update

  • Tommy Hilfiger has announced its Make It Possible strategy with the goal of becoming fully circular by 2030. To achieve this, there are 24 targets across four pillars. These include “Circle Around,” which aims to create fully sustainable products, “Everyone Welcome,” which is to become fully accessible to all people, “Made for Life,” to operate with care in areas of production affected by climate change and “Opportunity for All,” to create an opportunity for all Tommy Hilfiger employees.
  • The rental market is dealt a blow as Rent the Runway permanently closed all of its stores, which temporarily shuttered in March due to the pandemic. It will still operate drop-off and pick-up locations in select cities.
  • In other rental news, Selfridges has partnered with HURR Collective on a designer rental collection, aligning with the department store’s Project Earth initiative.
  • The price of single-use plastic bags in England is set to double to 10p across all shops next year with small retailers no longer exempt from the fee.
  • Stella McCartney ventured into the genderless apparel market with the launch of Stella McCartney Shared – a streetwear-inspired capsule collection inspired by diversity, individuality and “positivity in the face of climate change.”
  • Oxfam has launched its Second Hand September campaign encouraging people to pledge to only shop second hand for 30 days or more. The initiative helps give clothes a longer life by keeping them from landfill and allows Oxfam to support those in poverty.
  • In mid-August Allbirds launched in Korea making the sustainable footwear brand now available in 35 countries.
retail landscape
Instagram @oxfamgb

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