BRC: “Shoppers to lose out if UK does not adopt EU global trade deals”

The British Retail Consortium has released new evidence that highlights the importance to UK consumers of maintaining the benefits of trade deals that the EU has negotiated with other countries, especially when it comes to clothing.

As a member of the EU, the UK currently benefits from zero or low rate tariffs on various imports from bilateral trade deals that the EU has negotiated with third countries. From the day after the UK leaves the EU, on March 30, 2019, it will no longer be covered by these international agreements, so imported goods will be subject to higher tariffs and potential customs barriers. For consumers, this means higher prices.

Andrew Opie, director of food and sustainability at the British Retail Consortium, said: “While securing a deal with the EU to enable tariff-free trade to continue remains the priority, the deals the EU has negotiated with countries around the world also contribute to the choice and affordability of goods that UK shoppers purchase every day. People need reassurance from Government that these deals will be transferred in time to ensure that UK consumers don’t lose out.”

BRC: “Shoppers to lose out if UK does not adopt EU global trade deals”

British Retail Consortium highlights importance of bilateral trade deals to UK consumers

Using import data from UK retailers, the BRC said it has identified the countries where negotiating replica trade agreements will make the most difference to ensure prices do not rise immediately on exit.

These deals are particularly important for the price of clothing for UK consumers, and a “no deal” could mean the tariff on clothing from countries such as Turkey and Tunisia, both major suppliers to the UK, could rise from zero to 12 percent.

Opie added: “New or higher tariffs inevitably mean consumers would face higher prices in their everyday shop, as staple products such as fruit, vegetables, fish, and clothing would be hardest hit. Price increases of any scale would add to the burden of hard-pressed consumers whose finances are already being squeezed by inflationary pressures.

“Now that an agreement has been reached to move the negotiations on to trade, the focus must be on securing the continuity of free trade with Europe, alongside replicating these existing agreements with countries outside of the EU. These are the crucial next steps that Government needs to take to avoid a cliff-edge situation on Brexit day and to deliver a fair Brexit for consumers.”

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UK footfall continues to drop

UK footfall declined by 10.5 percent on New Year’s Eve, following drops in footfall on Boxing Day, down 4.5 percent, as well as a decline of 2.3 percent between December 27 and December 30, according to new figures from Springboard.

However, Springboard notes that footfall did recover on New Year’s Day, rising by 16.8 percent from last year, helped in part by the fact the day fell on a Monday this year.

Despite the year-on-year rise on New Year's Day, footfall dropped away markedly from December 30, where it fell by 14.4 percent between December 30 and New Year's Eve, and then by a further 9.7 percent between New Year's Eve and New Year's Day.

Diane Wehrle, insights director at Springboard, said: "The drop in footfall on New Year's Eve was unexpected, and particularly the magnitude of the decline. Last year footfall rose on New Year's Eve, but this was a response to a significant drop in 2015 which saw severe weather conditions. It was against this backdrop that it was anticipated that footfall would rise modestly.

“The mitigating factor may have been the wind and rain that was evident earlier in the day - from Storm Dylan - which could have led consumers to change plans, however, the weather had mainly cleared up by the early evening.”

Wehrle added: “Overall the Christmas and New Year trading period this year has been challenging for bricks and mortar stores, with noticeably lower footfall than last year. In part this is a reflection of caution amongst consumers, but is also a function of underlying structural shifts in consumers’ shopping habits due to online activity, and the fact that spending is spread across a wider range of products than ever before which is increasingly encompassing leisure experiences rather than purely physical goods.”

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UK consumers start Christmas shopping early in sales

Savvy British shoppers are looking to prepare for Christmas 2018 with the help of the January sales, according to a new report from the Halifax, with consumers expected to spend an average of 91.83 pounds taking advantage of the discounts.

The survey reveals that men will spend the most in post-Christmas sales at 106.73 pounds, while women will spend 77.63 pounds. When it comes to regional data, consumers in London are expected to spend the most at 172.76 pounds with shoppers in Northern Ireland expected to spend just 47 pounds.

More than one-third (36 percent) said that they will buy next year’s Christmas cards in this year’s sales, with a third (33 percent) looking to pick up discount wrapping paper and almost a third (32 percent) even picking up presents to put under the tree in 2018.

In addition, the report reveals that with the growth of Christmas jumper days in workplaces all over the country, one in seven (15 percent) will buy a Christmas jumper now for next year, with more than a quarter of 18-34s (28 percent) leading the way. 27 percent of those in the North East said they’d buy a Christmas jumper now for next year, but only 8 percent of Scots and 9 percent in the East Midlands said the same.

Britons are not only starting to shop for Christmas 2018 but also saving, with one in seven (15 percent) planning to start saving towards this year’s Christmas in January, rising to 20 percent in Wales. Amongst 18-34 year olds 68 percent said they will save or have already started to save for Christmas 2018, compared to 55 percent of 35- 54 year olds and only 34 percent of over 55s.

Jon Roberts, managing director of Halifax credit cards said: “Christmas can be an expensive time of year, so it’s encouraging that people are thinking longer-term and planning for 2018 already by saving and picking up cards, wrapping paper and even Christmas jumper bargains in the sales.”

The report also revealed that more than one in three Brits received at least one Christmas gift they didn’t like, but only 7 percent of Brits return or exchange them, preferring to store them (31 percent), gift them to a charity shop (28 percent) or re-gift them to someone else (23 percent).

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Forever 21 takes steps after payment card security risk

Forever 21, Inc. has discovered more information about the payment card security incident that happened a few months ago. After the mishap on November 14 in 2017, Forever 21 made various changes and took several measures on the matters.

Since 2015, the retail giant used an encryption technology for its payment processing system. The company received a report from a third party in mid-October this past year suggesting that there was some unauthorized activity in regards to payment cards, according to a press release. At the time, Forever 21 hired payment technology and security firms to help assist the situation.

Forever 21 investigates payment card security incident of 2017

The investigation of these situations found that the encryption technology on some point-of-sale (POS) devices were not always on. This meant that there were unauthorized network access and installation of malware on some of these devices that could search payment card data. The investigation found that the encryption was off and malware was installed on devices in certain U.S. stores from the time period of April 3 to November 18. Payment cards used on the brand's website were not affected.

In order to ensure that the payment card security matter doesn't happen again, Forever 21 has been working with its payment processors, POS device provider and third-party experts to address the operation of encryption in all of Forever 21's in-store devices. "We regret this incident occurred and any concern this may have caused," Forever 21 released in a statement. Currently, stores outside of the U.S. have a different payment system, and the fast-fashion company is still investigating these matters.

Photo Source: Forever 21

Asics opens first flagship stores in New York and Vienna

Japanese footwear maker Asics has opened two new brand stores - one on 579 Fifth Avenue in New York City, which is the brand's first flagship store in the US - and one on Mariahilfer Strasse in Vienna, Austria, the city's longest and most lively shopping street, which is the first Austrian brand store.

Both stores were designed to represent Asics' heritage and mantra of “Sound Mind, Sound Body”, which is reflected in the brand's name, which is an acronym for the Latin phrase ‘anima sana in corpore sano’, meaning “a sound mind in a sound body”, thus encouraging the pursuit of mental and physical health and well-being.

In addition, the new flagship stores serve as platforms for the brand to reach a wider variety of consumers. Also, for the first time in a brand-owned location in the US, Asics features two distinct brands, namely its atheletics brand Asics and lifestyle brand Asics Tiger.

Asics opens first flagship stores in New York and Vienna

“Asics is proud of its unique approach to the retail experience and our product development that focuses on maintaining a healthy lifestyle as a whole. By combining two of our uniquely different brands, we are offering consumers a wide range of quality performance and lifestyle shoes and apparel for an array of needs – directly addressing the shift in the way people are working out and moving today,” commented Gene McCarthy, president and CEO of the Asics America Corporation. “We are truly excited to see how consumers respond when we bring the essence of our brand and our heritage to the streets of New York City for our biggest presentation of the brand yet.”

First Asics flagship stores in New York and Vienna

The 2,035 square foot Fifth Avenue store, located in New York's shopping mecca, balances the highly technical aspects of the brand’s products - a sound body - with natural, warm finishes, features and materials - a sound mind - resulting in an “environment that immerses customers in a world where both the mind and body are stimulated”.

Asics opens first flagship stores in New York and Vienna

The new global retail concept that combines performance and lifestyle products, represents the pinnacle of a new global concept created by design agency Brinkworth and is reflected across point of sale areas globally. “Every design and material detail has been elevated and considered against Asics’ heritage and local context, bringing a distinct New York attitude to the space,” said Sam Derrick, director at Brinkworth.

The same is true for the Vienna store, where a motion ID running service point and a community space are among the highlights. The former provides individualised recommendations for the best running shoe for each customer and the latter offers free classes that range from yoga to HIIT training.

Among other store highlights are digital touchpoints that inform customers about products, weekly running analyses, mannequins made out of recycling materials and hangers made of 50 percent grass and 50 percent recycled materials.

Asics opens first flagship stores in New York and Vienna

Asics' new global campaign ‘I MOVE ME’ is brought to life via a sensory experience exhibited by sight, sound and motion. In-store elements include an infinity mirror, LED light columns and ‘I MOVE ME’ visuals that are strategically placed throughout the space and prominently displayed in the large floor-to-ceiling windows for maximum exposure both on the interior and exterior.

Photos: Asics flagship in NY (1); Asics flaship in Vienna (2-4), all courtesy of Asics

Retailers are expected to receive returns valuing 2.5 billion pounds from unwanted Christmas presents this month, with January 2, dubbed “takeback Tuesday” as consumers handle returns as they go back to work following the festive break.

According to a study commissioned by Royal Mail, three in four consumers who purchased women’s clothing will return an item, followed by footwear (38 percent) and electrical goods (37 percent).

When looking at the clothing category in more detail, Royal Mail states that dresses (37 percent) are the most commonly returned women’s item of clothing, followed by crop tops/t-shirts (22 percent) and trousers/jeans (20 percent). While for male shoppers trousers/jeans are the most returned item (28 percent), followed by shirts (23 percent) and coats/jackets (20 percent).

The main reason for returning clothes is because an item did not fit (42 percent), followed by wrong size (32 percent), not suitable (20 percent) or was not what was expected (20 percent), according to Royal Mail’s annual Delivery Matters report.

While logistics consultancy LCP, which came up with the 2.5 billion pounds returns figure, states that shoes have by far the highest return rate at 28 percent, followed by clothing (20 percent) and homewares (15 percent).

Royal Mail adds that shoppers also now have an expectation of ease and efficiency when it comes to online order returns, with 81 percent of consumers say they prefer returns labels to be included with purchases. While almost 90 percent would consider themselves likely to shop with a retailer again if re-sealable packaging was provided.

Speed and guidance is also key, with 96 percent adding that they believe it’s important to get notified of a refund upon their item being returned, while 75 percent consider it important to have guidance about which returns label to use and to get refunded quickly after a return.

Nick Landon, managing director of Royal Mail Parcels, said: “January is the busiest time of year for returns. Having an easy way to return online purchases is a crucial part of the online shopping experience. For retailers everywhere ensuring their returns experience is in line with consumers’ expectations is incredibly important.”

UK shoppers stayed away from bricks-and-mortar stores on Boxing Day, according to new figures from Springboard, with footfall falling 4.5 percent year-on-year.

While luxury department stores including Selfridges and Harrods experienced record numbers of shoppers for their Boxing Day sales, many other retailers experienced one of the most “challenging boxing days that bricks and mortar stores have seen” since Springboard first published Boxing Day activity in 2012 the company stated.

According to the retail intelligence company, Boxing Day footfall was down 5.9 percent on the high street, while shopping centres were down 3.5 percent and out of town location footfall fell by 2.1 percent.

Diane Wehrle, insights director, Springboard said: “This undoubtedly reflects the extent of discounting that has already occurred – particularly over Black Friday – and also the growth in online trade this year. In addition to this, Black Friday now rivals Boxing Day in terms of the volume of footfall generated and so its influence as a key trading day in the retail calendar has been diluted.

“The extent of discounting together with the fact that that stores still account for around 80 percent of total spend, and that activity in bricks and mortar stores declined, suggests that sales will be lower this year on what was traditionally the key shopping day of the year.”

Jace Tyrrell, chief executive officer of the New West End Company, which represents retailers around Bond Street, Oxford Street and Regent Street, stated that Chinese shoppers had helped to boost takings across London’s main shopping streets to 20 million pounds by midday on Boxing Day, with luxury purchases such as handbags and winter fashion in “high demand”.

Tyrell added: “Although footfall was down in single digits on last year we are still expecting solid sales with average spend increasing and over 50 million pounds to go through West End tills by the close of Boxing Day, driven by discounts of up to 70 percent.”

Personalisation: An antidote to the homogeny of fast-fashion?

With the ability to instantly adopt catwalk fashion and provide trend-led clothing for an affordable price, fast fashion retailers have been among the bigger value gainers in the last few years. The success of fast fashion has been near universal, thanks to efficient supply chains and economies of scale that have allowed fast fashion brands to market design-led offerings at very low price points. One of the most successful fast fashion brands over 2012-2017 in absolute value growth terms was H&M, which grew by USD 4.8 billion according to Euromonitor International provisional estimates as it expanded aggressively beyond its core market in Western Europe. However, as fast fashion becomes widely available, it is erasing identity and true personal style is becoming obsolete. Millennials are becoming disillusioned and eager to recapture their own personal style, seeking unique and individually tailored products that reflect their own values rather than following a homogeneous style. Brands in the fashion industry are already offering personalised products to consumers and are currently looking for ways to deliver personalised solutions quickly and on a larger scale.

adidas seeking speedier personalised solutions

Sportswear giant adidas was among the first players to bring customised products to the masses, through the likes of its mi adidas platform where customers can personalise shoes, choosing between various graphic prints, and add a personalised message. The challenge mi adidas is facing is that it takes a few weeks to deliver the product to consumers once manufactured. In a digital world where consumers are used to accessing products instantly this remains a main turn-off factor limiting the prospects of personalised fashion.

Thus, in an attempt to deliver speed to consumers and to be able to address their unique needs within days, adidas is placing factories closer to consumers, opening a brand new automated manufacturing plant in Ansbach, Germany in late-2015. In fact, Speedfactory is adidas’ attempt to develop the capacity to deliver customisable goods quickly, as automated technology is expected to transmute digital designs into customised footwear within hours, and deliver it directly to consumers in Europe within a few days.

The new era of 3D printing bringing mass production

adidas’ partnership with Silicon Valley start-up Carbon brings the mass production of personalised shoes even closer. The result of this partnership is Futurecraft 4D, a major adidas footwear innovation for 2017. Futurecraft 4D uses light and oxygen and is able to manufacture 3D-printed midsoles on a scale of 100,000 pairs by 2018. Although companies have demonstrated shoes with a 3D printed midsole, this is the first time a sportswear manufacturer will produce and sell 3D printed midsole shoes on such a large scale, since the new technology speeds up the manufacturing process and brings down print time. With footwear, the ultimate goal of adidas would be to replicate the ‘Knit for you’ pop-up shop that saw the real time creation of custom sweaters based on a body scan of each buyer. Such innovations and speedy customised solutions is a great strategy for adidas to catch up with its main rival Nike; with preliminary Euromonitor International estimates putting value sales at USD30 million in 2017, adidas still remained far below Nike which saw global sales of USD47 million in 2017. However, the preliminary data is also showing that adidas has begun outperforming Nike by delivering much higher growth of 16 percent, while Nike has reported growth of just 1 percent in 2017.

Customised footwear also has the potential to maintain robust online sales growth rates for retailers. Globally, 16 percent of footwear is sold online in 2017, making footwear one of the most digitally penetrated fashion categories. According to Euromonitor International’s 2017 Global Consumer Trends Survey, in 2017, 47 percent of respondents indicate that one of their main motivations to buy products in brick-and-mortar stores is because they prefer to see or try the product before buying. However, if brands were able to offer customisable footwear so that consumers would be confident that it is a perfect fit, then this would have the potential to significantly accelerate the growth of online shopping.

Artificial Intelligence making mainstream strides

As consumers are increasingly shopping online, retailers are looking for a way to enhance the consumer shopping experience. Thus, they are already using AI that is analysing data collected from the consumers’ searches and previous purchases to provide personalised recommendations of the products that consumers might need in future. In November 2017, Alibaba, which holds 72 percent of apparel and footwear internet retailing sales in China, used artificial intelligence to bring personalisation into brick-and-mortar stores during Singles’ Day, a Chinese shopping festival, by installing fashion assistants called StyleAI that acted like personal stylists. The technology could transform commerce by giving consumers an incentive to visit brick-and-mortar stores at a time when offline retail is declining in favour of online. Such a move is in line with the Chinese government’s plan to lead the world in AI by 2030, with China already being among the largest investors in AI technology.

Personalisation will remain a key trend within the fashion industry for years to come. However, brands really need to work hard to bring personalised products into the mainstream by reaching the scale, speed of production and delivery that fast fashion retailers provide. With adidas selling personalised sweaters through its “Knit for you” pop up store for USD215 however, brands still need to reduce the production costs to achieve true disruption.

Written by: Kseniia Galenytska, Senior Research Analyst at Euromonitor.

Image: H&M

Amazon records best holiday season ever

As online giant Amazon announced yesterday, the company “celebrated its biggest holiday” season this year, with more than four million people starting Prime free trials or beginning paid memberships, Amazon stated in a press release. However, no sales concrete sales figures were mentioned yet.

“Thank you to the millions of customers and hundreds of thousands of Amazon employees all around the world who made this holiday better than ever before. We look forward to another great year ahead,” commented Jeff Wilke, CEO Worldwide Consumer at Amazon.

The number 1 and number 2 top-selling products across all categories were Amazons Echo Dot and Fire TV Stick with Alexa voice remote, respectively. In the US, UK, Germany and Japan, Fire TV continues to be the number 1 streaming media player family across all retailers. Items shipped with Free One-Day Shipping or Free Same-Day Delivery or Ultra-Fast Delivery with Prime Now more than doubled this holiday season. With more than one billion items ordered worldwide, small businesses and entrepreneurs had a record-breaking season as well.

Amazon records best holiday season ever

“Since Day One we have obsessed over what we believe our customers care about – incredible deals and low prices, fast and free shipping, and a wide selection of top products – and we continue to provide all three, all the time,” explained Wilke. “We’re excited that people continued to join Prime this holiday, to take advantage of more fast and free shipping options new convenient delivery like Amazon Key, as well as early access to Lightning Deals and unlimited streaming of TV shows and movies, including Prime Originals and more.”

Across North America and Europe, Amazon associates at ten fulfillment centers picked, packed and shipped more than one million customer packages in a single day. The online retailer's peak day of customer fulfillment in 2017 was December 19.

In the fashion category, the best-selling items in the US this holiday season included the Asics Men's GEL Venture 5 running shoe, Levi's Men's 505 Regular Fit jeans, UGG Women's Classic Short II boot and the Alex and Ani Initial Expandable wire bangle bracelet. According to Amazon's holiday fun facts, customers purchased enough Calvin Klein products on Amazon.com during the holidays to give five items to every attendee at Coachella 2017.

According to Amazon, customers shopped from hundreds of millions of products, including a vast selection from small businesses and entrepreneurs; more than one billion items were ordered from them – and over just five days, from Thanksgiving through Cyber Monday, nearly 140 million items were ordered from small businesses and entrepreneurs.

Photos: Amazon website
Department stores embrace retail theatre to boost sales

Department stores are setting the stage for a new era of experience shopping. Often referred to as retail theatre, department stores have had a tough decade, struggling to grow in a changing retail environment fraught with increased competition from online players and a drop in consumer demand. Shoppers, as we know, no longer need to leave their front door to buy a daily pint of milk, let alone to purchase clothing garments.

Enhanced shopping experiences are therefore being embraced by retailers, to lure customers back to their stores, recognising that consumers today do not just visit them to buy things. A desire for an omnichannel experience is forcing a change in the retail world and physical stores are becoming immersive brand experiences.

According to Accenture's Global Shopping report, the wants and needs of retail consumers and the efforts retailers are making to meet those needs reveals a fluid landscape where the ability to adapt has become a must-have skill. As consumers turn up the volume regarding their customer experience demands, retailers face a unique set of hurdles that will require a fundamental shift in the customer/company relationship.

Social shopping, retail theatre, shoppertainment

"All the major department store chains are trying to give their stores a raison d’être in the internet age. Retail theatre was pioneered by famous London department stores such as Selfridges," wrote the Guardian earlier this year. Whether it is called social shopping, shoppertainment or retail theatre, retailers are looking for more innovative ways to create an exciting in-store shopping experience.

When Westgate Shopping Centre opened in Oxford in October this year shoppers were welcomed by a theatrical performance of Alice in Wonderland. Last year Selfridges debuted the Festival Of The Imagination event, inviting customers to experience Selfridges not only as a store, but also as a “portal into the creative mind.”

Anyone who has ever been to Dubai and visited the Mall of the Emirates will know the meaning of retail theatre. It boasts a giant 22,000-square-metre indoor ski piste right in the middle of the desert. It's computer, the Dubai Mall, has an on-site aquarium with over 140 species of aquatic life, and the world’s biggest collection of sand sharks in a captive environment. This is a testament to the power of shoppertainment in driving store foot traffic. On a smaller scale, London’s Stratford Centre held an Alice in Wonderland tea party that saw a 30 percent increase in store foot traffic, reports Shoppertainment Management.

2018 promises to be an innovative year for retail theatre. As brands and stores of all sizes embrace new ways of connecting with audiences and customers, shopping has become so much more than brick-and-mortar sales. Shopping has become a journey in search of experience. It is up to retailers to make it both unique and memorable.

Photo credit: Mall of the Emirates