We kick off this week with continued disheartening news for high street favourites. Debenhams’ journey into liquidation continues with the confirmation of locations for 52 store closures, leaving 45 remaining locations trading for another few weeks to fully clear stock. This, combined with Dixons Carphone permanently scrapping all airport outlets due to the removal of tax free shopping by the government, has painted a torrid picture for perennial high street favourites. Whilst supermarkets in general tended to fare amongst the brightest, they still suffered heavily with losses – evident through Sainsbury’s £261m loss due to costs relating to the restructuring of Argos and COVID expenses. The focus was clear however, prioritising the world of digital continued to be a point of success for both Sainsbury’s and its’ Argos brand, whilst offering a hybrid of fulfilment options in the supply chain is swiftly becoming the new normal for success – combining dark stores, click-and-collect, and e-commerce operations.
It has long been known that digitisation has been the key for success for the majority of retailers over the past two decades, with the pandemic accelerating aspects of these digital trends to a level previously unseen. It has acted as a catalyst in areas such as contactless commerce, 3D visualisation, subscription models, and digital consumer engagement. KFC for example, hot on the heels of fresh competition from the USA’s treasured Popeye’s brand entering the UK, seeks to utilise Peak AI to leverage data and provide guest centric menus. Grocers have sought to capitalise on both smaller, local stores in prediction of the ‘new normal’ of office workers, alongside some such as Waitrose forging key partnerships with the likes of Deliveroo to maximise convenience for consumers – creating 400 jobs in the process.
Fashion retail has been at the forefront of leading recovery efforts from the post-pandemic slump – with data from the ONS highlighting a 17.5% increase in sales that month, contributing to overall retail sales lifting 5.4% alongside Mulberry reporting upbeat financial results due to online success and growth in Asian markets. The fashion industry has pioneered innovation, both in technology and consumer engagement, for decades. This has continued to be critical, with Harrods opening a beauty focused store acting as a customer touchpoint (featuring a champagne bar to add to the luxury experience!), and Asda rolling out new vintage, second-hand ‘stores within stores’ in partnership with Preloved Vintage Kilo to capitalise on the growing resale trend within fashion retail.
Sustainable initiatives, and on a wider scale, socially conscious initiatives look set to continue to be the make or break for fashion and luxury retailers alike. On the 8th anniversary of the Rana Plaza disasters, MPs have called for fast fashion giants to improve wages for factory workers, whilst ASOS has published their fifth annual Modern Slavery Statement which calls for legislation to go further than the current Modern Slavery Act. With more of a consumer focus, Farfetch have released their first Conscious Luxury Trends Report alongside updating their Fashion Footprint tool, providing a reflection on consumers’ ethical shopping habits. This, alongside initiatives such as Kering’s My Environmental Profit & Loss tool, also allows consumers to see the impact of an item on the environment. LVMH have joined the likes of Prada and Bulgari in enabling consumers, through blockchain, to view the history of a product through a unique identifier / NFC chip.
Ultimately, whilst digitalisation is key – it is not as easy as simply providing an e-commerce solution. Companies must listen to and engage with consumers on the topics they care about, whilst maintaining the creative flair to provide value for both the consumer, and the wider supply chains they impact.
Raj Ganatra – Consultant
Consultant Raj Ganatra shares a roundup of this week’s retail news, including updates from LVMH, ASOS, Harrods, Sainsbury’s, and other retailers – with a focus on the creative initiatives which retailers are deploying to enable digital success.