DOCSLIB.ORG

Session 3 the Changing Landscape of International Retail

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Session 3 the Changing Landscape of International Retail WELCOME THE DISRUPTIVE FUTURE OF RETAIL Tony D’Onofrio The Coronavirus For MORE Visit www.tonydonofrio.com 2 © 2020 TD Insights 2020 . All Rights Reserved. The Coronavirus and Retail Sales For MORE Visit www.tonydonofrio.com Source: Bain & Company, 2020 3 © 2020 TD Insights 2020 . All Rights Reserved. You are the Leaders to Shape It. The $30 Trillion Opportunity Retail Apocalypse or Renaissance ? Where is the Retail Shrink ? Digital Transformation Wake Up Call The Disruptive Future of Retail 4 © 2020 TD Insights 2020 . All Rights Reserved. www.tonydonofrio.com The Disruptive Future of Retail CHINA 5 © 2020 TD Insights 2020 . All Rights Reserved. The $30 Trillion Opportunity 6 © 2020 TD Insights 2020 . All Rights Reserved. Global Retail Sales Forecasts Retail sales growth, 2020-21 forecasts (real % change per year) 5% Total Retail Sales Worldwide, 2017-2023 4% 2020 2021 Trillions and % change $29.763 $28.472 3% $27.243 $26.074 $25.038 $23.956 $22.974 2% 1% 0% Asia and Middle Eastern North Latin Western 6.2% 4.3% 4.5% 4.5% Australasia East and Europe America America Europe 4.5% 4.1% 4.5% Sub-Saharan Africa 2017 2018 2019 2020 2021 2022 2023 Retail Sales % Change Source: E-Marketer 2019 / Economist Intelligence Unit 2020 7 © 2020 TD Insights 2020 . All Rights Reserved. China and Global E-Commerce Growth Total Retail Sales in China -vs- US Global E-Commerce Growth Trillions Source: Cushman & Wakefield, 2019 / E-marketer 2019 © 2020 TD Insights 2020 . All Rights Reserved. China’s ecommerce market is larger than the next 10 markets combined Russia Canada $30 Bn United $55 Bn Korea Kingdom CHINA $90 Bn USA $135 Bn $1.5 Tn $600 Bn Germany France $80 Bn $65 Bn Japan $115 Bn India $40 Bn Online Retail Transaction Brazil Indonesia (B2B/B2C) Value 2019 $30 Bn $15 Bn Argentina $7 Bn Source: McKinsey 2019 / Totem 2020 © 2020 TD Insights 2020 . All Rights Reserved. USA Retail Apocalypse or Renaissance? 10 © 2020 TD Insights 2020 . All Rights Reserved. Despite the News, USA Retail Strong For every chain closing stores, 5.2 chains opening stores Retail Continues to be Strong In last 2.5 years +8,575 net stores increased (in chains with 50+ stores) Since 1/1/17, Total Retail Sales Increased $636b Number of Chains adding stores increased 56% in 2019 Number of Chains closing stores decreased 68% Source: IHL Group 2019 11 11 © 2020 TD Insights 2020 . All Rights Reserved. Over Stored at the USA Mall 2016 Total Retail Square Footage per Capita US 23.5 Canada 16.4 UK 4.6 Malls built at 4x population France 3.8 growth rate since 1975 Spain 3.4 Italy 2.8 USA retail 10x more space per capita than Germany and est. 20x for apparel / dept. stores Germany 2.4 Source: Cowen Research, IHL Group 12 © 2020 TD Insights 2020 . All Rights Reserved. Stores Still and Will Matter in Online Sales NA Retail & Hospitality Spend by Fulfilment Channel 7.0 $6.13 $5.83 $5.98 6.0 $5.70 $0.45 $5.43 $0.44 $5.25 $0.42 $0.41 $4.99 $0.38 $0.85 $0.36 $0.78 5.0 $0.67 $0.72 $0.32 $0.54 $0.59 $0.38 $0.44 $0.51 $0.49 $0.31 $0.19 $0.25 4.0 $0.14 3.0 $4.31 $4.31 $4.32 $4.32 $4.21 $4.17 2.0 $4.04 Consumer Spend (Trillions USD) Consumer Spend (Trillions Store Revenue 1.0 Ecommerce Rev. Store Fulfillment Ecommerce Rev. WH Fulfillment 0.0 Ecommerce Rev. Fulfillment Center 2017 2018 2019 2020 2021 2022 2023 YEAR Source: IHL Group © 2020 TD Insights 2020 . All Rights Reserved. Where is The Retail Shrink? 14 © 2020 TD Insights 2020 . All Rights Reserved. FY 2018 $51 Billion USA Retail Shrink Challenge Much more of Somewhat more Retail Last 5 Years a priority a priority Total Shrink Averages Organized Retail Crime 29% 37% 65% FY 2018 1.38% Ecommerce Crime 18% 48% 65% FY 2017 1.33% Cyber Crimes 30% 33% 63% Internal Theft 25% 35% 60% FY 2016 1.44% Return Fraud 13% 38% 51% Where have you noticed the greatest FY18 $ Average Loss increase in fraud occurring? Employees $1,264 IN-STORE ONLY SALES ONLINE ONLY SALES Shoplifting $547 42.9% 30.2% MULTICHANNEL SALES Robbery $2,885 (for example, buy online, pick up in store) 22.2% Source: NRF / University of Florida, 2019 15 © 2020 TD Insights 2020 . All Rights Reserved. USA Loss Prevention Budgets 39.7% LP Budgets KEY Is your company allocating 4.8% Increasing significantly additional resources to Increasing somewhat 4.8% address risks this year? 31.8% Remaining flat Decreasing somewhat 19.1% Decreasing significantly Yes, technology resources 55.6% Yes, other budget resources 34.9% Yes, staff resources 28.6% No 31.8% Source: NRF / University of Florida, 2019 16 © 2020 TD Insights 2020 . All Rights Reserved. USA LP Technologies Top 5 Loss Prevention Systems In Use Source: NRF / University of Florida, 2019 Emerging Technologies Fully Implemented Pilot / Limited Rollout Implement in 2019 Implement 2020 No Current Plans POS ANALYTICS 56% 6% 6% 19% 13% VIDEO ANALYTICS 16% 18% 11% 11% 44% FINGERPRINT POS 11% 6% 5% 78% FACIAL RECOGNITION 6% 4% 6% 2% 81% 17 © 2020 TD Insights 2020 . All Rights Reserved. Digital Transformation Wake Up Call 18 © 2020 TD Insights 2020 . All Rights Reserved. Store Systems Priorities 3.7% Top 10 Strategic Priorities for 2020 Average increase Store IT spending in 2020 Personalizing Customer Experience 63% vs. 6.2% last year Inventory Visibility 54% Empowering Store Associates 53% Support Store Pickup/Delivery of Digital Orders 42% Upgrading CRM/Loyalty Programs 38% Refresh POS infrastructure 37% Customer Journey Design 37% POS concept evolution (ie. Mobile POS, cloud POS) 36% IT transformation to better compete 31% WFM Software/Hardware 26% Store communication (WAN/WIFI) Upgrade 25% Source: RIS News / IHL Group Study 2020 19 © 2020 TD Insights 2020 . All Rights Reserved. +136% +330% +310% +300% +266% +288% +450% +460% +750% Source: IHL Group 2020 20 © 2020 TD Insights 2020 . All Rights Reserved. AI/Machine Learning > When and Where for Retail Operational Areas 29% 23% 10% +114% BI/Analyitcs 21% 20% 10% +143% Human Resources 21% 19% 10% +143% Customer Facing 13% 20% 18% +285% Employee Sales Assist 11% 19% 10% +355% Deployed Now Will Deploy Within 12 Months Will Deploy Within 24 Hours © 2020 TD Insights 2020 . All Rights Reserved. The $15+ Billion Innovation Challenge Nearly 70% of Amazon’s Total Operating Profit 87% - 237% Avg. IT spend increase required to effectively compete with Amazon 150 Million People Advertising 39.4% 12 Month Growth Source: IHL Group, Statista, Bloomberg, US News 22 © 2020 TD Insights 2020 . All Rights Reserved. The Disruptive Future of Retail PHILIPPINES Coresight Research 2017 23 © 2020 TD Insights 2020 . All Rights Reserved. The Disruptive Future of Retail 24 © 2020 TD Insights 2020 . All Rights Reserved. Technology Driving Shifts in Retail Power FUTUREFUTURE OF OF RETAIL RETAIL MANUFACTURER RETAILER CONSUMER Pre-1970s 1970s 2010s 25 © 2020 TD Insights 2020 . All Rights Reserved. Time to Reach 50 MILLION Users Innovation SPEED CONSUMER IoT Connections 2018 3.6bn PENETRATION RATE 47% 61% (% of population) by type, bn 2025 5.0bn 4.8% CAGR SMARTPHONES % of connections* 2018 60% 79% 2025 MOBILE INTERNET Users Sources: Economist 2019, GSMA Mobile Economy 2019, Interactive Schools 2018 26 © 2020 TD Insights 2020 . All Rights Reserved. CROWD STARTUP GYMS The “Millennials” Have Arrived HOUSES FUNDING CASUAL PROJ. USA POPULATION BY GENERATION RELATIONSHIPS DINING CABLE BREASTAURANTS TV DESIGNER AMERICA COSTCO BAGS N CHEESE 70% of Millennials in NAPKINS GOLF CEREAL USA and 62% of Millennials in UK would appreciate a brand or retailer DIAMONDS YOGURT PANTS using AI tech to show more interesting products. BEER FABRIC SOFTENER FOOTBALL BARS OF SOAP Source: Pew Research, 2018 DIY HOTELS STORES DEPT. 60% STORES of Millennials willing to actively MOTORCYCLES give away more data about themselves in return for better marketing experiences CANNED TUNA Source: Retail 2030 Future Report 27 © 2020 TD Insights 2020 . All Rights Reserved. 71% will allow The Digital Omnishopper 67% do location-based click-and-collect alerts while in stores Today vs. 5 Years Ago 70% use a 90% who click-and- retailer’s app collect make an CONSUMERS SHOP LESS while in their additional purchase stores on pickup in store In Malls 54% In Stores 31% CONSUMERS SHOP MORE ACTIVE SOCIAL Online 73% MEDIA USERS On Smartphones 61% PENETRATION Local 32% 3.8 BILLION 49% Sources: RIS Shopper Megatrends 2019, NextWeb.com 2020 28 © 2020 TD Insights 2020 . All Rights Reserved. Stores Not Going AWAY Educate & empower in-store employees using technology E-commerce sales As % of total Opportunity for improving in-store experience* Source: Economist 2017, Cowen & Company 2017 / PSFK / RSR Research 29 © 2020 TD Insights 2020 . All Rights Reserved. Why Clicks NEED Bricks CLICKS Getting Physical CLICKS Insights • The Delivery Last Mile • Amazon > Bookstores > Amazon Go > Whole • INNOVATION Differentiation Foods ($13.7 Billion) • Expanding Loyalty Programs • Return Rate – Online nearly 33% / instore 9% • Alibaba $8 Billion in Physical Stores Last 2 Yrs • The Profit is in the Store > Fresh Hippo (Hema) Supermarkets Where Do Apparel Retailers Make The Largest Profit ? In Store Online Online In Store Online Ship Pick Up From Store 32% 30% 23% 12% Profit Margin Profit Margin Profit Margin Profit Margin Forbes 19 April 2017, Forbes 27 August 2017), Economist 2017 / Bloomberg Business Week November 3, 2017 30 © 2020 TD Insights 2020 . All Rights Reserved. What Shoppers Want…..Value to Privacy WHAT DO CUSTOMERS WANT TO SEE? MORE LESS 34% 58% Product Customization Shopper Tracking Without Permission 31% Sales of Previously 56% Owned Products Facial Recognition 30% 55% Special Events In-Store AI Taking Over the Shopping Experience Source: RIS Shopper Megatrends 2019 WILL ALLOW DIGITAL ID IN STORES Very Likely WILLING TO PROVIDE NOT WILLING TO PROVIDE Extremely Somewhat Likely Likely 12% 6% Birthday 39% Income 35% 37% PERSONAL Favorite Social Media 38% Contact Info 29% 21% INFORMATION 24% Favorite Drinks 35% Favorite Social Media 27% Never Favorite Entertainment 31% Household Composition 24% Not At All Likely 31 © 2020 TD Insights 2020 .
Load more

Recommended publications
  • The Retail Apocalypse - Fact Or Fiction?
    The Retail Apocalypse - Fact or Fiction? May 10, 2019 Panel Introductions • Moderator: • Manuel Farach, Member, McGlinchey Stafford • Panelists: • Sarah Lemke, Vice President, Project Development, New England Development • Matt Epstein, Director, Goulston & Storrs, P.C. Agenda • Current State of Retail • Is It Really an Apocalypse? • Strategies for the New Future of Retail • Conclusion and Q&A Current State of Retail- Store Closures Abound ▪ Over 12,000 stores closed in 2018 ▪ Over 5,800 stores have already announced closures planned for 2019, including: ▪ Payless- 2,500 stores ▪ Gymboree- 805 stores ▪ Family Dollar- 390 stores ▪ Shopko- 371 stores ▪ Gap- 230 stores ▪ Sears- 70 stores ▪ Victoria’s Secret- 53 stores ▪ Abercrombie & Fitch- 40 stores ▪ Other retailers closing: Aerosoles, American Apparel, BCBG, Bon-Ton, Children’s Place, CVS, Dollar Tree, Foot Locker, Guess, JC Penney, Limited, Macy’s, Michael Kors, Toys R Us, Victoria’s Secret, Wet Seal © New England Development 4 Current State of Retail - Store Closures Abound © New England Development In 2018, over 145 million square feet of retail closed 5 Current State of Retail - Bankruptcies Continue © New England Development 6 What’s Causing Widespread Closures and Bankruptcies? ▪ Retailers facing massive debt from private equity financings ▪ E-Commerce and the “Amazon Effect” ▪ “Over-Retailing”/Saturation of the Market ▪ Changing Consumer Demands ▪ Inability to Adapt © New England Development 7 E-Commerce - Part of the Problem E-commerce continues to gain steam- growing 15% in 2018,
    [Show full text]
  • Municipality
    TheMunicipality Your Voice. Your Wisconsin. January | 2019 2019–2020 LEAGUE LEGISLATIVE AGENDA Split Party After the Retail Apocalypse, Preparing Wisconsin New Records Control is Good Small State Agency — Prepare for the Property Opportunity Zones Schedule Approved for Municipalities Big Statewide Impact Tax Meltdown for Investment for Municipalities 4 8 The Municipality12 | January 2019 20 24 1 Is there a company that insures only cities and villages? Oh yes, dear Why LWMMI, of course For 33 years, the League of Wisconsin Municipalities Insurance Program has responded to the coverage needs of local cities and villages, saving them substantial amounts of money in the process Protecting The Communities We Live In. 608.833.9595 | www.LWMMI.org A Mutual Company Owned by Member Cities and Villages. TheMunicipality The Municipality Official Monthly Publication of the League of Wisconsin Municipalities January | 2019 Volume 114, No. 1, January 2019 Editorial Offices 131 W. Wilson St., Suite 505, Madison, WI 53703 Feature Dial (608) 267-2380 In-State (800) 991-5502 Fax: (608) 267-0645 Small State e-mail: [email protected] Split Party Agency — Here’s to Did You Website: www.lwm-info.org Control is Good for Big Statewide You Know? The Municipality serves as the medium of Municipalities Impact exchange of ideas and information on municipal affairs for the officials of Wisconsin cities and villages. Nothing included herein is to 3 4 8 11 be construed as having the endorsement of the League unless so specifically stated. The Municipality (ISSN 0027-3597) is published monthly at $25 per year ($5.00 per copy, back After the Retail Preparing issues $5.00 each) by the League of Wisconsin Apocalypse, Wisconsin Municipalities, 131 W.
    [Show full text]
  • The Retail Apocalypse - Debunking the Myth
    Public Square | CNU Journal September 2019 The Congress for the New Urbanism Page 1 The Retail Apocalypse - Debunking the Myth Introduction – The “Retail Apocalypse” is a This article also touches on some emerging retail concept being actively promoted through media trends, including retrofitting vacant mall anchors headlines, and largely based on recent closures and leveraging the “Halo Effect” of Omni-channel among national chain stores across the nation. marketing to optimize retail sales. However, it is only a myth that can be easily debunked with real data. Increasing Number of Retail Establishments – The hypothetical Retail Apocalypse should be It is important to debunk the myth and change supported by a decline in the total retail the dialogue about the future of retail establishments – but nothing could be farther nationwide, in our downtowns, and all urban from the truth. In fact, the United States had over settings. By challenging mainstream media and 1 million retail establishments in 2018 – and more shifting the conversation, we hope to instill new than the prior year 2017. More specifically, the faith and encouragement for urban and town Bureau of Labor Statistics (BLS) reported planners, developers, downtown merchants, and 1,044,509 establishments for 2018, for a net gain of main street managers. +2,413 establishments since 2017 (1,042,096). The 2018 figure also represents a net gain of over This article explores real data and demonstrates +20,800 establishments since the trough in 2011. that the total number of retail establishments and aggregate retail sales are actually increasing; A timeline of total retail establishments since 2001 new chain stores and restaurant openings are is shown in chart below.
    [Show full text]
  • Resilient Forms of Shopping Centers Amid the Rise of Online Retailing: Towards the Urban Experience
    sustainability Article Resilient Forms of Shopping Centers Amid the Rise of Online Retailing: Towards the Urban Experience Fujie Rao Melbourne School of Design, University of Melbourne, Melbourne 3010, Australia; [email protected] Received: 13 June 2019; Accepted: 17 July 2019; Published: 24 July 2019 Abstract: The rapid expansion of online retailing has long raised the concern that shops and shopping centers (evolved or planned agglomerations of shops) may be abandoned and thus lead to a depletion of urbanity. Contesting this scenario, I employ the concept of ‘retail resilience’ to explore the ways in which different material forms of shopping may persist as online retailing proliferates. Through interviews with planning and development professionals in Edmonton (Canada), Melbourne (Australia), Portland (Oregon), and Wuhan (China); field/virtual observations in a wider range of cities; and a morphological analysis of key shopping centers, I find that brick-and-mortar retail space is not going away; rather, it is being increasingly developed into various shopping spaces geared toward the urban experience (a combination of density, mixed uses, and walkability) and may thus be adapted to online retailing. While not all emerging forms of shopping may persist, these diverse changes, experiments, and adaptations of shops and shopping centers can be considered a form of resilience. However, many emerging shopping centers pose a threat to urban public life. Keywords: retail resilience; online retailing; shopping center; urban experience; urbanity 1. Introduction Shopping has been at the heart of urbanity since the earliest cities developed as sites of exchange. One sees and touches the product, perhaps smells and tastes it, bargains with the trader and experiences the larger social, political and cultural life that comes with traditional marketplaces.
    [Show full text]
  • Perspectives on Retail and Consumer Goods
    Perspectives on retail and consumer goods Number 7, January 2019 Perspectives on retail and Editor McKinsey Practice consumer goods is written Monica Toriello Publications by experts and practitioners in McKinsey & Company’s Contributing Editors Editor in Chief Retail and Consumer Goods Susan Gurewitsch, Christian Lucia Rahilly practices, along with other Johnson, Barr Seitz McKinsey colleagues. Executive Editors Art Direction and Design Michael T. Borruso, To send comments or Leff Communications Allan Gold, Bill Javetski, request copies, email us: Mark Staples Consumer_Perspectives Data Visualization @McKinsey.com Richard Johnson, Copyright © 2019 McKinsey & Jonathon Rivait Company. All rights reserved. Editorial Board Peter Breuer, Tracy Francis, Editorial Production This publication is not Jan Henrich, Greg Kelly, Sajal Elizabeth Brown, Roger intended to be used as Kohli, Jörn Küpper, Clarisse Draper, Gwyn Herbein, the basis for trading in the Magnin, Paul McInerney, Pamela Norton, Katya shares of any company or Tobias Wachinger Petriwsky, Charmaine Rice, for undertaking any other John C. Sanchez, Dana complex or significant Senior Content Directors Sand, Katie Turner, Sneha financial transaction without Greg Kelly, Tobias Wachinger Vats, Pooja Yadav, Belinda Yu consulting appropriate professional advisers. Project and Content Managing Editors Managers Heather Byer, Venetia No part of this publication Verena Dellago, Shruti Lal Simcock may be copied or redistributed in any form Cover Photography without the prior written © Rawpixel/Getty Images consent of McKinsey & Company. Table of contents 2 Foreword by Greg Kelly 4 12 22 26 Winning in an era of A new value-creation Agility@Scale: Capturing ‘Fast action’ in fast food: unprecedented disruption: model for consumer goods growth in the US consumer- McDonald’s CFO on why the A perspective on US retail The industry’s historical goods sector company is growing again In light of the large-scale value-creation model To compete more effectively Kevin Ozan became CFO of forces disrupting the US retail is faltering.
    [Show full text]
  • Has the Retail Apocalypse Hit the DC Area?
    POLICY BRIEF Has the Retail Apocalypse Hit the DC Area? Leah Brooks, Urbashee Paul and Rachel Shank APRIL 2018 POLICY BRIEF APRIL 2018 | LEAH BROOKS, URBASHEE PAUL AND RACHEL SHANK1 In 1977, the White Flint Mall opened to great acclaim as Maryland’s premier mall, complete with glass elevators, glamorous anchor stores, and an exciting eatery. Now, more than four decades later, White Flint Mall is situated in a sea of empty parking lots. Except for anchor tenant Lord and Taylor, with which the mall owner is in protracted litigation, the mall sits empty. About a decade before White Flint launched, Northern Virginia’s Tysons Corner Center opened, also to acclaim. Tyson’s Corner has seen continued success,2 welcoming Apple’s flagship store in 2001,3 and Spanx’s first brick and mortar store in 2012.4 The promised increase in walkability ushered in by the Silver Line expansion has heralded opportunity for new residential and commercial development.5 To what extent is this divergence due to e-commerce? The Rise of E-commerce Indeed, there is substantial evidence that brick-and-mortar retail is suffering. CNN Money10 reports that 2017 marked E-commerce dates to 1994, when the New York Times the highest number of retail store closure announcements in reported that Philadelphia’s Phil Brandenberger used his history. Within the past year, once-prominent malls in computer to purchase a Sting album. In the following year, New Jersey and Pennsylvania have closed almost 200 Amazon sold its first book, and Pierre Omidyar founded stores. And the wave seems unlikely to be over: Toys R Us Ebay.6 has recently declared bankruptcy, while long-time anchor tenants Sears, Kmart, J.C.
    [Show full text]
  • PASI News Winter 2019
    Volume 43 - Number 4 Winter 2019 Professional Advisory Services, Inc. 2770 Indian River Blvd. – Suite 204 • Vero Beach, FL 32960 (800) 847-7274 • (772) 778-0552 • fax (772) 770-2979 Market Update – An Extraordinary Decade by David A. Jaffe, M.D. In his book Thank You for Being Late, author Thomas Friedman poses detailed and compelling arguments suggesting that our planet is experiencing one of the greatest inflection points in world history – catalyzed by the accelerating impact of technology, globalization, and climate change. It is a well-documented and compelling read. In the shadow of this postulate, the “twenty-tens” were a pretty good but hardly extraordinary decade in the financial markets. Consider: the 256% total return of the S&P 500, translating into an average annual return of 13.5%, makes it only the fourth best decade since the 1930s (yawn). Of course, one could be forgiven for exaggerating the magnitude of the decade’s progress when taken in the context of recent history, specifically following on the heels of the “twenty-oughts”. Dubbed by some the “lost decade”, investors holding the S&P 500 from 2000-2010 experienced a decline of 0.86%, even after reinvesting cash dividends. The lost decade earns the dubious distinction of being the worst 10-year investment period since the 1930s, thanks to the Great Recession and stock market plunge of 2008-2009. The dreary market experience of that era set the stage for the healthy recovery that we have all enjoyed over the last ten years. Governments around the world pumped trillions into projects which spurred economic growth, while central banks led by the U.S.
    [Show full text]
  • How Digital Transformation Is Reshaping the Global Fashion Industry
    Trending this season: How Digital Transformation Is Reshaping the Global Fashion Industry www.commercetools.com Executive Summary When it comes to online revenue share, the global fashion business takes the pole position. The growth of mobile commerce, as well as social media, translate both into new revenue streams but also into challenges which have to be met. This white paper talks about how well-known brands and retailers tackle things like brand experience, assortment, and scalability and how they leverage cloud infrastructure and in-house technical know-how to adapt to these changing conditions. Introduction According to McKinsey’s 2018 State of Fashion report1, “The total sales of the traditional fashion sector have grown by more than 20 percent over the last three years”. Every year, the fashion industry, ranging from retailers to luxury brands, drives a significant profit to the global economy. It is one of the biggest, yet most challenging industries impacted by hundreds of factors, including economic uncertainties as well as digital transformation. Digital transformation in the fashion industry brings a lot to the table, but if ignored, it can unravel everything else. In response to this digital wave, many fashion brands are now under pressure to innovate while at the same time being cost-conscious. Brands have started to improve their speed to market and to innovate and automate their core product design, manufacturing, and overall supply chain process. The need to embrace digital transformation is a need of time for them. Why? Because consumers’ expectations are now at the highest level. They are no longer content with the simple purchase transaction; they want to have an experience attached to it, and the credit goes to digital technologies they are exposed to.
    [Show full text]
  • Bankruptcy Trends and Developments in the Retail Industry George H
    Domestic and International Bankruptcy Thought Leadership Bankruptcy Trends and Developments in the Retail Industry George H. Haramaras The retail industry is dynamic and changes quickly. Although dramatic headlines referring to retailers in bankruptcy (e.g., “retail apocalypse”) may be overstated, the retail industry is at an important stage in its history. Retail bankruptcies are frequent and they experienced an increase in volume in 2018. Big changes are occurring in the retail industry. Accordingly, this discussion examines bankruptcy in the context of the retail industry. This discussion broadly examines the retail industry. This discussion identifies current developments and important indicators associated with the retail industry. This discussion summarizes important operational attributes of retail operators. This discussion examines how the unique attributes of retail affect industry debtors in bankruptcy. Finally, this discussion describes several specific areas of the bankruptcy process relevant to retail debtors and identifies trends in retail bankruptcies. NTRODUCTION “retail apocalypse” can be misleading when describ- I ing the recent state of retail industry bankruptcies, The retail industry is dynamic. It is highly vola- 2018 did represent an uptick in the number of tile, currently undergoing significant changes, and retailers filing for bankruptcy. It is an important consists of companies with visible brands designed time for retailers. to capture the attention of consumers. As a result, when a large retailer files for bankruptcy, it can This discussion develops a clear picture of the garner disproportionate attention and grab head- retail industry today, and then examines the trends lines. For example, while Sears Holding Corporation and developments of retail companies in the context (“Sears”) was debatably the most familiar bank- of bankruptcy.
    [Show full text]
  • The Demise of Toys 'R' Us Is a Warning
    BUSINESS The Demise of Toys ‘R’ Us Is a Warning The private-equity companies swooping in to buy floundering retailers may ultimately be hastening their demise. BRYCE COVERT JULY/AUGUST 2018 ISSUE [July 1, 2018] nn Marie Reinhart was one of the first people to learn that Toys “R” Us was shuttering her A store. She was supervising the closing shift at the Babies “R” Us in Durham, North Carolina, when her manager gave her the news. “I was almost speechless,” she told me recently. Twenty-nine years ago, Reinhart was a new mother buying diapers in a Toys “R” Us when she saw a NOW HIRING SIGN. She applied and was offered a job on the spot. She eventually became a human-resources manager and then a store supervisor. She stayed because the company treated her well, accommodating her schedule. She got good benefits: health insurance, a 401(k). But she noticed a difference after the private-equity firms Bain Capital and Kohlberg Kravis Roberts, along with the real-estate firm Vornado Realty Trust, took over Toys “R” Us in 2005 [money.cnn.com/2005/03/17/news/fortune500/toysrus/]. “It changed the dynamic of how the store ran,” she said. The company eliminated positions, loading responsibilities onto other workers. Schedules became unpredictable. Employees had to pay more for fewer benefits, Reinhart recalled. (Bain and KKR declined to comment; Vornado did not respond to requests for comment.) Reinhart’s store closed for good on April 3. She was granted no severance—like the more than 30,000 other employees who are losing their job with the company.
    [Show full text]
  • Thoughts on the “Retail Apocalypse”
    APRIL 2018 THOUGHTS ON THE “RETAIL APOCALYPSE” summary Retail is changing and some companies face challenges, but this theme has probably been overhyped, and implications for investors are limited. • The retailing industry is experiencing significant change and traditional business models have been disrupted. The growth of e-commerce has dovetailed with ongoing store closures by some high profile retailers, leading to press reports about an ongoing “retail apocalypse.” • We think implications for investors of these trends are limited, as the retail sector has a low CA research publications aim to present you with insights weight in many indexes, pricing for many of the most troubled assets at least somewhat from a variety of different reflects these headwinds, and fundamentals (and thus share prices) for many large retailers viewpoints. The views of our Chief Investment Strategist have held up surprisingly well. can be found each quarter in VantagePoint. • One exception may be diverging trends in fundamentals for high and lower quality mall opera- tors; skilled REIT managers may find opportunities during “baby thrown out with the bathwater” situations where pricing for shares of high quality assets diverge from underlying fundamentals. A number of high-profile retailers shuttered their stores in 2017, prompting a flurry of articles about a looming “retail apocalypse.” The growth of e-commerce is often cited as the culprit, as are statistics about the “over-malling of America” and changing consumer tastes. Retail is changing and some companies
    [Show full text]
  • The Role of the Physical Store in an Omnichannel Strategy
    THE ROLE OF THE PHYSICAL STORE IN AN OMNICHANNEL STRATEGY A qualitative study of Generation Z in the Swedish fashion industry Axel Wedebrand, Charlotta Ödling Department of Business Administration Master’s Program in Marketing and Finance Master's Thesis in Business Administration II, 15 Credits, Spring 2021 Supervisor: Vladimir Vanyushyn Abstract The modern retail landscape is experiencing a continuous change due to digitalization. With the growing number of available channels, consumers' consequent behavior within the fashion retail environment are becoming ever more complex. Which thus poses a challenge for fashion retailers in trying to not only understand them, but how to serve them best. Along this evolution of retail due to digitalization, physical retail stores have closed down due to the increasing competition from e-commerce, although it remains the biggest distribution channel. The role of the physical store is thus experiencing elements of an existential crisis. In this, Generation Z remains an ambiguous consumer segment whose importance will only increase as the generation comes into its purchasing prime. But, Generation Z is not yet well understood as limited research exists on the subject. And as they’re the digital native generation, where retail omnichannel strategies are commonplace, seeking to understand their attitudes, preferences and perceptions of omnichannel retailing, but also the physical store, is thus essential moving into the future. Therefore, the purpose of this study is to distinguish and explore the value of the physical store in the eyes of Generation Z in an omnichannel strategy, within the context of fashion retailing. RQ: What is the role of physical fashion stores within omnichannel strategy, in regard to Generation Z? In order to answer the research question, the method of choice was a qualitative one.
    [Show full text]