October 20, 2020
Retail news and trends to watch out for
- Online to offline. China’s Alibaba Group is looking to further expand its New Retail strategy, which aims to better integrate online and offline, and step up its grocery delivery business through the acquisition of a controlling stake in Chinese hypermarket and supermarket operator Sun Art Retail Group. Alibaba will acquire shares from French retailer Auchan and will have a 72% stake in Sun Art. The Sun Art Retail Group has 481 hypermarkets and three mid-size supermarkets in China. Alibaba already owns the Freshippo retail chain in China, which has a strong digital component and delivery app.
- More beauty online. UK-based online retailer Asos plans to go deeper into beauty, with the aim of tripling the category’s sales over the next three years. The company said that beauty is a strategic category and has seen strong demand from consumers throughout the lockdown – a trend it wants to capitalize on. Over the past two years, the company has developed beauty and expanded the number of brands it offers. This year, the retailer added Charlotte Tilbury and Urban Decay to its line-up. Asos says it will continue to approach beauty in a way that appeals to consumers in their twenties. The news came as Asos announced strong results for its full year ended August 31, with sales up 19% and profits rising 329%. However, despite the growth, the company expressed a cautious outlook and highlighted the impact that the COVID-19 crisis will have on the purchasing power of its core consumers who are in their twenties.
- Stores as fulfillment centers. More retailers are hopping on the trend of using their brick-and-mortar stores as fulfillment centers for online orders. US-department store Macy’s said it would close two stores to the public and convert them to fulfillment centers in response to an uptick in online orders in the run up to the holiday season. Turning stores into fulfillment centers is one way to simplify the last-mile delivery of online goods (although the trend is also no doubt due to fewer shoppers in stores or shoppers spending less time in stores as a result of the pandemic). Tied into this trend is the rise of curbside pickup for online orders or click & collect. Apple too just announced that it would fulfill orders for its iPhone from its physical stores – although these stores will also remain open to the public.
- Travel retailers delve into digital. More travel retailers are teaming up with e-commerce platforms as they look to make sales beyond passenger-light airports or encourage cautious consumers to buy without having to enter a store. Last week, travel retailer 3Sixty Duty Free announced a partnership with e-commerce platform Grab at Dallas Fort Worth International Airport. The deal will mean travelers will be able to pre-order travel-retail products and then choose to either pick-up in store or a opt for a delivery to gate via the Grab platform. The idea is to offer shoppers convenience and contactless, touch-free shopping.
- Livestreaming for travel retail. Chinese digital travel retail platform TripurX is another company that is benefiting from its recent partnership with a retailer – in this case China Duty Free Group (CDFG). As part of the partnership, the company initiated weekly livestreams with the retailer, whereby shoppers can click on product links that lead to CDFG’s website or pre-order products at its stores. TripurX specializes in providing Chinese shoppers with duty-free catalogs and allows them to pre-order products and pick-up in-store. It also has a rewards program that offers discounts and other benefits for frequent pre-ordering. Customers can download the TripurX mini-program on social-media platform WeChat and shop by brand and product category at duty-free stores near them or on their journey. The platform has nine million users and 400,000 to 500,000 daily active users on its mini program. Some 90% of its user base is female, with 81% aged 20-35, and 71% living in tier-one and tier-two cities. The typical user spends more than Rmb2,500 ($299) per order. Consumer behavior analysis shows shoppers booked products six to eight days before a trip, while 73% who pre-ordered online also shopped in offline stores.
- Inclusive offerings. US-based retailer Nordstrom has launched a new beauty category with a focus on Black-founded brands, called Inclusive Beauty. The permanent offering is available in a dedicated online category and at Inclusive Beauty outposts at 27 Nordstrom stores. Featured brands include haircare lines Baby Tress, Bomba Curls and Briogeo, cosmetics brand Beauty Bakerie and skincare brands BeautyStat, Epara and Mantl.