Retail news and trends to watch out for
- Douglas ramps up digital. German beauty retailer Douglas made a bold statement about its digital ambitions last week, saying that it is making the move from being a retailer with an online shop to a digital company with a brick-and-mortar business. It added that it is on its way to becoming the leading premium beauty platform in Europe. The company has made strides in its digital strategy in the past few years (including the launch of a marketplace model in 2019), which has helped it overcome lockdown-imposed store closures this year. With e-commerce turnover now €750m, the company says that it is close to reaching its milestone of €1bn in sales from the channel. To further boost its digital business, the company will integrate its online shops, marketplace and stores into a data-based beauty platform. It will also recruit 100 new tech employees and roll out its marketplace to two new countries this year (the marketplace currently operates in Germany and Austria), and make targeted investments.
The question is what will happen to its brick-and-mortar stores? Douglas stressed that physical stores will be used to attract new customers to online, for example for acquiring customers for its app. The stores are networked with e-commerce operations through Click & Reserve or Click & Collect. In addition, the company has also already begun to Ship from Store in French stores, and this initiative will be launched in select stores in Germany in the run up to Christmas. However, Douglas said earlier this year that it would look to ‘realign’ its store network, which analysts have interpreted as potential store closures. Douglas could also look to use more stores as distribution or fulfillment centers. The company is due to provide more detail on how it will restructure its network at the beginning of next year.
- Printemps: More clicks, less bricks. French department-store group Printemps is to close seven stores to curb losses. While the retailer has been hit by COVID-19 imposed store closures (non-essential retail is currently closed in France as part of a second nationwide lockdown), it has also been impacted by what it calls a structurally difficult market, which analysts read as the rise of e-commerce, as well as France’s terrorist attacks, strikes, and the Yellow Vest movement last year. Printemps plans to invest around €40m per year in digital, reinventing its retail experience and expanding its product offer. Earlier this year, the retailer appointed Jean-Marc Bellaiche as ceo, who as strategy and business development senior vice president of Tiffany’s was credited with accelerating the brand’s digital transformation. He also most recently flexed his digital muscles as chief partnership and strategy officer at French unicorn and analytics company Contentsquare.
- Rite Aid’s natural approach. US-based retail pharmacy chain Rite Aid has rebranded and unveiled a new store format focused on holistic health and geared to millennials and Gen X. The new format has seen the retailer shift its beauty offer to more natural, chemical-free options, following consumer feedback that showed that its target demographic is looking for products that are conducive to a healthy and balanced lifestyle. The focus is on products that are organic, non-GMO, cruelty-free, clean and free from harmful chemicals.
- Boticàrio’s personalized fragrance store. Brazil-based Grupo Boticário has opened a new concept store for its Boticàrio brand in São Paulo City that allows shoppers to create their own personalized scent and features an Artificial Intelligence (AI)-based fragrance finder tool. The Boticário Lab store allows shoppers to create a scent with a perfume expert from a choice of bases – from florals to fougères – and using accords such as vanilla, leather or citrus. There are around 1,800 possible combinations of ingredients. The fragrance formula that the shopper creates is saved in a database so it can be reproduced. The personalized scent comes in customized packaging featuring the consumer’s signature. Also at the store is a Scent Finder tool to help clients find a fragrance from 90 options in the brand’s portfolio that is best suited to their taste based on psychological and behavioral associations.
- Tomorrow’s retail. Some 73% of global retailers believe the shift to online sales will be permanent post COVID-19, while 56% are looking to sell through additional digital channels this year and 53% are planning more online experiences, such as digital events and livestreaming, according to a report by market-research company Euromonitor International. Euromonitor says that the need for human connection will be greater than ever, which will boost conversational commerce – an area that is expected to become less transactional and specifically tailored for brands’ biggest followers. In addition, the company states that the e-commerce boom has magnified the impact of delivery costs on profits, which is leading companies to explore new methods from high-tech robots to low-tech curbside pickup and click and collect. It adds that as companies use stores as fulfillment or distribution centers, retail, distribution and property will merge into one.
In terms of brick-and-mortar, the report highlights that the role of physical shops is evolving – from stores to modular, open and pop-up spaces and distribution warehouses in city centers. It also says that 50% of global consumers feel safer in standalone stores in 2020, compared to just 10% who prefer shopping centers. Touch-free commerce and contactless payments will be key for physical retail.
And despite the rise of e-commerce, physical retail will remain the most important and biggest channel globally over the next five years. Indeed, 35% of global consumers say that ‘being able to immediately walk out of store with purchase executed’ is the most desired store feature. Shopping locally and supporting local businesses will also be important for consumers.