Retail Unwrapped from The Robin Report

Facing Consumer Activism

Deborah Patton — Mon, 10 Mar 2025 04:01:00 +0000

We are operating in a climate of consumer activism and empowerment that can unfortunately show up in brand dislike, even hate, both of which make indifference sound like a godsend. Consumers always vote with their pocketbooks. That’s both good and bad news for retailers. And activist consumers have made their voices heard for centuries, with collective movements and boycotts, and on the flip side, as positive grassroots brand builders. Again, good or bad news for retailers depending on where they sit.

No one wakes up in the morning wanting to trash a brand. And no one wants to wake up feeling their once-trusted brand has sold them short by not sharing their values. To be fair to retail leaders, resisting the pressure of investor activists takes enormous tenacity and patience. And responding to the needs and whims of all consumer-activist stakeholders, including customers and employees, takes an equal level of stamina.

Although retail leaders are not necessarily trained as political operatives, it is becoming clear that playing to influencers and policymakers might be a good short-term practice to survive in a highly disruptive marketplace. That doesn’t say much for a brand’s integrity when its ethos swings in the wind. Customers want brands they can rely on and trust. On that note, see the end of this report for TRR’s activism checklist for some proactive strategies.

Active Activists

If you’re paying any attention to the news headlines, you might conclude that the American consumer is reaching an inflection point of frustration. When real income and spending power are diminished, retail is typically the first line of resistance when shoppers pull back. Compound that with principled spending, and you’re on the brink of serious pushback by customers who typically vote with their pocketbooks.

America has a long tradition of consumer activism. The Boston Non‑Importation Agreement and the Montgomery Bus Boycott were coordinated consumer actions that forced large policy changes. On the marketing front, the Bud Lite brand positioning disaster has become a brand legend. Backlashes against Target’s LGBT positioning has also become a textbook retail cautionary tale. Now Target is facing a 40-day backlash which began at the start of Lent (those 40 days of retail fasting) because Target made changes to its DEI programs. Other recent examples include the Tesla backlash in Europe and Poland’s call for a Tesla boycott. The New York Times reports that Tesla sales plunged 76 percent last month in Germany, part of a wider pan-European slump. The Guardian reports that “Data from the European Automobile Manufacturers’ Association showed sales of new Tesla cars almost halved in Europe last month. The figures left analysts scrambling to assess how big a factor was customers turning their backs on the brand because of Elon Musk’s foray into EU far-right politics.”

Brand Hate

The political weaponizing of consumerism is becoming problematic. Our TRR colleague Glyn Atwal reports, “The online community is a global megaphone. Anyone can share their views, opinions, and experiences about almost anything – including brands they love or even hate. Emotional sentiment is amplified through social networks. This can drive brand engagement if the narrative is positive. However, the dynamic shifts when online content attacks brands, directly. Social media has become a go-to outlet for consumers to let off steam. Disappointment, anger and even rage directed towards brands is the new normal of the ‘callout’ culture. Consumers don’t just walk away from brands quietly; they can actively campaign against them and their impact can have a lasting effect in attracting new customers. Likes, product reviews, blogs, TikTok and the spontaneous combustion of social media are consumers’ tools to make or break products and services. And with the proliferation of chatbots and agents, AI is the latest influencer, positive and negative. That said, some people’s hate campaigns are love campaigns for others.”

If you accept that the social media megaphone has become the go-to tool to mobilize consumer activist movements, it’s no surprise that the February 28^th 24-hour U.S. “economic blackout” movement prompted online by The People’s Union gained social media traction as its call to arms was posted, reposted and amplified. Was the boycott successful? That’s in the eye of the beholder. According to an interview in Newsweek with John Schwarz, an unknown and with questionable-credibility (with an extensive manifesto of demands) orchestrator of the event, “The success of the blackout will be determined by the level of participation, which he planned to monitor through website registrations, interactions on social media and the overall visibility of the campaign.”

That’s not exactly a data-driven business formula that tracks sales, a measure of sustained rejection of a retail brand or evidence of a change in policies, which seemed to be the intent of the boycott. A one-day blackout against U.S. retail behemoths is, as one retail expert told us, “Like taking a knife to a gunfight.” In this case, the day-long boycott seemed to be more a movement among constellations of friends than a national outcry. On the 28th, anecdotally, it was retail business pretty much as usual.

That said, a cascade of new grassroots boycotts is planned by many organizers, and critical mass could reach a groundswell in the future. This is not trivial; retailers need to pay attention and take the consumer’s collective voice seriously.

Are Retailers Flying Blind?

The fact remains that American consumers are just as confused as the retail industry in how to move forward to stave off inflation and inevitable tariff-based price hikes. As our colleague Mark Cohen says, with tariffs used as geopolitical bargaining chips, consumers are left to deal with any fallout by paying higher prices or simply being unable to purchase at all. Leaders of retail operations of all sizes are put into untenable positions to manage their businesses fairly, burdened by external pressures.

We are looking at a potential perfect storm fusing trade policies with activism and consumer frustration. In terms of immediate priorities, the potential collateral damage of tariffs is becoming increasingly clear. One dismal outcome could be a rising tide of consumer resistance and rejection transforming geopolitical circumstances into retail brand hate. According to Atwal, “Brand hate is an increasing threat to a brand’s identity and reputation. In an era dominated by hashtag activism, the temptation for brand marketers to hope that negative associations will dissipate is no longer a viable strategy.”

Activism Checklist

With an increasingly vocal consumer and a growing undercurrent of consumer activism, what should the retail industry do? By no means comprehensive, this checklist has topline activism deterrents and guidance for anticipating the future, not catching up to it.

Before activating an initiative, challenge your assumptions. If your team is in alignment on how your audience will respond, beware. You must consider a wide range of possible and plausible responses, then ask what-if questions before launching publicly.
Risk Management. Savvy retailers have agile, dynamic crisis management plans and systems in place. Digital tools track real‑time consumer behavior while social listening tools monitor attitudinal change. Pay attention to the shifts and develop contingency plans that will minimize the impact of short‑term disruptions.
Scenario Planning. State the intended or ideal effect of any initiative or change, conversely, look at what could go wrong, and then consider the most likely outcome. Develop a plan of action for each plausibility. Finally, weigh the value of the ideal outcome against the alternatives and calculate the risks and benefits. By deeply challenging the effort and calculating a response, you reduce the risk of being blindsided by any result.
Early Warning Systems. Continuously assess the scale, scope and intensity of negative sentiment. Putting an early warning system in place to detect instances of brand hate online will help brand owners regain control before irreparable damage occurs.
Transparent, authentic communication for all stakeholders, including the workforce builds trust. Proactive customer outreach, even a mea culpa, and engaging sincerely with consumer concerns are more likely to weather consumer activism.
Listening to your customers and engaging in online conversations is critical market intelligence. If a customer sees that the brand is part of the solution, they may forgive that brand much more easily.
Culture. Watchwords to operate by: North Star, empathy, shared purpose, courage.
Above all, avoid the temptation to use policies and protocols as marketing billboards. Do the right thing for the right reason.

Designing a Future

Ultimately, successful retail is not a transaction, it’s a relationship built on trust and respect. You could call it good hospitality, offering the services and products that customers need and desire. No one wakes up in the morning wanting to trash a brand. And no one wants to wake up feeling their once-trusted brand has sold them short by not sharing their values. To be fair to retail leaders, resisting the pressure of investor activists takes enormous tenacity and patience. And responding to the needs and whims of all consumer-activist stakeholders, including customers and employees, takes an equal level of stamina.

Consumer activism gains traction when people feel they have been disintermediated and ignored. There’s no silver bullet for retailers in serving all their audiences, however being honest, open and empathetic engenders mutual trust and respect. As does operating aligned with stakeholders. We have to hand it to Costco as a leader in truth to power. It has a North Star of shared purpose and a moral imperative to stand up for what is right for all their stakeholders. That ethos makes customers into loyal advocates and is an impressive model for building trust in times of uncertainty. And considering the level of uncertainty in today’s whiplash marketplace, let’s hope they maintain their trust position in how they handle any cost increases from the tariff wars. As we said, customers vote with their pocketbooks, and there is a lot at stake in our disruptive marketplace.

WHSmith: A 200+ Year-Old Icon in Danger

Mark Faithfull — Tue, 25 Feb 2025 05:01:00 +0000

In late January, the 233-year-old UK retail group WHSmith officially raised the for-sale sign over the door of its retail store chain and confirmed that it was “exploring potential strategic options for this profitable and cash generative part of the group, including a possible sale.” It has since attracted a number of suitors to run the 500-store business, including Doug Putman, the billionaire Canadian record label boss who previously rescued music and entertainment HMV from bankruptcy in 2019.

With WHSmith’s travel business accounting for 75 percent of the company’s revenue of $225 million and 85 percent of trading profit, it’s little wonder that management would like to focus on its expansion.

Putman has been joined by several other potential suitors including Apollo-backed Bensons for Beds owner Alteri and Hobbycraft owner Modella Capital, whose executives have previously been involved in specialty retailers including Paperchase and Tie Rack. WHSmith is keen to wrap up a deal during this spring, but just what will a buyer actually be purchasing and what should they do with the real estate? Is it the end of a two-century-old icon?

A Tale of Two Retailers

The first thing to be clear about is that the modern WHSmith has evolved into two very different businesses. It has pivoted heavily toward travel retail over recent years, with the company operating under multiple brands in airports around the world, including a significant presence in the U.S. In all, it has become a 1,200-strong travel retail store operation at airports, rail stations and hospitals. That division has become highly successful and the current management wants to retain that business and concentrate its efforts on it with no distractions.

The distraction is currently London-listed WHSmith’s other arm, its UK retail stores. It is the epitome of a historic retail brand: WHSmith’s first store was opened in 1792 by Henry Walton Smith and his wife Anna in Little Grosvenor Street, London and the company opened the first ever travel retail store in Euston railway station in London in 1848.

The retail store part of the business specializes in selling a range of items from greeting cards and stationery to books and magazines. While it offers the convenience of everyday and gifting staples in one place, its merchandise mix offers nothing unique that cannot be bought elsewhere or online. So, its 200-year-old survival is, if anything, something of an achievement given the collapse of so many other general retailers and the fierce competition across its core categories.

By the Numbers

WHSmith’s retail stores recorded flat operating profits of just over $40 million last year, and the combined group has a market capitalization of more than $1.9 billion, with its stock price up about 7 percent since the announcement but still off about 4 percent over the past 12 months. That is undoubtedly being held back by its retail store operations.

With WHSmith’s travel business accounting for 75 percent of the company’s revenue of $225 million and 85 percent of trading profit, so it’s little wonder that the management would like to focus on its expansion. “Over the past decade, WHSmith has become a focused global travel retailer. The group’s travel business has over 1,200 stores across 32 countries, and three-quarters of the group’s revenue and 85 percent of its trading profit comes from the travel business,” the company said in a statement addressing speculation over its future.

Store Sell-Off Potential

Its traditional business might not be setting records, but it is still profitable, and it has been optimizing its store real estate. It’s planning to close 15 of its 500 stores as part of a pre-planned rationalization following the shuttering of a similar number last year. Buyers are expected to pay as much as $125 million. Assets include the Richard & Judy Bookclub brand (a popular book recommendation club fronted by two TV presenters), while 200 of the physical sites include a footfall-driving large post office, plus the chain has the rights to distribute Toys R Us products in the U.K.

In terms of WHSmith retail properties, most stores planned for closure have prime locations, which means they could be packaged and sold in parcels to other retailers such as Marks & Spencer, which is looking for new locations to expand its popular food-only outlets. However, Jonathan Pritchard, a retail analyst at investment bank Peel Hunt states that if downsizing WHSmith was the likely route to a more robust business, the retailer would have already made that move. “They have been doing a brilliant job with the asset,” he said. “The stores are not necessarily underinvested but (are) on high streets where footfall is in decline.”

Bankers at Greenhill have been appointed to run the sale process for the retail store arm of the business with a deal expected in the coming months. Currently run by chief executive Carl Cowling, the disposal of its retail stores would leave him and his management team to focus on a pure-play travel retail company in a move likely to be welcomed by investors.

The retained business would also include shops in hospitals, a niche which is growing rapidly, with 145 stores in 100 hospitals across the U.K., and potential for openings in 200 additional sites, WHSmith said in its last set of results in November.

Across the Pond

It is the U.S. where WHSmith’s international travel business espies growth. In North America, revenue for the 21-week period to 1.25 was up 6 percent compared with the prior year on a constant currency basis, and up 3 percent on a same-store basis. Its Travel Essentials business, which is the largest and fastest-growing part of the North American division, saw total revenue up 20 percent and up 7 percent on a same-store basis, compared with the prior year.

Its travel business actually encompasses more than just international and domestic airport retail. With over 640 stores internationally in 30 countries outside the U.K., WHSmith North America operates over half of those. The company has businesses across 28 countries in Europe, Asia Pacific, the Middle East and India.

WHSmith’s acquisition of Marshall Retail Group (MRG) in 2019 accelerated growth in the U.S., with banners including WHSmith, MRG, and InMotion targeted at locations such as resorts (MRG has stores across Las Vegas, for example), bus stations, universities, and airports. It also operates standalone coffee and convenience-hybrid formats, a specialist bookstore format (The Bookshop by WHSmith), souvenir stores, plus kids toys and books chain Zoodle. In other words, everything aside from the retail store arm it wants to ditch. The current U.S. pipeline includes about 60 new stores of which eight will be at Orlando Airport, Florida.

End of a Two-Century Era

The fact that the WHSmith group has remained a profitable business is a testament to its management over the past two decades, which has optimized the business and ramped up its travel operations to become a global player. Arguably, for its retail store operations, it has managed to cope with huge online challenges across its core categories as well as it could, which leaves the question for buyers as to where they extract extra value from the retail store operations. Certainly, a honed real estate portfolio will help, but as analysts have pointed out if it were that easy then the current management would have done it already. Whatever happens, a new chapter awaits one of the U.K.’s most storied retailers.

OK Gen X: Purchasing Behavior of the Sandwich Generation

Jasmine Glasheen — Mon, 10 Feb 2025 05:01:00 +0000

Which generational cohort has big middle-child energy? Enter the least discussed generation of all, born between 1965 and 1980, Gen X is dubbed “the Sandwich Generation” because they’re sandwiched between infamous baby boomers and equally infamous millennials. Gen X may be the smallest generation, but they’re actually 22 percent more likely than boomers to fall in the “high-income” segment. In fact, Gen X earned 33 percent of total U.S. income despite representing just 25 percent of the population. They’re also the fastest-growing spenders in the beauty category.

Brands and retailers can’t afford to ignore the MTV Generation, but that doesn’t stop them from trying. Gen X is rife for targeting with strategic merchandising and marketing initiatives.

Brands and retailers can’t afford to ignore the MTV Generation, but that doesn’t stop them from trying. Don’t be one of these brands and retailers that overlooks Gen X purchasing behavior. Gen X is rife for targeting with strategic merchandising and marketing initiatives. Let’s discuss how to do it.

Gen X’s Purchasing Mentality

Why is Gen X overlooked, despite their hefty aggregated incomes? One reason could be that much of their discretionary spend is already spoken for: Gen Xers often carry the financial burden of caring for their aging relatives, as well as younger dependents. They’re scrambling to put away money for retirement, as they have the lowest retirement savings of any generation. Most Gen Xers have less than 5 percent of the savings they’d need to retire comfortably. So, successfully marketing to Gen X requires an awareness of the financial pressure they’re under.

It comes as no surprise, then, that Generation X prioritizes value, but we aren’t talking about crappy products without staying power. Gen X is the most likely generation to use a price comparison website––besides their peers in China and India. Gen X is 7 percent more likely than the average consumer to research a product before buying it––but they value product quality over price alone (sorry, Temu).

That’s because these savvy consumers have been around long enough to see so many chintzy brands rise and fall and too many subpar products fall apart in their hands. As a result, their perception of a product’s value extends beyond the price tag to product functionality, durability, and longevity. They’ll pay a bit more for a product that lasts if the brand or retailer is able to justify the price.

And speaking of product quality, Gen X is still incredibly brand loyal. They came of age in the 80s heyday of legacy brands. Remember when an Adidas shirt would retain its shape through 300 washes? Remember when any shirt with the Adidas label was high quality? Gen Xers do. The “Myth of the Maxxinista” never really permeated their purchasing mentality––they expect high-quality products from well-known brands. Be forewarned: Product quality is essential and brands that license their logo to companies with subpar manufacturing processes risk alienating the Sandwich Generation.

The Adoption Gap

Remember the 90s? When malls were cultural epicenters and legacy brands operated similarly to spiritual gurus, making grandiose affirmations about fashion, beauty, and the human bodies that partake in them? Gen X does. And while few of us wish to go back to a time before #metoo and body acceptance were a thing––well, evidently half of us––brands did have an allure and reputability that’s hard to replicate in the modern retail marketplace.

Gen X consumers are still looking for that level of trust. They’re the OG (original gangster) brand loyalists; not blind to the faults and global issues of the brands they patronize but looking to build lasting relationships with authentic brands and less willing than younger generations to purchase outside of their tried-and-true brand Rolodex.

We can’t talk about how the younger generations shop without talking about the apps on which they do so: the TikTok ban, Instagram, YouTube, and burgeoning sites like RedNote, Flip, and Whatnot are the places purchases happen. This isn’t the case for Gen X. Sure, about 70 percent of them use the same platforms, but they don’t live their lives on them. That’s the differentiator.

A whopping 58 percent of Generation X are laggards or in the late majority of innovation adoption. But this isn’t because they’re dinosaurs that lack the technical acumen to post a selfie. Lumping Gen X in with boomer stereotypes (that aren’t even true for most boomers) is deeply offensive to the first folks to watch MTV and own cell phones. They aren’t boomers and their reluctance about technology is rooted in fact. Meta scandals, TikTok bans, information selling––Gen X knows all about it. They’ve seen what the fixation on technology has done to younger generations and aren’t interested in following suit.

So, while Gen X is highly aware of what’s happening in the world, they’re getting their information from CNN, thank you very much, and not Meta. While Gen X plays their current role as a life raft for aging parents and work-averse young dependents, they just want to get a product that works as well as possible, as affordably as possible, with as little BS as possible.

Transparency Is Still Key

Millennials’ lack of brand loyalty has been decried on every news channel, so it’s interesting that none of these narratives focused on celebrating Gen X. As consumers, Gen X is perhaps the least narcissistic of any generation, prioritizing providing food and necessities for their families while saving a buck or two for a retirement that may never come. You can’t market impulse buys to Gen X, but you can still build authentic relationships with them that last for life.

Brands and retailers that focus on communicating the efficacy of their products through product demo videos (with subtitles!) and customer reviews have more impact than those hawking snake oil and miracle cures on TikTok. Loyalty programs are a hard YES for Gen X customers, just make sure your store associates are trained on how to properly execute them.

Don’t forget Gen Xers when it comes to social media, just focus on demonstrating the value of the product for the price. Show Gen Xers how products work, what’s in them and why they will last. That approach will build your revenue over the long run better than the next thousand viral videos to come with an eventual post-TikTok.

The Power of the Solo Travel Economy

Glyn Atwal — Wed, 05 Feb 2025 05:01:00 +0000

Many visit a Starbucks for its ‘third place’ environment where they often sit alone, immersed in their own virtual worlds. These ‘seat warmers’ enjoy almost complete sound insulation thanks to their state-of-the-art audio gear and interact through screen technology.

In a case of missed opportunity, marketers have traditionally taken a functional approach to connect with the solo consumer, often focusing on practical (not experiential) solutions.

It’s not just the branded coffee, but the entire experience that makes me-market patrons feel they are not alone. Starbucks offers belonging to a community, and like many other casual dining chains, caters to an evolving demographic: the solo consumer.

There is no longer a stigma about being in public places alone. Mintel research reveals that only 21 percent of German singles perceive themselves as lonely compared to almost 40 percent of the German population. Solo consumers don’t seek sympathy — they want empathy with brands that understand their priorities and preferences.

Demographic Shifts

Globally, single-person households are rising at the fastest rate of all household types. In the U.S., 29 percent of all households are single. This phenomenon is even more pronounced in South-East Asia. In Japan, 34 percent of all households are single while in South Korea, this figure is an astounding 42 percent.

This rise in single-person households reflects a conscious lifestyle choice. Younger individuals, for instance, are increasingly delaying commitments to relationships and marriage. In China, more than half of individuals aged 25 to 29 remain unmarried highlighting a growing choice — particularly among women — to determine their own destinies without the pressure to marry. South Korea’s 4B movement and the trending #boysober on TikTok have further encouraged women to opt out of traditional relationship norms.

Solo Travel Economic Power

The rise of the solo consumer defines a new economic dynamic: the solo economy. One sector experiencing significant growth is travel and hospitality. The global solo travel service market was valued at approximately $130 billion in 2023 and is projected to reach nearly $200 billion by 2032.

This market’s growth potential means that solo travelers can no longer be dismissed as a niche audience. According to an American Express survey, 76 percent of millennials and Gen Z said that they were planning on taking a solo trip in 2024 which is set to grow in 2025. Solo travel represents a prime opportunity for industry players to design experiences tailored specifically to the needs of the individual traveler. For instance, Four Seasons offers the Solo Travel – Naviva All-Inclusive Package, promoting “personal growth, genuine connection, and thoughtful individualization.”

Table For One

The increasing normalization of solo consumers continues to disrupt consumption patterns. In 2024, solo dining in the U.S. saw an 8 percent increase in OpenTable compared to the previous year. Plus, in the U.S., solo diners spend 48 percent more per person than other diners. Younger consumers are at the forefront of this quiet solo dining revolution. According to research from OpenTable and KAYAK, 68 percent of Gen Z and millennials reported dining solo at a sit-down restaurant within the past 12 months.

Dining out also holds an additional appeal for solo diners with a focus on self-reflection and personal growth. In fact, 34 percent of respondents cited “me time” as the primary motivation for dining alone.

Me-Market

Singles may face higher costs, such as housing, but the appreciation of financial independence has given rise to a me-market where individuals confidently and unashamedly spend on themselves.

Self-care plays a pivotal role for solo consumers, particularly among women; in Germany, almost 50 percent of female singles prioritize self-care. Brands can make a difference. For example, Marriott Bonvoy offers a range of solo travel tips, including a 20-minute video titled “How to Have a Life-Changing Trip By Yourself,” designed to inspire and empower solo travelers.

Marketers should pay close attention to creating a solo premium. The trend of self-gifting is gaining momentum; according to the Salsify 2024 Consumer Holiday Shopping Report, 73 percent of millennials and 68 percent of Gen Z were inclined to purchase items for themselves during the holiday shopping season.

In a case of missed opportunity, marketers have traditionally taken a functional approach to connect with the solo consumer, often focusing on practical (not experiential) solutions. For example, smaller food packaging sizes cater to individual needs. HelloFresh’s “Dinner for One Delivery” offers a convenient option for single individuals.

However, to truly resonate with the solo consumer segment, marketers must go beyond functionality and tap into an emotional sweet spot. For instance, Krispy Kreme’s Triple Choc Indulgence Boxed Single appeals to the desire for self-indulgence (perfectly suited for an evening watching Netflix). We’re not touching the nutritional backstory on this one.

Retail for Solos

The solo consumer offers a chance for brands to engage with a segment that has been largely overlooked. The retail sector is no exception. Urban demographics are skewed towards single households who are more likely to pay a premium for convenience. As a result, retailers are rethinking which retail formats can best compete in urban environments.

The continual expansion of Tesco Express, a small-format concept of the leading supermarket chain in the UK has become a one-stop shop for both everyday essentials and occasional luxury indulgencies. This success could serve as a blueprint for Walmart to reconsider its decision to discontinue Walmart Express in the U.S., which was phased out in 2016.

Meanwhile, IKEA is expanding its global network of smaller stores in city centers, including the recent opening in Arcardia, Los Angeles. As Javier Quiñones, CEO and Chief Sustainability Officer of IKEA U.S. noted, “Our expansion goal is simple: to be where people are, whenever and however they want to experience IKEA.”

Solo consumers are empowered to make lifestyle choices on their own terms, but retailers must also address their emotional needs, such as the need to feel valued. According to the Hilton 2025 Trends Report, 46 percent of solo travelers believe that friendly and helpful staff would improve their travel experience. This highlights a clear opportunity for employee training programs—not just in hospitality, but across all customer-centric industries—to bridge this gap.

Starbucks understands this dynamic. Baristas have long asked customers for their names and written them on cups. And for those seeking some me-time, Starbucks provides the time and space where individuals can enjoy their coffee experience – however, they prefer.

The University of Arizona Campus Store Transformation

Gwen Morrison — Mon, 27 Jan 2025 05:01:00 +0000

While most retail sectors have been navigating disruption over the past two decades, it’s a more dramatic story on campus. In the consumer market, books are at risk. The general market for physical books has been shrinking for years with the shift to digital content and the growth of e-readers. Then compare this with a virtual wipe-out of physical textbooks.

According to Jon Bibo, CEO of the Independent College Bookstore Association, “The traditional textbook world evaporated in just 4-5 years, as it was replaced by digital course material.” That leaves a lot of floor space in major universities. Some colleges have to fill over 15,000 square feet of retail space, and larger universities deal with 30,000 square feet or more. This calls for a campus store transformation.

Brand marketers would benefit from a stroll across campuses where students have meals delivered all hours of the day by Grub Hub robots and pick up Amazon orders through lockers strategically positioned at student unions and dorms. Digital native students are increasingly frustrated with long checkout lines at brick-and-mortar formats where the product is often locked behind cases. Enter an opportunity to bring innovation that takes friction out of shopping.

On Campus Customers

Enrolled students aren’t the only audience shopping campus bookstores. Prospective students often make decisions on where to study based on impressions of all aspects of campus life down to the details on retail and food service options. A typical tour concludes with the opportunity to purchase collegiate swag.

Then add in parents and alumni who are important donors, and the store becomes a critical marketing tool. Wildcats gameday alone is big business where major universities see over 50,000 transactions. In the U.S., campus sales are close to $8 billion with licensed apparel representing about a quarter of this at schools with athletic programs.

University of Arizona Campus Store Retail Transformation

The disappearance of textbooks was a contributing factor to a rebranding initiative at the University of Arizona. The campus store had devolved into a disorganized, unfocused layout that was confusing and cluttered. U of A recognized that its bookstore no longer aligned with its broader institutional image of excellence and innovation.

After bringing on Peter Neff as Executive Director (previously with Meijer), they embarked on a transformation. Taking stock of the “house of brands” that included Apple, Nike, Champion and a full-service Starbucks within the store, Neff and his team set out to optimize the value of brands that appeal to campus constituents while staging a total makeover.

They analyzed what to keep and what new brands to add. A technology center became a centerpiece and new apparel brands such as Lululemon were brought in. A total redesign was led by Onyx Creative. Neff now proudly describes the store as a central hub for students, faculty, staff, alumni and visitors. “The renovation is intended to better resonate with the new generation of students.” All stakeholders agreed to rebrand it “U of A Campus Store” to reflect what is actually inside. Just four months after reopening its doors, sales were up 12 percent.

A Study in Brand Management

These developments should have brands clamoring to break into campus stores. According to Bibo, brands often don’t align their own collegiate ambassador events with product presence at the nearby campus stores. Brands that supply athletic uniforms through carefully negotiated sponsorship agreements with university athletic departments often miss the opportunity to engage in store-level promotional partnerships. Campus pop-ups and social media set-ups could be strengthened if they connect through college bookstores.

Bibo points out that Jansport, Vitamin Water and Dell invested early on with sales teams dedicated to the college consumer which gave them an initial leading edge over competitors. They no doubt recognized how college students establish longer-term brand affinities that translate their purchases well beyond graduation.

Big Tech Comes to the Big Ten

Brand marketers would benefit from a stroll across campuses where students have meals delivered all hours of the day by Grub Hub robots and pick up Amazon orders through lockers strategically positioned at student unions and dorms. Digital native students are increasingly frustrated with long checkout lines at brick-and-mortar formats where the product is often locked behind cases. Enter an opportunity to bring innovation that takes friction out of shopping.

Looking ahead, this sector is ripe for an infusion of technology. Amazon is already launching its cashier-less “Just Walk Out” on a number of campuses in the U.S. and beyond.

Retail Media is moving into the space which will demand more alignment of brand content and resources. Virtual “try-on” kiosks allow cosmetic brands to play in the game where students with little training can work the counters.

As advanced AI, sensors, computer vision, and RFID come together for seamless shopping on campus, the shopping experience will make a lasting impact as these sophisticated consumers enter the market for first-time homes and other life-stage milestones.

A Lucrative Market that Doesn’t Like to Be “Sold To”

Brands targeting the 18-24 campus consumer recognize the value of the 15 million students who spend $200 billion annually. Lucille Dehart of Columbus Consulting points out that creating loyalty in this lucrative market is challenging at best. “These consumers are exposed to more options than prior generations.” Growing up with social platforms, they are highly influenced by friends, reviews and recommendations. “They have a great deal of information and competitive choices — so earn their trust and nurture the relationship with micro personalization.

Consider Campus Stores Your Innovation Lab

The benefit of an on-campus presence? Dehart says, “Once you get them you’ve got them for a while.” The message here is that savvy brands know that loyalty starts young, and they work with campus store management to sell their products targeted to younger consumers.

Brands aiming to cultivate loyalty with ‘hard to reach’ students will find more leeway and collaboration on campus than with national chains. They can test curated product assortments and marketing strategies that integrate events and activations. Special edition merchandise can further brand engagement with students.

College students are often at the forefront of trends and cultural shifts. With their ability to amplify content on social media, they can be brand advocates and a great source for product and messaging feedback. The value of this audience through influence and future spending power should not be overlooked.

Campus stores are a great opportunity to tap into a market with innovative in-store experiences to introduce new products and services. It’s not rocket science to figure out what brands excel when students exit through the campus gift store, armed with must-haves and needs.

The Story of Next Retail Success

Mark Faithfull — Wed, 15 Jan 2025 05:01:00 +0000

Next retail, the multi-brand fashion and homewares retailer, has become the unrivaled champion at making the mundane exciting. Think Gap Inc. in its heyday. Not only has the U.K. retailer used its magic formula to consistently demonstrate remarkable success in an industry known for its volatility, but its stock is riding at an all-time high and its normally glass-half-empty boss Lord Simon Wolfson has even been quite cheery at recent trading updates.

Next’s sustained growth and prominence are rooted in a blend of strategic foresight, operational excellence, innovative brand integration, and a keen ability to stay on trend without ever being too trendy. CEO Simon Wolfson has been a pivotal figure in steering the company’s consistent growth and has undoubtedly been at the heart of its retail success strategy.

And he believes that after several decades of almost untroubled success (Next dates its history back to 1864 but the first branded Next retail store opened in 1982), he’s hit on a new retail success strategy to perform even better. Not only that, his company has been snapping up a range of fashion and home brands and he has pledged to expand overseas to try and crack a market that has so far proven underwhelmed by Next’s offer – the U.S.

Simon Woolfson Drives Impressive Success

Next offers good quality basic apparel and homewares, with fashion covering everything in womenswear, menswear and kids across jeans, chinos, T-shirts and tops, to dressy eveningwear, office wear, coats and other wardrobe staples. Without an obvious direct U.S. comparison, its offer straddles Gap and Banana Republic, with a slight nudge towards increased premium offers but with pricing that remains accessible.

Next’s sustained growth and prominence are rooted in a blend of strategic foresight, operational excellence, innovative brand integration, and a keen ability to stay on trend without ever being too trendy. CEO Simon Wolfson has been a pivotal figure in steering the company’s consistent growth and has undoubtedly been at the heart of its success.

And that keeps on coming. Next upped its profit guidance for the year again as sales jumped in its third quarter due to the early cold snap. Sales at the chain rose 7.6 percent over the prior year for the 13 weeks to Oct. 26, 2.6 percent above its guidance for the quarter. Total U.K. sales climbed 5.8 percent for the period, while total U.K. online revenues were up almost 8 percent. As a result, Next raised its profit guidance for the full year from $1.24 billion to $1.26 billion.

It also forecast sales to hit $7.84 billion in its full-year results, a rise of 7.4 percent from last year, as it upped its fourth-quarter sales guidance from a 1 percent rise to 3.5 percent. Woolfson’s approach to balancing traditional retailing with digital innovation has kept the company resilient in challenging times.

Space and Place

While the brand’s apparel may not raise the pulse, the retailer has been consistently innovative and a pioneer in how and where it operates. For example, it has largely abandoned the high street for out-of-town retail parks long before many fashion retailers emigrated to the enclave of DIY and appliance stores.

Next’s real estate strategy has been a cornerstone of its success. It adopted a disciplined approach to its physical footprint, focusing its investment on flagship stores and retail parks. These larger-format stores often include a mix of fashion, homewares, and lifestyle products, creating a one-stop shopping destination that appeals to a broad customer base. Next has also been ruthlessly effective in blending its brick-and-mortar presence with its online operations. Its stores, many with easy access and free parking, which is a rarity in the U.K., also serve as click-and-collect points. The company’s online platform, Next Directory, has evolved from a (somewhat famous and coveted) mail-order catalog to a sophisticated online marketplace.

Cost Control Focus

One of Next’s key strategies is its meticulous focus on cost control and inventory management. By leveraging advanced data analytics, the company ensures that stock levels align closely with demand, reducing the risk of overstocking or understocking. This efficiency extends to its supply chain management, where Next has built strong relationships with suppliers to ensure quality and reliability at competitive prices.

Bright Horizon

The usually cautious, dare we say downbeat Wolfson has spent much of the past 12 months calling 2024 the start of a “new era” after determining that Next’s “magic formula” initiated in 2017 had stopped working.

He feels the horizon now looks somewhat brighter for three reasons: new brands and new territories, growing sales from its infrastructure business Total Platform, and equity investments in fashion brands such as Reiss, FatFace and homewares/furniture brand Made, each giving Next the opportunity to reach a wider audience.

He believes that he can take the Next brand to “another level” by “backing newness with conviction, giving our customers a genuine breadth of choice, and delivering better, more aspirational levels of quality,” while also developing new brands like Love & Roses and Friends Like These in-house.

IP and Third-Party Deals

Next is looking to grow through acquiring the IP of third-party brands like Cath Kidston and Made.com, which it currently operates as independent licensing businesses. Wolfson is also pursuing licensing agreements with other third-party brands, like Laura Ashley, Reebok, and Bath & Body Works. These partnerships combine Next’s specialist sourcing and technical skills with the individual brand’s heritage and identity.

It has also inked deals with Superdry and AllSaints in kidswear, and French Connection and Clarke & Clarke in home, bringing a more diverse choice underpinned by their own branded staples. Next recently partnered with The Cotswold Company to launch the homeware brand’s ranges online and has rolled out its premium online fashion platform, Seasons, selling a selection of premium and luxury brands, seeking to build on the success of the Reiss acquisition.

Next is planning to grow its third-party business by creating a dedicated ecosystem for higher-end labels, including Ganni, Marc Jacobs and Tory Burch — and recently snapped up a 16 percent stake in homeware and lifestyle brand Rockett St. George following a series of homeware and clothing collaborations. Meantime, health food and supplements retailer Holland & Barrett has opened new concessions inside three stores.

The list goes on, and on, and on. With its larger stores, there is a very real possibility that Next will be more akin to a department store rather than a fashion brand before long.

International Growth

Another big avenue for growth is overseas expansion, with Next conceding that it has performed stronger closer to home in Europe and in the Middle East, where there is stronger brand awareness, and it is able to distribute goods on shorter lead times and at competitive prices. Next is looking to franchise and wholesale relationships in India and other Asian countries and has embarked on a “very encouraging trial” with Nordstrom. It has apparently agreed on terms with another undisclosed U.S. retailer and is in talks with others, while its goods are already available online through its dedicated U.S. website.

Next’s third expansion avenue, Total Platform, will grow through outsourcing its infrastructure to other businesses. It uses this infrastructure within its invested brands so it can benefit from their growth and Next will inevitably snap up more businesses to plug into the platform.

One of the most remarkable things about Next is that in an industry and a sector known for volatility, it has managed to chart an incredibly smooth passage. While rivals such as department store groups Marks & Spencer and John Lewis have had to endure challenging years, and others have disappeared, Next has rarely made a misstep.

It has doubled down on quality, raising prices but remaining accessible for the middle market, and its operational and strategic excellence show few signs of waning. If retail is detail, Next has consistently been the king of doing the basics brilliantly, time after time.

Its big challenge is to develop as an international brand. Next’s collaborative, multi-brand success is almost certainly driven by the halo effect some of those niche labels bring to the group. The Nordstrom trial has been relatively small scale to date but if it does ramp up, don’t expect to notice. No one does off-the-radar, understated success like Next.

Bal Harbour Mall on Wheels: Pop-Up Retail Innovation

Pam Danziger — Thu, 09 Jan 2025 05:01:00 +0000

Innovative is not an adjective typically used to describe malls. Yes, malls have evolved since their founding in the 1950s. They’ve gotten bigger and added more things to do. They tore down the walls to become lifestyle centers. But mall operators have followed the same basic business model over the years: build it, fill it and people will come. Mall owners’ revenues are made by leasing space to tenants, not selling stuff to customers. But Bal Harbour Shops has a plan to make the mall a pop-up retail innovation.

Bal Harbour Shops is a haven for luxury shoppers in Miami’s Bricknell City Center that opened in 1965 and Whitman Family Development owns the property. Given the success of Bal Harbour over the years – the ICSC named it one of the nation’s top-performing shopping centers – it could rest on its laurels and continue business as usual. However, like the proverbial shark that must keep moving or die, Lazenby believes his mall must innovate to avoid the same fate.

Pragmatic Bailouts

While operators like Simon and Brookfield have stepped in to save struggling retailers, like JC Penney, Brooks Brothers, Forever 21 and Eddie Bauer, their investments were primarily intended to keep lease revenues flowing, not to perfect what makes retail tick. Simon Property CEO David Simon called its SPARC real estate investment trust group merely a sideline to its core business.

Malls tailor their tenant mix and format to the local community, but their primary mission is to bring people into the mall and get consumers to drop a lot of cash while there so they get their monthly lease payments.

Innovation Comes to Bal Harbour Shops

The mall business model has worked just fine for the better part of 70 years, so no major innovation has been considered. However, Bal Harbour Shops CEO Matthew Whitman Lazenby sees it differently and understands better than most how to balance the complicated interplay between mall leasing and retail selling business models.

Bal Harbour Shops is a haven for luxury shoppers in Miami’s Bricknell City Center that opened in 1965 and Lazenby is the fourth generation to lead the family firm, Whitman Family Development, which owns the property. Given the success of Bal Harbour over the years – the ICSC named it one of the nation’s top-performing shopping centers – it could rest on its laurels and continue business as usual. However, like the proverbial shark that must keep moving or die, Lazenby believes his mall must innovate to avoid the same fate.

Mall on the Move

Urgency was the genesis of the idea to pack up the Bal Habour Shops into modular shipping containers and move them to customers rather than wait for them to come to the mall. “The idea was to take the Bal Harbour experience and put it in a bottle,” Lazenby said. Now making its fifth pop-up appearance in West Palm Beach, 70-odd miles from home base, the Bal Harbour Access Tour is the industry’s first traveling shopping center, fully equipped with shopping and dining experiences.

WPB Access brings shops by Balmain, Dolce & Gabbana, Lanvin, and Tiffany & Co, among others, to West Palm Beach’s CityPlace for a limited engagement through January 15. It also made eight-week appearances in Raleigh, NC, Sarasota and Destin, FL and Greenville, SC. When Hurricane Helene hit, Access repurposed the restaurant to provide meals for first responders.

“The idea of pop-up retail is not new. And doing retail out of shipping containers isn’t new either, but nobody’s ever done it on the level of a shopping center,” Lazenby said. “Quite frankly, the logistics are mind-boggling, trying to get some 30 containers assembled, disassembled and transported. It’s like a carnival – a real retail circus.”

Origin Story

The idea for a traveling luxury mall came as a mash-up of several different ideas bandied about during the pandemic. The owners were developing an ecommerce platform to keep Bal Harbour Shops operating virtually during the shutdown. They also committed to opening a brick-and-mortar operation in Key Largo and faced nothing but roadblocks until they eventually had to terminate the lease.

The company is awaiting the completion of the Bal Harbour Shops’ expansion in 2026 designed to disrupt mall business-as-usual. To fill in the timeline gap, the design team offered the crazy suggestion of using shipping containers to put its stores on wheels and move them. It turns out the idea wasn’t crazy but inspired.

Setting the Stage

Bal Harbour hired an Italian architectural firm to design the mall on wheels concept and BMarco Structures out of Atlanta fabricated the 30 containers that make up the traveling pop-up. Ten different stores can fit into the space and after the fourth week of the eight-week pop-up event, the shops can be restaged, with some retailers moving out and others moving in. And some retailers, like Tiffany, stay in place for the whole eight-week run. The on-site Whitman Restaurant remains center-stage throughout to host events and offers dining for 150 guests.

“Generally speaking, there’s a rotation so we can curate the brands. Some corporate cultures are geared toward doing innovative things so they want to be with us all eight weeks in every market. Others let someone else try it and will maybe join later,” Lazenby explained. Advice to holdouts: Step outside of your box and try something different.

Exclusive Access

Bal Harbour Access is exclusive access, meaning that guests must register to become members of the Bal Harbour loyalty program, which takes a few seconds and costs nothing. Besides opening the door to the pop-up experience, members receive personalized shopping services and a beautifully produced and content-rich quarterly Bal Harbour Magazine.

Access locations are selected where luxury shopping experiences are thin on the ground, and also where there are underserved pockets of high-net-worth customers, such as in Raleigh which anchors North Carolina’s Research Triangle. Lazenby said that Raleigh has outperformed every other market in terms of new members and traffic, but the pop-ups in the Florida panhandle, like Destin, generated higher sales performance with less traffic.

Loyalty and Retention

Obviously, Bal Harbour Access is a customer acquisition strategy. So far, the first four appearances have yielded over 50,000 new customer connections and the WPB location is sure to bring in many more with high-profile guests and media gathering around Mar-a-Lago during Trump’s transition period.

“While in retail, it’s more efficient to keep a customer than acquire a new one, customer acquisition is the name of the game for Access. It’s been costly, but getting new customers is critical if you are focused on the long-term as we are,” Lazenby added. “It’s all about making and curating a place that people want to spend time in. We want to create an immersive luxury experience that establishes an emotional connection with customers in their place.”

Innate Innovation

Lazenby’s family has been involved in retail since the very beginning of Miami Beach, which wasn’t incorporated until 1915. Even in those early days, the company went against standard industry practice in selecting tenants. “Back in the day, landlords selected tenants who would put the most money into their bank account. That irritated my grandfather, who felt it was important to build a community. He wanted tenants that would be good for the mix on the street, like culturally important bookstores, even if they weren’t big rent payers,” Lazenby explained.

His family also identified early on the economic significance of luxury as wealthy snowbirds from around the world started to migrate to Miami in the winter. That’s why Lazenby says, “When we’re targeting our customers, we look global.” About 80 percent of Bal Harbour customers are not locals, though they may have a second, third or fourth home in the area.

Currently, Bal Harbour hosts about 100 legacy luxury retailers, interspersed with promising up-and-comers. Saks Fifth Avenue and Neiman Marcus anchor each end of the block and once these two companies merge, he doesn’t expect the current arrangement to change. Another 40 or so stores will be added after the expansion opens in 2026.

“We go back a long way dealing with legacy European luxury brands. When my grandfather brought in Gucci back in the 1970s, he dealt directly with Aldo Gucci. Luxury brands had a small footprint back then, but they have consolidated and gotten a lot bigger in size and scale, like Louis Vuitton’s enormous Paris store or Tiffany’s landmark building in New York,” he reflected. “But a luxury store can get too big. There’s intimacy in a smaller scale, like we offer. We give our stores enough space so they can put their best foot forward in product and service. It’s a balancing act,” he continued.

It’s also a balancing act for a center like Bal Harbour Shops to maintain continuity for 60 years while keeping it fresh and lively for each generation of customers. Bal Harbour Shops has found a way to insert innovative new ideas into the mix, managing the overall business with a long-term view to keep new and loyal customers coming back for more. Bal Harbour Access is a short-term, eight-week tactic that serves a long-term strategy.

Peek & Cloppenburg Conscious Fashion Store Bets Big

Mark Faithfull — Wed, 08 Jan 2025 05:01:00 +0000

At the revamped retail offer within Potsdamer Platz in Berlin, Düsseldorf-based department store chain Peek & Cloppenburg is aiming to prove that sustainability sells, debuting its P&C Conscious Fashion Store. It stocks only environmentally friendly apparel and merchandise and is probably the largest outlet globally to go fully green.

The decision to incorporate brands that are not sustainable as such, but have specific products or ranges that are, has been perhaps the most controversial element, Thimo Schwenzfeier, general sales manager, admits. However, he says the intention is not for any brand to lecture or showboat but rather to showcase selected items to prove that sustainability can sell, therefore encouraging greater adoption by all brands.

Impact Returns

The store has been designed as a work in progress for the retailer to figure out how it can incorporate sustainability within all its full-line stores around Germany. As a sustainability innovation lab, it serves as a collaborative platform for information exchange and the development of sustainable concepts and services to extend product lifecycles. With an understanding that sustainability is more than a headline, it is also expected to perform on the bottom line.

The store is an anchor in Brookfield Properties’ revamped mall, The Playce and is spread over around 32,000 square feet across three sales floors. The concept is to offer eco-conscious fashion collections as well as a range of sustainable brands. The assortment has been curated according to social, environmental and toxicological metrics and includes new brands plus capsules from mainstream brands that have an environmentally friendly selection within their broader assortments.

Situated on the ground level with two basement levels, the store showcases new and hot products, has a repair shop and a recycled and re-use area, plus spaces that can be converted into event spaces or used for workshops and tutorials.

Architecture of Omission

The store is designed according to an ethos to reduce its environmental impact, according to criteria that Peek & Cloppenburg calls the ‘architecture of omission.’ This matrix means that any element not considered essential, such as ceiling panels, wall suspensions and floor coverings, have been omitted. Moreover, fixtures use Made in Europe sustainable materials wherever possible, the furniture is a reduced, flexible, durable modular design, and digital signage can be changed as branding positions change.

“The Conscious Fashion Store is intended to inspire and provide impetus,” says Thimo Schwenzfeier, general sales manager responsible for the store and the spearhead for the new approach at what has been a typically conservative retailer. Peek & Cloppenburg is no obvious eco-warrior and this store, open a year now within a wider scheme where stores have been opening steadily, is a radical departure for the business.

“We want to appeal to people who are already interested in buying more sustainable fashion, as well as reach a broader mass consumer and get them excited about this topic. That’s why we decided to open in Potsdamer Platz in Berlin, a central location where both residents and tourists can drop by and discover our store,” Schwenzfeier says.

In order to extend the lifecycle of goods, customers can have their garments repaired in an open workshop, and can also have them restyled and upgraded by professionals on-site, customized by embroidery or printing by specially-trained staff. With this concept, Peek & Cloppenburg wants to encourage its customers to be more conscious about their apparel and to give new life to their favorite pieces. “Walk-ups in store can go to the repair shop and have their garment fixed in somewhere between 40 to 60 minutes,” he adds. “It also adds some theater to the store, why hide something like this away when it can add animation to the store?”

Financing Conscious Fashion Stores

Getting the green light for the project wasn’t easy; the retail board had to be convinced of the viability of the project and also that it could prove a useful testing ground for sustainability-based merchandise within its regular stores.

“Our focus is on fair fashion and we feature capsules from other brands,” says Schwenzfeier. “The aim for this, as a standalone store, is to be profitable and to create a more experimental and eco-conscious offer, because the concept has to survive in the commercial world. Sustainable brands have to be able to compete in the fashion market.”

The decision to incorporate brands that are not sustainable as such, but have specific products or ranges that are, has been perhaps the most controversial element, he admits. However, he says the intention is not for any brand to lecture or showboat but rather to showcase selected items to prove that sustainability can sell, therefore encouraging greater adoption by all brands.

“It’s important that we attract the general population in the area and encourage them to explore. We also want to appeal to conscious shoppers and Berlin is an obvious location because it has a large population who call themselves conscious fashion shoppers. But it is with shoppers who want to be active that we see the most potential and we still need to raise awareness,” he adds.

“We also want to attract traditional Peek & Cloppenburg shoppers whom we want to encourage the adoption of sustainability. One of our other Berlin stores is in Mall of Berlin, which is just a short walk away, so we have to offer something different here that is also appealing.”

Tourists are another strong source of customers but he says they can be difficult to reach and it is also difficult to know what they might want. “We’re still in the learning phase. Collaborations, working with brands, workshops, they are all playing a part in what we are offering here, trying to build a community of eco-conscious shoppers and creators,” he says. “We want to showcase opportunities, and strategic possibilities.”

The Playce

The anchor store is joined by the themed Upside Down Museum and an upcoming Mattel store at the other end of what is effectively a gallery space at the heart of the much larger mixed-use development.

U.S. investment giant and mall market powerhouse Brookfield Property Partners paid nearly $1.4 billion for the majority stake of the development at Berlin’s famous Potsdamer Platz in 2016. An area with a storied history, it was the thriving city heartbeat in the 1920s but was later divided by the infamous Berlin Wall until it fell in 1989. The area was then reinvented in a scheme driven by the head of Germany’s automotive giant Daimler, to create a city center.

The sprawling estate of 17 buildings totaling 2.9 million square feet encompasses 446,000 square feet of retail, plus 493,000 square feet of leisure including two hotels and when acquired by Brookfield in 2016 was half-empty, having never quite captured the notoriously-hard-to-please Berliners. The mall was tired and in too close of proximity to larger malls; there were 69 malls in the city when Brookfield bought the scheme and 72 now, including the much larger Mall of Berlin just a five-minute walk away. Brookfield’s intention was to differentiate, not compete. Much has also been done to improve the public area closing off some streets to create walkways and introducing more bars, cafés and retailers.

But the most obvious change is the nearly $200 million spent on the Arkaden shopping center, now rebranded The Playce. Numerous escalators between the ground and upper floors were removed to clear the central internal passageway and convert the environment into something more akin to a modern-day arcade.

Will Green Sell?

Schwenzfeier admits that the retailer needs to do more work to ensure that Berliners know the store is there and just what it offers. That should be helped by the mall which has gradually been adding retail and leisure units and is now close to full occupancy.

So around 18 months in, the store is testing the concept and the contention that an eco-conscious fashion store can be profitable in its own right. Whether Peek & Cloppenburg then rolls out more conscious fashion stores or, more likely, embeds the concept within its existing stores remains to be seen. Schwenzfeier is an infectious enthusiast, and his job is to get Berliners engaged to convince his board that this is the right direction.

Retail Forecast for 2025

Mark Cohen — Thu, 02 Jan 2025 05:01:00 +0000

As a prelude to a the retail forecast for 2025, let’s look back into the recent past, and then look at what is happening today. In 2020 Covid-19 devastated broad swaths of the retail industry. Even for those essential retailers who were able to remain open for business, consumers’ needs and wants shifted dramatically. Stay-at-home apparel and accessories, and stay-at-home work products and decor businesses boomed while traditional work wear, travel wear and entertainment wear businesses dried up. This was the collateral damage when many people either began to work from home or were furloughed from their jobs.

Though inflation-driven price increases have abated markedly, the fact is that most products that have become more expensive are never going to revert to pre-Covid prices. History suggests that inflationary price effects take a very long time to normalize with respect to consumer behavior.

Re-Entry Retrospective

In 2021, as the Covid-19 crisis began to ease, stores reopened and consumers flush with unspent disposable income and government cash from subsidized employment began to shop with abandon. The retail luxury business, in particular, skyrocketed. But the consumer spending boom didn’t last because explosive inflationary pricing soon reared its ugly head. Driven by unprecedented worldwide pandemic-driven supply chain and manufacturing disruption along with billions of dollars of extraordinary government spending, consumer prices on virtually all products rapidly increased at rates not seen in the U.S. since the late 1970s and early 1980s.

Interest rate inflation followed suit. Consumers’ irrational exuberant behavior came to an abrupt halt. This slowdown in retail has continued with notable strength evident only in low-end, value-priced products and, most notably, necessities such as groceries and consumable products. Though inflation-driven price increases have abated markedly, the fact is that most products that have become more expensive are never going to revert to pre-Covid prices. History suggests that inflationary price effects take a very long time to normalize with respect to consumer behavior.

Reversal in Retail

Unfortunately, whatever normalization trends emerge today in 2024 may be fundamentally reversed in 2025 if, or when, Donald Trump’s promised draconian imposition of tariffs takes place. Throughout the consumer space, whether on the manufacturing or retail side, plans are already being drawn up to accommodate tariff-driven price increases.

In the cold hard light of day, consumers, forced to shoulder these newly imposed tariffs, will inevitably respond with muted spending. Countries, such as China don’t pay tariffs and broadly speaking, manufacturing efforts will not revert back to domestic production here in the US – not in the short term (and in many cases, never.) There will be a scramble to move overseas production from China to other countries, but that won’t fully alleviate the impending increases that consumers will be faced with. Tariffs may very well be imposed on other countries than China and then of course there will likely be retaliatory actions taken which will further exacerbate pressure on retail pricing.

Retail Forecast for 2025

Net/net, when this year is finally over, 2024 may be best described as a year of recovery in retail. In contrast, however, 2025 could very well see retailing revert back to the Covid/post-Covid weakness that we have just started to shrug off. In light of the incredible uncertainty posed by the new administration’s rhetoric without specificity or clear rationale, we can only forecast retail performance next year very cautiously.

Why Is the Silver Generation’s Spending Power Ignored?

Glyn Atwal — Tue, 31 Dec 2024 05:01:00 +0000

Brand executives seem to have an instinctive obsession with channeling marketing strategies and budgets toward winning over the Gen Z demographic. This is nothing new; next gens are always more attractive to marketers projecting youth and exuberance and they can often change the way a brand is perceived.

The Emily in Paris star Philippine Leroy-Beaulieu (1.1 million followers on Instagram), the 61-year-old French actress who plays Emily’s boss made a front-row appearance at the Saint Laurent show at Paris Fashion Week. She is celebrated as an authentic representation of timeless elegance. For luxury brands, these role models serve as a silver lining — a reminder that mature celebrities can enhance a brand’s relevance and prestige.

The latest dramatic Jaguar rebranding identity (including the iconic logo redesign) campaign, ‘Copy Nothing’ is no exception. It redirects “focus on Gen Z, emphasizing diversity, creativity and bold expression.” There is no denying Gen Z’s importance as a driver of future growth. Bain & Co estimates that by 2030, this demographic will contribute to 25–30 percent of luxury market purchases. Yes but, there’s the reality of who’s actually got deep pockets right noiw. The power of the Silver Generation’s spending power is often overlooked.

The cooling of the luxury market is a stark reminder that it will be increasingly difficult for prestige brands to drive growth from younger generations alone. The squeezing of Gen Z’s disposable incomes coupled with an uncertain economic outlook is changing spending patterns. Millennials are in a high acquisition life stage with young families.

Demographic Shifts

The world is getting older which is “an irreversible global trend,” according to the United Nations. As reported by McKinsey & Co., the share of the U.S. population aged 50+ will reach 37 percent in 2025, growing to 42 percent by 2050. This trend is even more pronounced in China, where over half the population will be aged 50 or older by 2050 and in Japan where 36 percent of the population will be aged 65+.

Silver Spenders

The silver generation population has an enviable spending power that accounts for an increasing share of consumption. Approximately 73 percent of all wealth in the U.S. is accounted for by the over-55s. The silver economy is reflected in market data across numerous consumer categories. For instance, the State of Fashion 2025 report by McKinsey & Co. and Business of Fashion reveals that the silver generation accounts for a larger share of total fashion spending than younger consumers. In 2023, those aged 59 and over contributed 37 percent of U.S. retail apparel spending, compared to 23 percent for millennials.

Myths Debunked

Brand executives with a youth bias risk missing out on significant growth opportunities if they fail to challenge common misconceptions about the evolving consumer and lifestyle trends of the silver generation population. First, the idea that older adults are not significant consumers is a myth. In 2023, per capita spending on clothing among those aged 59 and older in the U.S. was 21 percent higher than that of millennials and Gen Z combined.

Second, the stereotype of mature adults as laggards is outdated. The silver population embraces healthier lifestyles, with individuals aged 55+ comprising approximately 23 percent of U.S. gym memberships. They also prioritize physical appearance and mental well-being. In Great Britain, France, and Spain, women over 55 account for nearly half of all beauty product sales in a confluence of wants and needs.

Finally, the assumption that digital engagement is limited to younger generations doesn’t hold up. While younger cohorts dominate social media, silver surfers are catching up. In the UK, individuals over 70 spend more time online than any other age group except Gen Z. Surprisingly, the Entertainment Software Association reports that 29 percent of U.S. gamers are aged 50 and older – an increase from 17 percent in 2004.

Silver Generation Strategy

The silver generation is far from homogeneous and should not be defined solely by age but rather by their lifestyles, attitudes and values. Brands that craft a silver strategy tailored to specific needs and aspirations can significantly impact their bottom line. The beauty business is ahead of the curve. For example, L’Oréal Paris’ Age Perfect Golden Age Rosy-Oil Serum is designed specifically for mature skin. The launch was supported by silver influencers, which, according to Gabriella Ostrenius, Nordic Social Brand Lead at L’Oréal Paris, aimed “to reach a growing, tech-savvy mature audience while delivering a refreshingly positive message about personal care.”

Optics are crucial and role models are influencers. Emily in Paris star Philippine Leroy-Beaulieu (1.1 million followers on Instagram), the 61-year-old French actress who plays Emily’s boss, made a front-row appearance at the Saint Laurent show at Paris Fashion Week. She is celebrated as an authentic representation of timeless elegance, joining other leading high-profile actresses including Helen Mirren and Isabella Rossellini. For luxury brands, these role models serve as a silver lining – a reminder that mature celebrities can enhance a brand’s relevance and prestige.

Intergenerational Appeal

Brands that have built brand equity around ‘youth culture’ typically hesitate to embrace silver marketing. The risk of diluting their ‘cool’ image is too high. But that’s a short-sighted strategy. Attention to detail in execution can make a meaningful difference to create intergenerational appeal. For example, the new Gucci Blondie bag presented on the Cruise 2025 runway is promoted by the 79-year-old music and beauty icon Debbie Harry. Her charisma not only resonates with mature audiences but also serves as an inspiring role model for younger generations.

Intergenerational Diversity

A company’s internal culture is a key factor in leveraging the market potential of the silver demographic. At L’Oréal, 15 percent of the global workforce is over 50 years old, and its ‘For All Generations’ program, launched in 2022, actively promotes intergenerational diversity. This initiative fosters greater diversity in the decision-making process at all levels throughout the organization.

Intergenerational mentoring has been recognized as critical to the transfer of knowledge within the luxury fashion industry. Bottega Venita’s Accademia Labor et Ingenium which opened in 2023 is according to Leo Rongone, Bottega Veneta CEO, “a key strategic pillar to preserve Bottega Veneta’s unique savoir-faire”. The craft school allows master artisans to pass down their know-how, skills and experience to a new generation of artisans.

A Delicate Balance

The challenge for brand executives is to balance their silver strategies to capitalize on incremental growth opportunities without alienating existing customers. Burberry’s new CEO, Joshua Schulman, has recognized the importance of re-engaging high-spending consumers who invest in quality products. It is a refresh of the brand’s past strategy to over-prioritize younger, trend-focused audiences who may or may not have purchased the products.

Maintaining that life stage balance is a tightrope. The social media backlash against Jaguar’s current rebranding campaign is a case in point. Jaguar’s managing director, Rawdon Glover, noted, “We don’t want to necessarily leave all of our customers behind. But we do need to attract a new customer base.” The jury’s out on whether Jaguar risks sidelining the brand’s core customer base in pursuit of broader appeal. The new logo attempts to express modernity and minimalism for a legacy brand. It remains to be seen if Jaguar will successfully strike this balance.