Tag: stores

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Business

Consultants see innovation and pop-up shops

Experts see innovation and pop-up stores

A shopper browsing used clothing at a pop-up swap event in Singapore.

CATHERINE LAI | AFP | Getty Images

LONDON – The future of physical stores has been challenged by the coronavirus pandemic, but experts believe the key to survival will be reinvention.

For some time now, retailers have been trying to attract customers by creating in-store experiences. Now, however, they need to get creative as shopping habits change and customers become more demanding.

Online shopping has been booming since the pandemic began. In the UK alone, internet sales rose from under 20% to over 32% in just three months at the start of the first Covid-induced lockdown. And experts expect the convenience of buying online means consumers will continue this habit even after the pandemic.

According to accounting firm PwC, nearly 50 stores closed every day in the UK in 2020.

Both trends show how important it is for retailers to get their physical presence right.

Kristina Rogers, Ernest Young’s global consumer leader, told CNBC in March that there is “a real redefinition” in the way retailers use their physical spaces.

“It’s no longer just an exchange,” she said, adding that retailers need to understand who their customers are and what they want.

Customers are browsing clothes at the Pangaia pop-up in Selfridges department store in London on April 12, 2021 as coronavirus restrictions are eased.

GLYN KIRK | AFP | Getty Images

She highlighted how Target, one of the largest retailers in the US, chose to have more space in their stores for Apple products. That way, customers interested in Apple devices can check them out in Target when shopping for other things. This is also handy for current Apple users who can merge two trips into one.

“They’re building a ‘mini mall’ in their shop,” she said.

But not every retailer has such a large area to work with. In fact, some experts believe that successful businesses of the future could be those that keep offering new things regardless of their size.

“There will undoubtedly be fewer physical stores going forward,” Matt Clark, managing director of consulting firm AlixPartners, told CNBC’s Street Signs Europe in March. “But the remaining stores need to offer an even bigger experience, additional services and just the ability to purchase products.”

One way for retailers to stand out is to focus more on pop-up stores. These are spaces that are temporarily open to showcase a particular line or product and that have become increasingly popular in recent years.

Stella McCartney Store on Bond Street in November 2020.

SOPA pictures | LightRocket | Getty Images

“One of the most important ways for pop-up shops is to create new opportunities for exploration. It’s not about a consumer walking into a Ralph Lauren store that is the same today as it was 10 or 20 years ago,” says Alex Cohen. A commercial real estate expert at Compass told CNBC.

Some well-known brands have already searched for pop-ups to attract more customers. British fashion designer Stella McCartney is showcasing a variety of local businesses in her flagship store on Old Bond Street in London to celebrate the lifting of restrictions on retailers in the UK. Guess is about to open its first pop-up store in Germany for activewear.

Pop-up areas allow retailers to create something “really fresh” while saving costs, Cohen said.

“Brands have the ability to spend a lot less, not have to commit to a long-term contract, spend less on modular installations, and do it very quickly,” he added.

Exclusivity

In addition, this type of business promotes the idea of ​​exclusivity – a feeling that is becoming increasingly popular with many customers.

“The whole idea of ​​exclusivity is really important. The fact that a pop-up is expiring … is causing excitement among consumers. ‘Wow, if I’m not looking at this pop-up retail offer … at the In den in the next 3 months it will go away, I will never be able to see it, “he said. This adds the kind of excitement that is lacking in many traditional stores.

So it’s not just about the feeling of having an exclusive product, but also about an exclusive experience. This means that retailers can benefit from this exclusivity trend in other ways.

“In terms of exclusivity, many retailers now, either by agreement or actually, when you arrive at a store require you to be connected to a seller. You can’t surf and that creates a sense of exclusivity for better or worse,” added Cohen.

sustainability

Brands are also recognizing the increasing importance of sustainability, both from a business perspective and due to growing customer awareness.

And it’s not just reflected in more “ethical” product lines, but also in what services are available in physical stores.

On its flagship in Stockholm, H & M offers services to repair old clothes and rents out some of its outfits for special occasions.

“The sustainability movement really highlights one of the core dichotomies that the fashion industry is particularly facing, but also a broader retail sector,” said Clark of AlixPartners.

“The debate between value and value: The need to really clearly define your sustainability traits, your ethical sourcing, etc, while delivering great value that is not only cheap but also great value for money which means consumer. “

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World News

Cryptocurrencies usually are not helpful shops of worth, says Fed’s Powell

Cryptocurrencies are not useful stores of value, says Fed's Powell

Federal Reserve Chairman Jerome Powell holds a press conference following the two-day meeting of the Federal Reserve’s Federal Open Market Committee on July 31, 2019 in Washington.

Sarah Silbiger | Reuters

Federal Reserve Chairman Jerome Powell said Monday that cryptocurrencies remain an unstable store of value and the central bank is in no hurry to introduce a competitor.

“They are very volatile and therefore not really useful stores of value and are not supported by anything,” Powell said during a virtual panel discussion on digital banking hosted by the Bank for International Settlements. “It’s more of a speculative asset that essentially replaces gold, not the dollar.”

Powell spoke on a day when Bitcoin had dipped on Coinbase but was still trading near $ 57,000 apiece. The cryptocurrency has seen its price spike in the past seven months due to rapid trading activity and growing acceptance in the financial industry.

In recent years, the Fed has been working on its own payment system that allows for faster money transfer. The final product is expected to be revealed over the next two years.

Alongside this, the Federal Reserve has also conducted other research to determine whether a central bank digital coin would be necessary or practical.

On the latter, Powell said the Fed was taking its time before doing anything.

“To move this forward, we would have to let Congress, the administration and broad sections of the public buy us in, and we haven’t really started the task of that public engagement,” he said. “So you can expect us to be very careful and transparent about developing a central bank digital currency.”

The Boston Fed partnered with the Massachusetts Institute of Technology last year to conduct a multi-year study into the development of a central bank digital currency. The work is expected to take two to three years and, even then, will focus on the hypotheses of a central bank sponsored cryptocurrency rather than its upcoming implementation.

Powell said Congress will likely have to pass some sort of enabling bill before the Fed can proceed with its own currency.

However, he noted that the Covid-19 pandemic emphasized the importance of developing better payment systems so that money can get to those in need quickly.

“It has, in a whole range of things, highlighted the different effects of so many things on poor and low-income and low-income communities,” Powell said.

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Business

Retailers are opening extra shops than they shut, aided by low-cost lease

Retailers are opening more stores than they close, aided by cheap rent

Sportswear retailer Fabletics plans to open two dozen stores in the U.S. this year, bringing the total to 74.

Source: Fabletics

For the first time in years, retailers across the country are planning to open more stores than close.

From Ulta Beauty and Sephora to Dick’s Sporting Goods, Five Below and TJ Maxx, companies are recovering from the Covid pandemic and dusting expansion plans that have been put on hold. In the most recent example, sporting goods retailer Fabletics announced Thursday that it will open two dozen stores in the United States this year. Even Toys R Us, the popular toy chain that filed for bankruptcy in 2017 and eventually liquidated, has a new owner looking to open stores before the 2021 holidays.

Retailers are looking to duplicate brands that have remained strong during the recession sparked by the pandemic. Or they look forward to testing new concepts that can attract new customers. And cheaper rents make these opportunities irresistible.

According to a recording from Coresight Research, US retailers have announced 3,199 new openings and 2,548 closings since the beginning of the year. The company recorded a whopping 8,953 closings and just 3,298 new openings last year as the pandemic weighed on the retail industry and bankrupted dozens of businesses.

Looking back, there were a total of 4,548 openings announced by retailers in 2019 and 3,747 in 2018, Coresight said. So far, the openings in 2021 are well on their way to reaching the top every year before.

After a tsunami of store closures in 2020, the retail real estate landscape is tainted with vacancies. Shopping center owners and malls across the country are looking for tenants to fill this space quickly. Meanwhile, some retailers are more optimistic after weathering the dark days of the pandemic. They want to seize a market where they have more power over their landlords when they sign new contracts or bring negotiations on the table.

“There is more space available and we can achieve better terms today than we did two years ago,” said Adam Goldenberg, co-founder and CEO of Fabletics, in an interview.

A woman walks into a store in New York City on February 22, 2021.

John Smith | Corbis News | Getty Images

The trends are particularly pronounced in top retail markets like Manhattan, which are usually a mecca for tourists and commuters. Retail rents in New York City fell to historic lows last fall, falling as much as 25% from 2019, according to a semi-annual report by the Real Estate Board of New York.

And rents were still falling from the third to the fourth quarter. Average retail rents fell 1.6% quarter over quarter, said commercial real estate services company JLL. The decline was more pronounced in certain markets: For example, along Lower Fifth Avenue from 42nd Street to 49th Street, retail rents fell 7.6% quarter over quarter, JLL said. They fell 4.8% in the Madison Avenue district.

Meanwhile, empty storefronts continue to be a headache for landlords. New York City retail property vacancy rates rose 21% year over year in the fourth quarter. This is evident from a separate follow-up by CBRE.

“After the pandemic, we can again host training courses in stores and special shopping days,” said Fabletics’ Goldenberg. “There’s a real sense of community that comes from being physically present.”

Great recession pattern repeated

Many of the companies that have new openings planned this year are focused on value. They range from Dollar General and Dollar Tree to the inexpensive retailers Burlington and Ross Stores to the discounters Aldi and Lidl. However, there are specialist retailers in the mix, including Bath & Body Works from L Brands and Gap’s Old Navy.

These retailers were some of the top performing in the business. For example, during the fourth quarter of L Brands, sales in the same store at Bath & Body Works rose 22% year over year, while at Victoria’s Secret they fell 3%. At Gap, Old Navy’s fourth-quarter sales rose 7% in the same store, while the brand of the same name saw a 6% decrease. Dozens of Gap and Victoria’s Secret stores will close this year as both companies invest in building their superior brands.

Some real estate experts say the growth is reminiscent of what the industry saw from the great recession. Retailers become more confident as they plan more stores, both inside and outside of malls.

“We’re very excited about the malls,” said Jay Schottenstein, chief executive of American Eagle Outfitters, during an earnings conference call in early March. “This is probably the best opportunity for us to find new locations that are offered to us … at affordable rents for us.”

American Eagle plans to open around 60 locations this year under the banner of Aerie, the loungewear and lingerie brand for teenagers and young women. 25 to 30 of these new stores are referred to as offline by Aerie, a sports line that the company launched last summer.

Time to experiment

Part of the activity is a result of experimentation that runs through the industry. Take Burlington Stores. It opens a handful of smaller prototypes that are meant to be scaled up in the future.

It is planned to open 75 new Netto stores this year, 18 of which were new openings planned for 2020 that have been delayed by the pandemic. About a third of the new stores will be around 25,000 square feet smaller than a typical location of 50,000 to 80,000 square feet, the company said.

“This is going to be a big year for experimentation,” said Deborah Weinswig, founder and CEO of Coresight Research. “The landlords have always had this friction because they have tried to take away as much rent as possible from the tenants. Of course, that’s their job. But I think it harms innovation.”

This year, Weinswig expects companies to test everything from smaller stores to what are known as dark stores that serve solely as hubs for shoppers to pick up online orders. The experimentation could also be done in other ways. Nordstrom is testing live stream shows that can be bought, for example.

“It’s a tenant market right now,” said Perry Mandarino, head of restructuring and co-head of investment banking at B. Riley FBR. “I’ve seen examples of short-term leases with easy-outs, and reasonable rates are perfectly available.”

Still, not every retailer firmly believes Americans will be returning to stores anytime soon.

“Two years from now, when the market looks back on me, I will be seen as either visionary or slow to transition,” Lands’ End CEO Jerome Griffith said in an interview. Lands’ End only has 31 stores of its own today and has no plans to increase that number but instead is investing in e-commerce.

“I’m not positive about the foot traffic in the stores,” Griffith said. “People will do things, people will be outside, but it will be things like going to restaurants and bars and going to the movies, going to sporting events, going to concerts. But I am very careful in our stores in front . “

“We have stopped expanding the branch,” he said. “Two years ago I would have told you that this will be a big part of our growth strategy.”

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Business

Toys R Us’ final two shops within the U.S. are closed for good

Toys R Us' last two stores in the U.S. are closed for good

The New Toys “R” Us Store opens at Garden State Plaza in Paramus, New Jersey.

Source: Tru Kids Brand

Toys R Us closed the only two stores that were left.

The legendary toy retailer made the decision based on the troubles caused by the Covid pandemic and plans to shift resources to opening new locations where there will be better customer traffic, a CNBC spokesperson told CNBC in a statement emailed With.

“Consumer demand in the toy category and for Toys R Us continues to be strong and we will continue to invest in the channels in which the customer wants to experience our brand,” the person said.

Toy sales in the US rose 16% last year to $ 25.1 billion, market researcher The NPD Group reported on Monday as families turned to toys to keep children busy during the health crisis. However, a greater proportion of these sales take place online.

Tru Kids, a company that acquired the intellectual property of Toys R Us during its liquidation in 2018, opened two smaller stores in late 2019: one at Unibail-Rodamco-Westfield’s Garden State Plaza mall in Paramus, New Jersey, and a second in Simon Property Group’s Galleria in Houston. The Houston location closed on January 15th while Paramus closed on Tuesday.

Representatives from URW and Simon did not immediately respond to CNBC’s requests for comment.

Tru Kids still runs the Toys R Us website, which ultimately sends customers to Amazon to complete a purchase after marketing toys.

Many consumers have stayed away from brick and mortar stores during the pandemic and have instead bought more online. Retailers in shopping malls have suffered extraordinarily. It will likely take some time for shoppers to get used to returning to the malls, and a retail research firm predicts that up to 10,000 store closings could be announced by retailers in the US this year, which would set a new record.

Bloomberg first reported on the closure of Toys R Us on Friday.

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Business

Adidas will preserve opening new shops regardless of Covid e-commerce surge: CEO

Adidas will keep opening new stores despite Covid e-commerce surge: CEO

Kasper Rorsted, CEO of Adidas, told CNBC that the German sportswear company will continue to invest in brick and mortar stores despite the boom in e-commerce sales during the coronavirus pandemic.

“There is no doubt that online business has accelerated in two to three years in the future … but I think if you ask most people, going out and shopping is a great social element and the products are easy to see and feel again, “Rorsted said in an interview that aired on Closing Bell on Wednesday.

“So we’re going to keep building stores. We’ll announce that in March next year, where we’re going to build and create a great store experience,” he added.

Adidas posted a 51% increase in online sales in the third quarter compared to the same period last year. This followed a 93% increase in the second quarter, despite total sales decreasing 34% on a currency-neutral basis. For the year, Adidas plans online sales of more than 4 billion euros (4.9 billion US dollars), said Rorsted, a significant improvement from around 1 billion euros about four years ago.

Rorsted, Adidas CEO since 2016, said the company’s growing e-commerce strength will affect the in-store shopping experience going forward. “We believe the stores are still here, but much closer to the online experience,” he said. “I think most people are really bored of sitting at home,” added Rorsted.

Adidas announced earlier this week that it has initiated a “strategic alternative evaluation” process for Reebok, including a potential sale of the brand, which it acquired in 2006. Rorsted told CNBC that the pandemic was “not at all” the reason Adidas decided to rethink its approach with Reebok. Rather, he claimed that the health crisis had actually improved the underlying fundamentals of the sporting goods industry, as more and more people wear casual clothing while working from home and taking up outdoor recreational activities.

“I think there will still be a long way to go before people want to get back into suits and brown shoes. This trend continued. There is no doubt that the pandemic really accelerated this,” said Rorsted. “Working from home and having a much more casual lifestyle is a big part of a lot of the clothes we have,” he added.