Highlights from Shoptalk Europe
The first European Shoptalk conference happened in Denmark. Two years after its first conference in Vegas, the conference has earned a reputation as the better-curated cousin of New York’s gargantuan NRF. “What does AI mean for the future of retail experiences?” seemed to be the question of everyone’s minds. Also on the agenda: China’s undeniable importance, human-centered design and the prominence of vertical integrators.
OMGucci - so hot right now
Gucci sales are up 43%! Parent company Kering’s shares paraded to all-time highs last month as it reported third-quarter earnings and predicted 2017 would be a record year. Where’s the growth coming from? The young. The company revealed that 55% of sales in the first three quarters of 2017 were to people under 35. Gucci’s ‘shadow committee’ - a group of under 20-somethings that guide the CEO on all things cool seems to be paying off for the firm. Strong sales at other Kering brands Puma and Yves Saint Laurent also buoyed growth.
And it’s not just Kering - the luxury sector is back in style as the health of the global economy improves. Chinese consumer spending on luxury goods is on the up after decreasing rapidly last year. LVMH, Kering’s closest competitor also reported better than expected earnings. Its shares climbed 40% since Jan 2016.
China, Japan and new retail
China’s tech scene is taken by ‘new retail’. An excellent post by Hans Tung, managing partner at GGV Capital analyzes this trend. He notes that much of the discourse in retail is dominated by ‘moving ecommerce offline’ - but this presents only half the picture. Instead, Hung highlights what he considers the more important half of 'new retail’ - “The other half is about selling beautifully designed, quickly manufactured, and frequently iterated products at the lowest prices possible, making customers pleasantly surprised”. It’s a great piece that reminds retailers of the need to use technology beyond just automating or digitizing traditional processes. Instead, how might retailers use tech to create better products? Given the rapidly emerging possibilities, what else can we do to make their lives more pleasant and convenient?
Tung points to Uniqlo and Muji as good retailer examples, as well as Takashimaya mall. Another good example - Miniso. Founded in 2013, the brand turns over $1.5B across 1000+ stores and sells household, everyday goods in minimalist styles. The brand invested $100 million in design in 2016 and defines its strategy as three highs and three lows: “high beauty, high efficiency, high quality; low cost, low gross profit, low price”.
Top 5: What we're reading
Shoppers are more interested in free than fast shipping. Link
What Sephora knows about women in tech that Silicon Valley doesn’t. Link
Deliveroo plans dark kitchens. Is it an opportunity for small players? Link
Amazon quietly rolls out activewear line. Link
Turnaround efforts pay off in luxury; Michael Kors, Ralph Lauren. Link