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Blog postsSeptember 27, 2019

FLEXE Hub: Retail 2.0

A roundup of the latest news on logistics, retail, and industry trends

Keeping up with the latest store closures, emerging tech, and what Amazon is doing could easily be a full-time job. Luckily for you, it’s ours.

This week we’re looking at trending news around the ways retailers and brands are changing and revolutionizing the industry, including:

  1. Discount stores moving into the eCommerce space
  2. Retailers take a stand for sustainability
  3. Fashion brands want shorter, more flexible leases

Department stores beware: Discount retailers are moving online

Low-price retailers like Ross, Kohl’s, and Marshalls have been stealing market share from department stores for a few years now, largely benefitting from the “Retail Apocalypse” rather than falling prey to it. While others have been going under, they’ve been expanding and opening new stores. Ross said they were opening 100 new stores in 2019 and TJX—which includes T.J Maxx, Marshalls, and HomeGoods—had plans to open 125.

By moving into the eCommerce space, Marshalls will have an even greater opportunity for growth, and potentially pose an even greater threat. Following in the footsteps of sister-store T.J. Maxx, which launched an eCommerce site in 2013, Marshalls is planning to use its online presence to complement in-store sales, rather than cannibalize them, by ensuring the two channels have entirely different products. It’s also hoping that the eCommerce site will promote more in-store visits by allowing customers to return online orders in stores.

For department stores that are already struggling to stay relevant and maintain an eCommerce presence, the added pressure of eCommerce competition from formerly in-store only retailers gives them just one more thing to worry about.

Via Retail Dive, Money

Retailers took a stand during the climate strike

Patagonia, Lush, and several other retailers stood up for sustainability by closing up shop during the climate strike on September 20th. This is both a noble move, and one that’s good for business. A Morning Consult report found that younger consumers are expecting brands to “use their influence to impact political and cultural issues” and consumers across all generations approve of "brands who champion environmental initiatives."

From a brand standpoint, there’s a clear push for businesses to have a stance on values like social justice and sustainability. But beyond that, they need to be able to back those values up in every aspect of their business. Everything from how they treat their employees to how environmentally efficient their supply chain is, needs to align in order for customers to trust them, and give them their loyalty.

Via Retail Dive

Fashion gets flexible

In retail, leases are getting shorter and more flexible in reaction to the way retailers now want to do business. Small, digitally native brands don’t want to invest a lot of money into a long-term lease for a space that may or may not perform for them. And landlords don’t want a bunch of retail space sitting around empty.

As a result, the average retail lease length is dropping. From 2007 to 2017, chain-store leases dropped from an average of six years to four-and-a-half years. While direct-to-consumer brands have an average lease length of just “eight weeks globally and only four weeks in New York.”

These flexible leases are appealing because they provide a low-risk way for retailers to test new locations and retail concepts. They can also serve as a marketing tactic. Melody Hernandez, VP of perfume brand Boyfriend said that their pop-up space “was more than anything a marketing play. You can think of the money we spent on the pop-up as ad spend.”

Alice Ratcliffe, Head of Brand at Appear Here, believes this trend is here to stay, saying that “the lines [between temporary and permanent retail] have definitely become blurred." This is great for smaller brands, who get access to retail spaces that never would have been in their reach before, and larger brands benefit by being able to stay more nimble and adaptive in their retail strategies.

Via Glossy

FLEXE news & events

Gartner Supply Chain Brief

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The 2019 State of On-Demand Warehousing

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Old news

In case you missed them, check out our last few FLEXE Hub’s: The end-to-end supply chain, Back to school 2019, and Life after the mall.