This week, shopping centers from Paris to Jakarta demanded digital vaccination records from customers in order to enter. Governments have imposed new rules to slow the spread and allow for normal life.
For fashionAll vaccine mandates have pros and cons for retailers around the world.
Retailers want to bring shoppers back to physical stores. These stores are powerful as stages for brand experience and consumers spend more in-store than online. Anything that makes shoppers feel safe is likely to work.
In recent months, stores have seen a resurgence in foot traffic after more than a year of intermittent closures, but retailers may again suffer if the spread of the Delta strain isn’t contained. Already, new strains have already harmed retail sales in the United Kingdom and China.
“Traffic is coming back to stores, but it’s a moving target,” said retail consultant Robert Burke. “Everyone wants to create a safe environment for customers.”
Another important concern is the safety of employees, especially when frontline retail workers are in high-demand and retailers are under pressure for greater concern about their well-being. Here too, vaccination requirements may be helpful.
Vaccine mandates can have many complications, despite their benefits.
For a start, there’s the logistical challenge. While countries like France, Italy and Spain have adopted digital health passes quickly, many major markets lack the technology infrastructure to enable retailers to efficiently and accurately check vaccination status.
Vaccines are also highly polarizing, especially here in the United States. There are two camps in America: those who support inoculation, and those who are against it. “anti-vax.” The country’s federal and state governments have yet to impose mandates, leaving retailers to contend with the issue alone. This presents a particular problem for large retail chains serving customers on both ends of the political divide.
What if customers resist? Compliance with mask mandates is often a problem because sales associates are not trained properly and are subject to abuse when they ask customers to comply. This can lead to a drop in sales at a time when there is a shortage of retail workers. Similar liabilities are associated with vaccine mandates.
“Whatever a brand can do to make people feel more safe and secure and protected is vitality important,”Doug Stephens, a retail guru who is also a columnist in the BoF, said that. “Vaccination is a relatively practical health and safety issue, like wet floors are a health and safety issue. But where things begin to break down is enforcement.”
Government regulation can help push things forward. It takes the hard decision out of retailers’ hands while giving them the ability to implement it.
It’s telling that in most countries, governments, not retailers, have made the first move.
“Retailers are hesitant,”Burke. “It’s only going to happen when governments mandate it. If governments had a requirement, many retailers would be happy. And they would have the right to enforce it.”
THE NEWS IN BRIEF
FASHION BUSINESS AND THE ECONOMY
Tapestry beats quarterly sales estimates on luxury rebound. Net sales rose to $1.62 billion in the fourth quarter from $714.8 million a year earlier, topping analysts’ average estimate of $1.56 billion. The Coach handbag maker’s rebound has been fuelled by the vaccine-aided reopening of economies which has boosted demand for designer apparel and purses.
Farfetch reports first quarter results that beat expectations. The luxury ecommerce retailer reported a 43 percent increase in revenue year-over-year for the second quarter. The company’s gross merchandise value was up 40 percent this year, and doubled compared to the second quarter of 2019 — exceeding $1 billion. These strong earnings are coming in the middle of recovery in luxury after a hard year.
As US shoppers spend more, Pandora jewellery sales surpass pre-pandemic levels. According to the Danish jewellery maker, quarterly sales rose by 63 percent in the US over 2019, thanks to massive financial government stimulus and vaccinations against Covid-19. Sales in China, the world’s largest jewellery market, fell 13 percent in the second quarter compared to 2019.
Xi Jinping’s call for wealth redistribution sends luxury shares down. The Chinese president’s statement that he aims to restrain “unreasonable incomes” and expand the country’s middle class sent LVMH’s share price down 5 percent in the trading day that followed his remarks. Kering fell by 3.6 percent and Burberry by 5.5 percent.
China’s retail sales growth slows, missing expectations. Natural disasters and sporadic outbreaks of Covid-19 trimmed year-on-year growth to 8.5 percent last month, according to data released Monday by the country’s National Bureau of Statistics. Analysts expected an increase of 11.5 percent.
Chanel will show its 2022 cruise collection in Dubai. Chanel will bring its 2022 cruise collection from the south of France to Dubai on November 2. It’s a return to the United Arab Emirates for the brand, which presented its 2015 cruise collection there.
Lululemon makes an investment in Genomatica, a company that produces sustainable materials. The fitness apparel giant announced it will replace the conventional nylon in some of its apparel with Genomatica’s plant-based alternative. The companies did not disclose the size of Lululemon’s investment.
Allbirds expands into activewear. The direct-to-consumer brand’s new range includes leggings, shorts and tank tops made entirely from natural materials. Each product will be labeled with its carbon footprint, and the company will offset those emissions. It is also expanding its presence in the booming market for sportswear amid indications that it is planning to go public.
Old Navy will normalise plus-size apparel as part of its growth push. All the brand’s designs will now be available in larger sizes and the plus-size section of stores eliminated. Plus-size clothing will no longer be sold at a higher price. The retailer will also use a wider range of models on its website as well as mannequins in its stores.
Shein will launch a TV series about design competitions. The show will follow 30 emerging designers as they compete to win $100,000 and will feature a star-studded panel of five judges, including Christian Siriano, Law Roach and Khloé Kardashian. The four-part series begins on August 22 and will be available to stream on Shein’s app and social media platforms.
Jack Wills founder launches Aubin brand with support from Next The British high-street retailer has a 33 percent stake in Aubin and will provide e-commerce infrastructure for its operations. The deal is the latest sign of Next’s ambitions to expand its influence following the pandemic.
THE BUSINESS OF BEAUTY
Estée Lauder tops quarterly sales estimates as demand for makeup rebounds. Strong online sales, increased Chinese demand and investments made in skin care products helped Estee Lauder rebound from lower makeup sales in 2020. The company’s makeup division saw sales rise 76 percent to $960 million in its fourth quarter ended June 30, reporting a return to growth that was more than a year in the past.
Queer Eye’s Karamo Brown expands skincare brand to UK. Mantl, a skin care line for bald men, was launched last year by Brown and two Honest Company alumni in America. It is expected to triple its sales this year due to increased UK expansion. The brand is among a group of companies seeking to tap into emerging demand as interest in men’s beauty products grows.
Kris Wu is being held on rape charges. The Chaoyang District People’s Procuratorate in Beijing approved the arrest of Chinese actor and singer, Kris Wu, on suspicion of rape after a legal investigation, it said on its official Weibo account. Legal sources claim that the Chinese law allows police and prosecutors to believe that Wu has committed the crimes against which he is being accused. Wu and his team denied the allegations when he was detained on July 31.
Carré Sutton sues former Elite Model Management executives over rape claims. The suit filed last week in a Manhattan federal court alleges that Gérald Marie, then the president of Elite’s Europe division, “repeatedly raped”Sutton and later “trafficked”She was also recommended to wealthy men in Europe. It claims Trudi Tapscott was negligent in overseeing the welfare and development of the newly scouted models. Marie denies these allegations.
Hunter shakes up the leadership. The British company, which is well-known for its rain boots and other products, has appointed Paolo Porta interim chief executive to the position. Porta joined Hunter in June 2020. The company also hired Sandra Romboli, the global design director, and Claudia Plant, chief marketing officer. Hunter is undergoing a turnaround to make the company an outdoor lifestyle brand.
MEDIA AND TECHNOLOGY
Amazon to open department store-like retail shops. The first of the e-commerce behemoth’s large-scale retail locations will open in the US, according to The Wall Street Journal. Amazon’s existing smaller stores include bookstores and tech-focused shops, while the new department store-sized outposts are expected to include fashion and clothing, among them Amazon’s private label products.
Tencent and Weibo report Q2 revenue and active user jumps. The technology giant Weibo’s second quarter net revenue jumped 48 percent year-on-year, helped by a 47 percent rise in advertising and marketing revenue. Tencent’s second quarter revenue was up 20 percent year-on-year to 138.3 billion yuan ($21.3 billion). Tencent’s social media platform, WeChat, saw monthly active users rise 3.8 percent on the year to 1.25 billion yuan, in spite of a recent temporary suspension in new user registrations due to tightened data collection regulations.
Korea’s top antitrust regulator fines Coupang $2.8 million. According to the Korea Fair Trade Commission (KFTC), hundreds of sellers were forced by the Korean ecommerce giant to comply with illegal sales or marketing policies from early 2017 to late 2020. KFTC stated that this was done to preserve its market dominance in Korea, which is a fierce competition for online retailers. Coupang stated that it will appeal the finding.
Darcey Sergison compiles.