You can now rent your sofa from John Lewis
John Lewis is launching a furniture rental service for the first-time as the department store sets its sights on “the next generation of customers”. A selection of 50 John Lewis furniture items, ranging from chairs to sofas and desks, will now be available for shoppers to rent. Customers can choose to rent items for periods of three months, six months or a year at a time, seeing the monthly costs drop the longer they choose. John Lewis will also offer renters the chance to purchase their furniture at a discounted rate after renting it, and payments will stop if the customers reach the original purchase price while they’re renting.
It has partnered with third-party rental service Fat Lama who will operate the rental scheme, deliver furniture within two days and collect it when renters have finished their lease. The move forms part of John Lewis new business remodel, which is targeting younger millennial customers. “Attitudes towards renting items and the sharing economy have dramatically shifted in recent years, and we know that renting, reselling items and recycling them is a growing priority for our customers,” John Lewis director of home Johnathan Marsh said. “Renting furniture will give more customers access to our high-quality furniture as well as the latest designs. “It also offers them the flexibility to enjoy living with a bold, trend-led piece of furniture that they may not want forever, to easily change style, size and type of furniture if they are moving to a new rental property, or just need a stylish desk to temporarily work from home. All with the peace of mind that they are making more sustainable choices.” Fat Lama’s co-founder and chief executive Chaz Englander added: “The world is changing. People are focusing more on access instead of ownership. “As we have seen in the US, renting furniture instead of owning it is becoming the new normal for millennials; a generation that is moving house every 12 months. “With this being our first step into furniture rental, it was important for us to find a partner that could supply high-quality furniture at scale. John Lewis could not have been a better fit.” The service is currently only available across greater London, but is expected to be rolled out further in the near future.
Selfridges eyes entry into product repairs and resale in sustainability push
Selfridges has said it is looking at launching into product repair and resale as part of plans to radically improve its sustainability. The luxury department store said it was also exploring a move into “refill and rental” of some products as part of a commitment to change how customers shop in its stores by 2025. The proposals are part of the retailer’s new Project Earth sustainability initiative. It said the new programme would start with eight weeks of experiments across its stores and online aimed at seeing how it can reinvent certain retail models, working alongside more than 300 brand partners. Selfridges Group global managing director Anne Pitcher said current consumption habits have been “broken by the pandemic”, with customers taking greater consideration of the environmental impact of their shopping choices.
Select's third CVA slammed by landlord group as outrageous
Select has reportedly been criticised by a trade association for UK real estate after proposing a third CVA. The British Property Federation (BPF) has spoken out against the womenswear retailer’s most recent CVA, describing it as “deplorable”, Drapers reported. Select proposed a third CVA last week after its second, which had been in place since June 2019, and was terminated on May 8 following its failure make rent payments. Last week, Select was working with advisors from Howard Kennedy to secure rent cuts, after it failed to pay rent since Covid-19 struck. The fast fashion retailer had launched its first CVA in April 2018, which saw it cut rents by 75 per cent and save 2000 jobs. BPF chief executive Melanie Leech said Select is “attempting to exploit the CVA process” by proposing to pay no rent for many of its stores, giving little indication as to how long the CVA will last and not producing a rescue plan. She added that it would be “outrageous” to suggest that the business should be given new rights to break leases on stores that have benefited from rental discounts.
Westfield denies plans to raise new equity
Westfield has reportedly responded after reports emerged that the property giant is mulling raising new equity as the retail sector rides out Covid-19. Reports last week suggested that shopping centre owner Unibail-Rodamco-Westfield (URW) was aiming to raise $3.5 billion (£2.67 billion) in new equity, according to Bloomberg. However, Westfield said it has not decided on its strategy for deleveraging and is still weighing out the benefits of “all potential strategies”. The company, which operates two Westfield shopping centers in the UK, said deleveraging remains a priority with its planned disposal of £3.5 billion in assets in the next couple of years. The two UK shopping centres – Westfield Statford and Westfield London in White City – recorded a 27.5 per cent drop last month in net revenue income during the half-year period. “No decision has been made yet on any of the available additional deleveraging options,” Westfield said in a statement.
M&S to take on Big 4 grocers by promoting everyday prices
Marks & Spencer has said it will heat up the competition against major UK grocers by promoting ‘everyday prices’ as part of its transformation strategy. The retailer spent months developing a range of food products to transform its image and convince households to do their regular food shop at its stores. From this week, M&S will launch its “remarksable” campaign which will show customers that 240 of its grocery staples are now at everyday prices. From August 18, there will be 240 Remarksable lines in stores as M&S promotes hundreds of grocery staples. The high street retailer will also launch TV advertising as part of its plan to transform its image. Remarksable was first introduced last year in an effort to engage with customers and encourage them to carry out their everyday shopping at M&S. “We have spent the past 18 months continuously upgrading our quality and at the same time investing in price and now customers can see the result as 240 key staple items are the most competitively priced in recent history,” M&S Food managing director Stuart Machin said.
Tesco rolls out free delivery
Tesco is reportedly adding free delivery to its Clubcard Plus loyalty scheme as the competition against online giant Amazon heats up. Jeff Bezos’ Amazon said last month that customers can buy cheese, baked goods, fresh meat, fruit and vegetables with no delivery fee if they subscribe to its £7.99 a month Prime service. Tesco chief executive Dave Lewis said now that Amazon has announced a similar service to its 15 million UK members, Tesco will have to “think about how it puts delivery into Clubcard Plus,” The Sunday Telegraph reported.
Debenhams appoints Hilco for possible liquidation
Struggling British department store chain has appointed Hilco Capital to draw up contingency plans for a possible liquidation of the chain in the unlikely event that an attempt to sell the business ends in failure. Debenhams on Tuesday said it would cut a further 2,500 jobs, while taking “all necessary steps” to give the chain every chance of a viable future. The company said that the move to appoint Hilco Capital, first reported by Sky News on Saturday, was part of that process but not an indication that liquidation was a likely outcome. “Debenhams is trading strongly, with 124 stores reopened and a healthy cash position,” Debenhams said in a statement. “The administrators have appointed advisors to help them assess the full range of possible outcomes which include the current owners retaining the business, potential new joint venture arrangements (with existing and potential new investors) or a sale to a third party.”
M&S to scrap 7000 jobs
Marks & Spencer has confirmed it will axe a total of 7000 jobs over the next three months as part of its efforts to transform the company amid the Covid-19 pandemic. The job cuts are expected to take place across stores, regional management and its support centre. M&S said the plans came after seeing a “material shift” in trade. The job cuts are in addition to the 950 cuts revealed last month as it sought to make changes to its management structures. The embattled retailer also said that lockdown has taught it to learn to work more flexibly, using the same staff to manage both the food aisles and the clothing section. Meanwhile, it will be using new technology to replace some management. “In May we outlined our plans to learn from the crisis, accelerate our transformation and deliver a stronger, more agile business in a world in which some customer habits were changed forever,” M&S chief executive Steve Rowe said. “Three months on and our Never the Same Again programme is progressing; albeit the outlook is uncertain and we remain cautious.
Frasers Group could face probe after chair's share purchase blunder
The accidental purchase of nearly 4000 shares in Frasers Group might win its chairman an investigation by the Financial Conduct Authority, but the regulator is unlikely to go in with “all guns blazing”, a financial crime expert has said. On Tuesday, Frasers Group, part of Mike Ashley’s business empire, said that chairman David Daly had bought around £11,000 worth of shares “in error”. It comes just days before the firm, which owns Sports Direct, House of Fraser, Jack Wills, Game and Evans Cycles among others, was set to present its full-year results on Thursday.
Ocado accidentally replaces Waitrose items with M&S weeks ahead of switchover
Ocado has accidently replaced a number of Waitrose products with Marks & Spencer products weeks before the official switchover is due to take place. Customers have reported finding M&S products in the place of Waitrose items which were reportedly out of stock. The orders were made in late July, over a month before Ocado is set to replace Waitrose’s 4000 item-range with M&S’ 6000-item range as part of a new joint venture dubbed Ocado Retail. According to Ocado, the substitutions were made in “error” for Waitrose goods which were out of stock. “Due to a system error, a very small number of M&S products were substituted for out-of-stock, equivalent products, and incorrectly delivered to Ocado customers at the end of July,” Ocado said. “This was swiftly corrected and we notified affected customers who were issued with a refund.” M&S has been developing its own-brand range for Ocado for months, aiming to match the Waitrose range it was replacing so closely that customers would not be affected by the change. M&S said: “We have replaced as many Waitrose products as possible with an existing M&S product, or a new one that is being specifically developed by M&S. “There are a few products that haven’t been replaced, such as the low-sellers that would naturally have been removed in our range’s normal evolution. “Whether the original products were from the premium range or the Essentials range, we have matched or improved the quality and value wherever we can.” While 4600 M&S items are currently listed on Ocado’s website, the official switchover is due to take place on September 1.
Lack of fashion discounts drives inflation
UK inflation jumped to its highest level for four months in July as fashion retailers held off from steep discounts after lockdown, official figures have shown. The ONS said Consumer Prices Index (CPI) inflation lifted unexpectedly to one per cent in July from 0.6 per cent in June. This was far higher than expected, with most economists predicting the figure would stay flat at 0.6 per cent for the month. The Retail Prices Index (RPI), another measure of inflation, also surged last month, to 1.6 per cent compared to 1.1 per cent in June. RPI is used to calculate the cap on annual rail season ticket price increases in Britain, meaning commuters face an increase in season ticket prices of 1.6 per cent despite people being urged to return to workplaces. Fares are usually increased every January, although there is speculation ministers are considering delaying the 2021 rise due to low passenger numbers. The ONS said the leap in CPI came after petrol and diesel prices soared higher due to a rebound in global oil prices and as lockdown restrictions have eased worldwide. A much smaller fall in the cost of women’s fashion last month compared with a year ago also drove the hike in the cost of living, with retailers holding off from the traditional hefty summer sales after reopening from lockdown. The ONS data showed that fashion retailers refrained from widespread discounting, having already slashed prices at the start of lockdown. While price tags were cut, the fall was far lower than a year earlier, with women’s clothing prices down by 1.7 per cent between June and July, compared with 4.4 per cent a year ago. Clothing and footwear prices are usually slashed each year between June and July as retailers look to shift summer stock ready for the arrival of autumn ranges. Meanwhile, the CPI including owner-occupiers’ housing costs (CPIH) – the ONS’s preferred measure of inflation – was 1.1 per cent last month, up from 0.8 per cent in June. Economists said the big leap in inflation was also down to the ONS’s decision to return to collection prices for services that were unavailable during lockdown, with inflation set to fall back again over the year ahead.
Primark enters 13th market with debut store in Poland
Primark has officially entered its 13th market with the opening of its first store in Poland. The store, which has created over 250 jobs, is located at Galeria Młociny shopping centre in Warsaw. The new store spans 39,396sq ft of retail space across two floors and showcases Primark’s latest shop fit with 30 cash desks and 35 fitting rooms as well as free Wi-Fi throughout. As with other Primark stores, the new Warsaw site included extensive measures in place to help safeguard employees and customers amid the coronavirus pandemic. Primark’s store at Galeria Młociny features women’s, men’s and children’s fashion collections, including footwear and accessories, as well as lingerie, homeware and product ranges made of sustainable, recycled, and organic materials. Meanwhile, the “back of house” space for shopfloor staff features open spaces and features “Recharge café” with a kitchen area and modern décor. “We are delighted to open the doors of our first store in Poland, our 13th international market, and to offer our amazing fashion at amazing prices to customers from Warsaw and beyond,” Primark chief executive Paul Marchant said. “We are incredibly proud to see our growth into new markets continue across Europe and I would like to thank all our colleagues who have been working hard to ensure we are ready to welcome our customers to shop in a safe environment for all.” The opening in Galeria Młociny brings the total number of Primark stores to 382 across 13 international markets.
44% of customers expect to permanently change shopping habits post covid19
Almost half of UK shoppers have said they believe the coronavirus pandemic will have a permanent impact on their habits, according to new research. Research by O2 Business and Retail Economics revealed that 44 per cent think they will see permanent changes to the way they shop, with many saying they expect to shop online more regularly. The survey showed that 47 per cent of shoppers think the number of times they shop online will definitely increase. This is the latest concerning sign for high street retailers who have seen footfall decrease after people were told to stay at home at the start of the outbreak. At the peak of the pandemic, around a third of consumers, 34 per cent, said they bought essential and non-essential items from online retailers, the research said. Customers had already increasingly turned to online retailers ahead of the pandemic. Around 24 per cent of customers said they have purchased items online before whilst in a retail store, with 36.5 per cent saying they have used their mobile to look at reviews and price-check online while out shopping. “The impact of Covid-19 has re-wired the customer journey, leaving many retailers scrambling to assess the impact as they attempt to realign their proposition to meet a new normal,” Retail Economics chief executive Richard Lim said. “We’ve already witnessed a significant shift towards online and it’s inevitable that some of these behaviours will become permanent, with digital playing a much more important role. “Many of these consumers are shopping for goods online for the first time, overcoming the barriers of setting up online accounts, entering payment details and gaining trust. “The new normal will involve a step-change in the integration of digital technologies and retailers are assessing what this means for the number of stores, where they should invest and the potential partnerships that could be formed.”
Toys R Us restructured ecommerce operations are now run through Amazon
Toys R Us is now using Amazon to power its ecommerce operations as it quietly ends its partnership with rival Target.
Ahead of the holiday season last year, the recently resurrected Toys R Us announced a new partnership with Target to power its ecommerce operations. Under the tie-up, customers purchasing products on the recently launched ToysRUs.com had the option to “buy now at Target.com”, where they were redirected to Target’s website to complete their purchase. It has now quietly ended its partnership with Target, and its website now redirects shoppers to Amazon. Toys R Us’ initial demise was in no small part due to Amazon and although it now has an entirely different business model and ownership, the toy retailer still bears scars from the pairs’ historic relationship. In 2000, Toys R Us signed a 10-year contract with Amazon to be its sole supplier of toys, in an effort to capitalise on the emerging online market. Amazon broke the terms of the contract and allowed other companies to sell toys on its marketplace. It said that Toys R Us didn’t supply a broad enough range of toys, including many of the leading ranges. Toys R Us sued Amazon for reneging on its initial agreement in 2006, successfully winning $51 million in damages by 2009. Despite the significant payout, it initially claimed almost double this amount. The toy retailer now operates a “Retail as a Service” platform enabling brands who sell in store to actively manage their instore experiences and analyse how their in-store experience translate to online sales. This new model sees “the hottest toy products and brands” pay a subscription to Toys R Us to include their products and “immersive”, “highly interactive” experiences instore, but will take 100 per cent of the revenue.
Debenhams & Asda ex-CEOs lining up £6.5bn private equity bids for Asda
Former Debenhams chief executive Rob Templeman and former Asda chief executive Paul Mason are reportedly working with private equity groups on a £6.5 billion bid for Asda. Templeman previously ran Debenhams as a private and publicly listed business and is on board with Apollo Global Management while Lone Star Funds is working with Mason on the potential bid for Asda, Sky News reported. Formal takeover bids are expected to be tabled early next month.
Retailers must start gearing up now for a peak season like no other
Every year, retailers around the world set to work planning for the peak in demand that builds between Black Friday and Boxing Day. Standard peak season is hard enough to manage and this year’s peak is shaping up to be a task of epic proportions. Unlike previous peaks, this year the majority of demand will show up online. Physical stores around the world have been forced to close their doors due to Covid-19, and even as they re-open, many consumers remain wary of setting foot inside. Shoppers have migrated online in such volumes that ecommerce has been running at usual peak levels since May. As we start to approach the real peak season, these levels are predicted to reach never-seen-before heights. Not only does this require an operational bandwidth on a whole new scale, it also calls for a different approach to customer experience. And all of this takes time. Retailers must start gearing up now for what is shaping up to be a peak season like no other.
Build backup into your network
This year’s peak is a massive opportunity for retailers. It’s a chance to recover lost profits offline, win new customers and even drive new revenues. But many will find themselves in the frustrating situation of high demand, freshly mobilised sales channels… and no carrier availability to get orders to customers! Many enterprise retailers rely solely on one or two carriers all year round. This poses a big risk going into peak, when providers quickly reach full capacity. Retailers must diversify their partner ecosystem to build the agility they need to come out on top of this year’s peak season.
Offer a dynamic delivery promise
Online shoppers want to receive their parcel in a way that suits them, whether that’s next-day delivery, pick up in-store, or collection at a PUDO point. 60 per cent of consumers say they would select a retailer based on the delivery options provided, and 74 per cent expect these options to be displayed on the product page. Unfortunately, the higher the demand, the harder it is to maintain delivery promises. Retailers must find a way to retain consumer choice, while risk-proofing fulfilment to avoid disappointment.
Optimise your post-purchase experience
Every shopper you convert during peak will either become a return customer, or a disappointed deserter. In this year’s peak, it’s not just the shopping experience that counts – or even the product itself – but also the process of waiting for the order to arrive. It’s just as important to offer speedy delivery, easy-to-follow tracking, and options for returning the item. Even before the coronavirus outbreak, 57 per cent said they would be more likely to choose a retailer with a simple returns policy, and a further 69% said tracking was one of their top three considerations when shopping online. Retailers must invest in their post-purchase experience to keep customers coming back well after peak has passed. Let’s be honest, when it comes to this year’s peak season, few need convincing of the opportunities. However, many have continued to view online as a secondary channel and are now scrambling to build the infrastructure required to serve customers there. The good news is, it’s not too late to prepare your ecommerce fulfilment to seize the opportunity. At Metapack, we’ve put together the Retail Peak 2020: Capacity Planning Playbook, which outlines the steps the world’s leading retailers are taking now to make the most of a peak season like no other.
New service eliminates the need for customers to queue to get into independent stores
The Independent Retailers Confederation (IRC) announced today that it has partnered with BookAShop in order to encourage and rebuild the confidence of shoppers. BookAShop is facilitating a new way to shop, both for post-COVID-19 openings and beyond. In the short-term, the booking service app will facilitate re-opening strategies and social distancing measures while ensuring the safety of both customers and staff. It is designed for retailers of all sizes and locations, and can be used by both UK and overseas shoppers planning their shopping trips. A key feature available is to enable customers to book appointments to shop based on their needs. This will eliminate queuing outside of stores, and allow customers to shop within safe environments while adhering to changing social distancing guidelines. The app also uses technology to calculate the correct amount of people and staff allowed in a shop at any one time. The new partnership gives the variety of trade associations that make up the IRC the opportunity to offer their members free access to the app until April 2021.
Key themes of the week - Opportunity & Jobs
Key article of the week - Retailers must start gearing up now for a peak season like no other
Key question of the week - Will we see the usual line up of big budget Christmas ads this year?