Daily LInks
1. EU says Amazon breached antitrust rules, opens second investigation into its e-commerce business: The European Commission is challenging Amazon, saying it used independent sellers’ data to benefit its own retail business. Amazon said it disagreed with the commission’s assertions and “will continue to make every effort to ensure it has an accurate understanding of the facts.” – Read More on CNBC
2. How Allbirds Became Silicon Valley’s Favorite Sneaker: While Allbirds’s restrained design turns off those who default to splashy Nike s (or even a pair of logoed New Balances), it drew in many. “They were so minimalist, with no logo, no flashy colors, very minimal branding.” – Read More on the WSJ
3. China luxury goods demand rising dramatically: Cartier CEO. “Money that doesn’t [get spent] on travel comes back to some products,” said Vigneron, who says that brick-and-mortar stores will “become less transactional and more social, more experiential.” – Read More on Nikkei
4. How social media platforms gave multi-level marketing a coronavirus surge. A social media blitz from the nail polish multi-level marketing company Color Street urged potential sellers to “invest some of that stimulus check in yourself and start making money instantly.” – Read More on Modern Retail
5. RETRO READ: Multi-Level Marketing is Being Likened to an Illegal Pyramid Scheme & Backlash is Growing. From LuLaRoe to Young Living, MLMs currently amount to a $36 billon industry in the U.S., and critics say that many have a business model that focuses on recruiting “downline” and getting new distributors to buy the product, rather than on actual sales to consumers, making them akin to pyramid schemes. – Read More on TFL
6. What a vaccine could mean for retail: “The positive news this morning as it relates to the development of a vaccine is clearly a win for retail, but in our view, should disproportionately benefit fundamentals and stocks of the off-price space, even as near-term fundamentals will likely experience less robust improvement vs. others.” – Read More on Retail Dive
1. For Ferrari Less Is Still Plenty, Maybe More: Smart luxury brands do, in fact, move down market, but generally only with new, differentiated brands. In the 60s and 70s, Ferrari did this with its “Dino” line of mass production sports cars. Today, it essentially does this with swag — a seemingly endless line of Ferrari badged slippers, surf boards and other be-stallioned tchotchkes. – Read More on Bloomberg
2. RELATED READ: Luxury in the Age of COVID? Hermès is “Resilient,” Ferrari is “Extraordinarily Stable.”The seeming similarities between war-time Hermès and Ferrari shed light on an ongoing debate about where Ferrari – which is currently in the process of revamping its non-car licensing operations in a move to bring that segment more upmarket – resides in the market as a whole. – Read More on TFL
3. Why The Global Economy Is Recovering Faster Than Expected: Sectors, such as those for autos and other durable goods, took a big hit from physical lockdowns, but once those were lifted, they bounced back strongly, often fully — and sometimes even exceeding pre-crisis levels. These sectors represent about 16% of the U.S. consumption. – Read More on HBR
4. The Duty-Free Business Must Reroute to China: Even after passengers feel safe to travel long haul again, the old spending habits may never come back. The faster Europe’s duty-free operators can expand in mainland China, the better their chances of a full recovery. – Read More on the WSJ
5. Japan luxury retail in dire straits – but will bounce back, analysts say: The stylish boutiques of Ginza, Omotesando, Shinjuku and Harajuku are all but devoid of shoppers as the pandemic keeps foreign arrivals away. But savvy luxury brands are in it for the long haul and short-term fluctuations are not major challenges, one expert says. – Read More on SCMP
1. Default odds for consumer industries ease but remain elevated:Overall, the risk of default fell for department stores. It stood at 7.8% as of Oct. 30, down from above 40% in April when the coronavirus pandemic forced stores to close their doors. The figure, however, is still up from 2.1% in January. – Read More on S&P Global
2. U.S. Firms Get Another Boost From China: Business and consumer activity inside China has returned to pre-pandemic patterns in many ways. Cities are bustling with crowds of office workers and traffic on streets. Restaurants, shopping malls and gyms are packed. Movie theaters are open. Domestic air travel in August inched closer to levels not seen since before the pandemic. – Read More on the WSJ
3. Music videos replace runways as Covid halts fashion shows: “With 2020 spent mainly indoors, screen time has become the only thing connecting us to the outside world,” says Morgane Le Caer, data editor at Lyst. Standout items of clothing from this year’s biggest pop videos – which, on average, have viewing figures in their hundreds of millions – have instantly become in demand online. – Read More on the Guardian
4. RETRO READ: Fashion Won’t Stay on the Sidelines When it Comes to Film. But Is This Art or Advertising? Fashion’s foray into film is hardly novel territory. Well-funded brands, like Chanel and Dior, have long created short “films” – oftentimes for fragrances and cosmetics. – Read More on TFL
5. Fur is out of favor but stays in fashion through stealth and wealth: The recent development of luxurious, realistic-looking fur-free furs has helped some brands shed the animal hide from collections. However, scores of high profile figures wear fur – albeit in stealthier ways, too, with celebrities ranging from David Beckham to Emma Stone wearing Canada Goose jackets, which have coyote trim hoods. – Read More on the Guardian
6. RELATED READ: Fashion or Faux Pas? The Conversation About Fur Has Become Far More Nuanced. Faux fur “garments are made entirely out of artificial fibers like polyester that are a byproduct of the petroleum industry,” and fake fur garments are also “almost impossible to recycle” and often end up landfills as a result of a fast fashion culture. – Read More on TFL
1. Michael Kors and upscale brands from Ralph Lauren to Coach are realizing that if they want to be seen as luxury, they have to act as such — even in a pandemic. These upscale brands are likely making the right call by sticking to their guns on pricing. Each has been on a years-long journey to solve the problem of overexposure, using various tactics to try to regain their cachet by becoming less ubiquitous but more luxurious. – Read More on Bloomberg
2. RETRO READ: Michael Kors Wants to Boost its Luxury Credibility, So It’s Going on a Shopping Spree. By acquiring Versace, a well-respected Milan-based brand, Michael Kors is not only pursuing its strategy to grow, but also employing diversification tactics geared towards luxury, a sector that is growing faster than companies selling to general consumers – which is precisely where Kors’ brand and the group as a whole is positioned today. – Read More on TFL
3. UK to big brands: do more to avoid forced labor in China’s Xinjiang. British lawmakers on Thursday urged big brands – from Gap to Zara – to ensure high-street fashion was not made from cotton picked by Muslims held in camps in China’s Xinjiang region. About a dozen fashion brands were asked by a committee of lawmakers to explain how they were tackling the risk of modern slavery in their supply chains. – Read More on Reuters
4. Fashion’s Diversity Experts on How the Industry Can Avoid Tone-Deaf Missteps: “I think the notion that fashion was exclusive is exactly where we went wrong. Where we thought only a certain type of person could model on a runway or be shown in ads or be on certain types of teams. There was this facade that fashion was homogeneous in nature, that there was one standard of beauty and fashion.” – Read More on Yahoo
5. Coronavirus Prompts Rent the Runway to Think Beyond Rentals: Rent the Runway is raising a new round of financing and is focusing on selling clothes, not just renting them. Several other e-commerce sites that sell used clothing are preparing to raise additional funds from investors. In recent weeks, both Poshmark Inc. and ThredUp Inc. have said they filed paperwork with the Securities and Exchange Commission for IPOs. – Read More on the WSJ
1. Luxury Certificates Will Soon Be Standard in China: Breitling announced that it will issue “digital passports” for its watches. The digital certificates use a blockchain-based solution that prevents scammers from hacking or altering information. According to Tech Crunch, these certificates will ensure that customers will “also see the benefits of supply chain regulation.” – Read More on Jing
2. The decade of VC funding that shaped e-commerce and DTC brands: In reality, sources said the amount of investment in DTC brands is meaningfully smaller than it’s built up to be. “Consumer businesses can only be so big. How many unicorns do we know about in the CPG space? Allbirds, fine — they just got there. Warby Parker. People thought Casper was, but that wasn’t true.” – Read More on Retail Dive
3. High fashion in Italy faces “strange,” uncertain times: “In this period, some of our customers came back because to go to our competitors is difficult now because they’re abroad. And we have faced a strange moment when everybody’s coming back and telling us, “Well, we want to do ‘Made in Italy.’ So we want to work with you more than before, but your prices are too high.” – Read More on Marketplace
4. It’s getting harder to find Nikes—and that’s just how Nike wants it: Whether it’s Levi’s, Nike, Under Armour, or Gucci, the aims are generally the same. They want to elevate the images of their brands and maintain a tighter grip on them by selling in fewer, better stores. If they don’t, they risk losing the cachet that helps make a brand desirable and motivates shoppers to buy its products, especially at full price. – Read More on Quartz
5. RELATED READ: One Year After Nike Stopped Selling on Amazon. “For years, Nike had refused to sell directly to Amazon, fearing it would undermine its brand. Nike executives were unhappy with how unauthorized sellers continued to be widely available on Amazon.” – Read More on TFL
1. How to Build a Digital Brand That Lasts: The internet era makes brands less durable in part because consumer habits have digitized, creating new business models that have blindsided many traditional brands. But there is nothing inherently antagonistic to legacy brands about digital lifestyles. Coca-Cola remains one of the world’s most valuable brands – and it was invented in 1892! – Read More on HBR
2. Americans show they’re eager to shop even as pandemic stretches on, retail economist says: Retail, the biggest driver of the U.S. economy, has bounced back in recent months — even as millions of Americans are out of work and cases of Covid-19 rise, but holiday spending is still expected to be lower than last year. – Read More on CNBC
3. RELATED READ: Dependent on Consumer Spending, How Can the U.S. Economy Survive a Pandemic? Today, the spending habits of American households make up 70 percent of the U.S. gross domestic product, a measurement that describes the size of the economy. U.S. companies spend about $230 billion on advertising each year, half of all the money spent on advertising globally. – Read More on TFL
4. COVID-19 Pandemic has the Fashion Industry Reeling: “We expect a large number of fashion companies to go bankrupt in the next 12 to 18 months,” McKinsey & Co. said in a report. “The interconnectedness of the industry is making it harder for businesses to plan ahead.” – Read More on Newsweek
5. Brandless is back: In an email on Tuesday, the American e-commerce company that manufactures and sells products under its own Brandless label revealed that it is back in business with new owners. Take a look back at the company’s approaching to branding. Despite its name, the startup is not actually “brandless” at all. – Read More on TFL
6. Travel has plummeted. Can your favorite luggage brands survive? A flood of venture-backed, direct-to-consumer luggage startups popped up about 5 years ago, wooing millennial travelers with trendy suitcases. Since the onset of COVID, these brands say that sales of hardshell suitcases have improved slightly, particularly in European and Asian markets, although they are nowhere near what they were before the pandemic. – Read More on Fast Co.
1. What CEOs Are Seeing and Saying About Covid, the Election and the Economy: “There’s a crazy notion that nationalizing your supply chain creates greater resilience. That’s not the case. It’s having a globally connected supply chain with multiple points of back up.” – Read More on the WSJ
2. RELATED READ: Forget Reshoring, if Fashion Wants to Innovate, Companies Should Focus on Omnishoring. After a long and strong wave of offshoring – manufacturers moving their factories abroad, often to low-cost countries such as China – limits to that model have emerged, especially in the fashion industry. These include hidden costs in logistics, quality and in coordination, as well as counterfeiting, negative impact on the environment and poor working conditions. – Read More on TFL
3. Luxury goods, luxury multiple for newbie Cettire: Cettire sells globally via its website. It sources products from more than 1300 designer brands – think Gucci, Balenciaga, Burberry – and sells more than 160,000 products. Its margins are understood to be about 35 percent, helped along by its ability to be fully integrated with suppliers and the fact that its global logistics are all handled from outside of Australia. – Read More on AFR
4. Estee Lauder Says Duty-Free Sales in China Are Bouncing Back: Chief Executive Officer Fabrizio Freda said Monday that Chinese travel stores — the type seen in airports and train stations — were a “stand-out performer” in the company’s most recent quarter, posting double-digit growth. Global travel sales, meanwhile, were flat from a year earlier. – Read More on Bloomberg
5. RETRO READ: Travel Retail, a Luxury Cash Cow, Down as Much as 70% in Some Hubs. For luxury brands, the risk is sizable. Coresight put airport retail sales at $44 billion in 2019, and Switzerland-based Dufry projects the value of the segment to inch towards $67 billion over the next few years. Given the revenues at are up for grabs (and growing) in this segment of the market, many luxury groups have focused their attention here. As NPD Travel Retail analyst Luke Stockton told Skift last year, “If travel retail isn’t of strategic important to global brands, it should be.” – Read More on TFL
6. Retailers Use AI to Improve Online Recommendations for Shoppers: Companies keep their algorithms a closely guarded secret. Amazon Inc.’s AI algorithms scour millions of listings for items matching a buyer’s search query, weighing more than 100 variables, such as past purchases, age, gender, and a long list of criteria known only to company insiders. – Read More on the WSJ
1. In Luxury Market, Being Amazon Is Still a Burden: Amazon is off to a slow start in its latest effort to woo luxury goods onto its platform. Big luxury brands are moving to take back control of their e-commerce business, cutting back the inventory retailed by third-party sellers such as Mr. Porter, Farfetch or department-store websites rather than their own e-commerce platforms. – Read More on WSJ
2. Burberry’s recovery doesn’t check out: When Burberry revealed in 2018 that the designer Riccardo Tisci was taking over from long-time creative director Christopher Bailey, shares in the brand leapt 5%. However, just as his turnaround was starting to take shape, the pandemic hit. Sales at the FTSE 100 group, known for its distinctive check pattern, plunged. – Read More on the Sunday Times
3. Fashion insiders reveal how COVID-19 is altering the industry: Many brands have chosen to cultivate a more direct relationship with their customers digitally, selling them products directly through their own online stores and maintaining the flexibility to decide what inventory to highlight. – Read More on Fast Co.
4. Sinéad Burke: “My goal was to change the entire fashion system.” The combined spending power of the disabled market, Burke likes to point out, is as big as China’s, yet it is chronically underserved by the fashion industry. “Knowing that, my goal was never to create a line of clothing that I could wear. Rather, it was to change the entire system – which tells you everything you need to know about my personality, really.” – Read More on the Guardian
5. Everyone Is Buying Designer Handbags for the Apocalypse: “Hermès bag sales are up 60 percent, and they are selling for 18 percent more per bag on average,” Tracy DiNunzio, CEO and founder of Tradesy, an online reselling business. “Louis Vuitton bag sales are up 123 percent, with an average price per bag up 104 percent.” – Read More on InStyle
6. RETRO READ: Five Key Things that Are Expected to Shape Fashion and Luxury in the Wake of COVID-19. Luxury goods companies have no choice but to rethink their strategies in order to weather a more severe crisis for the sector than the financial crisis of 2007. Many consumers will face a reduction in their financial resources and that could put a hold on their purchases. This situation may force luxury houses to reduce the number of collections and products offered each year. Consumers could even reconsider the concept of ownership and shift toward rental services. – Read More on TFL
1. Beauty brands were quick to tout diversity during summer protests, but the commitment was short-lived: The majority of beauty brands have gone back to their pre-BLM norms. A complicating factor is that companies increasingly rely on influencers for their social media content, but many brands tend not to feature creators with dark skin tones. – Read More on Fast Co.
2. LVMH Saves Face but Little Money in Tiffany & Co. Deal: The French company does avoid the risk of reputational damage from potentially losing a court battle involving Tiffany & Co. LVMH chairman Bernard Arnault’s reputation as a savvy deal maker is scratched, although not seriously damaged. It is Tiffany that has come through the affair looking shiny. – Read More on the WSJ
3. This New Pre-Order Site Paves the Way for a Slower, “Gentler” Fashion Industry: ““We’ve been taught by the high-street brands that you can see something on the runway and get it for $60 next week. It’s really time to unpick those habits, because someone is suffering in that equation. More than one person is suffering.” – Read More on Vogue
4. Here’s How French and German Covid-19 Lockdowns Could Rattle Luxury-Goods Sales: The sector will face more headaches if France and Germany’s curfews are just the beginning. The “increasing risk of lockdowns in other European countries in the largest quarter of the year (on average ⅓ of annual sales) is likely to be taken negatively for the luxury sector,” meaning negative earnings revisions, say the analysts. – Read More on Barron’s
5. Virtual Influencers Make Real Money While Covid Locks Down Human Stars: Seraphine’s follower count is nearly 400,000 and she’s making appearances in Shanghai to promote her music, while most flesh-and-blood social-media stars are stuck at home. Despite not being real, she still sometimes wears a mask. – Read More on Bloomberg
6. RETRO READ: Virtual Models/Influencers are Landing Major Jobs & Making Real Money in the Process. Considering that a whopping 91 percent of luxury brands rely on influencer marketing and given various advances in technology, “which make it increasingly difficult to distinguish the real from the fake when navigating the online world,” it is arguably just good business for companies to be building influencers of their own. – Read More on TFL
1. Amazon Reviews Alleging Counterfeit Products Can Get Sellers Kicked Off Platform: How Amazon treats third-party sellers is at the heart of a recent House Judiciary Committee report concluding that big technology companies often abuse their power over smaller partners. The committee’s recommendations include providing adequate recourse to sellers and eliminating forced arbitration clauses from contracts that deprives them from filing a lawsuit. – Read More on Bloomberg
2. On Alibaba’s Singles Day, Chinese consumers look to spend more, shift away from American brands: “It’s a genuine advancement on the part of Chinese manufacturers. They’re getting more sophisticated in their marketing of luxury products.” – Read More on CNBC
3. The Startups Building a Future of Zero Fashion Waste: Most brands typically overproduce by 30-40 percent, and of the more than 100 billion new garments produced every year, 20 percent are never sold at all. One way to address the problem of overproduction is to flip the production model on its head. – Read More on Forbes
4. ‘Every day is casual’: How Kohl’s is betting on the wellness movement to become permanent. Expect to see fewer handbags in Kohl’s stores in the future — and more laundry detergent and yoga pants. It’s part of the new strategic framework Kohl’s announced last week, in which the department store chain said its focus going forward is to be the leading retailer for shoppers looking for products to support an active and casual lifestyle. – Read More on Modern Retail
5. Lenders Cracking Down on Mall Owners Behind on the Mortgage: Some lenders are now worried about fast-falling retail property valuations, which around the country are plunging by as much as 75 percent. Lenders say they are compelled to conduct foreclosure sales to recoup what is owed them. – Read More on the WSJ