Simeon Siegel, CFA’s Post

Simeon Siegel, CFA speaks to WWD about retail’s circle of life currently being re-learned “as ‘DTC or die’ fades from conversation and brands internalize that the right wholesale partners can be powerful partners.” “All too often in retail, the quality of sale erodes long before the actual sale. Companies chase revenues that are bad for their business that will cost them in the future. The problem is a dollar today looks very attractive, even if it costs two tomorrow. Retail is a cycle of overstretching on revenues, giving it back and trying to reset and regrow. http://spr.ly/60485iOQn

A message to owners/ founders in independent fashion ecommerce Discounting is basically equity release for your brand. There's always going to be time periods where you need a cash injection. But if you need to release more and more equity each year to make your numbers then the path only leads one way, to TK Maxx. That's why most financial advisors will tell individuals to downsize, find alternative credit or do literally anything else aside from releasing equity in their home. The trouble is, a typical Head of Ecommerce is only around for 18 - 24 months and they'll be long gone before the real consequences of discounting their way to YoY growth manifests. Unless you're one of the lucky few to win a good, long-term Head of Ecommerce, then you'll need to be the custodian of your brand's equity. Make sure you're always building more than you release.

On average, for every $100 of returned merchandise, it costs retailers about $25. And with return rates at an all-time high, that's why we're seeing this change. But consumers are used to free returns - they're a given, not a 'perk' anymore. My advice to retailers would be to tread carefully here. Consumers are more choosy than ever, and you don't want this to be the thing that turns them off for good. #Fashion #Retail #Returns

"Macy’s leans into higher-margin private labels. Given softening sales, higher-margin private labels can help boost the retailer’s bottom line....However, execution is critical. Macy’s needs to deliver on-point designs or else it will be left with a glut of difficult-to-clear goods." In the new world of omni-channel retail, my view is that often times the reseller is confusing what the customer is looking for (from them). Great brands. Well merchandised. Well priced. Consistency. Delivering value. There are always trade-offs. But to me, leaning into great brands while keeping the ability to offer private label - at value pricing (think Costco Wholesale Kirkland signature) is the move. If you are looking to replace brands / merchants with private label meant for this purpose - this is a road to nowhere. (Amazon recently retreated on this strategy) Brand Value maters. Today more than ever. #brandvalue https://lnkd.in/gEVJxJCd

Great piece from Placer.ai on the off-price retail segment’s success in 2023. Although overall apparel was challenged in 2023, these retailers were solid, with Y-o-Y traffic growth in each quarter. Likely due to an increasingly more debt burdened and price squeezed middle-income consumer. https://lnkd.in/gXej8vGs

Although generally smaller stores seem to be the trend over the past decade because slow moving merchandise can be sold online and therefore stocked at industrial sites where real estate costs are lower, some retailers are now saying that larger flagship-type stores are more beneficial for the store brand and customer experience. For example, Inditex, the parent of ZARA SA closed a quarter of its stores since 2018 and now has 5,745 locations across the world. Yet total revenue from stores increased 8% in 2022 compared with four years earlier, with each store selling 30% more on average, according to Inditex CEO Óscar García Maceiras. He says that store managers routinely tell him they want to expand (the store size) because only larger stores are able to accommodate most or all of Zara’s (merchandise) range. Though Inditex stores are getting larger, sales per square foot is now up 16% relative to 2019, Garcia said. Zara's fast-fashion competition seems to be focusing on upgraded stores as well. UNIQLO is still expanding in Western markets, where its footprint is significantly smaller than H&M and Zara, but it is also opening destination stores. H&M has cut its store count 14% from its 2019 peak to 4,375 stores but increased its capEx budget by 43% for 2023 to roughly $1 billion, partly to push ahead with store modernization. 

Fast fashion giant H&M's decision to charge return fees for online purchases reversed after backlash. But 'try-and-return' trends and supply chain factors like fuel and labor costs continue to affect retail pricing. Travis Tokar, Professor of Supply Chain Management at Texas Christian University, notes increased costs in the supply chain, leading to more expensive products and impacting customer policies. #Fashion #Retail #SupplyChain #Pricing https://hubs.la/Q02bcpwz0

Following in the footsteps of ZARA USA and boohoo, a new wave of #retailers have started charging shoppers to return items purchased online. Last year, several #fashion giants began implementing return charges as the industry looked for ways to mitigate the impact of the costs associated with online returns. Moss Bros. Group Ltd, Mountain Warehouse and THG have since followed suit and are now charging customers to return items which they’ve purchased online. Moss Bros reportedly told The Telegraph that it had introduced a “modest” fee to “reflect the increasing cost of collecting and processing these returns” after conducting a review of the wider market. What do you think about this latest news? Should more retailers introduce return charges to dissuade consumers from returning too many items? Let us know below: https://okt.to/SPiMe3

The recent shift in H&M's return policy. It's indeed a notable development in the fast fashion industry and one that signifies a strategic move towards more sustainable and cost-effective practices. The decision to charge for returns aligns with the broader trend we're observing in the retail landscape. As shipping costs surged during the pandemic, it has become imperative for industry leaders to reassess their return policies. H&M's move mirrors the steps taken by fellow retailers like Zara and Uniqlo, reflecting a collective effort to address the challenges posed by an unusually high return rate in the online fashion segment. I find it particularly interesting that H&M has extended this policy exclusively to non-members of their customer platform. This approach not only encourages customer engagement but also offers an additional incentive for membership. It will be intriguing to observe how this shift impacts customer behaviour and influences long-term purchasing patterns.

Walmart Marks, 51st Year of Increases, Raises Annual Dividend by 9% https://lnkd.in/di7Eq8qK Walmart has raised its annual dividend by 9% to celebrate its 51st consecutive year of increasing profits. This move shows the company's financial stability and long-term growth prospects. #walmart #dividend #profits #growth #retail Global Retail Outlook Magazine