Fast fashion targeted in France, Hermès is being sued, Trader Joe’s tote bags are having a huge moment, Whole Foods is mixing things up, and Ted Baker calls in the administrators.
In The Loop #36: this week's retail insights, news and trends. Content designed for busy retailers, carefully curated with expert analysis to save you time and help you thrive.
Fast fashion: the French are bringing Shein and Temu to heel. Can Britain follow suit? - The Guardian
France is on a mission to make fast fashion less appealing. From 2025, a surcharge of €5 will be added to each item of clothing, rising to €10 from 2030. The bill will also outlaw fast fashion advertising in a bid to make business as difficult as possible for the retailers who produce huge volumes of clothing and have a quick turnaround of collections. In essence, this new legislation is designed to hit ultra fast fashion retailers where it will make the most difference- reach and profit. The big question is, will this move from the country that values quality craftsmanship and fashion change how the world sees and regulates these retailers? Only time will tell.
📌 Takeaway: ultra fast fashion retailers are even taking market share from the fast fashion retailers such as H&M, who we’ve been accustomed to seeing on our high streets for years. Temu and Shein are taking disposable fashion to another extreme, and the only way to minimise their environmental impact is to dissuade customers from buying from them; without demand, there’s no place for the supply.
Hermès sued over claims it only sells Birkin bags to ‘worthy’ customers - The Independent
News that Hermès is being sued in the US for allegedly only offering access to Birkin bags to customers who have already bought in to the brand raises some interesting questions. Legally, this is muddy water and may violate US antitrust laws, but it also forces us to reassess what defines luxury. Birkin bags have always been reserved for the select few, both in terms of access and price because that’s what makes them so covetable to buyers, at any price that Hermès wants to attach to them. Also, this could be a tricky road to go down because asking customers to pay for access is nothing new, in fact, Costco have been doing just this by charging a membership fee for access to their warehouses for years. Ultimately, luxury is struggling, and this may be another way for Hermès to remain “exclusive” (and profitable), even if it risks alienating customers, but does that even matter when demand for their products will always outstrip supply?
📌 Takeaway: this furore won’t stop customers from wanting a Birkin bag because Hermès has shown the lengths it is willing to go to to keep the piece exclusive, and in the end, that’s what luxury shoppers will pay for, whatever the cost.
How Trader Joe's tote bags became an unexpected style symbol in Japan - The BBC
Speaking of in-demand bags, next is a story about the Trader Joe’s mini totes that I was convinced was a joke, but isn’t. For weeks, we’ve been hearing about these $2.99 limited edition tote bags from the US grocer reselling for thousands of dollars on eBay, but this article discusses how the craze has spread beyond US shores and as far as Japan. Without even trying, Trader Joe’s has created a viral product, a feat any brand would dream about, but the retailer has reaffirmed its position that it does not condone the resale of any of its products.
📌 Takeaway: sometimes customers just want what they can’t have, even if it means paying over the odds for the chance to show that they have what others can’t get.
Whole Foods still pressing ahead to ‘expand UK footprint’ despite shuttering stores - Retail Gazette
Proving that food shopping is primarily about location and convenience, Whole Foods is closing under-performing stores and opening new ones in locations that are a better “fit” for their customers. Whole Foods is perfectly placed to entice shoppers with a larger grocery budget who are looking for specialist items, and by meeting them where they are, they are giving them convenience alongside a best in class shopping experience.
📌 Takeaway: meet your customers where they are because convenience matters, especially when it comes to essentials.
Nearly 1,000 jobs at risk as Ted Baker prepares to appoint administrators - The Guardian
Sadly, the news that Ted Baker has called in the administrators didn’t surprise me. Why? For years, I haven’t been able to define what Ted Baker is as a brand. Is it high street? Not at those prices. Is it luxury? Not with that volume. Is it design-led? Not recently, but there was a time when Ted Baker was the place to go for the perfect dress or bag at a reasonable-ish price. Ted Baker has become “somewhere in between”, and therein lies the problem. Their brand identity has collapsed over the years and it’s hard to see where it can fit in to the current UK retail landscape.
📌 Takeaway: be clear on what your brand stands for because messaging is important if you want to to be memorable.
👀 What else caught my eye this week?
Next profits are up - it seems they can do no wrong
Hobbs is creating a wonderful in store experience - I went in to the new Watford store this week, and it was a treat. Excellent customer service, beautiful fitting rooms, and a store layout that screamed luxury
The White Company has an a new app, and I love it.
The M&S spring womenswear advert featuring Sara Sampaio is fun, eye-catching, and totally on-brand.
The rising price of chocolate - this FT article is worth a read if you’re as worried as I am.
💡 Retail Insights by Retail Collaborative
In case you missed it on Linkedin, in this week’s “Retail Insights” I took a look at the collapse of Matches Fashion and what that means for the luxury e-commerce market.
Here are my thoughts:
Last week Matches in fell in to administration, just two months after being acquired by the Frasers Group.
Mistakes were made:
Overstocking lines when luxury is about creating demand through exclusivity
Presenting “curated collections” to social media savvy customers who want to do their own research rather than being told what to buy by buyers they don’t know
Trading out of limited store locations (Matches only have three locations, all in London)
Discounting on luxury has devalued the products
Lessons can be learnt:
Show the value of products through videos and detailed descriptions
The old-school store + website model doesn’t enable experiences and immersion, which is key for capturing customer attention and sales; customers expect more, so innovate using tech
The fashion industry is changing and will centre on community and immersion, not exclusive locations most people can’t access; if you don’t include your customers, you can’t expect to succeed
Create content on platforms that allow your brand to stand out (user generated content is the future of retail marketing)
Convenience alone won’t be enough to save online luxury because marketplaces in particular can be tricky to navigate.
Scrolling web pages is akin to sifting through racks and queuing- and none of these experiences scream luxury
Here are some broader questions we should be asking about luxury e-commerce:
💭 What does the Matches collapse mean for luxury e-commerce?
💭 Are customers getting fed up of being told what to buy by “experts”?
💭 Is the multi-brand marketplace, especially in the luxury space, falling out of fashion?
💭 Are online luxury marketplaces doomed to fail because they can’t innovate and/ or attract customers with personalised content like the brands they stock?
My view:
Trying to sell luxury products online when luxury is more than just a product is doomed to fail. Luxury is an experience, a lifestyle, and by definition, customers want to touch the products, buy them in store, and feel special carrying the bag out.
In other words, the convenience of online shopping is no longer enough to compensate for the lost experience of in-person retail.
What are your thoughts?
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And that’s a wrap for this week!
I’d love to hear from you, so let me know what you think of this week’s edition and what you would like help with in your retail business.
Until next week,
Hina