FROM THE DESK OF DEBORAH WEINSWIG

Blockchain Technology Can Help Reassure Consumers Looking To Buy Luxury Goods

This week, three luxury brands—Cartier, LVMH and Prada—announced the formation of the Aura Blockchain Consortium, which they named “the world’s first global luxury blockchain.” The consortium is targeting several important goals, including communicating information on authenticity, as well as ensuring responsible sourcing through high levels of transparency and traceability throughout product lifecycles.

Blockchain is the fundamental technology behind cryptocurrencies and has recently come under the spotlight again as the technology supporting NFTs (non-fungible tokens), which have drawn eye-popping prices for digital-only artwork and other content.

Within the consortium, the technology is used to connect a product or client ID to a blockchain, which creates a new, secure and non-reproducible block at every stage of the value chain, from raw material sourcing and production to sale and resale, and so on. Since the components in a blockchain are public, consumers can follow the entire lifecycle of a product and verify its authenticity without needing expert authentication. The platform uses technology from Microsoft and blockchain specialist ConsenSys, and is open to all luxury brands.

The cost of counterfeit items in global retail is huge. The Organisation for Economic Co-operation and Development (OECD) estimates that trade in counterfeit goods accounts for 3.3% of total global trade—and this figure is on the rise—translating to at least $650 billion annually, based on data from the United Nations Conference on Trade and Development (UNCTAD).

Moreover, the luxury segment faces many indirect costs of counterfeiting. LVMH employs more than 60 lawyers and spends more than $17 million annually just on legal action against counterfeiters, and it represents just one company of many facing a swathe of producers of non-authentic goods. In addition, resellers and consumers have to hire experts to verify goods for resale, which are often returned if their provenance is found to be questionable, generating expenses for the consumer and retailer. Therefore, the ability to verify the authenticity of a product via the new platform should reassure potential buyers and strengthen the resale market.

Alongside authenticity, sustainability is an interesting aspect of the blockchain-fueled consortium, although LVMH provided few details on this application. Consumers will be able to track the provenance of materials used to make specific products, thereby avoiding goods with undesired sources.

While there are existing technologies that can be used to identify and verify the authenticity of goods, they currently require connection to a software platform. Currently, makers have the option of embedding RFID (radio-frequency identification), NFC (near-field communication) or even Bluetooth chips in products, with the level of security depending on the application—RFID chips, for example, can offer encrypted data storage. Israel-based innovator Nexite embeds Bluetooth beacons in goods, enabling tracking throughout the supply chain as well as insight into what is in the consumer’s closet. Moreover, apparel company Spyder has embedded NFC chips into some of its collections, which can be scanned to enable access to current information, such as snow reports in the case of ski jackets.

The Aura consortium of luxury brands promises to eliminate many of the headaches of purchasing luxury goods, offering a transparent and secure way of verifying the authenticity and history of an item throughout its entire lifecycle. LVMH is already using the platform for its Hublot watch brand to offer a digital warranty, as well as enabling the owner to upload a photo of the watch to verify its authenticity. This easy access to proof of provenance could reassure would-be purchasers that goods are, in fact, what they purport to be, saving them the expense of hiring an expert for verification and eliminating any nagging doubt as to whether a purchased product is authentic.

US RETAIL AND TECH HEADLINES

BJ’s Wholesale Appoints Bob Eddy as President and CEO

(April 20) Company press release

• BJ’s Wholesale has announced that its Board of Directors has appointed Bob Eddy as President and CEO, effective immediately. Eddy joined BJ’s in 2007, became Executive Vice President, CFO, in 2011 and Chief Administrative Officer in 2018. He was named Interim CEO early this April following the sudden passing of Lee Delaney.
• Laura Felice, currently BJ’s Senior Vice President, has been appointed Executive Vice President, CFO, replacing Eddy.

City of Boston Launches Reward Program B-Local

(April 19) ChainStoreAge.com

• The City of Boston, Massachusetts, has launched B-Local, a points-based rewards program accessed via mobile app. The program’s goals are to encourage local shopping and support the recovery of neighborhood stores and restaurants that have been impacted by the pandemic.
• Using the B-Local mobile app, consumers can automatically earn rewards at participating local businesses when they make purchases with credit, debit or prepaid cards linked to their B-Local account. These points can then be applied as cash discounts at participating business. The City of Boston will reimburse the rewards, meaning there is no cost to users or businesses.

Lululemon Announces Launch of Resale Program

(April 20) Company press release

• Lululemon has announced the pilot of Like New, the brand’s first recommerce program, as part of its expansion of sustainability initiatives. Lululemon customers in California and Texas will be to trade in “gently used” Lululemon clothing in more than 80 participating stores or by mail in exchange for an e-gift card. In June, the trade-in program will expand into an online resale program in the same markets.
• Lululemon has partnered with recommerce technology specialist Trove to support its resale technology and operations. Lululemon stated that purchasing a Like New product can save up to 50% of the product’s carbon footprint and 310 grams of waste.

Michael Strahan Expands Partnership with Tailored Brands

(April 19) Company press release

• Footballer turned broadcast journalist Michael Strahan and his business partner Constance Schwartz-Morini have announced the expansion of their existing partnership with men’s apparel company Tailored Brands, after the introduction of their first collection together last year. Tailored Brands will offer the MSX by Michael Strahan line in Men’s Wearhouse and Moores stores and online.
• The athletic-inspired collection, referred to as “workleisure,” will include hoodies, joggers, polo shirts and T-shirts. The pieces in the collection are designed to be suitable for home as well as for work or social environments.

Save Mart Deploys Shelf-Scanning Robots at California Stores

(April 19) GroceryDive.com

• Supermarket chain Save Mart has announced the rollout of Simbe Robotics’ autonomous inventory robot, Tally, at select stores in California. Tally robots autonomously audit store shelves to ensure products are in the correct locations on the floor and notifies staff if products are low or out of stock. According to Simbe, the robots can scan up to 30,000 products during one day.
• The pilot program will be installed in two Lucky California Stores, in Dublin and San Ramon, and two FoodMaxx stores, in Modesto and Tracy.

EUROPE RETAIL AND TECH HEADLINE

Associated British Foods Reports a 17% Decline in Group Revenues; Primark Reports a 90% Decline in Operating Profits

(April 20) Company press release

• Associated British Foods reported group revenues of £6.3 billion ($8.7 billion) for the 24 weeks ended February 27, 2021 (the first half of fiscal 2021), representing a 17% year-over-year decline. Group operating profits declined to £369 million ($514.2 million), down by 46% year over year, during the same period.
• The company’s fashion retail segment Primark saw its revenue decline by 40% during the same period and its operating profit fall to £43 million ($59.9 million) from £441 million ($614.4 million) reported during the first half of fiscal 2020. The company’s overall decline in revenues can be attributed to pandemic-led store closures and lockdown restrictions.

Carrefour Reports Growth During Its First Quarter of 2021

(April 21) Company press release

• Carrefour reported 4.2% like-for-like sales growth during the first quarter of 2021. The rise in sales can be attributed to robust food sales in the key markets of Brazil, France and Spain.
• The company also announced plans to buy back up to €500 million ($601.2 million) of its shares by the end of 2021, as part of its capital allocation strategy.

Footfall in Retail Outlets in England Increases by Approximately 200% as Covid-19 Restrictions Ease

(April 19) TheGuardian.com

• According to the British Retail Consortium and separate data from market research firm Springboard, the number of people visiting shops rose by 195.5% in England in the six days to April 17, 2021. This was due to relaxations in Covid-19 restrictions—retailers were allowed to reopen on April 12, 2021 (stores were forced to close amid the nation’s third lockdown at the end of 2020).
• The highest traffic was reported in cities including Portsmouth, where footfall was up more than 100%, and Birmingham, Leeds, Liverpool and Manchester, which all recorded a 300% increase in footfall.

Kering Announces Sharp Revenue Rebound During First Quarter of 2021

(April 20) Company press release

• During its first quarter of 2021, Kering reported year-over-year revenue growth of 25.8%, driven by solid sales performances reported across all business segments/houses. In terms of region, Asia Pacific reported 83.0% growth and North America reported a 46% increase during the period.
• The company reported a 108% increase in online sales during the first quarter of 2021—with e-commerce accounting for 14.0% of overall retail sales.

M&S Announces Plans To Build Automated Online Warehouse To Increase Online Capacity

(April 19) Company press release

• M&S has announced plans to transform its Bradford Distribution Centre to an online warehouse for M&S.com by December 2021.
• The move is a part of the company’s strategy to reinvent its supply chain and enhance online capacity of its MS2 online business division.

ASIA RETAIL AND TECH HEADLINES

Abercrombie & Fitch To Shut Its Only Singaporean Store

(April 20) CNALifestyle.ChannelNewsAsia.com

• Fashion brand Abercrombie & Fitch announced the closure of its only store in Singapore through an Instagram post on April 19. The store is set for closure on May 2, 2021. No further details were disclosed.
• The store, located in Knightsbridge Mall at Orchard Road, is currently running a closing-down sale with store-wide discounts of 50%.

CPG Companies Favor Neighborhood Stores Over E-Commerce Players in India

(April 21) ETRetail.com

• Large CPG (consumer packaged goods) companies are prioritizing restocking neighborhood stores (known as kiranas) over e-commerce companies in India, amid local lockdowns in the major states of Delhi and Maharashtra.
• Mayank Shah, Category Head of Indian food company Parle Products, stated, “We are seeing a huge increase among consumers buying essentials from kirana stores… Our immediate and core priority now is ensuring quick replenishment of stocks at the neighborhood retail stores.”

Gojek Co-CEO To Lead GoTo Following Gojek–Tokopedia Merger

(April 20) BusinessTimes.com.sg

• Co-CEO of on-demand delivery and digital payments company Gojek, Andre Soelistyo, is set to head GoTo, according to sources. GoTo is the result of the merger between Gojek and e-commerce company Tokopedia. Representatives from the companies declined to comment.
• Gojek’s shareholders will have a 58% stake in GoTo, while Tokopedia owners will have a 42% shareholding in the company.

Lazada Partners with ComfortDelGro Taxi To Offer In-App Taxi-Booking Service

(April 21) Company press release

• Singaporean e-commerce company Lazada has announced a partnership with domestic taxi operator ComfortDelGro, which will allow shoppers to book a cab through the Lazada app. Lazada Singapore CEO James Chang stated that the partnership will enhance the “shoppertainment” experience for Lazada users.
• As a part of the collaboration, Lazada shoppers will be able to save 4% on all ComfortDelGro rides booked through the Lazada app over the next six months.

Tommy Hilfiger Expands Its Harbour City Store in Hong Kong

(April 20) RetailInAsia.com

• Tommy Hilfiger has expanded its Harbour City store in Hong Kong from 970 square feet to 1,280 square feet. The expansion is designed to reflect Tommy Hilfiger’s global store design concept, featuring a digital screen to display campaign videos, light oak flooring and mid-century light fixtures.
• The Spring 2021 Tommy Hilfiger collection will be launched exclusively at the newly expanded store. All products in the collection are made using sustainable methods and materials.