Nitheesh NH
FROM THE DESK OF DEBORAH WEINSWIG
Selling Fashion in the Metaverse: More Than the Emperor’s New Clothes? Among the topics discussed by Coresight Research analysts this week is the extent to which consumers may adopt the metaverse as a channel for purchasing real-world items—in other words, as the next stage of e-commerce for physical goods. As one of the biggest retail categories, and one intertwined with impulse purchases and projection of personal identity and image, fashion has one of the strongest potential matches with metaverse shopping. This form of purchasing can take one of two forms—virtual goods such as clothing for use within the metaverse, and physical goods, with the metaverse substituting for e-commerce as a digital purchase channel. In our recent discussions, the more skeptical have pointed out that the experience of purchasing physical fashion goods visualized in a cartoon-style, virtual world represents a meaningful downgrade on the current, regular e-commerce experience that offers high-quality photography, video and size guides. Users looking for the latter kind of shopping experience in the metaverse ultimately get redirected to companies’ regular websites. However, selling physical goods is just one part of metaverse commerce; purchasing virtual goods is another. Metaverse Fashion Week A growing number of brands and retailers are trialing fashion sales in virtual worlds. The first metaverse-based fashion week took place in Decentraland on March 24–28, 2022. Decentraland is one of the oldest metaverse platforms and is most accessible to users (from a desktop). The event saw immersive experiences, exclusive NFT (non-fungible token) collection drops, fashion and runway shows, virtual storefronts, panels and discussions and after-parties. Brands and retailers sold not only virtual apparel through NFTs, but also sold physical goods via NFTs tied to physical items on the marketplace or by directing users to their websites. More than 70 brands, many notable and many metaverse-native, participated in the Metaverse Fashion Week (MVFW) to showcase collections or sell products to customers in the form of NFTs. NFTs from virtual store exhibitions and catwalks are available in Decentraland’s marketplace and listed in secondary marketplace OpenSea, and many were available to purchase through the brand’s website when viewers clicked through the display during the event. To participate in digital commerce, users had to download crypto wallets. Fashion retailing giant Forever 21 is one of the few stores to have established a permanent shop in Decentraland. In its storefront, the company presented an exclusive collection of avatar wearables designed for Decentraland. Debuting virtual collections and stores were UK-based Selfridges, which provided an immersive journey inspired by its iconic Birmingham store, and Tommy Hilfiger, which partnered with Decentraland playground Boson Portal to sell both digital and physical products appearing in its store. Dolce & Gabbana designed an exclusive NFT collection of 20 avatar wearables. [caption id="attachment_145605" align="aligncenter" width="700"]
Virtual Tommy Hilfiger clothing pieces in its store (left); Boson Portal playground (right)Source: Boson Protocol[/caption] [caption id="attachment_145606" align="aligncenter" width="700"]
Custom avatars from Dolce & Gabbana’s MVFW collectionSource: UNXD[/caption] Prospects for Fashion in the Metaverse We expect Decentraland’s MVFW to be the first of many virtual fashion shows, and we expect many more brands to trial this emerging channel. The five-day MVFW attracted over 100,000 unique visitors in total. Even brands that did not sell products as NFTs but simply wanted to establish a presence and gain exposure benefited from interacting with customers within a virtual setting and creating immersive environments. Events such as these drive high digital footfall and feature many partnerships with NFT projects, blockchain projects and metaverse-native brands, which can smooth out the process of transitioning from physical to digital. While we see challenges in trying to sell physical products in virtual worlds, given the apparently unfavorable comparison with where e-commerce is now, brands and retailers selling digital assets during MVFW will have enjoyed minimal overhead, inventory and production costs, and were able to overhaul their experiences on a day-to-day basis. Look out for more from us on the metaverse or read our extensive existing coverage.
US RETAIL AND TECH HEADLINES
Albertsons Reports Strong Fourth-Quarter Sales Growth (April 12) Company press release- Supermarket chain Albertsons reported net sales growth of 10.1% year over year in its fiscal 2021 fourth quarter, ended February 26, 2022. Comparable store sales increased by 7.5% year over year and diluted EPS increased by 25.0%.
- The company’s gross margin decreased by 20 basis points (bps) year over year to 28.7%. For fiscal 2022, the company expects year-over-year comp sales growth in the low-single digits and a decline in adjusted EPS by 7.2%–12.1% year over year. It expects to spend $2.0–2.1 billion in capital expenditures.
- Canadian apparel specialty retailer Lululemon Athletica is set to launch its “Lululemon Like New” resale program in all of its US stores on Earth Day, which falls on April 22. The rollout follows a successful pilot across 80 Lululemon stores in Texas and California, which began in May 2021.
- Through the program, Lululemon customers can trade in their gently used leggings, tops, jackets and more for an e-gift card. Shoppers can also access a selection of used products for resale on the retailer’s website.
- Target has launched a new apparel resale program in partnership with ThredUP resale-as-a-service (RaaS) solution, wherein Target is selling used apparel through the ThredUP platform.
- The selection consists of clothing from Target’s private-label brands and from its past designer collaborations, as well as some luxury clothing items. There are approximately 400,000 pieces total on the Target ThredUP page with discounts of up to 90%, according to the company.
- Beauty retailer The Body Shop has introduced in-store refill stations in some of its US stores for body, hair and hand care products. In June 2021, the company announced a five-year plan to launch refill stations in most of its stores around the globe in an effort to cut plastic use.
- The company expects 49% of its US stores to be equipped with refill stations by the end of 2022. The available product selection will range from six to 12 items, depending on the store size.
- Walmart has appointed John Rainey as the company’s new EVP and CFO, effective June 6, 2022. He will succeed Brent Biggs, who has served as Walmart’s CFO since December 31, 2015.
- Prior to serving as CFO at financial technology company PayPal for seven years, Rainey worked for United Airlines and Continental Airlines.
EUROPE RETAIL AND TECH HEADLINES
Albert Heijn Expands Delivery Options with Deliveroo and Thuisbezorgd (April 12) Company press release- Dutch supermarket chain Albert Heijn has expanded its delivery options in partnership with British online food delivery company Deliveroo and Dutch online food delivery company Thuisbezorgd, enabling customers to get groceries delivered within half an hour.
- The service will start next week from two stores in Amsterdam and will be expanded further if successful. Customers will be able to choose from a range of 1,200 items.
- British online fashion retailer ASOS reported net sales growth of 4.0% year over year in its fiscal 2022 first half, ended February 28, 2022, with UK sales growth of 8.0% and US sales growth of 11.0%. However, the company’s sales growth rate for Europe was low at 1.0% year over year. Its diluted EPS declined by 117.0%.
- The company’s gross margin decreased by 190 bps year over year to 43.1%. For its second half of fiscal 2022, the company expects sales growth to accelerate, despite a challenging external environment. It also expects improved lead times as supply chain constraints ease.
- German discount retailer chain Lidl has appointed Matúš Gála as its new CEO for Lidl Belgium and Luxembourg, effective May 1, 2022. Gála will succeed Boudewijn van den Brand, who has served as CEO at Lidl Belgium and Luxembourg for eight years and will be leaving his position on April 22, 2022.
- Gála has already served 14 years at Lidl, including five years as CEO of Lidl Slovakia and previously as Sales Director and Regional Manager.
- British apparel retailer Marks & Spencer (M&S) has launched a new rental collection in collaboration with fashion rental platform Hirestreet. The collection will land on Hirestreet for Easter with clothing designed for holidays, staycations and events, according to the company. Rental starts from £10 ($13).
- The collection is made up of 40 womenswear pieces from the company’s in-house brands Autograph and Per Una. M&S will launch 16 looks this week and then add additional new styles throughout the spring-summer season.
- Norwegian food and consumer goods retailer Orkla has named board member Nils Selte as its CEO and President. He succeeds Jaan Ivar Semlitsch, who has served in the role since August 2019.
- Selte has been a non-executive member of Orkla's board since 2014 and will be responsible for accelerating Orkla’s transformation measures.
ASIA RETAIL AND TECH HEADLINES
Lawson Considers Seijo Ishii IPO (April 12) Reuters.com- Japanese convenience store operator Lawson Inc. is considering taking its subsidiary Seijo Ishii Co. public via an initial public offering (IPO). Seijo is a fully owned grocery chain with approximately 14,500 outlets. Japanese trading company Mitsubishi Corporation owns a 50% stake in Seijo.
- Although decisions are not yet final, Lawson is reportedly aiming to launch the IPO by the end of 2023, which will value Seijo at over ¥ 200.0 billion ($1.6 billion).
- Indian eyewear retailer Lenskart is in talks to close a $200–250 million funding round, which would raise its valuation to $4.5–5.0 billion. Alpha Wave International, formerly Falcon Edge Capital, is reportedly leading the funding round, which will also include a secondary share sale.
- Lenskart intends to use the funds to develop its domestic and global operations. Funds raised will also be allocated to expand Lenskart's direct-to-consumer (DTC business) and acquire brands in the US and Europe.
- Swiss performance running label On has opened its first Asian flagship store, located in Tokyo. It is the world’s largest flagship store in terms of area, according to the company.
- The store spans three stories and covers 320 square meters in Tokyo’s Harajuku district. The ground floor features a 3D-printed rock that replicates Switzerland’s Engadin Valley, the Alps location that inspired On’s founders to set up the brand.
- Uniqlo, owned by Japanese apparel retailer Fast Retailing, has launched an online tailoring service in Japan, designed for people with disabilities. The new service provides alterations including adding front openings to T-shirts and sweatshirts and switching zippers or buttons to Velcro.
- Shoppers book their alterations via the Uniqlo website and specify the changes they want before sending in their items via post. Shoppers can also access a digital meeting with the tailor via the website. The company will return altered items to consumers via post.
- Waresix, an Indonesian logistics firm, has secured $50 million in a series B+ funding round led by Tiger Global, Temasek and East Ventures. The new funding round raised the company's valuation to $420 million.
- In December 2020, Waresix acquired Trukita, a marketplace portal that helps customers locate offers for freight and trucking services for delivery. Waresix has capitalized on this acquisition to develop various areas of the supply chain, including truck management, warehousing, multi-modal transportation and vendor management.