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Around the Web: Retail’s Woes, New Shopper Territories, China’s Consumerism

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This week’s headlines focused on retail’s demise, appealing to niche consumer demographics and China’s growing consumerism.

After filing for bankruptcy in March, Gordmans is charting new retail territory. The Omaha World-Herald reported that Gordmans is venturing into the off-price sector and despite a better move, could face competition from established discount players, including Macy’s Backstage, Nordstrom Rack and TJ Maxx.

(Related on SJ: Op-Ed: What it’s Going to Take to End Retail’s Current Armageddon)

The demise of Sears has been on everyone’s lips lately. The Washington Post analyzed the retailer’s robust past and how a few setbacks, including diversifying ventures, product niche competition and a heavy dependence on suburban shopping malls led to its downfall. Though many see the writing on the wall, Sears still seems to be planning a comeback.

(Related on SJ: Moody’s: Distressed Retailers Protecting Assets at Lenders’ Expense)

Fast fashion and evolving shopper habits are contributing to New Look’s latest financial woes. According to Bloomberg, the U.K. retailer experienced $21.5 million in pretax loss, witnessed a decrease in sales by 2.4% and a revenue loss of 6.6%. New Look’s majority stakeholder, South Africa-based Brait SE, which also experienced a slight decline in stock value, is working to combat a tough retail environment and offset competition from other giants like Amazon and Lidl.

(Related on SJ: Why the UK’s Plus Size Market is a Potential Boon for Retailers)

Target wants to make new headway in the Midwest. The Chicago Tribune highlighted how the company plans to open a fleet of mini-stores in the Chicago vicinity that will cater to the urban millennial demographic. Although it may be too early to see if Target’s “small format” stores could ramp up sales for the retailer, the move demonstrates a more streamlined brick-and-mortar landscape with more focus on clothing, food and beverages and houseware items.

(Related on SJ: Report: Most Retailers Think Their Physical Stores Will Be Gone in the Next 10 Years)

High-end fashion is gaining momentum in the digital market space. Observer released a ranking of the top luxury e-commerce brands, which broke down companies according to aesthetic, brand inventory, social media presence and sales. Net-A-Porter topped the list with the best semi-annual sales and Instagram following, while London-based Browns achieved a spot for its off-the-cuff assortment.

(Related on SJ: Bain: Luxury Market Set to Rally on China Recovery)

Fast fashion continues its dark hold on factory garment workers. Dazed interviewed Rahul Jain, the director behind the world-acclaimed documentary, Machines, and how this masterpiece provided an inside perspective on the horrific conditions of a Gujarat-based apparel factory. With the documentary, Jain aims to raise awareness worldwide about labor abuse and why the industry needs to press for better working conditions.

(Related on SJ: FLA Report Identifies Ways to Mitigate Child Labor Risks in Cotton Sector)

Could a digital self-service model be the answer for struggling retailers? Third Channel explored how Sephora is engaging in a self-service strategy, where consumers are provided with an interactive digital experience. When visiting select Sephora locations, consumers can interact with digital displays, consult with online experts about makeup advice and virtually try-on products with a mobile app. Unlike traditional retail, this model fosters consumer education, creates an easier purchasing journey and caters to consumer convenience.

(Related on SJ: Report: Six Innovations to Watch in Apparel)

Chinese consumerism is scooping worldwide markets, but is it a positive movement? Quartz spoke with University of California-San Diego professor Karl Gerth about how China’s growing middle class will continue to fuel shopping activity, brands will shift their R&D plans for Chinese consumers and how the American dream could be tainted for this demographic.

(Related on SJ: E-commerce is Big in China. Really Big.)

Labor in conditions in China are shifting, as big-name manufacturers, including those that produce Ivanka Trump footwear, seek cheaper labor in other nations. The New York Times highlighted how China’s labor force is becoming costlier and less citizens are willing to take on production jobs. What’s more, China Labor Watch activists, who were allegedly detained last week, exposed how these facilities pay less and make workers endure longer shifts.

(Related on SJ: Report: Geopolitical Instability is Having a Chilling Effect on Retailers’ Supply Chain Moves)

Retail may be undergoing a major shift, but technology has also caused consumers to change their spending activity. Bloomberg noted how in addition to lower incomes, inflation, convenience and financial psychology, technology has enabled consumers to shop smarter.

(Related on SJ: Technology Drives Value in Ranking of Top 100 Most Valuable Brands)

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