Giorgia Judges: 25 July

    By Giorgia Gallarati, Associate Consultant at BJSS

    Giorgia Gallarati

    It has been an eventful few weeks for some retailers worldwide too, one particular news item which caught my eye is the return of Toys ‘R’ Us.

    It’s another day and another fast-fashion retailer launching a sustainableclothingline! Last week Zara announced plans to use only sustainable materials and green packaging for all of their products by 2025. This ambitious announcement certainly raised a few eyebrows, given the fact that Zara’s owner, Inditex, is the world’s largest fast-fashion retailer and has been heavily criticised for the toll its clothing production has on the environment. There are many who believe that fast-fashion retailers will never be truly sustainable, as waste and lack of durability are part of their company DNA, just as low prices and a quick-to-market product are. It is of course a step in the right direction and a great example for other less environmentally conscious retailers. The truth is that the fast-fashion mentality is now so engrained in our society, that if we really want to improve the impact that retail has on the environment, we should use these examples as a catalyst to drive further industry change.

    Recently, we’ve also seen H&M in the headlines because of its environmental commitment, both through its digital channels (supply chain visibility) and in-store (with its reuse and recycle stations). H&M published its results last month and it’s great to see this strategy paying off, with a 12% rise in sales from last year. The fast-fashion war continues, so watch this space - I think we have a pretty exciting battle on our hands!

    It has been an eventful few weeks for some retailers worldwide too, one particular news item which caught my eye is the return of Toys ‘R’ Us. The iconic children’s retailer that filed for bankruptcy two years ago is now planning a comeback. Tru Kids Brands (Toys ‘R’ Us’ parent company), announced the opening of two new stores in the US, which should open just in time for the holiday season. What's most exciting about the announcement is the new store format which will be powered in partnership with b8ta, the booming tech start-up which is disrupting the physical retail space. These forward-thinking concept stores tick all the boxes for me: in-store experience combined with technology and strong branding. But what will be most interesting to see, is how the company will be able to re-build a new relationship with children, that it once had with older generations. Also, will the new and improved Toys ‘R’ Us even be able to win back its customers? In the past few years, about 94% of its business has gone to Walmart, Amazon and Target instead. To win back its followers, the toy store will have to offer a great digital presence and equally low prices. I am looking forward to reading more about this latest retail concept and its strategy to regain its rightful place in the toy industry.

    Last week UK-favourite online retailer Asos announced a profit warning for its upcoming results. According to the forecast, profit before tax might fall up-to71% compared to last year’s results. The company blamed ‘operational challenges’ such as issues with their new automated warehouse in Berlin. But in my opinion, this is not Justen operational problem, Asos has also been losing market share to fast-fashion retailer Boohoo. The competitor was effectively able to interpret consumers trends and has been successfully selling ‘Love Island’ outfits through its partnership with the programme and a well-executed social media marketing campaign through channels like Twitter and Instagram. What I think Asos can learn from its competitor is this deep understanding of its customers' values and convey them through social media in an effective and transparent manner. I’m sure there are some unhappy Asos shareholders this week, so it will be intriguing to see what the retailer’s next move looks like.