Alibaba Puts Tech in ‘FashionAI’ Boutique

Axios: “Everything is automated and powered by artificial intelligence — or soon will be — in a new fashion shop opening tomorrow in Hong Kong. From the time you enter, using an app to open an electronically locked sliding glass door, to the time you leave, you may never see another human apart from other shoppers …the objective is to merge e-commerce and brick-and-mortar retail — to make shoppers see them as one organism.”

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Kicks: How Sneakers Sneaked Up

The Wall Street Journal: “How on earth have people who make freaking footwear apparently managed to reduce athletic powerhouses like USC and Louisville to the role of glorified money launderers? It all comes down to the outsize importance of sneakers in popular culture. In his expansive, thorough and entertaining book ‘Kicks: The Great American Story of Sneakers,’ author Nicholas Smith traces the history of this $20 billion industry, arguing that the power and allure of the shoe have shaped American business and fashion for decades.”

“Their manufacturers have thus become economic forces larger than the sports they’re supposedly there to support. In many ways, to hear Mr. Smith tell it, the shoes have been wearing us.’Kicks’ serves as a comprehensive look at how much the sneaker became a signature indicator of cool, from Chuck Taylor and his Converse All-Stars to Clyde Frazier’s Pumas to Run-DMC and their Adidas to, of course, Michael Jordan.”

“Today, the author suggests, sneakers have essentially replaced music as the go-to investment for companies looking at getting into the youth market. They have become so popular that most manufacturers make limited-edition shoes that exist solely to become valuable and are almost never worn. The shoes aren’t for wearing; they’re simply for having.”

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How Jewelry Rattles The Millennial Market

The Wall Street Journal: “Jewelers are following fashion’s playbook for romancing millennials who are left cold by traditional, museum-like high-end boutiques. Brands are pulling out all the stops, designing products that customers can personalize and flaunting their ethical sourcing and sustainability. They are making online and in-store shopping distinctive and are hosting pop-up shops with limited-edition items.”

“The challenge is twofold: designing pieces that appeal to young shoppers and then persuading them to buy jewelry for themselves any time—and not just as the occasional milestone gift. Many millennials reserve splurging for technology or vacations—not fancy jewelry … When millennials do buy jewelry, they often seek out eclectic pieces from Gucci and other trendy brands. They also favor artisanal jewelry from small or new brands.”

“Diamond giant De Beers added nightclub touches to its sleek new Libert’aime by Forevermark store in Shanghai. The shop, which opened last month, has a scented VIP lounge for big-ticket purchases and a “diamond bar” with jewelry meant to be worn every day. One wall features an enormous detail of a diamond, where browsers can take Instagram-friendly selfies surrounded by gleaming facets. The jewelry in the shop is ‘designed to appeal to the 420 million millennials in China,’ the company said.”

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How Moosejaw & Walmart Make Music

The Wall Street Journal: “Walmart is betting that even under its umbrella, Moosejaw and other brands like the feminist-leaning ModCloth and men’s fashion clothier Bonobos can remain convincingly hipster. But Walmart has such a distinct culture; will it be able to maintain an appropriate distance or will executives from Bentonville swoop in, forcing everyone to wear those iconic blue big-box vests? … Some suppliers of high-end gear abandoned Moosejaw’s shelves to avoid doing business with its new parent.”

Yet: “Moosejaw’s loyalist shoppers appear unfazed. While there have been reports of social-media backlash against Walmart ownership of firms like ModCloth, Walmart’s overall e-commerce sales have picked up … Moosejaw will soon have a rolling pop-up store pulled across the U.S. by a semi truck—another innovation private-equity backers may not have sponsored. With access to Walmart’s shipping rates, Moosejaw.com offers free two-day shipping, which is increasingly expected by online shoppers.”

“Then there is the beer cooler. Much has been made of alcohol policies at Walmart subsidiaries, and Moosejaw’s victory in this category is notable. Before the acquisition, Bentonville executives noticed a padlocked beer cooler at its Madison Heights, Mich., headquarters … Shortly after the deal … Chief Executive Doug McMillon concluded that because Moosejaw had responsible policies, the cooler could stay. At this month’s shareholder meeting Mr. McMillon gave analysts a glimpse of why he’s bending the rules. He carries a list with him of top retailers from decades gone by, a sobering list that includes struggling Kmart and Sears that reminds him of the fleeting nature of success. Yesterday’s retail kings die ‘because they don’t change,’ he said.”

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Lightbox Jewelry: Lab Diamonds via DeBeers

The Washington Post: “De Beers, the diamond giant that for years has promoted gemstones as pricey and precious, said it will begin selling man-made diamonds that cost about a tenth of the price of a mined gem. The line of pink, blue and white laboratory-grown diamonds, which De Beers will sell under a new brand, Lightbox Jewelry, is designed to persuade shoppers to think of synthetic diamonds as a ‘fun piece of fashion jewelry’ instead of a lifelong investment, executives said. Prices will start at as low as $200 to appeal to a new generation of shoppers.”

“The lower-priced jewelry is as much about changing consumer habits and preferences as it is about economics, industry experts say. Today’s 20- and 30-somethings — bogged down by heavy student debt loads and stagnant wages — have less spending power than their predecessors did, but they have different values, too: A recent study by De Beers found that millennials would rather splurge on overseas holidays, weekend getaways and electronics than on diamonds.”

“Lab-grown diamonds — which are created in hot, pressurized chambers over weeks, instead of a billion years underground — have been growing in popularity as Americans spend less on traditional diamonds. The stones are increasingly marketed to younger shoppers as a cheaper, ethically sourced alternative to mined diamonds. But their chemical makeup is the same (all diamonds are made of just one element: carbon), and experts say they are indistinguishable to the naked eye.”

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Lord & Taylor’s New ‘Flagship’: Walmart.com

The New York Times: “Lord & Taylor is teaming up with Walmart to create an online store on Walmart.com that will offer about 125 fashion brands, including Tommy Bahama, La La Anthony, H Halston and Effy. Billed by both companies as a ‘premium’ shopping destination, the new online store reflects Lord & Taylor’s desire to reach a wider audience and Walmart’s hope to attract a different type of customer.”

“For Walmart, the partnership is the latest attempt to reach a more urbane shopper. As part of that effort, Walmart has made a string of acquisitions over the past year, purchasing the clothing sites Bonobos and Modcloth and starting its own bedding and mattress line, sold exclusively online.”

“The Lord & Taylor online store on Walmart.com is expected to open in the coming weeks. Lord & Taylor will be responsible for shipping the clothing to customer’s homes. It will continue to sell the same brands in its stores and on its own website at the same prices as it does on Walmart.com … Lord & Taylor executives referred to their site on the Walmart website as a new kind of ‘flagship’ store.”

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Stadium Goods: Getting Kicks From Luxury

The New York Times</strong>: “To walk into the 3,000-square-foot Stadium Goods store in SoHo is to be confronted by rows and rows of pristine, shrink-wrapped athletic footwear. Look closely and you might be a little stunned by the price tags. On a recent afternoon, for instance, a pair of white Nike Jordan 1’s by the fashion designer Virgil Abloh (Off-White, Louis Vuitton) originally priced at $190, was selling for $2,750 … Nearby was a rare pair of Adidas PW Human Race NMD TR, designed by the musician Pharrell Williams. Price tag: $12,350.”

“Sneaker fanatics have been around for decades, with swaps and buys largely happening on eBay or as personal transactions. But it’s only in the last few years that the reseller market has accelerated and gone sharply upscale. John McPheters, who co-founded Stadium Goods with Jed Stiller, says the shift has been driven by ‘men who are now learning from childhood how to treat fashion as a sport — the way that women have always treated fashion’.”

“The partners believe the future of sneaker retail will be a hybrid model combining traditional channels and aftermarket selling. ‘We’re a microcosm of what’s hot,’ Mr. Stiller said, noting that in the sneaker world what’s trending is not necessarily the newest item. ‘Where a lot of retailers are dependent on what brands are releasing at the moment, we’re not. Ninety-five percent of our stock are styles that are no longer on the market’.”

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H&M Stores Buy Into Big Data

The Wall Street Journal: “H&M, like most retailers, relies on a team of designers to figure out what shoppers want to buy. Now, it’s using algorithms to analyze store receipts, returns and loyalty-card data to better align supply and demand, with the goal of reducing markdowns. As a result, some stores have started carrying more fashion and fewer basics such as T-shirts and leggings … H&M’s strategy of using granular data to tailor merchandise in each store to local tastes, rather than take a cookie-cutter approach that groups stores by location or size, is largely untested in the retail industry, consultants say.”

“The H&M store in Stockholm’s swanky residential Östermalm neighborhood hints at how data can help. The store used to focus on basics for men, women and children, with managers assuming that was what local customers wanted. But by analyzing purchases and returns in a more granular way, H&M found most of the store’s customers were women, and fashion-focused items like floral skirts in pastel colors for spring, along with higher-priced items, sold unexpectedly well.”

“With the help of about 200 data scientists, analysts and engineers—internal staff and external contractors—H&M also is using analytics to look back on purchasing patterns for every item in each of its stores. The data pool includes information collected from five billion visits last year to its stores and websites, along with what it buys or scrapes from external sources … The chain uses algorithms to take into account factors such as currency fluctuations and the cost of raw materials, to ensure goods are priced right when they arrive in stores.” Nils Vinge of H&M comments: “The algorithms work around the clock and adjust continuously to the customers’ ever-changing behavior and expectations.”

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Barber Shop Museum & ‘Comedy Club’

The New York Times: “Arthur Rubinoff, 43, opened the roll down gate on a storefront along Columbus Avenue in Manhattan … Inside the space was under construction but already Mr. Rubinoff’s signature décor — with all the subtlety of Versailles — could be seen in the six ornate chandeliers being hung on a small ceiling and the elaborate gilded trim along the edges … the museum, at Columbus Avenue, between 73rd and 74th Streets, will double as a shop.”

“Visitors can get a haircut and peruse displays of antique and vintage barber equipment, from chairs and striped poles to towel steamers and straight razors. In addition to the displays, the space will have sets of antique chairs and mirrors that will serve as functioning haircutting stations. Mr. Rubinoff said he plans to use one chair himself, for ‘my special clients,’ and to keep the others free for different guest barbers he will bring in every week or two.” He says: “I want to rotate them through, like a comedy club, to bring in fresh talent from California, Arizona — I have barbers from Moscow. These days, people want to try new hands, new energy.”

“In the museum space, he pointed out where he will put a souvenir counter selling barbershop-themed accessories like cuff links and tie clips of his own design. Speaking of his own design, Mr. Rubinoff pulled out a pair of diamond-encrusted gold scissors he had crafted. Gold scissors and combs will be used for the highest paying clients who opt for the $118 ’21st Century Cut, he said.” He adds: “We’re going to offer them Champagne and black caviar on a cracker. It’s all part of the business plan.”

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E-urope: Amazon Struggles With Apparel

The Wall Street Journal: “Amazon.com Inc. might look like it’s taking over the world. But it hasn’t conquered Europe. Two decades after the internet behemoth’s first international foray into the region, it’s still working to gain traction selling apparel and footwear. That weakness in a major, growing market illustrates Amazon’s challenge as it expands abroad and tries to replicate its U.S. dominance of e-commerce.”

“To explain Amazon’s struggles in conquering apparel in Europe, retail executives and analysts point to an absence of top fashion brands, a website they say isn’t conducive to browsing for clothes and a fragmented market full of plucky competitors.”

“They say Amazon is like a chaotic, online department store where there is little control over brand presentation. By contrast, Zalando, ASOS and other specialty apparel sites are like an upscale online mall where brands are given more control and presentation is sleek, retail executives say … Amazon’s philosophy is that a large customer base attracts brands, while executives at Zalando and other competitors try to attract brands that will bring customers, said Barbara E. Kahn, professor at the University of Pennsylvania’s Wharton School of Business.”

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