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Weinswig’s Weekly 14 minutes

Weinswig’s Weekly—January 12, 2020

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Coresight Research

Key Points

January 12, 2020

This week’s note “From the Desk of Deborah Weinswig” offers our take on six major CES 2020 product launches in Las Vegas this week.

In the news this week:

  • Neutrogena has updated its app with AI technology that eliminates the need for specialized scanning gear to offer personalized skincare advice.
  • Uniqlo will open a store in Hanoi, its second in Viet Nam after opening one in Ho Chi Minh City in 2019.
  • Brazilian cosmetics company Natura has completed the acquisition of direct-selling company Avon after securing the requisite regulatory approvals.
FROM THE DESK OF DEBORAH WEINSWIG

Six Launches That Caught Our Eye at CES 2020

The Coresight Research team was in Las Vegas last week for CES 2020 (formerly known as the Consumer Electronics Show). We profile six top product launches from the seminal technology and retail event.

Connected Cities

Toyota revealed plans to build a prototype city of the future on a 175-acre site at the base of Japan’s Mount Fuji to be called “the Woven City,” a fully connected ecosystem powered by hydrogen fuel cells. Envisioned as a “living laboratory,” the Woven City will serve as a home to full-time residents and researchers who will be able to test and develop technologies such as autonomy, robotics, personal mobility, smart homes and AI in a real-world environment.

Panasonic said it will operate one of the most advanced transportation data networks in the US, connecting roadways in Utah, Georgia and Colorado using CIRRUS. Winner of the CES 2020 Innovation Award, CIRRUS by Panasonic is a connected vehicle data platform that can improve safety and mobility on the road by sharing data between vehicles, infrastructure, roadways and traffic operators in real time.

Sky Taxis and Connected Cars

Hyundai unveiled an electric vertical take-off and landing vehicle called SA-1 in partnership with Uber. Hyundai said it could take to the air as a sky taxi early as 2023. Hyundai and Uber are working on infrastructure concepts to support take-off and landing for the vehicle. Eric Allison, head of Uber Elevate, the company’s aerial arm, said: “We believe Hyundai has the potential to build Uber Air vehicles at rates unseen in the current aerospace industry, producing high-quality, reliable aircraft at high volumes to drive down passenger costs per trip.”

Sony surprised CES attendees with a concept car, albeit one designed to show off the company’s sensors and screens rather than its automotive capabilities. The car features sensing technology that can detect and recognize its occupants to allow gesture control of its onboard systems—which include a dashboard-wide series of screens for information and entertainment, surround-sound speakers and sensors and screens to replace side mirrors.

Another Voice Assistant Joins the Pack

Samsung announced that it would launch the Galaxy Home Mini in early 2020—the company’s first publicly released smart speaker. The speaker will be powered by Bixby, Samsung’s Alexa lookalike intelligent assistant. Samsung consumer electronics division CEO Hyunsuk Kim told Bloomberg the Galaxy Home Mini’s main function will be to let users control other Samsung devices by voice command—which implies it may be a less comprehensive voice assistant than established rivals.

Instant Beauty

L’Oréal unveiled a new hardware device called Perso which whips up compressed beauty formulas from physical cartridges to create skin care, lipstick and foundations on the spot. Perso’s app considers factors such as air quality, temperature and humidity that can affect the skin, then creates a recipe to match the conditions. It will also adjust the formula for morning or evening use.
Find our daily reports from CES 2020 on coresight.com

US RETAIL & TECH HEADLINES

Forever 21 To Relaunch its International Online Store

(January 7) RetailDive.com

  • Forever 21 has partnered with cross-border e-commerce service provider Global-e to relaunch its international online store in Canada, in the Asia-Pacific region and in Latin America. Forever 21 filed for bankruptcy in September 2019 and stopped selling online soon thereafter.
  • Global-e will support more than 95 currencies and 21 languages, in addition to more than 150 local and alternative payment options and localized tax and import duty calculation.

SmileDirectClub Partners with Walmart To Sell New Product Line

(January 7) TechCrunch.com

  • US-based SmileDirectClub has partnered with Walmart to sell its new line of oral care products in Walmart stores and on Walmart.com. The new line includes electric toothbrushes, teeth whitening kits, toothpastes and water flossers.
  • Following the announcement on January 6, SmileDirectClub shares jumped about 21%.

Ikea To Stop US Sales on Amazon

(January 6) RetailDive.com

  • Ikea has stopped selling its products on Amazon in the US. Ikea follows brands such as Birkenstock (which stopped selling on Amazon in 2016) and Nike (which announced its exit from the platform in November 2019).
  • Ikea did not say with which marketplaces it will work in the future, but did suggest the idea of creating its own marketplace, which would include competitor products.

Pier 1 Imports Plans To Close up to 450 Stores

(January 6) Company press release

  • Furniture retailer Pier 1 Imports plans to close up to 450 stores amid pressure from online and big-box retailers. Same-store sales at Pier 1 Imports slid 11.4% in its latest quarter ended November 30, 2019.
  • The company said it needs to reduce its footprint to better align its business with the current operating environment. The company will also close distribution centers and cut staff.

Neutrogena Updates its Skin360 App with New AI Features

(January 6) RetailDive.com

  • Beauty brand Neutrogena has updated its Skin360 mobile app to offer personalized skincare tips using a new face-scanning technology from Perfect’s photo editing and selfie app called YouCam. The old app required specialized scanner equipment.
  • Using Perfect’s artificial intelligence (AI) technology, the Skin360 app uses a smartphone camera to analyze wrinkles, fine lines, dark under-eye circles, spots and smoothness. The additional information the updated app collects helps to app refine product recommendations, as well as provide marketing and product development insights.
EUROPE RETAIL AND TECH HEADLINES

John Lewis Boss To Depart After Falling Christmas Sales

(January 9) Company press release

  • The John Lewis Partnership this week announced that Paula Nickolds will leave the company in February. Nickolds was appointed Managing Director of the John Lewis department store chain in 2017 and was due to take up a newly created role of Executive Director of Brand for John Lewis and its sister supermarket chain Waitrose, as part of a restructuring in February.
  • The announcement of Nickolds’s departure came after the partnership reported falling sales at the John Lewis department store chain: For the seven weeks ended January 4, sales were down 2.0% on a comparable basis. Waitrose sales were up 0.4% on a comparable basis. Management expects Waitrose full-year profits to be level on last year but John Lewis full-year profits to be substantially down. The company said it is yet to decide whether to pay its annual partnership bonus.

Mixed Holiday Performance at Marks & Spencer and Tesco

(January 9) Company press releases

  • Marks & Spencer reported further sales declines in its UK Clothing and Home segment in its third quarter, ended December 28. The segment’s comparable sales were down 1.7% versus a decline of 5.7% in the prior quarter and below the consensus estimate of a 0.5% increase. Third-quarter food comparable sales were up 1.4%, level with growth in the prior quarter and broadly in line with expectations. Management guided that the full-year gross margin is expected to be around the lower end of guidance.
  • Tesco reported a 0.4% fall in UK comparable sales for its third quarter, ended November 29, with a 0.1% rise in the subsequent six-week Christmas period. Management pointed to it being its fifth consecutive Christmas of growth and claimed to have outperformed the UK market.

Morrisons and Sainsbury’s Post Weak Christmas Sales

(January 8) Company press releases

  • Morrisons’ comparable retail sales ex fuel for the 22 weeks ended January 5 fell 1.7%. This included a contribution of (1.7)% from retail and 0.0% from wholesale. Management noted that wholesale was weaker than in previous periods due to lower sales at McColl’s, a retailer that Morrisons supplies.
  • Sainsbury’s reported comparable sales ex fuel fell 0.7% in the 15 weeks ended January 4. Total grocery sales rose 0.4% while online grocery sales climbed 7.3%. Total clothing sales were up 4.4% but total general-merchandise sales (mainly accounted for by its Argos chain) fell 3.9%, management cited declines in the toy and gaming markets.

Aldi UK Grows Sales 8% During the Christmas Season

 (January 6) RetailGazette.co.uk

  • Aldi UK grew its sales 7.9% year over year in the four weeks through December 24, 2019. Aldi UK’s Christmas sales exceeded £1 billion ($1.32 billion) for the first time. Growth was supported by 47 new store openings in 2019. Last year, Aldi reported 10% total sales growth for the week ended December 17, 2018.
  • In December 2019, Aldi sold 55 million mince pies, 22 million pigs in blankets, and more than two million Christmas puddings. Customers bought 9.2% more beer compared to last Christmas, and sales of Aldi’s champagne and prosecco grew 14% year over year.

L’Oréal Unveils its Newest Smart Beauty Product at CES 2020

(January 6) EssentialRetail.com

  • Beauty brand L’Oréal unveiled Perso, an AI-powered skincare device, at this year’s CES (formerly known as the Consumer Electronics Show). L’Oréal will release Perso in partnership with one of its leading skincare brands in 2021.
  • Perso features a four-step process to deliver on-the-spot skincare and cosmetic formulas that can increase personalization over time. Perso can also create custom formulas for lipsticks and foundations, but these capabilities will be unveiled at a later date.

Carrefour Acquires Food-Delivery Service in France

(January 6) Company press release

  • French grocery and general-merchandise retailer Carrefour has acquired French prepared food-delivery service company Dejbox, expanding its e-grocery offerings to include ready-to-eat meals.
  • Dejbox supplies prepared means to small and mid-sized companies for their employee canteens. The company has around 300 employees and generated estimated annual sales of around €20 million ($22.3 million) in 2019.

Watches of Switzerland COO To Step Down as New Executive Director Joins the Company

(January 6) Retail-Week.com

  • Watches of Switzerland COO Tony Broderick will step down from his position in April. Broderick was appointed COO in 2009 and has served as a member of the Board of Directors since 2000.
  • Separately, Craig Bolton has joined the company as UK Executive Director with immediate effect, responsible for bringing together the group’s brands and operational functions. US EVP David Hurley will continue to lead the group in the UK and both Bolton and Hurley will report directly to CEO Brian Duffy.

Debenhams to Close 19 Stores in January

(January 7) TheMDS.com

  • Debenhams has revealed the location of 19 stores in the UK it plans to close this month, which will result in 660 job losses. The company expects to close around 28 more stores in 2021.
  • The stores will close within two weeks, the first on January 11. Debenhams plans to shutter a total of 50 stores from its current portfolio of 166.
ASIA RETAIL AND TECH HEADLINES

Uniqlo Expands Footprint in Vietnam

(January 8) InsideRetail.Asia

  • Japanese retailer Uniqlo is set to open a store in Hanoi in the first quarter of this year.
  • The store will span 26,900 square feet across two floors at the Vincom Center Shopping Mall on Pham Ngoc Thach Street. This will be the company’s second store in Viet Nam, the first was opened in Ho Chi Minh City in December 2019.

E-mart to Shut Down its Discount Store Chain

(January 7) Nikkei.Com

  • Korean general-merchandise retailer E-mart is set to close its discount store chain Pierrot in a move to focus on its big-box stores. Pierrot struggled to keep up with rising rents in urban centers.
  • E-Mart has already shut one Pierrot store in Seoul’s Myeongdong shopping district and will shutter the remaining six within the year.

SecuX Launches All-in-One Cyptocurrency Retail Payment Solution

(January 7) Company press release

  • Taiwan-based blockchain security startup SecuX has launched what it says is the world’s first cryptocurrency retail payments solution. The platform allows various brick-and-mortar retailers to accept crypto coins and tokens as payment through multiple mobile apps.
  • The solution includes three components: a software development kit (SDK), a payment terminal module that can operate even without an Internet connection and a high security hardware wallet for shop owners to accept cryptocurrency payments.

Amazon Partners with Future Group

(January 6) Techcrunch.com

  • Amazon has entered into a long-term partnership with India’s second largest retail chain Future Retail to widen its presence in the Indian market.
  • Amazon India will be the authorized online sales channel for Future Retail stores, including department and grocery store chain Big Bazaar and lifestyle food superstore Foodhall. Future Retail now operates more than 1,500 stores across India.

H&M Launches Chinese New Year Collection

(January 7) InsideRetail.Asia

  • H&M has unveiled a Chinese New Year apparel collection for the Year of the Rat.
  • The collection will feature more than 100 items in womenswear, menswear, children’s apparel and special items featuring cartoon characters such as Tom and Jerry, and Minnie Mouse. The collection also includes accessories in red and gold.
LATIN AMERICA RETAIL AND TECH HEADLINES

Falabella Appoints New Sodimac CEO

(January 8) LaRepublica.co

  • Chile-based department store retailer Falabella has appointed Alejandro Arze as CEO of its home improvement subsidiary Sodimac.
  • Arze will replace Enrique Gundermann who was General Manager of this business unit for around 15 years. Arze has around 20 years of experience with the Falabella group and will start March 15.

Gire Group Launches New App

(January 6) America-Retail.com

  • Argentinian financial services company Gire Group has launched a new app called Rapipago. The mobile app uses a virtual account that allows users to pay for financial services, transfer and receive money. It also allows users to add credit to their mobile phones.
  • The Rapipago account uses a prepaid card issued by Mastercard.

Tambo Store Chain Eyes Expansion

(January 6) Peru-Retail.com

  • Peru-based convenience store chain Tambo has announced plans to open more than 100 stores this year, taking its store count to over 500 by the end of 2020.
  • The convenience store chain began its expansion outside Lima in Huacho, Huaral, Lurín and Chosica. It currently has over 400 stores, 121 of which were opened in 2019.

Walmart Chile Appoints New CEO

(January 6) Df.cl

  • Walmart Chile has announced Gonzalo Gebara will become CEO effective March 1, 2020, replacing Horacio Barbeito who has been leading the Canadian subsidiary of the company since October 2019.
  • Gebara now serves as Chief Administration Officer for Chile and Argentina. He joined Walmart in 2000 and led the integration of D&S and Walmart.

Natura & Co Completes Acquisition of Avon

(January 6) Retail-Insight-Network.com

  • Brazilian cosmetics company Natura has completed the acquisition of direct-selling company Avon after securing the necessary regulatory approvals.
  • Natura’s existing Executive Chairman of the Board Roberto Marques will now serve as group CEO. Joao Paulo Ferreira has been appointed Natura’s Latin America CEO and Angela Cretu as CEO of Avon.
MACRO ECONOMIC UPDATE

Key points from global macro indicators released January 1–7, 2020:

  • US: Continuing jobless claims in the US rose to 1.728 million in the week ended December 20 from 1.723 million the previous week. The IHS Markit manufacturing Purchasing Managers’ Index (PMI) was 52.4 in December, down slightly from 52.6 in November.
  • Europe: Eurozone total retail sales grew 2.2% year over year in November, versus a 1.4% increase in October. In Germany, total retail sales increased 2.8% year over year in November, versus a 0.8% increase in October.
  • Asia Pacific: In China, the Caixin Manufacturing PMI fell to 51.5 in December from 51.8 in November. In Japan, the consumer confidence index was 39.1 in December, slightly higher than the 38.7 recorded in November.
  • Latin America: Brazil registered a trade surplus of $5.60 billion in December, up from November’s $3.43 billion surplus. Colombia’s consumer price index (CPI) increased 3.8% year over year in November, following a 3.84% increase the prior month.
*Coresight Research’s evaluation of the actual figure’s impact on the economy relative to historical benchmarks and the current macroeconomic environment: + indicates a positive signal for the country’s economy, – indicates a negative signal and = indicates a negligible or mixed impact.
Source: US Department of Labor/Markit Economics/Eurostat/Statistisches Bundesamt/INSEE/Cabinet Office /IBGE/DANE/Coresight Research

 

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