HK Retail Expo 2016—Identifying Whitespaces in a Difficult Retail Environment
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HK Retail Expo 2016—Identifying Whitespaces in a Difficult Retail Environment
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HK Retail Expo 2016—Identifying Whitespaces in a Difficult Retail Environment
- 1. 1 Identifying Whitespaces in a Difficult Retail Environment Kiril Popov Analyst kirilpopov@fung1937.com June 15, 2016 FUNG GLOBAL RETAIL & TECHNOLOGY
- 2. 2 Agenda ABOUT US GLOBAL RETAIL OVERVIEW CONSUMER TRENDS TAKING ACTION
- 3. 3 About Fung Group TRADING LOGISTIC S DISTRIBUTIO N RETAILING Li & Fung Limited Listed on SEHK Global Brands Group Listed on SEHK Fung Retailing Limited Privately Held Entity Convenience Retail Asia Limited Listed on SEHK Trinity Limited Listed on SEHK Branded Lifestyle Holdings Limited LiFung Kids (Holdings) Limited Toyrs “R” Us (Asia) Suhyang Networks UCCAL Fashion Group Privately Held Entities Fung Holdings (1937) Ltd. A privately held entity and major shareholder of the Fung Group
- 4. 4 About Fung Global • Fung Global Retail & Technology advises retailers, real estate developers and tech companies on projects situated at the intersection of retail, tech and/or fashion. • Our team offers a robust knowledge bank and significant experience in the retail, fashion and tech fields. We are involved in many areas of the business and believe this allows us to offer a unique perspective by focusing on the future and where the sector is heading. A Unique Combination of Retail, Fashion & Tech RETAIL FASHIO N TECH
- 6. 6 Agenda ABOUT US GLOBAL RETAIL OVERVIEW CONSUMER TRENDS TAKING ACTION
- 7. 7 E-commerce Growth 8,677 9,210 14,281 14,586 14,732 21,423 33,252 36,006 137,412 279,973 0 50,000 100,000 150,000 200,000 250,000 300,000 Australia South Korea France Japan US Top 10 Internet Retailing Markets By Growth 2010-2015 ($ mn) Source: Euromonitor International - 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 2011 2012 2013 2014 Retailvalue(US$mn) Mobile Internet Retailing in Key Markets 2011-2014 USA China Germany Japan United Kingdom Russia
- 8. 8 Brick-and-mortar underperformance in the US Source: Company Reports -70% -60% -50% -40% -30% -20% -10% 0% Sears Christopher and Banks Pacific Sunwear Restoration Hardware Aéropostale Bebe Stores Lands' End Barnes & Noble Williams-Sonoma Dillard's Gap Change in Store Base: 2010-2015 There was a 7% year-over-year increase in store closures announcements in 2015 There was 29% less square footage associated with announced store closures in 2015 than in 2014 16 retailers closed at least 10% of their stores between 2010 and 2015
- 9. 9 US Retail Space Closure by Segment in 2015 Source: ICSC and PNC Real Estate Research 270 378 396 460 1,961 3,123 3,404 3,984 5,024 7,629 9,674 14,646 0 10,000 20,000 Retail, Not Elsewhere Classified Toy Stores Bookstores Sporting Goods Restaurants Discount Department Stores Drug Stores Home Furnishings Home Entertainment Grocery Stores Apparel Department Stores
- 10. 10 AMAZON ATHLETA CASPER AYR YOGIBO HARRY’S 1 400 120 1 1 2 3 21 1 1 7 150 4 27 25 12 2 Source: Company Reports Evolving Pure Plays (Number of Actual/Planned Physical Stores)
- 11. 11 Rebalancing in China – moving to O2O Source: Fung Business Intelligence Center, Fung Business Intelligence and China Commerce Association for General Merchandise Survey Wanda Group closed 56 Wanda Department Stores in 2015 Marks and Spencer closed 5 of its 15 stores in China in 2015 Rainbow Department Store closed 5 stores in 2015 Traditional retailers form partnerships with Internet players to facilitate O2O deployment: • Alibaba invested 28.3 billion yuan for 19.99% stake in Sunning • JD.com invested 4.3 billion yuan fo4 10% in Yonghui 55% of department stores have gone online: • 69% have launched their own transactional website • 55% have opened an online store on a third party platform
- 12. 12 Agenda ABOUT US GLOBAL RETAIL OVERVIEW CONSUMER TRENDS TAKING ACTION
- 13. 13 1. The Experience Economy • 78% of millennials prefer to spend money on an experience rather than buying something desirable • 69% believe attending live experiences helps them connect better with their friends and community and people around the world Source: Harris Poll Survey
- 14. 14 Experiential Retail: A Way to Bring Shoppers Back to Stores • Urban Outfitters acquired the Vetri Family group of restaurants in 2015 • Club Monaco collaborated Café Myriade to open an in- store coffee shop in Montreal In-Store Technology • Rebecca Minkoff offers interactive mirrors as well as virtual reality headsets in stores • Tommy Hilfiger stores have virtual reality headsets that allow visitors to experience runway shows Customization • In March of 2016, Nike revealed its app, Nike+, that gives shoppers the ultimate customized experience Food & Beverage
- 15. 15 Experiential Retail: Making the Experience Engaging • Urban Outfitters acquired the Vetri Family group of restaurants in 2015 • Club Monaco collaborated Café Myriade to open an in- store coffee shop in Montreal Food & Beverage • Rebecca Minkoff offers interactive mirrors as well as virtual reality headsets in stores • Tommy Hilfiger stores have virtual reality headsets that allow visitors to experience runway shows Customization • In March of 2016, Nike revealed its app, Nike+, that gives shoppers the ultimate customized experience In-Store Technology
- 16. 16 Experiential Retail: Customization and Personalization • Urban Outfitters acquired the Vetri Family group of restaurants in 2015 • Club Monaco collaborated Café Myriade to open an in- store coffee shop in Montreal Food & Beverage In-Store Technology • Rebecca Minkoff offers interactive mirrors as well as virtual reality headsets in stores • Tommy Hilfiger stores have virtual reality headsets that allow visitors to experience runway shows Customization • In March of 2016, Nike revealed its new app, Nike+, that gives shoppers the ultimate customized experience
- 17. 17 2. Social Networks as Retail Platforms Source: Activate, Company Reports, TechninAsia, Quartz App 2016/2015 Active Users (Mil.) Approx. YoY Change WhatsApp 1,000 37% QQ Mobile 860 5% Facebook Messenger 800 53% WeChat 760 39% Skype 300 27% Viber 249 29% LINE 212 57% Snapchat 100 45% 2.5 billion people are registered to use at least one messaging app Adults spent an average of 109 mins. per day in 2015 on social media sites such as Facebook, Twitter and Instagram Consumers spend 84% of their time in only five apps each month: One or two are likely social media, instant messaging, etc.
- 18. 18 2. Social Networks as Retail Platforms 27/7 Customer Service Marketing through influencers and promotions In-platform payments
- 19. 19 3. Healthy Living & Tracking Source: Euromonitor International -2% 0% 2% 4% 6% 8% 10% 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 CAGR2015-2020 Total sports clubs and gyms 2015 Sports Club Numbers and Growth 2015-2020 Russia China US 12 16 17 33 40 44 0 10 20 30 40 50 Team Sports Yoga Group Fitness Cycle Walk/Hike Run/Jog % Chinese Respondents Active in Selected Exercise at Least Once a Week 2015
- 20. 20 Dec. 2013 Feb. 2015 Jan. 2016 MapMyFitness • $150 million (cash) • Provides users with the ability to map, record and share workouts • Previous user base: 30 million MyFitnessPal • $475 million (cash) • Allows users to track stats on their food habits • Previous user base: 80 million Endomondo • $85 million (cash) • Previous user base: 20 million • Track workouts • Strong presence in Europe Gritness • Undisclosed • Search engine to find and join workouts • 1.5 million workouts available to users Launched UA HealthBox after announcing at CES 2016 • Combines fitness tracker with a heart-rate strap and smart scale • Connects with UA’s Record smartphone app • Price: $400 Announced UA and IBM partnership at CES 2016 • New UA Record app powered by IBM Watson • Cognitive-computing technology Under Armour: Healthy Living & Tracking Jan. 2015 Jul. 2015 Apr. 2016 Source: Company Reports
- 21. 21 Keep & Codoon • Mobile fitness trainer • Launched in February 2015 • May 2016: Raised $32 million in Series C • Total raised: $47 million • 30 million registered users • 11 million active users • Sports and wellness service provider • Launched in 2011 • May 2016: Raised $50 million in Series C • Total raised: $91 million • 50+ million registered users Source: Company Reports, Crunchbase
- 22. 22 Agenda ABOUT US GLOBAL RETAIL OVERVIEW CONSUMER TRENDS TAKING ACTION
- 23. 23 Growing Startup Ecosystem as Source of Innovation Source: StartmeupHK Working with startups offers a way to experiment and learn quickly
- 24. 24 NAME UR PRICE SELF-CHECKOUT Retail Technology Disruptors Framework New Retail Models HOW WILL THE CONSUMER SHOP IN THE FUTURE All Channel THE CONSUMER CAN SHOP WHEREVER + WHENEVER Experiential Retail MAKE THE STORE AN AWESOME PLACE Customer Engagement HOW DO YOU CONVERT THE CUSTOMER
- 25. 25 Thank You! Kiril Popov Analyst kirilpopov@fung1937.com June 15, 2016 FUNG GLOBAL RETAIL & TECHNOLOGY
Editor's Notes
- Athleta The Gap brand now has retail stores of its own. AYR The online women’s clothing line opened a “Guideshop,” a studio, showroom, and retail store in one. Bauble Bar The jewelry website has begun wholesaling and getting its brand into physical locations. Blank Label The custom menswear site has opened up physical locations in the Boston and DC areas. Blue Nile The jewelry website partnered with Nordstrom’s to open “webrooms” in stores Bonobos The men’s e-tailer has opened up stand-alone guideshops while also partnering with Nordstrom. Casper The online mattress startup has showrooms in NYC and LA to let customers take a test nap. Harry’s The shaving supply company has opened its own neighborhood barbershop in NY. Indochino The online seller of custom menswear has opened a NYC showroom. Rent the Runway The online dress and accessories rental company now has 4 stores. Warby Parker The glasses e-tailer has created multiple experiential showrooms. Yogibo The beanbag company has gone from online only to 24 physical locations YogaSmoga The online Yoga outfitter now has 2 retail stores and 2 R&D locations. Gilt Groupe After being acquired by Hudson’s Bay, Gilt Groupe will start being integrated with Saks off 5th.
- Trendalytics https://www.trendalytics.co/