Economy

Retailing In The Age Of E-Commerce: Department Stores' New Everywhere Approach

Department stores executives are realizing that only a smart digital strategy can guarantee a future for them. The necessity of 'omni-channel' retailing progressively became obvious for these city-center venerable institutions.

Printemps, in Paris (Frédérique Panassac)
Printemps, in Paris (Frédérique Panassac)
Philippe Bertrand

PARIS - Last January, at the National Retail Federation conference, everyone was talking about "omni-channel" retailing. But what is it? We have come to know the term "multi-channel" retailing, which consists in selling products on the Internet as well as in shops. Now omni-channel retailing aims at taking advantage from all available means for shopping: stores, mobile phones, computers, catalogues, and so on.

It should be noted that august institutions like the French store Printemps, founded in 1865, or the Japanese Daimaru, born in 1717, come up against fierce competition from e-commerce. This can be compared to what department stores had to face in the 1970s when mega-retailers began to boom. Tsutomu Okuda, leader of J. Front Retailing, the Daimaru parent company, didn't hide the truth: department stores' sales dropped by 30% within a 20-year span in Japan.

"Click and collect"

These chains know that their future lies in omni-channel retailing. The best example is John Lewis, a British firm that makes 22% of its sales online. It has been rewarded as the "best e-commerce website of Great-Britain," ahead of Internet-only players, and is considered the most successful example of this kind of 360-degree strategy.

Andy Street, the company's production manager, explains the formula: to have as many products online as in physical department stores, to resist an escalation of discounts, and the possibility to withdraw the products from both the 29 higher-end John Lewis stores and 194 Waitrose hypermarkets that belong to the chain.

This is "click and collect" - a very good way to get people in the stores. Thus, Internet becomes a way to create a link, which can strengthen thanks to the improved contact with the stores themselves.

But according to Bernie Brookes, CEO of Myer, an Australian department store chain, omni-channel retailing also represents a challenge concerning the way to rule the different shopping channels. It also raises the question of the optimization of the stores' surfaces.

Robert Wallstrom, CEO of Saks, thinks that the main difficulty is to "offer customers a unique experience" at stores, and to give priority to services. Indeed, adds Andrew Jennings, German CEO of Karstadt: "customers know all the products and prices nowadays. Their expectations are higher. They take the control."

Read the original article in French

Photo - Frédérique Panassac

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Economy

Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.


Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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