Consumption Downturn, Online Shopping Impact &Nbsp; Department Store Industry Winter?

In addition, coupled with e-commerce, etc.

Pei Liang, Secretary General of the China Chain Store Association, thinks that the department store industry has been very comfortable before. At present, this market prospect is a challenge for the department stores, which are facing a sharp rise in the price of clothing and the impact of online shopping discount war. It is more likely that it will bring about a revolution. In the future, the department stores should make good market expectations and prepare for the winter ahead.

Consumption downturn has far-reaching implications.

Nowadays, with the gradual cooling of the weather, and with the advent of traditional festivals such as new year's day and Spring Festival, the major department stores seem to welcome the golden age of "warm consumption" as scheduled.

However, the Chinese Commercial Daily reporter found in some shopping malls in Beijing, although some stores are still popular with customers, they only try not to buy them, and complain about the rise in clothing prices.

Industry related people said that, along with the upstream cotton raw materials rising, cotton related chemical fiber products and alternative products prices have risen in turn.

In the future, the rising price of raw materials will lead to higher prices of clothing products, and more and more customers will just go shopping.

Department stores will be caught in the dilemma of discount and profit making.

Fan Yanru, Deputy Secretary General of the Chinese general merchandise Association, does not think so.

Fan said that the rise in cotton prices led to the rise in clothing and other cotton products prices as early as the beginning of the year, and consumers already had some consumption expectations.

"Even if there is an impact, it is only phased, and the price of raw materials such as cotton has skyrocketed for a long time, which is in itself contrary to the laws of the market. In the future, it should be adjusted under the relevant state policies and regulations."

Moreover, the impact of rising prices of cotton and other raw materials on the real cost price of these cotton products is not large.

Fan Yanru told the China Commercial Daily reporter that for these brand merchandise entering department stores, the real price cost is not raw materials, but from the intermediate links such as brand dealers and agents. Once entering the department store sales, plus the entry fee and the store rent, a commodity has been increased several times, raw materials are only a small part. Therefore, the impact of rising raw material prices on clothing and other prices is only a short-term phenomenon. With the decline of the prices of raw materials such as cotton, this phenomenon should be changed.

A well-known brand women's clothing sales director in Beijing region deeply agrees.

Although the prices of raw materials such as cotton have made fluctuations in the prices of major brands, but in fact, the substantial increase in cotton prices has little impact on the famous enterprises whose brand value is high and their profits are relatively high. The impact on the SMEs with low manual mechanization is the biggest because the enterprises rely on the raw materials market more highly and have almost no bargaining power in comparison with the channels.

Pei Liang also believes that the impact of rising prices of raw materials such as cotton on the general merchandise industry is not large, especially for high-end department stores. The impact on the high-end department stores is even smaller, because people in high-end department stores do not care much about the rise in commodity prices caused by rising prices of raw materials of 10% or even 50% to 100%, while mass department stores and fashion department stores that serve ordinary consumers are indeed affected, but this effect is only temporary.

"It is the continuous decline of residents' consumption expectations caused by the continuous rise of CPI, which makes residents begin to reduce their desire to buy clothes, shoes and bags, and so on, which may be a matter for future department stores to pay attention to and start coping with."

Pei Liang said that the continuous upgrading of CPI will inevitably bring about a decline in the actual purchasing power of consumers, and the payment of food and other necessities will increase in the whole proportion of payments. The purchase of clothing and other items purchased by the department stores may decrease in the expected consumption of residents, which will become a major factor affecting the department store industry in the future. The department stores should make preparations for the "cold winter" ahead of this year's sales.

Online shopping impact on department stores

Online shopping has a bigger impact.

Comparing with the impact of the rising prices of raw materials such as cotton on the department store industry, the emergence and rapid development of e-commerce such as online shopping may really attract the attention of the department stores.

According to AI's data, in the past 2007 ~2009, the market size of domestic online shopping was 56 billion 100 million yuan, 128 billion 180 million yuan and 238 billion 800 million yuan respectively, accounting for 0.63%, 1.2% and 1.96% of the total retail sales of social consumer goods. At the same time, AI also predicted that in 2010 ~2012, the market scale of online shopping would be 386 billion 900 million yuan, 576 billion yuan and 791 billion yuan respectively, accounting for 2.78%, 3.64% and 3.64% of the total retail sales of social consumer goods.

It is understood that the sale of the 50 percent off free postage in the eleven Taobao mall, which just ended recently, was up to 936 million yuan on the day and even exceeded the total retail sales of Hongkong in the days of shopping paradise, 181 of which sold over one million yuan in this activity.

The woman in charge of the above brand also told the China Commercial Daily reporter, "what really hurts them is agency fees, store fees, rents and other channel fees."

In order to deal with this problem, the rising online shopping mode also urges these brands to try more new marketing modes, so as to reduce the cost and expense.

"For the department store industry, to adapt to the development of the times, to reflect on and change the existing traditional marketing mode, and to accelerate the pace of e-commerce reform should be the future development trend of the department store industry."

Fan Yanru said.

In Pei Liang's view, the impact and impact of the rising online shopping patterns such as Taobao on the department store will continue for a long time, because the online shopping has already had a certain scale, and its sales mode, logistics distribution and after-sales service are also quite mature. The development of online shopping has already diverted some consumer groups in the traditional department stores, especially for the 80 and 90's who like to enjoy online consumption nowadays, the traditional department stores are less attractive to them, and more and more things can be purchased online, which will undoubtedly have a great impact on the traditional department store industry.

Department stores need urgent reform

Although the impact of rising cotton prices on department stores is limited and pient, CPI continues to rise and consumer confidence is sluggish.

In addition, there is more impact from the rapid development of online shopping. If the department stores want to welcome the spring soon, it is imperative to change.

Pei Liang believes that the development of traditional department stores has been very good so far, and there has not been too much development bottleneck. Therefore, when it faces some big changes and problems, it may only rush into battle without any adequate preparation. The rise of clothing prices and the continuous increase of CPI prices caused by the rising prices of raw materials this year will more or less impact on the department stores. However, the inherent marketing mode of the department stores has not made a good response.

Pei Liang told reporters that many times these problems may eventually be pferred to the brand suppliers to digest, which has also increased the contradiction between the department store and the brand suppliers to a certain extent, which is extremely unfavorable for the future development of the traditional department stores.

"The department store industry has reached an urgent period of reform, and its own traditional procurement system should be the focus of reform."

Pei Liang said that foreign department stores have established their very mature procurement system, which can ensure that the department store itself has a higher voice and pricing power, and can locate its own products according to the needs of its own brands, rather than by some well-known brands.

However, the purchasing system of department stores in China has always been a traditional mode, and there is no more perfect marketing strategy. In the future, China's department stores should change their business models if they want to develop.

Fan Yanru also suggested that in the future reform of the traditional department store, we need to establish a comprehensive self-management mode and procurement system, so that the department store can have enough voice power from the purchase of the brand merchandise to the fixed price sale, thereby allowing the customers to serve the customers to a greater extent. This should be the future development direction of the traditional department store industry.