Clothing Brand Development: Extensive Operation &Nbsp, Or Intensive Cultivation?

The expansion of distribution networks has been the main driving force for the growth of the sportswear industry.

From 2006 to 2009, the total number of PEAK, 31st, XTEP and Lining 4 sports brand stores increased from 11129 to 23454, with a compound annual growth rate of 28.2%.

The total income of these 4 brands increased from 5 billion 455 million yuan in 2006 to 19 billion 986 million yuan in 2009, a compound growth of 54.2% per year.

However, as the base becomes higher and higher, the growth rate of stores inevitably slows down.

In addition, some brands' distributors are facing difficulties such as overcapacity or rising cost resulting in low profitability, which leads them to be more cautious and picky in opening stores.

Therefore, it is estimated that the growth rate of the four domestic sports wear brand stores will slow from 11.3% in 2010 to 9.4% in 2011.

With the slow expansion of stores, the future growth of sportswear enterprises will be determined by the operating efficiency of stores.

The faster the growth of single store sales, the higher the volume of orders and the rate of additional orders.

Take Kappa as an example, Kappa is positioned as a fashionable sportswear product. Since the first quarter of 2009, the growth of single store sales has been slowing down, resulting in excessive inventory in distribution channels and an increase of 2.8% in orders in the second quarter of 2011.

Kappa has been using media advertising since January 2010, but it did not boost retail performance as quickly as expected.

For China's clothing brand at this stage, should expand the market as the purpose of the expansion of channel type extensive operation?

Or is it to promote the healthy development of single store sales with the aim of fine management?

Each brand gives different answers.

Is the channel really king?

Many domestic brands in a year to open up agency stores, about 30% are in a state of loss.

The losses of these franchised stores did not affect the brand enterprises, but only the franchisees' interests.

The channel is almost regarded as the lifeblood of the development of Chinese garment enterprises, and the similar words such as "channel is king" and "who gets the channel gets the world" has been very popular.

A fact is that in the early days of the establishment of some clothing brands, in order to expand the market rapidly, acquire a higher market share and adapt to the market differences as soon as possible, many agents or franchising channels that have great advantages in this regard have been chosen.

For a time, the number of stores "blooming everywhere" has brought huge economic benefits to the brand, thus becoming a must kill skill for them.

For example, Anta, a famous sports brand in China, started a road to expand agents in the beginning, and the effect was obvious.

It is understood that in the 90s of last century, since its establishment, Anta has expanded more than 2000 stores in just a few years, and its density is very large.

It has been reported that in 1999 alone, Anta's sales increased by 35%, and won a large market share, especially in North China, Northwest China and Guangdong.

It is understood that as of 2010, Anta has more than 7500 stores.

According to media reports, by the end of this year, the total number of Anta shops will reach 1.

Among them, in addition to the large flagship store, almost all are joined.

It is reported that Anta has no fundamental changes in the framework of the channel, but has been adjusting and optimizing.

A person inside Anta said that Anta was closed to one hundred or two hundred or even two hundred or three hundred invalid stores every quarter, and then opened five hundred or six hundred new normal stores.

"This is the result of the different development strategies of every brand," a well-known buyer display expert said in an interview.

A brand chooses to expand its channels within the first time and increase the influence of the brand in the way of occupying channels, so that the brand will get certain opportunities in the competition so as to achieve the goal of crowding out the competitive brand.

On the one hand, it can make the brand grow rapidly in a short time. On the other hand, it is directly caused by some shops that lack risk assessment in a short time and will not be profitable.

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It is estimated that about 30% of the brand agencies opened by many domestic brands in a year are in a state of loss.

The losses of these franchisees did not affect the brand enterprises, but only the franchisees' interests. But if they were used for a long time, the reputation of the brand would be affected.

With the help of distributors, Anta successfully built up a high-quality sales network system and laid a solid foundation for competition. This is a successful example of brand enterprises' rapid development relying on distribution network.

But Anta's "luck" does not appear on the other sporting goods giant Lining.

Data show that Lining's recent orders are declining: Lining's product orders data released in April showed that the number of orders for shoes and clothing products in the third quarter of this year dropped by 17% compared to the same period last year, and the orders fell by 6% in the second quarter, which has declined for two consecutive quarters. If wholesale prices were calculated, the order volume in the three quarter of this year dropped 14%.

Of course, there are many reasons for this phenomenon.

However, analysts in the industry believe that the integration of bone and bone channels is one of the main reasons for the decline of Lining's orders.

In the past, Lining expanded by means of channels, and the compound growth rate was over 30% for ten consecutive years.

But with the rapid increase of human cost and rents, the business mode of relying solely on new stores to expand channels is becoming more and more difficult.

To improve the efficiency of single store, Lining has been promoting the integration of sales channels since last year, encouraging large dealers to acquire small distributors.

In fact, Lining's motivation to integrate channels is correct.

When the number of stores is too large, the operating cost will increase, which will affect the profit margin of the brand.

The Lining integration channel is releasing such a signal: China's sporting goods market will usher in a comprehensive integration stage, and the industry will end by relying on the "extensive management" of new shops.

Zhang Zhiyong, chief executive officer of Lining group, also said that the sports goods retail market is facing heavy pressure.

On the one hand, the growth mode of relying on a large number of new stores has been difficult to sustain. On the other hand, the cost of operating terminal retail stores is getting higher and higher.

At present, Lining has more than 129 distributors and over 2000 distributors.

As of December 31, 2010, Lining had 7915 retail outlets in China.

According to the information disclosed by Lining, the number of distributors will be reduced by about 30% in the reorganization plan proposed by Lining management.

Yao Xiaoyun, a famous buyer, also thinks: "how to choose development strategy, or whether the enterprise is in the stage of survival or at the stage of development.

Brands that are in the stage of survival need to occupy the market quickly within a certain period of time. It is understandable to adopt the strategy of constantly opening stores. Moreover, the number of shops is large, and the purchase volume of goods is large, so there is the price advantage of bulk purchase.

And in the development stage of the brand, there is a certain market share, we need to make the market to do fine and deep, we should continue to enhance the sales of single stores.

At the same time, if we are in the survival stage, if we simply pursue the single store performance, the development speed will be slower, so it will tend to be weaker in the market competition.

However, if we do a good job in a single store, we will make a good template and expand replication. "

Zheng Zhencheng, manager of operations department of Limited by Share Ltd, Fujian, said: "channel expansion is of great help to performance improvement. We believe that the expansion of channels is a" quantity "upgrade, while improving single store sales is a" quality "improvement. In the case of constant number of shops, effective promotion of single store sales can also achieve performance improvement.

By the same token, the success rate of opening a shop is high, the sales of single store has been effectively promoted, and it will also effectively guarantee the benign operation of the store, thus providing a strong guarantee for the healthy operation of the whole enterprise and the healthy development of the brand.

As a matter of fact, when the brand has developed for a period of time, it must consider its intensive cultivation.

Lining and other brands are faced with the problem: since they are determined to integrate channels, it is very important to integrate them.

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Intensive farming starts from canal control.

Some clothing brands began to consider gradually reclaiming agency rights, and self built channels to enhance their control over sales terminals and expand profits.

It is particularly important to note that with the development and growth of clothing brands, brand managers are increasingly unable to control their agents and franchisees. The latter demand more and more of their own brands, and the profits of their brands are getting thinner after they are returned to their agents.

Therefore, some clothing brands began to consider gradually reclaiming agency rights, and self built channels to enhance their control over sales terminals and expand the profit margins.

Wu Jianmin, chairman of Shandong sulang clothing and apparel Limited by Share Ltd, believes that the real development of Chinese clothing brands is nearly ten years.

In the 90s of last century, the concept of brand is very simple, and how to make brand through market channels is groping.

Therefore, in the early stage of development, because of the lack of the overall operation experience of the brand, enterprises choose the form of agency and affiliate to make the brand by using social resources, which is a natural choice.

However, when the brand develops to a certain stage and has the ability to run directly, it will generally follow the direction of the camp and use the appropriate means to express its brand as far as possible.

"Therefore, with the development of brand, it is a normal phenomenon for brands to gradually recover their channels."

In 2000, the domestic apparel giant YOUNGOR had more than 3000 stores, and most of them were franchises.

The huge franchising system makes the headquarters and terminal information unsmooth, the cost of management rise, and the profit is not satisfactory.

Therefore, YOUNGOR began to maximize the reduction of those poor performance franchises, only to retain 200 good performance stores, then the total number of terminal stores reduced to 2000 below, while increasing the proportion of Direct stores.

It is understood that the total number of shops in 2010 was 2145, with more than 400 Direct stores, and more than 1000 counters in shopping malls. The flat effect increased from 14 thousand and 600 yuan to 16 thousand yuan in 2010.

From the international point of view, in recent years, foreign brands have regaining the power of regional representation in China: Ermenegildo Zegna, Coach, Loewe...

These brands are breaking up with their agents and actively expanding the expansion of their stores.

In the view of Wang Xiangsheng, a famous brand strategy consultant in China, some brands chose agents and franchisees in the initial stage of development, because the agents can provide profits to the brands and build the market network.

However, with the maturity of the brand, some agents can not keep pace with the development of the brand. At this point, the brand will consider recycling and eliminate them.

In addition, agent franchisees are not willing to invest in brand names because they are not like brands. This is also a reason for branding to consider channel recycling.

The reporter has learned that although "channel recycling" has caused many concerns in the clothing industry, it is a very controversial topic whether the brand must go straight.

Wu Jianmin said that the brand selection channels must be considered comprehensively according to the brand's location, brand positioning, brand development history and target market positioning.

With the development of a brand, the proportion of direct, agent and franchisees is bound to change. Some brands may also become full direct battalions, but this does not mean that all brands must be directly run.

Zhou Sheng, chairman of fashion group of EACHWAY (Yi Hui), thinks that from the current fashion channel mode, the brand agent and franchise are more than direct camp.

Although many brands are far from enough, they do not need agents or franchisees at this stage.

Both the brand and the franchisee need a promotion process. When the agent develops to a certain scale, they need a company mode to manage their agent area. This is what many agents are actively doing now.

Another phenomenon is that the marketing ability of an agent in a certain area may be better than that of the brand dealer. With the maturity of the brand, many agents will also enhance their awareness of the brand.

Upgrading single store sales is the key to "intensive farming"

Since the development channel can no longer bring income growth and higher profit margin to the brand, then the promotion of single store sales is the best way to maintain the growth of the brand.

Deutsche Bank's research report said it was cautious about Chinese sports apparel stocks, because both their revenue growth and profit margins faced downside risks.

The report also pointed out that 2011 will be a year for Chinese sports apparel stocks to adjust. The new store driven expansion mode in the industry will come to an end, because the increase in discounts and operating costs has led to a decline in the profitability of stores, so retailers have lost the power to open new stores.

Since the development channel can no longer bring income growth and higher profit margin to the brand, then the promotion of single store sales is the best way to maintain the growth of the brand.

How to cultivate and promote single store sales?

Yao Xiaoyun believes that the first thing is goods management.

Goods management first refers to products, and products with good design and goods that meet the needs of the market are the reasons that can directly attract customers to try on. Then, the product specifications are all reasonable and the prices are reasonable. Only then can the purchase be made, and the logistics efficiency can be maintained in a timely manner, such as replenishment, replenishment, and timely delivery. It can maintain the full range of goods and maintain the frequency of updating the goods, so that the shop always feels fresh to consumers.

There are "good bullets" and then look at the role of shopping guide.

Good shopping guide can encourage some customers who are free to buy or do not buy marginal money to pay for them, even those who have no desire to buy, but are not strong minded buyers. Some powerful shopping guides can even persuade unique customers to purchase. Therefore, the service of shopping guide in sales is very important for improving the sales of single stores.

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Third is the decoration display, decoration display to enhance the sales of single store play a supporting role.

When Zhou talked about the role of display in promoting the sales of single stores, he said: "the sales performance of a store is expressed by a formula, that is, the number of people entering the shop is equal to the selling rate, the price per passenger. If every process in each process is done 10% less and 90%, then the final sales will be 70%, and the sales of the shops will be greatly reduced.

On the contrary, if each link is done more than 10%, sales will be close to 150%.

Therefore, every link must be the best in sales, and this process has the direct effect of increasing the number of people entering the store.

In a relatively mature shopping mall or MALL with a relatively fixed customer base, competitive brands will be located near a certain area. If your window or display attracts customers to make advanced stores, you will have the opportunity to achieve sales, which is equal to increasing the potential of store consumption.

Zheng Zhencheng, manager of the operation Department, said: "the industry knows that the ability of direct management and control of Locke has certain advantages. We have our own understanding of improving the sales of single stores. We have also made such a conclusion. If a store wants to create good sales, it must have the following factors: having a good terminal image; a friendly and passionate team; a professional and solid shop, a high level of service and a strong sales capability; a store from top to bottom attaches importance to new members and frequent customers; the store staff are good at using the two" marketing magic weapons "of" idea marketing "and" emotional marketing "to carry out on-site customer recognition; managers know how to make their partners happy. Fujian wonder Limited by Share Ltd

The terminal carries most of the content of the corporate image, so a good terminal image is a good corporate image in the eyes of consumers. As a fast fashion brand, it has always attached importance to the building of the terminal image. In the second half of 2009, it launched the fourth generation terminal image and upgraded the store image gradually. It launched the fifth generation terminal image in the first half of 2011, and began to promote it from the department store.

At the same time, through the perfect supervision system, terminal remote monitoring system, and "shadow customer" inspection system, we will supervise the store terminal image maintenance.

On the service side, through building a strong training system, the company keeps improving its comprehensive ability.

"Idea marketing" and "emotional marketing" are the two "magic weapons" of the original creation. "The 1 successful concept marketing is equal to the successful sale of 100 times". Through effective on-site customer recognition, the company passes the management concept to every customer who enters the store. At the same time, it emphasizes the emotional marketing strategy of "serving customers with passion, with passion for customers, keeping customers with friendship, and developing customers with true feelings".

Facing the bottleneck of development, upgrading sales is the most important. The promotion of single store sales shows that the sales efficiency is high, and the performance of Ping Mei is high, and the turnover rate has also increased.

Only in this way can the brand continue to develop after the slowdown of the channel.

In the process of development, brand is a process of constant balance. Only by combining extensive and intensive farming can we grow smoothly and smoothly. Simply by some way, it is not enough to support the healthy development of the brand.

Extended reading

Several blind spots to improve the efficiency of "single store"

"ABC (All Better Change) reform" is a reform of store operation mode implemented by the famous fast fashion brand "UNIQLO". Its core concept can be summed up simply as a few words -- attach importance to single store response and take the initiative.

Under this mode, every terminal store of "UNIQLO" is endowed with full autonomy, with the aim of creating the highest efficiency stock through "store order".

Li Kai Luo, President of China fashion industry economic research and President of Bi LAN International Investment Consulting Co., believes that the practice of "lifting up" stores in "UNIQLO" has activated the activity of stores, and the reverse construction of "shop supremacy" is worth studying.

In the past, it was often said that the terminal was king. In fact, only the importance of market occupation was taken seriously. The status of "pawn" in the shop made its proper role not be reflected.

The "lifting up" shop is actually a terminal in another sense.

Li Kailuo said.

Cao Yitang, an investment expert who has served as the strategic director of nine stratagem clothing and the head of Metersbonwe strategy, believes that the direct store will be an important profit growth point for Chinese garment enterprises in the future.

He takes ZARA as an example. "In addition to a few markets, almost all of the stores in ZARA are straight, ensuring store image, goods display and pricing management in line with the brand strategy formulated by the headquarters and the product planning strategy for the rapid response, and most of its straight shops are profitable."

Wang Xiangsheng, President of the IFB international fashion brand development management center, believes that the brand is the choice to open the store, or to improve the performance of each single store. The key is to see the category of the brand. If it is the leisure, sports category, the market space is very large, then we can increase the sales by opening more stores. After the increase of sales, the operation cost will be reduced and the profit rate will be increased accordingly.

However, some products, such as women's clothing, high priced brands, niche products and so on, can't increase sales by opening more stores, thus increasing profits.

"Therefore, those brands that are not suitable for opening more shops should consider the intensive cultivation of each single store and improve the performance of single stores."

He said.

But in fact, even for those brands that are more suitable for more stores, the expansion of their channels is not necessary.

In the first-line practice of Wang Xiangsheng, he found that the number of brand stores has been increasing. When more than two hundred or three hundred stores, there is a decrease in total sales and a decrease in profit margins.

"Here is a problem of saturation. For example, even when it comes to casual wear and sportswear, when the number of shops reaches seven thousand or eight thousand, the market has reached saturation. If you go to a shop again and exceed the critical point, the benefits will be reduced."

"A single store, if you work hard to manage it, though it may increase sales, but the profit margin will increase is another matter."

Wang Xiangsheng went on to explain: "if we concentrate on intensive farming, we need to spend more manpower, material and energy, which should be included in the cost, so the profit rate may not be as good as expected."

There is also a problem of Ping efficiency, which is also mentioned in every mention of the profit margin of single stores, but Wang Xiangsheng believes that there is a misguided tendency in "Ping effect".

When all other conditions are equal, the larger the store, the lower the flat effect, the smaller the shop, the higher the flat effect, but this does not represent the success of the brand operation.

In fact, "Ping effect" may first be used frequently by department stores, because under the existing circumstances, most Chinese department stores are mainly rental shops, and naturally they are very concerned about "Ping effect". This is obvious.

Therefore, it is inappropriate to measure the brand end store with "flat effect".