Liu Chunxiong On The Inventory Problem Of Clothing Industry

In the past two years, when the overall economy has not yet entered the downturn, there are many

(multinational brands and strong domestic brands) are facing high inventory problems.

The "tactical tactics".

The reason why I call it "tactical strategy" is that it only solves the problem of past quarterly inventory, but has not fundamentally solved the problem. The old inventory problem has not been solved, and the new inventory is still accumulating.

"Factory stores" should be emergency measures, and may continue to continue. Even some brand clothing outlets have all become "factory shops" tendency.

If the factory store in 2010 to 2011 still has effect, then the factory store in 2012 has almost failed, because too many stores have become "factory shops" without the signs of "factory shops".

If a few brand discount sales are effective, when almost all brand stores are at a discount, discount has almost no effect, not only can not digest the stock, but also lost the profit margins.

In 2012, the "May 1" and "Dragon Boat Festival" small holidays, clothing enterprises vigorously promoted sales, sales are not up to the usual weekend sales.

The clearance sale that used to be used at the end of the season is now in use since the beginning of the season.

When all enterprises are aware of the inventory crisis, most enterprises have lost the space of tactical operation, and there are not many choices to deal with inventory problems.

No sales promotion, sales fell sharply; sales promotion did not increase significantly.

Because the demand in the market downturn is mainly "rigid demand", the sensitivity of "rigid demand" to tactical operation is not high.

When tactical operations lose space, it is the most fundamental measure to solve inventory problems to solve problems from the strategic level and no longer generate new excess inventory.

Expansion and contraction simultaneously

First of all, we must re-examine the marketing environment in China and adapt to the mature marketing environment.

The industry has gradually matured, and the state has bid farewell to the rapid growth. It is unrealistic to hope for future growth to solve the current problem.

The marketing of mature market should be based on the rational marketing of detailed data analysis.

For example, when the economy is booming, many enterprises make the next year's growth target ideally 30% to 50%. Even if such targets have larger inventories, economic growth will always be digested.

In a mature market environment, such a marketing mode will certainly put enterprises in the last resort.

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Enterprises should pay more attention to and study the macroeconomic situation.

Besides paying attention to the macroeconomic indicators of GDP, we should pay more attention to more economic indicators, such as PMI, PPI, CCI (consumer confidence index), business prosperity and entrepreneur confidence index, electricity consumption, etc. these indicators constitute the overall judgement of the future economic situation.

Second, expansion and contraction.

To expand the digestion of inventory problems, to shrink the problem of profitability.

In the existing market and stores to digest inventory, too much pressure; if the expansion of the market size, it can be diluted inventory pressure.

After all, China's channels are relatively long, and the ability to channel inventory is strong.

Of course, the expansion of counter operation is facing greater pressure after all, but this is precisely the right way to solve the problem.

The operation of two leading enterprises in a fast moving consumer goods industry is very interesting: one is mainly driven by big tactics, the sales have not increased significantly, the profits have declined very seriously, the other is mainly based on market expansion, and the sales promotion is small, not only the sales growth is obvious, but also the profit has not declined.

Digestion inventory will inevitably expose the profit problem of enterprises.

Those markets or stores with poor profitability usually show their embarrassment in the downside of the economy. Therefore, they will break the contract and solve the problem of high cost, so as to make room for profit.

Thirdly, we re-examine consumer behavior in the new environment and formulate marketing strategies with macroeconomic environment structure.

The downward trend of the economy can best reveal the core demand of consumers.

We can see that under the downward trend of the economy, there are still some brands and products in counter trend growth, indicating that as long as we are studying the consumers, we have only weak products and no weak market.

When digesting inventory, we must not be in a mess. On the one hand, we should solve the problem through digestion inventory. On the other hand, we should study the future business strategy and solve the past problems in a new mode.

Faster than anyone else

After recognizing the changes, expansion and contraction of marketing environment, enterprises need to establish a fast marketing system.

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In the first half of 2012, a domestic garment company claiming to be "ZARA proud disciple" was built up with high inventories.

In fact, in my view, in addition to the slogan of "fast fashion", it simply did not learn the essence of "fast fashion" quick response, which would cause continuous accumulation of inventory for several quarters, so that it had to digest inventory all year round.

In this inventory crisis, SMEs are "less affected" because their reaction speed is faster than that of large enterprises.

Large enterprises are annual and quarterly rigid plan models. SMEs actually take the rolling plan mode (based on instinctive rolling plan instead of professional rolling plan).

Another problem in establishing a quick response mode is to establish a linkage mode of manufacturers to solve the problem of benign circulation of stocks.

In the past, manufacturers are the process of game, manufacturers should "pressure goods", businesses should "resist pressure", the result of the game is market demand is unknown, manufacturers to channel "pressure goods" as sales performance.

When the economic situation is better, the problem is hidden; when the economy is down, the problem is magnified.

At present, many excellent enterprises have begun to think about how to link the manufacturer's management information system with agents, and integrate the channel activities and inventory flows of agents into the plant management information system.

Enter a virtuous circle.