Understanding Of Flat Channel Of Garment Enterprises

What is flat channel?

Based on the profit maximization of garment enterprises, according to their own conditions, modern management methods and hi-tech technologies are used to maximize the producers' direct sale of goods to the final consumers to reduce the distribution channels at the sales level.

Influence of vertical integration of channels

With the rapid development of the world economy, the current market situation is changing from a seller's market to a typical buyer's market. The channel members close to the final buyer are also in the dominant position when they compete with the manufacturers in most cases, and thus are more likely to abuse their power and take the competitive strategy of damaging their interests to obtain their own bigger interests.

Under such circumstances, in order to avoid the increase of paction costs brought by opportunistic behavior of channel members, manufacturers will have sufficient motivation to implement vertical integration to control channels.

In particular, with the tide of globalization and mergers and acquisitions, the scale of garment enterprises in many industries is becoming larger and larger, with the abundant funds and strength needed for self operated channels.

At the same time, with the desire and ability, the vertical integration of garment enterprises is inevitable.

With the development of information technology and communication technology, the new technology and new products keep their novelty and leading time shorter and shorter. The direct result is the serious homogenization of products, and customers' loyalty is obviously reduced because of having more choices.

In order to gain more advantages in fierce competition, more and more

The manufacturers tend to adopt the way of brand competition, which will inevitably lead to a very high investment brand equity.

In the vast majority of cases, the establishment of such a special asset of brand equity requires the concerted efforts of downstream members, especially those brands that need to provide customers with pre sales, after sales and after sales services to win customers' satisfaction and make positive publicity. The role of channel functions is of great importance to the brand equity of manufacturers.

At this point, in order to protect this particular proprietary asset and avoid middleman's speculative behavior or malicious blackmail, manufacturers are likely to adopt a strategy of vertical integration.

The influence of current consumption culture

In the current consumer culture, consumers are increasingly seeking to be independent and innovative, resulting in the increasing demand for personalized products, which requires manufacturers not only to provide quality products and services, but also to meet the individual needs of consumers.

To achieve this goal, manufacturers need to meet at least two prerequisites: one is the shift from mass production to standardized customization, and the other is to fully grasp the consumer's demand information.

The former is or is being realized through the innovation of technological means and management methods, and the latter is more complicated. Besides the improvement of means and methods, it involves the innovation of ideas, etc., but the key is to shorten the distance between consumers and consumers. This inevitably requires the simplification of the level of channels, that is, the requirement of a flat channel structure.

At present, a noticeable trend of consumer behavior is the increase of uncertainty and the loss of commitment.

This means that the loyal customers that clothing enterprises take for granted are likely to turn to the competitors overnight. Therefore, garment enterprises need to pay attention to every move and adjust the Countermeasures in time.

According to statistics, the cost of acquiring a new customer is 5 times that of an old customer. As long as the annual customer turnover rate is reduced by 5 - 10%, the profit of the company can be increased by 25 - 75%.

Too many channel levels are obviously unable to meet the needs of garment enterprises closely monitoring customers' needs. Therefore, for most garment enterprises beset by customer churn, flat channel is an inevitable choice.

Another notable feature of behavior is the eclecticism of consumption.

Under the influence of postmodernity, consumers no longer seek the central, essential and consistent self image, but take more action oriented, seeking positive emotional experiences in various discontinuous and different moments through active participation and continuous image pformation. Today's consumers are more changeable and more intangible than consumers in traditional cultural environment.