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Fast Fashion Brand Channel Expansion Blocked, Supply Chain Faces New Challenges

2013/9/10 9:30:00 33

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H&M, UNIQLO, ZARA these "a href=" http://www.91se91.com/news/index_c.asp "fast fashion < /a" brand started in June as a discount competition.

not only the discount, but also the fall of new products in autumn.

This situation constitutes the background of this autumn's "fast fashion" industry.

How to spend the winter has become the theme word.

reporter found that fast fashion brand still continues the strategy of channel expansion in Chinese market.

spend the "winter" /p > scale benefit.

shop performance growth is limited, while expanding channels to increase stores and expand scale has become a way for fast fashion brands to choose winter.

As P entered into 2013, like many consumer brands, fast fashion brands are facing the economic downturn.

At present, the world's major a target= "_blank" href= "http://www.91se91.com/" > clothing "/a" chain retail brand: the United States GAP, Sweden H&M, Spain ZARA, Germany C&A, Japan UNIQLO almost appeared product line shrinkage situation.

the reporter came to ZARA Wanda store, and 1/3 of the display area was used for discount sales promotion.

In 2013, ZARA scored a marked foreign minister from the end of 6 and the beginning of July to the beginning of September.

in September of this year, only a row of containers were used to display discounted goods at ZARA Wanda store. In 2013, the discount area was large and the goods were placed sparsely, making the whole discount area very depressed.

P, which is not far away from UNIQLO, has been using the display methods of traditional Japanese style shops that are neatly laid out. But reporters also found that like UNIQLO and ZARA, the price war was launched in advance.

Its price war can be divided into two aspects.

Because UNIQLO has been adopting the strategy of product discount in turn, usually seasonal goods will delay the discount rate to increase profits.

However, in 2013, UNIQLO's main seasonal trousers were already on sale at the end of summer, and the discount price fluctuated at 25%.

in addition, the price of autumn products of UNIQLO is significantly lower than that of spring products.

Reporters saw the same cotton shirts, the price of autumn new products and spring products only after the price discount.

The price of shirts in autumn is only about 75% of that of shirts in the spring.

in the H&M Europe and America store, the technology of new products is relatively simple, the price basically stays at the price level at the beginning of the year, and the number of high priced products is not large.

Reporters learned that H&M started the discount season as early as mid June.

at the same time, the international well-known fast fashion "a href=" http://www.91se91.com "brand" /a "C&A also appeared the similar situation, the reporter observes in C&A Europe and America stores, its most obvious characteristic is, the storefront change season new product is inferior to the previous years.

Prices are basically flat with prices at the beginning of last year or last year.

Because C&A has been taking the low price route, its discount price space is not very large.

in the mall of American GAP, reporters saw that the new products of high-end products such as fur coats in the new season were very few. At the beginning of the year, there were at least 3 series of these products, with prices ranging from 3000 yuan to 4000 yuan.

The discount space of GAP is limited, but the discount time is very long. Almost all the year's activities are discounted, but basically maintained at around 30 percent off.

although most fast fashion brands are shrinking product lines and actively preparing for the "winter" strategy, major brands have adopted a more active strategy in terms of channel development, that is, to accelerate the opening of stores.

statistical data show that as of July 2013, H&M, UNIQLO, ZARA, MUJI, GAP, C&A, UR, WE, I.T and other fast fashion brands in 2013 opened a total of 84 stores.

In the first half of the year, UNIQLO added 31 new stores to the top of the expansion, followed by 18 new H&M, 10 new MUJI, and 8 new ZARA and GAP.

H&M plans to shop more than last year.

in a sense, the growth of store performance is limited, while expanding channels to increase stores and expand scale has become a way for fast fashion brands to choose winter.

the innate superiority of channel expansion

shopping malls welcome these brands that represent fashion sense. This will bring fashion consumers to the shopping malls.

Less than 4 years ago, the area of ZARA store in Beijing reached 1700 square meters, which has aroused heated debate in China. Subsequently, foreign brand stores have reached 2000 square meters in general. P

At the same time, the international brand ZARA and H&M can achieve up to 40 thousand yuan per square meter per year.

it is understood that in addition to Metersbonwe Ping efficiency can reach 20 thousand yuan / square metre years, most domestic < a target= "_blank" href= "http://www.91se91.com/" > shoes < /a > the brand efficiency is less than 10 thousand yuan / square metre.

the astonishing level of single store efficiency has made fast fashion brands full of vision for the expansion of channels and storefronts.

now, 2000 square meters have been "unable to handle". "Many brands have opened tens of thousands of square meters of shops in the streets of Beijing Wangfujing, Shanghai Huaihailu Road and several domestic cities."

Metersbonwe executives told reporters.

These stores are located in the prosperous area, because the performance of every square metre can be improved in the prosperous area.

"there is a comprehensive approach to improving the efficiency of products, including product lines, design and logistics, and even the upgrading of the entire supply chain."

The above told reporters that for domestic enterprises, one of the ways to improve the efficiency of the products is to raise the unit price of the products.

It is relatively simple to raise the unit price of products. in the past, many domestic brands adopted the way of raising the unit price of products to improve the efficiency. However, judging from the present economic situation, there is not much room for improving the price of the products, while foreign products seldom raise the price by raising the price.

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data show that foreign fast fashion brands are usually 4900 Euro even in foreign stores. When the store performance is basically fixed, fast fashion brands usually adopt the strategy of channel expansion to improve their performance.

in order to improve the sales volume of products, on the one hand, we should open large stores to increase consumers' understanding and trust in brand image. On the other hand, we should open new stores in the radiation area densely in the vicinity of flagship stores and big stores.

The influence of such a large shop can lead to sales around. "

Metersbonwe executives said.

After the completion of the P channel in Shanghai, the choice of ZARA and H&M began to expand to neighboring cities such as Hangzhou, and expanded its influence in the second tier cities through the influence of Shanghai.

The entry of P into the second tier cities is the focus of ZARA and H&M's next step.

H&M's new store plans are Wuhan, Chongqing, Kunming, Hangzhou, Xi'an, Chengdu, Changsha and other cities.

As of May 31, 2012, ZARA has opened nearly 140 stores in China, and has grown rapidly in the second tier cities.

for ZARA and H&M and UNIQLO, "these brands can bring into the flow of people. For this international brand, it is very strong relative to the stores, and the stores are very popular with these brands."

Marketing expert Haisheng told reporters, "some stores, especially in the second tier cities, even offer lower rebates and rent preferences, and introduce these brands."

in addition, Wanda has built its own brand Library in shopping malls such as Wanda. "ZARA, H&M and UNIQLO are in the forefront. They are the brands that sell first."

Haisheng said, "it can be said that the location problem is a difficult problem for domestic brands, and it is an advantage for international brands such as ZARA, H&M and UNIQLO."

In the process of urbanization in China, the volume of the second tier cities and the three tier cities is expanding. "This also leaves room for the development of fast fashion brands."

supply chain is challenged

domestic fast fashion is pre-sale, while the vast majority of ZARA products are produced in the season. < a target= "_blank" href= "http://www.91se91.com/" > designer "/a" will capture the most popular styles and fabrics of the season for production and processing.

in the rapid construction of channels, fast fashion brands are also facing the negative effects of excessive development.

ZARA is proud of the 10~14 Day reactive production distribution, which only takes 14 days from design to sales counters.

In China's direct shops, most ZARA stores have also implemented a 10~14 Day reactive production and distribution mechanism.

it is understood that ZARA's parent company Inditex will put more than 1000 designers into market research and design. In 2011, a total of 1 million 900 thousand garments were produced.

In order to reduce production costs, by the end of 2011, Inditex had 1398 suppliers in more than 40 countries.

When a new product is approved by the marketing department, the company often makes several factories submit their budgets for production simultaneously.

it is understood that most of the fast fashion enterprises in China need a 90 day cycle from order to product listing, that is to say, the domestic fast fashion is pre-sale, while the vast majority of ZARA products are produced in the season. Designers will capture the most popular styles and fabrics in the season for production and processing.

It is understood that the vast majority of ZARA products are produced in the season, and the proportion of pre season production is only about 10%~15%.

as we all know, the challenge of the season's production is "China's logistics environment is not very favorable, especially in the two and three tier cities, whether products can achieve 14 days cycle is a challenge."

The Metersbonwe executives told reporters.

The main reason is that China's railways are basically monopolized, but the railway is by far the most rapid and low-cost way of logistics.

"The logistics cost in China is much higher than in the US and Japan," said the head of the Logistics Department of Canon group, Japan.

"logistics costs in the United States are very low, less than 10%, while in China, shipping, rail and motor pportation are comprehensive pportation, logistics costs up to 20%, so logistics is also a very big cost test."

another challenge comes from training for salesmen.

In fast fashion stores, salesmen are called sales consultants, and sales consultants are divided into two categories, one is a salesperson who works 25 hours a week, the other is a salesperson who works 40 hours a week.

reporters in the ZARA, H&M and UNIQLO small and medium-sized stores saw that the average number of employees is around a dozen people. Because of the 8 hour working system and the rest of the day, the average small and medium-sized shop workers are at least 30 people.

With the rapidly expanding demand and turnover of the storefront, the annual sales consultant's gap is increasing.

before the use of these employees, fast fashion brands usually have sales training for about two months, and their employees are between 20 and 30 years old.

However, because of the shortage of staff, many salesmen did not receive two months of training, so they hurried to work. This led directly to the fact that salesmen had not been trained well before being pferred to their jobs quickly.

when visiting two stores of ZARA and H&M, the reporters met the dispute between sales consultants and customers.

The sales staff of ZARA Wanda store are generally around 25 years old, and sales attitudes and norms are all criticized.

Salesmen treat customers with bad manners and speak indifferently, which are far from their international brand image.

> in the < a href= "http://www.91se91.com/news/index_c.asp" > H&M < /a > Europe and the United States, the reporter saw that the two level checkout counter was unattended, and there was a hint of downstairs checkout. The whole management seemed very messy and casual.

In addition, the salesperson refused to make a complaint call.

in addition, recruiting staff is also a common problem encountered by these three fast fashion companies. Stores are actively recruiting sales consultants with salary ranging from 3000 to 4000 yuan, and the salary level is in the upper and middle reaches of the industry.

"Now is the post peak period after 85 and 90, and the integration of employee personality and business is a very big challenge. Many new stores have been launched in the absence of manpower, which makes it difficult to guarantee the service level of the staff."

Marketing expert Hai Sheng said: "the channel construction is good, but the software management can not keep up, it is a very big problem for the enterprise."