Where Should We Go To The Department Store Again?

Facing the rapid changes in consumption habits and concepts, the department store industry has entered an era of absolute change. What is more cruel is that invariance is waiting for death. The transformation of shopping centers, increasing the proportion of self employment, with the help of network technology... Department stores are looking for various possibilities for self-help.

　　 Department stores are closing in.

Recently, news about the closing of shops in Beijing East Fourth Ring store in Parkson Department has spread like wildfire. This is just a typical example of the department store industry. Not long ago, the leaders of department stores such as Hua Tang and Wangfujing also announced the closure of the first tier city stores.

The department store industry has entered a large scale since last year. In the first half of 2014, the main department stores closed 12 stores, according to the statistics of union business network. At the same time, the operation of department stores is not ideal. According to the latest data of World Bank Richard's, in the past three years, the sample data of a number of department stores showed that the annual compound growth of rents and staff expenses was 14% and 18.5% respectively, while the average annual compound growth of operating income was only 8.8%. And publicly available data show that 18 domestic A shares department stores in the first half of a number of companies earnings warning.

Lai Yang, Secretary General of Beijing Institute of business economics, said that with the change of consumer habits, the advantages of traditional department stores in time and space do not exist. At present, the transformation of department stores is imperative. Some companies still insist on the traditional mode of merchandise sales, and are doomed to be eliminated.

The decline of the department store industry is closely related to the rise of diversified retail outlets, such as commodity categories, low price electricity providers, and focus on differentiated and experiential shopping centers.

"Tmall's double eleven turnover last year was 35 billion 19 million yuan, equivalent to the total sales of Wangfujing and Parkson in 2012. Nowadays, electricity suppliers have made great impact on department stores by virtue of category and price advantage. Zhang Ping, general manager of Ying Shi Group Research Center.

In the view of Wang Yongping, Secretary General of the China commercial real estate alliance, apart from the impact of the electricity supplier, it is closely related to the surging supply of commercial projects.

RET Rui Yide data show that only in Beijing from 2013 to 2015, the volume of newly added commercial projects was about 3 million 400 thousand square meters, equivalent to 17 Xidan Joy City.

　　 Brand combination Differentiation Increase Self-support Proportion

At present, most of the department stores in China operate in the form of joint operation, which is profitable through deduction or royalty, which makes department stores neglect to cultivate their core competitiveness and rely too much on lots and business circles.

In view of this problem, increasing the proportion of self run has become a way of self rescue for department stores. It is understood that self-employed department stores in Europe and the United States is already a relatively mature experience, but also the future development trend. Shopping malls including Messi stores, Martha stores, and even Crawford are adopting this model and forming a unique competitive advantage.

Zhang Ping said that according to the development characteristics of different commercial markets and local consumption characteristics, department stores can increase their self employment ratio, and create a mode of combining boutique department stores with local characteristic department stores by introducing buyers and local original brands. This will help to get rid of the embarrassment of the "two landlords", not be restrained by the mainstream brands, but also control the brand mix and format distribution to avoid the vicious competition caused by homogenization.

In fact, some department stores are trying to get rid of the dilemma of homogenization through self employment. For example, Wangfujing department store has started centralized purchasing and centralized management in Beijing area.

But Zhang Ping also pointed out that not all department stores are suitable for increasing the proportion of self operated enterprises.

At the same time, professionals, including Lai Yang, also said that the current commodity upgrading is quite fast, and the department stores themselves do not have the experience of distribution. Whether it is to increase the proportion of self run or develop its own brand, its investment threshold is quite high. If there is no large-scale network foundation support, this mode will be hard to maintain. "Martha's department store's performance in foreign countries is good, but it is not satisfactory in China. On the one hand, it is because of acclimatization, and on the one hand, it also raises doubts about the mode of proprietary brand."

　　 draw lessons from Shopping Mall To enhance sense of experience and comfort.

Faced with the declining trend of the industry, many enterprises have begun the attempt of transformation. One of the more common examples is to learn from shopping centers to increase consumers' experience in shopping process.

Just in the past June, Tianhong added a new store in Shenzhen, which is located in the shopping mall community department store. As a large department store with 60 stores in the country, the attempt of Tianhong in the shopping mall reflects the trend of the Department Store transformation.

In fact, since last year, enterprises including Shimao, Wangfujing, SOGO and Kade have been adjusting their stores in Beijing. For example, the department store format of Shimao will be transformed to the shopping center. The old department store in Beijing is also trying to transform the shopping center. By compressing the traditional retail area, it will operate in the new center with the shopping center's main rental mode, and introduce more leisure entertainment experiential formats.

"The department store industry can give full play to its inherent advantages, enhance the attractiveness of specific consumers, and draw on the characteristics of shopping centers, combine with the actual situation, locate the target customers accurately, maximize their inherent advantages, enhance consumer experience and comfort, which is an important trend of department stores in the future. Zhang Ping said.

But there are also doubts about the prospects of department stores. Wang Yongping believes that the commercial real estate cake is getting thinner and thinner, and homogenization and foam gradually appear, not only department stores, shopping centers in the future development is also facing many difficulties. And most of the department stores are small in size, even if they are transformed into shopping centers, they will be squeezed by large shopping centers in the region.