Will Stores Discourage Luxury Consumption From True Or False?

In China's three or four tier cities, the expansion of luxury stores has stagnated, and the electricity supplier has made up for this demand. China's small town "tyrants" began to try to buy luxury goods on domestic and foreign websites, which posed more challenges for shopping centers in small cities.

Physical store problem

"I have turned off a dozen stores." A senior Swiss watch brand China general manager told the daily economic news that in recent two years, the luxury market has plunged rapidly, and its sales in China have dropped by about 10%, which has been a good achievement in the industry.

Faced with such a situation, luxury companies choose to turn off poor performing stores to save costs. At the same time, we should invest more in business shops and do more VIP activities to promote sales.

Stores are very critical for luxury brands. The count CEO, Mai Zhen Jie, told reporters that the entity store is the space for the brand to communicate with customers, and its significance is not just sales. Luxury brands attach great importance to the Internet, but for the price of high-end watches tens of thousands or even tens of thousands of yuan, the meaning of the Internet is more communication and interaction. At present, no high-end watches and jewellery brands choose pure electric business.

However, the super high cost of physical stores also makes the luxury brands feel under pressure. Recently, the consulting firm disclosed that the first floor store rents in Shanghai Hang Lung Plaza and the national gold center have reached the level of 100 yuan / square meter / day. In the sharp decline of passenger flow, the sales entities are playing the game of burning money.

This year, many luxury brands began to slow down, and even closed some of the existing stores. In the latest quarter of Coach's earnings report, the number of stores in mainland China increased by only two.

Hendry, an executive at the watch retailer, said that many luxury brand strategies this year were to streamline the stores and decisively shut down those stores that had poor location and difficulty in making profits. More cautious when opening new stores, and strive to "open a successful one". For flagship stores, important stores to increase investment and enhance customer experience.

For top shopping centers, shop space is scarce. The brand wants to expand the area, and the phenomenon of cross layer is increasing. But not every brand can successfully take up the space upstairs or next door. For those poorly managed shopping centers, the vacancy rate is rising.

First marketing and re marketing

In the second half of 2014, Luxury goods The leading brands of the industry, Hermes and Chanel, have issued official WeChat accounts, and have begun to stabilize information about pushing brands and products. Most of the luxury brands currently operating in China own their official WeChat public numbers, micro-blog and video can not be small. Among them, the British luxury brand Burberry is a pioneer of digital technology, using various means to broadcast the show.

But generally speaking, luxury brands are more cautious about e-commerce. At present, the luxury brands involved in e-commerce are mainly cosmetic and light luxury brands. These brands have lower unit price and more vivid market image, so they are suitable for Internet.

Estee Lauder, L'OREAL, CLARINS and other high-end cosmetic brands have set up online flagship stores on Tmall and other electronic business platforms. At the same time, they will further enhance their store experience function, so that customers can have more space to try cosmetics. Offline trial, online shopping, the functions of physical shops and online shops are further broken down.

Make up in some shopping centers in Shanghai brand In the first floor to occupy a limited space counters, at the two lower floor of the shop rent a larger area of specialized shops.

This online and offline integration mode is increasingly being recognized by brands and shopping centers. Burberry told reporters that in the flagship store of Kerry Center in Jingan, Shanghai, store sales will help customers place orders at Burberry's flagship store. Customers can also pick out the color and material of clothing, and complete some "customization". Customers can also pick up the goods at the store. The brand will exempt this part of online sales from shipping costs of 180 yuan per unit.

Gu Ming, general manager of luxury e network, told reporters that logistics is a key link of luxury electric business. In order to ensure the most important experience of luxury brands, luxury electric providers usually choose the best logistics service providers, and freight rates are usually higher.

At present, there are many patterns in the layout of luxury brands online. Coach chose to build a self built e-commerce platform. Burberry opened an official flagship store in Tmall, which was once considered a different style. SalvatoreFerragamo and HugoBoss authorize the domestic e-commerce website to walk online and launch online sales.

Small Star Group CEO Summit told reporters that the competition between luxury electronic business platform and physical shopping center are similar, and the domestic e-commerce platform hopes to win more high-end brand support, giving better conditions for luxury brands.

"Uncertainty" in three or four tier cities

However, in the three or four tier cities, the situation is different. As luxury prices turn cold, many brands have abandoned plans for further sinking. Those developers who want to win the luxury brand for their shopping centers can only try light luxury and fast fashion brands at the moment.

For the Wanda Commercial real estate that is being sprint on the market, their partners in the three or four tier cities are mainly Chinese local fashion brands and the relatively deep progress of localization in Europe and America. Fashion brand 。 The total price of these brands is more close to the people, and can play a role of attracting popularity in the three or four tier cities.

For wealthy groups in the three or four tier cities, luxury consumption is not convenient enough. They usually go shopping in North China, Hongkong, China and overseas. Luxury e-commerce has played a complementary role in this demand.

With the beginning of cross-border electricity supplier, domestic consumers can directly place orders for luxury goods abroad, which will have another impact on the physical stores. Tax relief may make the price of this commodity more favorable and lower than that of physical stores.