Men's Clothing Industry High Inventory Reform Futures Order System

Statistics show that retail sales of clothing commodities increased by 1% over the same period last year, and the growth rate dropped by 4 percentage points over the same period last year. Among them, the retail sales of men's clothing decreased by 3.1% year-on-year. Yesterday, the Shenzhen retail business association (China brand chain development conference organizing committee) and Qian Xun (Beijing) Information Consulting Co., Ltd. jointly issued the "2014 - 2015 China Men's wear brand development research report", said: the domestic macro-economic situation presents a complex situation, the uncertainty of the external environment has increased the difficulty of men's clothing business. As the men's clothing industry mainly adopts the centralized ordering mode, the market changes will lead to partial orders being not fully implemented, thus increasing the inventory and bringing about business uncertainty. The men's clothing industry is facing a high inventory situation.

False demand leads to high inventory.

At present, the domestic Men's wear brand Showing obvious characteristics of industrial clusters. They are mainly concentrated in coastal provinces such as Zhejiang, Jiangsu and Guangdong, forming zhe faction (YOUNGOR, reporting birds) and Su faction (red bean). Bosideng Hai Lan's home, Fujian faction (seven wolves, llang, dyed cards, nine herding kings) and Guangdong school (Karl Denton, group Hao) men's clothing. East China and Southern China are the biggest regional consumer markets for men's clothing in China.

According to the report, for men's clothing industry, inventory accounts for 5% to 8% of the production volume, which is a reasonable level. 30% is close to the limit. For example, the proportion of men's clothing stocks to production: 51% for wolves, 84% for birds, 37% for Busen, and 52% for Hai Lan. The high inventory of men's clothing industry has seriously hindered the return of funds, thus inhibiting the rapid response of the supply chain to the market, and the supply chain can not respond quickly, and further create a new backlog of inventory, forming a vicious circle.

According to the survey, Men's wear industry Most of the enterprises use the sales mode of the futures order meeting to complete the sales volume of 50% to 80%. At the order meeting, the agents often order more goods according to their own judgment to prepare for the goods being broken, and the brand stores also store more commodities for replenishment, that is, the so-called bullwhip effect, the false demand of both sides, resulting in the high inventory situation.

Lack of management in franchised stores

Menswear consumers pay more attention to brand identity. Therefore, shopping centers and service stores are often the first places for their consumption. Among them, the proportion of shopping centers in shopping centres is 62%, while other shopping centers are 38%. Compared with online sales, sales of traditional channels account for about 90%.

At present, most men's high-end men's wear brands are still dominated by agents. The traditional channel mode of agency and franchising is not conducive to the control of the terminal. Most of the brand men's clothing companies choose to join the mode of rapid expansion. This franchise expansion mode can achieve great results in the early stage of enterprise development, but it is followed by the lack of management of brand stores, and the lack of guidance for franchisees to set up shop locations, decoration, ordering and marketing leads to poor quality of stores and poor control over prices.

With the rapid expansion of franchised stores, various costs are also increasing. The rent of the core business circle of the first tier cities continued to rise. Under the franchisee mode, some men's clothing enterprises are hard to understand the situation of the terminal market. They are expected to be insufficient and the price deviate. Once the order quantity exceeds the market demand, it will easily lead to a backlog of inventory levels at all levels of distributors and form a stock crisis.

We need to reform the futures order system.

"In order to control inventory effectively, we need to reform the futures order system." Experts from Shenzhen retail business association pointed out that the disadvantages could be reversed by increasing the frequency of ordering, reforming the order mode, and strengthening the integration of offline and offline industries.

According to the survey, most sports brands have increased the frequency of orders from half a year to once a quarter. The Lining group, which is seriously affected by backlog, has taken positive actions to transform its traditional order pattern into a retail led ordering mode with the characteristics of "inertia orders + best seller SKU replenishment + fast response products". Based on consumer research and market analysis, the group set up the best selling stock unit portfolio and specific SKU plan for the whole country to meet the needs of different consumers. Through shop analysis, help distributors and distributors make more appropriate ordering decisions. When fairs order products to be listed, provide timely replenishment support based on monitoring sales volume. At the same time, according to the market reaction, the rapid reaction products are introduced. This quick response product is only a small number of products. It will test the market reaction in two weeks. Once the product is sold well, it will quickly organize mass production. If sales are not good, reduce or even suspend production.

According to the report, business casual brands also take the initiative to adjust the quantity of orders, and control the inventory by using the "semi spot, semi futures" supply mode. King Mu usually reserves 10% to 20% of its own capacity to deal with temporary replenishment, seasonal demand, unforeseen large orders or other emergencies. Its annual sales volume is about 30%.

It is understood that traditional brands and online direct selling brands compete online, and traditional brands win. For example, in recent years, double eleven, entered the top ten list of transactions, nine of Chengdu is a traditional brand, JACK&JONES, seven wolves, GXG, Luo Meng and other sales far ahead. Therefore, for China's men's wear industry, the current electricity supplier channel is a supplement to traditional channels. Many brands stock up through the line. Only when the online and offline channels are smooth can the interests be maximized.