Why Do Chinese And European Department Stores Last Longer?

This year, the Chinese department store industry has fallen into a state of decline. Recently, the news of Wanda Group's decision to close 45 Wanda stores is even more startling. In fact, the situation in the department stores is more serious than it seems.

Why are the giants of department stores facing such severe challenges? The impact of the great economic situation can not be ignored. Secondly, competition and carve up from Shopping Mall and e-commerce channels. Last but not least, the disadvantages of the traditional department store operation mode are beginning to be exposed. The decline now proves that the previous success may be accidental, or that the previous successful mode has failed.

The traditional department store mode in China is a product evolved from supply and marketing cooperatives and commodity circulation channels. Many of the listed companies are the ownership background of state-owned enterprises and collective enterprises in the early years. Although in the wave of reform and opening up, they experienced shareholding reform in their ownership, but the management mode came from the inheritance within the system, with strong regional characteristics and strong local protection.

Such as Shandong's Ginza and GUI he, Chongqing's new world and heavy hundred (now merged into a company), Hubei's Wu Shang, Hebei's northerners group and so on.

And the department stores that enter the country from abroad are like Jiu Guang.

In the cities of Shanghai and Beijing, the market acceptance is relatively large, and it can survive and develop. But in the field, it will immediately become a competitor in the local market, and has lost many advantages in the local supplier relationship, customer recruitment and maintenance.

In a highly competitive environment, whether local department stores evolved from state-owned or collective ownership, or foreign department stores, have focused their efforts on the pursuit competition for brand resources and flat output.

Over the years, the domestic department stores have the following characteristics:

"Ping efficiency" is the most commonly used index in the department store industry. It continuously improves the sales performance and gross profit contribution per square meter, resulting in the reduction of the public passageway in the vast majority of the domestic department stores, from 2.4 meters to 2 meters or even 1.8 meters, and the camp area of each brand has been continuously compressed.

The mall tries to accumulate more brands in the confined space. This not only causes the brand image not to be fully displayed, but also makes the consumers feel uncomfortable and poor shopping experience, thus leaving the Shopping Mall more room for development.

"High quality" and "high quality" are the single goal pursued by many domestic department stores. Every year and half a year, they think about how to adjust and eliminate them and introduce more upscale brands, so as to enhance the unit price and sales and profits of customers.

In the past, the practitioners of domestic department stores all had a dream of "LV, Gucci and Cartier". Now, the domestic department stores must talk about "light extravagance". These two situations are logically all in one continuous line, all in pursuit of more high-end positioning, ignoring the actual demand of local target customers, and also do not attach importance to the actual needs of suppliers who have already worked in the field.

Most department stores in the country adopted a very simple way of marketing. They almost equated marketing promotion with sales discounts, buy and send, full gifts, multiple points, and so on, but they were always equivalent to attracting customers through price reduction.

In the absence of e-commerce, it has been effective at a time. However, the electricity supplier has greatly reduced the cost of the channel, the cost of decoration and the cost of personnel, thereby hitting the department store at a lower price.

Domestic department stores did not adopt more effective creative marketing activities to attract new customers.

Facing the impact of Shopping Mall, most domestic department stores have reference.

The combination of formats has introduced catering and entertainment brands to enrich the store mix and increase customer retention time.

However, does the domestic department store imitating Mall really work? Will the discount price be able to compete with the large number of e-business enterprises that burn money? These strategies may work together in the short term, but in the long run, they can not help the domestic department stores to break through the difficult position.

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Department stores are facing competition from other channels. This is not a unique phenomenon in China. In other developed countries around the world, we can see that the situation of department stores is not as severe as that of Chinese counterparts. Especially those excellent department stores in Europe that have been handed down for centuries, let us explore the key factors of their success, hoping to get some inspiration from them.

European department stores mostly adopt the buying system in terms of commodity mix. The buying team of department stores knows who the target Target Consumer is, who buys goods for them, what goods to buy can meet the needs of these users, thus creating a differentiation.

Comparatively speaking, most of the department stores in China do not do enough to understand the users and understand the brand and products.

Often a brand, regardless of its origin or location, will be regarded as a high-quality high-end brand if it opens shop in Beijing SKP and shops in Hangzhou Tower.

This simple logic of derivation leads to homogenization.

Some department stores colleagues are also trying to explore new brands, but if the imported brands are too designers and consumers do not know, the sales volume is very low. If they are too high popularity and popularity, it is very similar for merchants and purchasing departments to take this ruler. For example, Shanghai Rui general merchandise is very unique, but the brand is too high and the audience is too narrow.

IziRetail thinks that in the aspect of brand combination, we should follow a "28 law", that is, 80% of the brand should be the brand that the target customer can recognize, 20% can be the brand that just entered the market, and the 80% brand can also reflect the differentiation of our store with different shop forms.

Some excellent department stores in Europe, based on the purchase system, introduce brands that meet their own positioning and refuse mediocrity, so as to avoid being reduced to imitation.

These department stores are brave enough to stick to themselves and create a classic that can not be imitated.

The creative design of buildings and the classic idea of pursuing centuries of inheritance are another core element of business philosophy.

Most of the department stores in the country have been criticized by a real estate developer in Hongkong for being "building rubbish". Although the comments are somewhat extreme, most of the department stores lack soul and creativity. The buildings and the interior are serious. The Logo can hardly identify the differences between Wangfujing stores in the whole country, and even the difference between Parkson and Yintai can not be identified.

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Most of the department stores in Europe are positioned accurately, serving local residents or tourists, serving the wealthy or the middle class, with clear positioning.

Department stores are also very strict in selecting brands, once they have established cooperation.

It will create a stable business environment for the brand, and rarely change the position of the brand arbitrarily during the contract period. There are too many uncertainties in the domestic business environment.

In addition, the employees of European department stores are relatively stable, so that the style and location of department stores can be extended.

Another feature of European department stores is the magnificent display and display.

The same brand has different products and exhibitions in different department stores. Different goods correspond to different displays, different displays reflect different themes, different themes tell different stories, and finally different stories attract different customers.

Everything is so natural and logical.

In such an environment, customers do not buy for buying, but because they are attracted and moved.

Silent communication triggers the most primitive movement, arousing customers' thirst for a better life.

Buying behavior is no longer a mere materialistic desire, but a yearning for beauty.

The analogy is that a department store is similar to a park. It is the place where people spend their time. Disney park attracts children centered customers. Universal studios are attracted by Hollywood movie fans. Ocean Park attracts customers who are passionate about nature and irritating sports.

There should be similar themes in department stores.

Our domestic department stores lack much in the theme building, they realize the importance of creative marketing, but the problem is follow suit and similarity. For example, no matter what their location is, they want to start exhibitions of rhubarb duck, Transformers, Snoopy, pandas, Dora A dream and so on at the door, so that they can attract people. But such a simple replication may increase passenger flow in the short term, and in the long run, it will not help to recruit new core customers for department stores.

In the voice of China's traditional department stores, the cases of excellent European department stores are believed to give more inspiration and thinking to the vast number of friends engaged in the department store industry. The department store mode is still developing healthfully in the global scope. The mode itself has not been exhausted, and it is the extensive management mode that the vast majority of department stores in China need to adjust at present.

If we want to discuss how to find a favorable topic in adversity, there is not a universal plan that can be applied everywhere. From the aspects of the improvement of the property environment, the optimization of category combination, the improvement of marketing, and the management of customer relationship, we can enumerate various dimensions.

The optimization of a specific project needs to be discussed in combination with the project and the characteristics of the local market.

It is gratifying to note that some domestic department stores' friends are already on the road to success, so long as they are in the right direction, they will arrive at the goal of magnificent pformation sooner or later.