Fashion Brands Carry Out Corresponding Strategic Adjustment At The Right Time.

In the past 10 years, countless brands have mushroomed like wild mushrooms and plundered resources and consumers in various markets.

Today let us count the brands that were once and now barbarous, and we can also get some inspiration from the rise and fall of these brands.

What is barbaric growth?

In this era of consumption and information explosion, it is not surprising that we should grow vigorously through the east wind.

Over the past more than 10 years, the growth of the fashion industry has mainly focused on three major trends: fast fashion, light luxury and sports.

It is these three trends that make the annual growth rate of several strong brands at a high level, even startling.

Let's talk about fast fashion.

Fast fashion has almost entered every household. As a brand of parity, it can be said to be a big kill in the last ten years.

Now any shopping center, or even a luxury store, is going to be fast

In order to attract people's traffic.

The picture below shows sales growth of UNIQLO, Zara and H&M from 2004 to 2014.

As you can see from the chart, the highest annual growth rate can reach 25%. In 2011 and 2012, three fast fashion brands began to run horses in the Chinese market, and continuously increased sales with growth stores.

But the barbaric growth of stores is also a decline in single store sales. Taking H&M as an example, as shown in the figure below, the single store sales of H&M have shown a downward trend since 2008, but this has not affected the brand's determination to continue to expand rapidly.

Because for the mass brand, there is no worry about overexposure and low price affecting brand image. Only by covering the masses of consumers can we have a place in the competitive brand.

The most luxurious growth is Coach and MichaelKors.

Since its listing in 2011, MichaelKors has attracted 50% people's growth rate over the past four years, even though the current growth rate has dropped to 32%.

Coach has also created an astonishing record of over six consecutive years of growth of over 20%.

However, some analysts pointed out that the former Coach would be the MichaelKors of the future. The red fried chicken in those days was bound to usher in a sharp recession in a few years.

After all, light luxury is different from fast fashion. As long as there is a brand premium, the problem of low price and over exposure will exist, resulting in additional damage to brand image.

Take Coach as an example, according to common sense, sales and profit growth should bring about the increase of gross profit margin, but the gross profit margin of Coach began to decline in 2008 (as shown below), indicating that since 2008, Coach has begun to use discount sales promotion to attract consumers.

Finally, the gross profit margin of Coach fell to 71.9% in 2009. (the figure above shows that the sales growth rate of Coach in 2009 is almost zero, which explains why the brand will start sales in 2009. After that, it has maintained this level for 5 years, and finally, sales began to decline in 2013.

It can be seen that Coach's 5 year discount sales promotion strategy has made the brand's pot pot full, and its sales have gradually returned to light.

But in the past 5 years, too, the brand image has been overdrawn, and consumers have begun to lose.

Therefore, it can be seen that if the luxury brands rely on discount sales to serve consumers, the life cycle will be only 5 years.

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Similarly, although MichaelKors continues to maintain an alarming growth rate, gross profit margins began to decline this year, indicating that a large number of consumers have started buying discount MK. If other external conditions and Coach are the same, then the time left for MichaelKors will be the next 5 years. Therefore, it is a conservative estimate that in 2020, sales of MichaelKors began to decline.

But as the brand competition intensifies, the brand life cycle will be even shorter.

And stock analysts seem to have anticipated this, so there is a very interesting phenomenon. Although MichaelKors can still maintain an annual growth rate of more than 30%, its stock continues to fall.

Fast fashion and light luxury have grown enough barbarism, especially the annual growth rate of 30%-60% is enough to match that of Apple Corp.

But this is not the highest standard in the fashion industry.

By contrast, the growth of sports brands can be regarded as unreasonable.

The sports brand here is neither Nike nor Adidas.

Here are the brands that are eyeing Nike and Adidas, such as UA and Lululemon.

Let's start with a sales growth rate of UA and Lululemon in the past 10 years.

Yes, you are not mistaken. Lululemon grew by more than 100% in 2006. In the next two years, it continued to grow 77% and 84%.

UA is relatively stable, and has a rise and fall in a certain range.

Rather than UA for the first time in 2014, the growth rate exceeds Lululemon for the first time, rather than Lululemon falling to UA.

In fact, there are many similarities between the two brands. They all rely on sportswear. They all have high popularity in North America. They are all driven by the star effect.

But product positioning is destined for Lululemon's stamina.

Unlike UA's location, Lululemon is the main player.

Most of the influential stars are women, so since the establishment of the brand in 2000, they have won the favor of many female consumers in a short period of time, relying on yoga, weight loss and weight loss, and then gradually accepted by men's athletes.

UA, on the contrary, starts using the beast like muscle lines to evoke the wildness of every athlete from the gym, and now UA is also expanding.

The line tries to influence women with male players.

As a sports brand, it is easier to extend women's clothing from men's clothing than men's clothing.

Therefore, if the two markets coincide, it will be much easier for UA to grab the market share of Lululemon.

Writing here, I can not help but look at the latest data of Lululemon. Its sales in the same quarter in the first quarter of fiscal year 2016 have begun to decline, but it is gratifying to note that the sales volume of the brand electricity suppliers has increased linearly, which is undoubtedly a good way to cover more consumers.

A brief analysis of these rapidly growing brands shows some clues.

The growth of a brand can not be separated from the east wind. The rise and fall of each brand, brand cycle and influence factors are quite different. As a brand, what can be done is to maintain an objective and calm analysis in high-speed growth, find causal relationship in historical data, and make corresponding strategic adjustment at the right time.

As consumers, just be happy to consume.