U.S. Bond Losses After Pformation O2O Is Still Normal.

Does the United States have "norm"?

Old customers are far away from growing up, and young customers have their hearts in mind. The products and brands of Smith Barney are becoming increasingly unattractive.

In 2014, the United States was forced to close nearly 800 stores as inventories rose to 31 million 425 thousand.

In July this year, the United States issued a fixed increase fund-raising plan, to raise 9 billion yuan, to do a whole channel platform, will carry out O2O to the end.

This is the third time in the United States of America's "O2O".

Traditional old problems, can new methods solve them?

Inventory problems caused by congenital genes

From the end of 1990s to about 2010, China's garment industry has experienced rapid development. In some years, the net profit growth of the United States has reached 600%.

But everything changed since 2010, and the size of Smith Barney's stock suddenly increased from 900 million yuan at the beginning of the year to 2 billion 548 million yuan at the end of the year.

The most direct manifestation of all this is inventory.

The reason for inventory is more production or less sales.

Production is much more wrong for the market, while selling less means that the designer of clothing consumers do not like, can not meet the needs of consumers.

Both of them are related to the mechanism behind the US state.

At the beginning of its creation, the model of Smith Barney was very similar to that of Nike. At that time, there was a popular name, called "light company".

As a result, virtual operation has become the way of the development of the United States: outsourcing the two links of garment production and sales, leaving only the core part of the company, including product design, brand promotion and a small number of Direct stores.

Because there are very few direct outlets, expansion and sales depend on franchisees, so ordering will become the core of all work.

The United States has 4 orders each year. The meeting time is usually 6~8 months before the clothing market.

For example, the United States is preparing for next spring clothing orders.

The order will normally run for 2~4 weeks, and the participants will have franchisees and company executives.

At the order meeting, Smith Barney will show more than 100 designers' styles of clothing design, and then decide by franchisees which styles to produce and how much each style and model each produces.

This means that the power of clothing production planning and style design is in the hands of franchisees.

The advantage of this mode is that the risk is borne by the franchisee, and the style and quantity are determined by the distributor. They need to buy their own garments with cash.

And according to the request of the United States, franchisees need to sign a 3 year agreement, and the annual volume must be increased by 25%.

American Apparel is ordered by franchisees and then reproduced.

In theory, such a mode should not generate inventories.

However, from the end of 1990s to 2010, the market grew rapidly, and the US and the franchisees had formed a habit of rapid growth.

Each year, the board of directors and the Finance Department of the United States and the United States will set a target of 30% growth and then produce it according to this standard.

In the year when clothing sales soared, it seemed that there was no problem.

Even with a small amount of inventory, it is negligible in the face of huge profits.

In 2008, the US bond listed on A shares, and chairman Zhou Chengjian jumped to fifth place in China's richest list.

As the market slows down, the US state's aggressive production plan starts to go wrong.

With the franchisee fleeing, the US stock began to surge.

Although we have realized the possible changes in the market, there is inertia in the operation of enterprises.

In the past, the market grew by more than 30% every year, and human resources and production plans were made according to the growth of 30%.

The inventory problem is solved year after year.

Can I learn ZARA?

The United States has seen the problem and is adjusting accordingly, and the direction of adjustment is ZARA.

This is different from that of Smith Barney's 4 annual order meeting, ZARA.

It is a small quantity of production and quickly updated, every two weeks will update a batch of products, and then will not sell products quickly discounted sales.

Chinese garment enterprises tend to mass production and update products in the 3 month cycle.

ZARA also has a complete set of "buyer system". Most of these buyers are senior practitioners in fashion industry. They participate in fashion week all year round to understand the latest fashion trends and fashion elements, and feed them back to the ZARA design department to guide the design.

In comparison, Mei Bang sends designers to buy two costumes every year in Europe, Japan and Korea and Hongkong.

Because the production time of cloth is very long, the production cycle of clothing is usually 60~80 days.

If some clothing has been sold well, it has become a "heroic single product". It will be too late to replenish the goods.

Before next season's clothing arrives, stores may be faced with no goods to sell.

Therefore, China's clothing enterprises tend to produce more, and franchisees tend to take more goods, because they can not be sold, and they can also sell at a discount.

However, the sales situation of these two years is relatively poor, so the whole industry has backlog a large number of stocks.

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ZARA will send a batch of new clothes in two weeks, and will not face the possibility of breaking goods.

According to the understanding of American state, ZARA enterprises are like ordering orders every day.

The slow speed of the United States is not only slow in design and production, but also slower in information feedback.

For example, ZARA is a fall series. Each style only sends three or four shirts or jackets to a store. There are very few spare stocks, and the super small or medium size will not be left.

If customers need it, store managers can apply for multiple shipments.

They also record the reactions of customers, see what they buy, what they do not buy, and what they say to the salesperson.

Now, the United States has begun to try to send some new products to stores every week, and try to improve the supply chain gradually by upgrading the speed of some categories (such as shoes).

Conflict between direct operation and franchise

The channel of the United States is a compound channel mode, which is mainly composed of "Direct stores + franchised stores", as well as agency mode, and special channels for stock products.

This kind of channel management is more difficult in terms of complexity and reaction cycle, and the "compound channel mode" is also the important reason for high inventory.

The compound channel mode reflects that there is no mechanism of inventory control between franchisees, agents and enterprises.

Not the harsh 15%~20% return rate and replacement rate make the franchisees and agents do not have too strong motivation for inventory control.

In the general data of China's fast fashion industry, sales and sales are even better than 60%~70%.

The number of ZARA can be maintained at over 85%, and inventory control capacity is over 20% of the fast fashion companies in China.

In order to learn more like this, Smith Barney started to push the store directly at the cost of 5 times higher than the franchisee.

In the month of 2009 5~6, the United States opened 3 flagship stores in the country with an area of 5000 square meters, much larger than most of the flagship stores under 2000 square meters in the past.

Soon, the revenue of the battalion stores accounted for half of the total, but the contradiction between franchisees and direct stores also appeared quickly.

In 2011, when the franchisee's inventory became a problem that must be addressed, the United States offered preferential subsidies to franchisees.

The franchisee can sell 20 percent off of the goods in the specified ten days, and the United States will grant 8% of the amount, which means that the franchisee will have to pay 12% of its profits and losses.

But many franchisees reflect that 20 percent off is simply not enough, and the United States direct store not far away is directly below 50 percent off.

This has hurt the franchisee, and the trend of each other has also become more serious in the overall depression of the whole garment industry.

The resentment of franchisees also affects the decision of the United States.

Because the franchisees are looking forward to bursting money, Smith Barney will choose more garments for each garment so as to prevent them from breaking up.

But the speed of the supply chain is there, and many of the projected explosions become more inventory.

This is exactly what ZARA is trying to avoid.

Any ZARA imitator will be told that keeping low inventory in fast supply chain is the foundation of this mode of profitability.

And ZARA did the same. Even if the prospects were excellent, they would rather not make the money, or mass production or replenishment.

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In fact, there is a good thing to do in this way, that is, consumers do not have to worry about their clothing "rotten Street", which is also the core taste demand and consumption stimulating point of the 90s crowd.

The Chinese enterprises that have consistently pursued their own efforts often understand this, but they can not avoid the temptation of short-term interests.

O2O and App

In 2014, Zhou Chengjian was still emphasizing learning from ZARA.

But now it seems that he has changed a teacher.

The new direction that Zhou Chengjian finds for us is O2O, which is the combination of entity stores and e-commerce.

In 2013, Smith Barney closed some franchises and opened more than 1000 direct outlets.

The purpose of doing this is to solve the game between past franchisees and direct stores through ZARA, and to plan for the O2O experience store on the other hand.

In addition, the United States will also independently operate two years of electronic business platform purchase network to return to the body of listed companies.

Consumers can log on to the electronic commerce platform of Mei Bang to view products and make an appointment for fitting through mobile phones.

Moreover, there are shop assistants to complete the corresponding clothing matching.

Do not want to buy clothes shopping, you can also order online, express home.

Of course, you can also place orders directly in the online store and pick up the goods in the physical store.

This is a new business model for the clothing industry, but it is not a new concept for China's retail industry. Suning, another practitioner of O2O, is also telling a similar story in a high-profile manner.

The key to O2O is to really attract people who like online shopping to get out of their homes.

Zhou Chengjian's way is to completely redecorate the shop.

The flagship store in Hangzhou is the first pformed shop in the United States. It has now become a "central station style". The hall has been pformed into a waiting hall, and the fitting room has been designed as a train compartment.

This is only one of them. The United States plan to design each experience store into different styles, "one city, one culture, one shop and one theme".

Each shop has leisure facilities such as a gallery, coffee bar and garden terrace, and provides free Wi-Fi to facilitate customers to rest and surf the Internet.

This ideal blueprint looks beautiful, but in practice, it has really become an ideal.

Huang Xi, the manager of the O2O experience store in Chongqing's Monument for Liberation, once said: "in the past two years, a store like O2O is not making money, usually for signs."

In April this year, the United States also launched a "fan" App.

Here, users can not only quickly and conveniently buy clothes that they need, but also make clothes that they like.

Splicing, making fashion sense pictures and sharing them on the platform.

If they are put on the advice, they can get the corresponding income sharing.

At present, the "fan" platform has signed many foreign brands, but unlike other similar services, it has different links to the third party e-commerce platform.

But does this "fan" really win customers? It seems that only one data is enough to embarrass the United States.

From the current App display data, Adidas brand has only 116 pieces on its shelves, but its number has exceeded 90000 times.

On the contrary, ME&CITY, the most popular subbrand in the United States, has nearly 4000 items on its shelves and only 70000 hits.

The embarrassment of host guest shift may be the beginning of the "Internet +" model of the US state.

For the United States, whose brand has become old, it is not realistic to expect this App brand and user participation mechanism to enhance the customer stickiness and drive the sales of free products.

Playing the "fan" card actually reflects the change of thinking in the innovation of the United States.

However, this still hasn't really realized the customization feeling similar to ZARA.

The generation gap between the US and the core consumer groups is still widening.

Leadership rendered ineffectual by recalcitrant subordinates

The United States is still working hard, but efforts need more money.

In July, the United States is expected to increase by 9 billion yuan to boost O2O.

In the 9 billion yuan use planning, 2 billion 500 million yuan will be used for the construction of the "intelligent manufacturing" industrial supply chain platform, 6 billion yuan for the O2O all channel platform construction, and 500 million yuan for the construction of the Internet big data cloud platform center.

The key is "intelligent manufacturing", but the United States does not elaborate on this. It seems to be able to measure the user data returned by the O2O channel through big data, understand the fashion trend more quickly, and quickly promote product updates, so as to achieve a fast thinking in the Internet age.

In fact, this is the Internet expression of ZARA fast fashion mode. How can intelligence be built?

For a company that sells over $10 billion, changing inertia is not so easy.

Zhou Chengjian discovered in 2011 that the company needed to pform, but it did not begin to really adjust until October 2012.

How to make the brand more clear and focus becomes a problem that the United States needs to solve as soon as possible.

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Comment:

Customer centralization is the best policy

Wen / Li Yujie, general manager of Beijing Consulting Co., Ltd.

We often talk about business models, but what is the business model? For the clothing industry, in fact, it is answering a question -- how do you satisfy the needs of customers?

The operation mode of American bond can be summarized as "virtual operation + endorsement". Even though "life experience Museum + American bond App" has been put forward for 2 years, it obviously has not become the mainstream.

How does the United States meet the needs of customers? Answer: design products, outsourced processing, sell in the shop which is mainly based on agents, constantly introduce image spokesmen, and name variety shows to enhance brand attention.

Now we are going to put

The main store sale is replaced by "selling App online in experiential shops".

But do you really think that pformation is the way to break through the predicament of three consecutive years of loss? I predict that the "O2O pformation" of the United States seems to be on the wall.

The reason is very simple. First of all, the so-called breakthrough is not a real breakthrough, and the product centralization mode remains the consistent mode of the United States.

Secondly, when we talk about "meeting customer needs", it means that we need to understand customer needs first. Is "life experience Museum + American bond App" really a demand or potential demand of US state customers?

With the development of the traditional garment industry, we can say that the strategy of more than 99% of enterprises is the same as that of the United States.

All strategic advantages are based on products and the product experts behind them. Departments and teams set up products around them, creating new products or selling products, which determines the number of awards they receive.

In the long run, enterprises should focus on strengthening product lines and constantly finding new ways to expand. Brands are considered to be more valuable than customers.

For three consecutive years, Smith Barney has told them that the strategy has lagged behind the times.

The environment is always changing. If your consciousness and strategy do not change, it is inevitable to be eliminated. No matter how big you are, think about NOKIA.

In fact, the endless problems within the company, as well as the external whizzing and rolling crisis are all appearances, but the inevitable result of the backward strategy of enterprises.

If we do not solve the fundamental problem before we get into the whirlpool of the problem, we will only be submerged by the sediment.

How should we get out of the predicament? Customer centralization.

Customer centralization is a strategy that combines the development and delivery of products and services with the current and future needs of selected customers, so that these customers maximize the long-term economic value of the company.

Fundamentally, not all customers are the same. They are committed to identifying the most important customers and willing to invest a lot of resources.

Not only to understand what these customers want, but also to deliver what they want, so as to create a stable, profitable and profitable future.

Another important question: will O2O become a good way for Chinese traditional clothing enterprises to overcome their difficulties?

Take the United States as an example. In the future, through trial and error, the number of experience shops will no longer grow blindly. The state purchase network and App will eventually be found to be "chicken ribs". The third party electronic platforms (Tmall and Jingdong) will not be able to go around in the end.

Mobile e-commerce seems to be a breakthrough, but the growth rate is still lower than the average.

The final result is not very different from the non pformation if the American state is out of the strategic level and the so-called "O2O pformation".

I wonder if the owner of American state will really cry out in his heart, "what do I take to save you? My American state", but it really needs to be saved.

Even now that self run stores, especially ME&CITY, have the tendency to grow counter trend, the proportion is too small for the US and the state.

If O2O pformation turns out to be the second miracle of the United States, then I can only say that the fate God really cares about it.

In the final analysis, only by solving the fundamental problem of "meeting customer needs and potential needs" is the only way out for traditional clothing enterprises to be reborn and break through.

Without the "customer centralization" awareness and the implementation of the strategy, the garment enterprises will be defeated in the subsequent competition.

To be precise, it is not to be defeated, but to be marginalized.