The Department Store Industry Wants To Get Out Of Embarrassment And Must Find Differentiation.

CEIBS market Professor Wang Gao, a marketing professor, points out that the challenges facing high-end department stores are very representative. The challenges are mainly from several aspects: first, the electricity supplier, whether in terms of selling price or operating cost. Department store Industry and Electronic Commerce There is no advantage compared with the platform, followed by the commercial mode and homogenization competition of the "lazy economy" in the traditional department stores, and finally, the rational consumption trend begins to rise.

[industry's three big mountains]

Department stores integrate into commercial real estate

Before the reform and opening up, department stores implemented the planned economy and placed the leading position in the retail industry. After the reform and opening up, the supermarket chains rose rapidly, and the department store was the first to be hit. Then the traditional planned economy was spanformed into a joint mode, that is, the store was no longer a pure retailer's role, but also integrated into the nature of commercial real estate. As a landlord or "two landlord", physical department stores do not undertake the risk of inventory and sale and spanfer them to the brand dealers in the shopping malls. No matter what the other party's income is, the market itself can have a royalty profit, which is feasible under the prevailing business mode.

Wang Gao pointed out that such a risk free economic model can easily continue to operate if sales are good, and once sales become difficult, rents become a heavy burden. If we do not change our business model, it will be difficult to solve the problem left over for decades.

Commodity structure is biased towards high-end.

Another factor is related to the change and trend of China's consumption structure. "When most of the urban residents' food and clothing problems have been basically solved, people have begun to pursue some spiritual consumption enjoyment. The proportion of money spent on necessities is decreasing, while the demand for heavy quality and brand oriented non essentials is increasing. According to this trend, the department stores tried hard to push their brand structure to the high-end direction, for fear that the price would be cheap and the brand was not big enough, such as the large shopping malls in the Huaihailu Road business circle, they must be a big gathering place. Wang Gao said, but in today's situation, the consumption trend of "rational rise" is becoming more and more significant. The demand for consumers with first-rate luxury brands is no longer frequent. When the gift market is seriously hindered and the demand for big brands continues to decline, the original commodity structure will have a huge impact and negative impact on the operation, bringing considerable pressure to the department store industry.

Homogenization of thousand stores

In addition, the homogenization of the industry is the root cause of the Chinese department store. The stores, brand, price, merchandise structure and even the floor arrangement are very similar. When consumers shop, there is no need to go to other shopping malls. In the context of declining demand, the problem is particularly prominent.

[how to find a way out]

Seize the advantage: experiential shopping

The department store industry in China is a bit embarrassing to this day. It mainly focuses on selling itself as a place of sale. This is exactly the inherent weakness of the entity department store. If it is compared with the price, category and convenience of the electronic business platform, it will undoubtedly attack its own length. If physical department stores continue to develop in the right direction, they must find their own advantages. And this advantage is undoubtedly experiential shopping.

Wang Gao has set up a typical case of traditional business spanformation experiential shopping, that is, the brand "Eataly", which was sold in Turin, Italy, and sold all the original flavor of Italy food. Now it has a high popularity and momentum in Europe and America. "It's really just a shopping mall, but it's not the traditional impression of buying a car, food and daily necessities. On the premise that the food supply is very complete, customers can buy the chef to enjoy the cooking on the spot, and also enjoy the spot ordering, plus the colorful food and flavour after entering the door, which can easily arouse consumers' appetite and purchase desire. Wang Gao pointed out that this is an extension of the "fitting room" function of a physical store, where customers can try not only to try on, but also to see how others are dressed and what other people are wearing. In such a series of linkage stimulation, we can better wake up consumer demand and consolidate customer groups.

Changing business: making differentiation

Wang Gao believes that if we want to improve the status of thousands of stores, department stores must find different ways of management, and we can start thinking about developing our own buyer organizations.

"In the Western department store industry, buyer is the most critical functional department. What kind of goods are purchased is decided by itself. Although the risk of inventory and sales pressure needs to be borne, the purchasing cost will be relatively low, and the price can be adjusted according to the overall operation. Even if seasonal and holiday activities are depreciating, there will still be relatively large profit margins."

Step by step, if we can not completely change the business model, we can consider the intervention of brands, participate in the selection of store brands and commodities, and match the positioning of customer groups on the basis of the existing joint mode. At present, even if we only consider the central business circle, there are ten general merchandise stores in Lin Lin, and it is really not difficult to achieve the characteristics of families. But Wang Gao believes that, though difficult, it must be done: "China's department stores will be faced with a revolution. Simply thinking about making easy money has not been easy, making differentiation and service experience can be welcomed, and this shopping mall is full of vitality."