Even The Department Stores Have Opened A Discount Shop. What Are The Secrets Behind It?

The two word "price reduction" is inherently possessed by a certain kind of magic, allowing customers to increase their sense of inner pleasure when buying discounted products.

In the economic downturn, discount stores are more crowded, and continue to seize the tradition.

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Moodie (Moody 's), one of the three largest credit Rating firm in the US, gives the latest forecast: Sales of retail outlets will grow 6%-8% in the next five years.

Analyst ChristinaBoni said: "the high passenger flow in the store proves its value."

Industry giant TJX data showed that the 2016 first quarter store sales rate increased by 7% over the same period last year.

The latest results of NPD, the research firm, have also delighted these shops - nearly 2/3 of customers now choose to shop at reduced prices.

More than half of the respondents were over 45 years old, and second adults were 25-34 years old.

Most of them are not one.

Or the loyal customers of the shop do not care too much whether the clothes purchased are seasonal or not.

In the year ending April 2016, the sales of discount stores increased by 4% over the same period last year, and half of the customers would spend on the spot.

"Today, fashion trends are not as important as they used to be.

We are more concerned about the way we wear in our daily life rather than ourselves in the color, pattern, tailoring and profile. "

NPD, chief industry analyst at MarshalCohen, said in an interview with the women's wear daily, "therefore, the focus of shopping becomes natural demand and preferential price."

A similar point of view is KurtSalmon, partner and director of retail strategy, ArnoldAronson.

"In the final analysis, people's demand for clothes is far greater than their desires."

He said, "unless it is a very attractive new garment that can not be bought, customers will not be willing to pay for it."

According to statistics from the Royal Bank of Canada capital market statistics (RBCCapitalMarkets), the sale of the costumes in 2015 was $45 billion (about 298 billion 990 million yuan), up 40% from 2009.

Its TJX, which owns T.J.Maxx and Marshalls, accounts for 43% of the price reduction industry, and Ross, Burlington and NordstromRack are regarded as the four largest diamond companies.

In 2014, TJX set a milestone: its annual revenue exceeds Macy 's department store.

Seeing that the sales momentum is good, retailers have agreed to expand their stores.

TJX plans to increase the number of stores from 2163 to 2223 this year; Ross is going to add 90 stores; Burlington expects to open 25 stores in the 2016 fiscal year, and NordRacks will soon open 15 new ones.

"From the sales growth rate, the discount shop is second only to the electricity supplier."

MarshalCohen, chief industry analyst at NPD, said: "they are stealing customers who belonged to department stores."

The game between the two has reversed in the past ten years.

At the beginning, the department stores requested manufacturers to promote sales at the end of the season, and the discount stores would pick up the remaining items after the promotional activities, and on that basis, cut the price again.

Today, TJX, Ross goods are basically directly from the manufacturers, quality, type and inventory can almost match the department store.

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Since 2016, Macy 's has closed 36 family stores.

Since people's consumption habits have changed and are likely to continue in the next few years, traditional department stores including Saks, Kohl 's and Bloomingdale' s are correspondingly.

In order to catch up with customers, Macy's launched a discount shop Macy 'sBackstage last year.

Its core strategic idea is to attract the millennial generation at a discount price, and then encourage them to go to full price shops in the future.

In MarshalCohen's view, the biggest difficulty is to deal with the boundary well, "how to control inventory and avoid profit erosion".