Clothing Brand Crazy Discount Pain

　　 Gap And Abercrombie&Fitch are facing a vicious circle.

When the brand is on the decline, these retailers have a common character: Crazy discount.

A new report from Credit Suisse highlighted these problems: "Gap and Abercrombie are high-frequency discount brand retailers in our price tracking, both of which are heavily dependent on very many discount promotions to stimulate consumer demand," the analyst wrote.

"Gap stores sell 31% less than the original price, while Abercrombie stores sell 25% less. The discount rates of the two companies are 13% lower than the average selling price of the average retailers. "Analysts are based on data from the discount sale prices of all brands in the homecoming season.

The report shows that over the past 18 months, the two companies have more than 50% discount each month. The discount sign of Gap retail store has made the brand fall into a discount circle. People are obviously used to the discount period of these brands; Gap's CEO Art Peck also mentioned this problem at the May earnings conference. He specifically referred to the troubled Banana Republic, comparing it to a "Coward game".

Credit Suisse said that such a commercial structure is based on the "high and low price mode" commonly used by small brand clothing retailers, which may lead to losing more of these brands. Clothing market Share.

In fact, from the point of view of the brand business, Gap has already felt the torment of these quarters. Sales of brands under the clothing retail companies: Gap, Old Navy and Banana Republic have fallen by 2% in the second quarter of fiscal 2016. Sales of Banana Republic fell by 9%, Gap fell by 3%, and Old Navy remained flat.

Of course, fast fashion is also the main reason for these brands to get into trouble. Credit Suisse points out that Zara, H&M and especially cheap Primark have led consumers to buy fashionable clothes at a low price.

At the same time, Zara also has a very well-known supply chain that is quick to respond to market changes. The technology behind it is a big data processing center within the brand. This technology gives the brand a very efficient ability to determine which products are consumers' needs and which are likely to be unsalable. Credit Suisse also points out that Zara is reducing its selling price and making it more competitive. Consumers who carry Zara shopping bags are hard to persuade them to return to high-end brands when consumers are accustomed to the high frequency replacement and low price of fast fashion products.

Similarly, when consumers are accustomed to buying brand goods at discounted prices, it is hard for them to find reasons to pay the full price for goods. "When the brand starts to make consumers wait until 30% or 40% of the price is used to buy goods, the only way to turn it around is to let them go through a very small number of fashion clothes and sell them as fast fashion brands as possible, so that these consumers can spend more at the full price of goods," the retail expert told business insight reporters. Abercrombie is also working hard to reverse its brand image. Gap's CEO believes that only one thing can win back the consumer. Clothes & Accessories Pay more: quality goods.

In a recent telephone interview with the company on its earnings report last Thursday, Gap's CEO highly claimed that the brand was able to win more profits from its products. "Therefore, when Gap can regain power and stick to the brand strategy of quality products, we have confidence in the brand commodity that we can redefine commodity prices and pass the quality value of goods from the brand, but at present, we still have a long way to go for our brands," but in fact, for consumers, they may only pay attention to the price performance of clothing.