Recently, COACH Closed Its Tmall Flagship Store.

Once again, it closed down.

Flagship store.

This is not the first time COACH has returned from Tmall.

As early as 2011, COACH rushed to close after a month's operation in Tmall.

According to COACH's closing shop argument, according to the agreement with Tmall, COACH only set a one month operation period (December 12, 2011 to January 15, 2012), so it does not involve so-called "shut down" and "abort".

In fact, COACH has been under the management strategy in recent years.

The double influence of the environment leads to the confusion of its authorized channels, and its products are conservative but can not keep up with the times.

It is worth noting that, in the exploration of electricity providers, COACH has been wavering and lagging far behind other luxury brands.

Mou Qing, senior vice president, said that the first challenge facing the international luxury brands such as COACH is pricing. The difference between domestic and foreign prices is obvious; secondly, the products allocated to the Chinese market are limited by brand headquarters.

Although the Chinese market is strategically emphasized, there are still many specific difficulties in specific commodity layout and stockpiling support, making it far from the brand image in China and the international series of images.

Third, the international light luxury brand has limited understanding of the domestic electricity supplier environment and online shopping consumer behavior, and there are many localization problems to be solved.

Why is it separated from Tmall?

From COACH's earnings report, we can clearly see its sales in recent years.

By the end of July 2, 2016, COACH announced its fourth quarter results, although COACH's fourth quarter sales increased by 15% to $1 billion 150 million at a constant exchange rate, but far below the 1 billion 170 million dollar forecast of Thomson Reuters.

From the longer term data, the analysis of COACH financial year 2015 financial report shows that the day of the brand is really not very good.

According to the 2015 fiscal year report, COACH net sales fell from 4 billion 860 million yuan in 2014 to 4 billion 190 million yuan, while total profit fell from $3 billion 300 million to $2 billion 910 million.

2016 COACH third quarter financial report shows that net profit also decreased from last year's US $390 million to US $379 million.

In recent years, COACH is facing a sharp shrinkage in both sales and profits, so the brand is also expanding its sales through e-commerce channels.

Actually, this is not the first time COACH has returned from Tmall.

As early as 2011, COACH rushed to close after a month's operation in Tmall.

According to COACH's closing shop argument, according to the agreement with Tmall, COACH only set a one month operation period (December 12, 2011 to January 15, 2012), so it does not involve so-called "shut down" and "abort".

So what happened this time?

In fact, in 2009, the official website of COACH was already online, but there was no product sales function at that time, it was only used for new product display and brand exposure.

After COACH Tmall flagship store tested water for a month, its official website launched its shopping function.

At that time, many people thought that the purpose of the "stealing teacher" was to build an electronic business platform.

For the operation and promotion of self built platform, Tmall flagship store can not be compared.

On the official micro-blog of COACH, most of the purchase links of the shopping guide have been pferred to the official website of COACH.

And some new models can only be purchased on the official website, such as the new Disney products series.

"The official website products are more complete and the new products are on the line, but most of Tmall is off season or inventory," a senior buyer of COACH said.

On the one hand, they put their energy and traffic on the official website, and the Tmall store was neglected. On the other hand, a large number of distributors and purchasing agents also pressed the living space of the "imperial palace goddess".

The online search engine of the electricity supplier searches for the keyword "COACH" in Tmall. The top ranking of search results is the store opened by a large number of distributors, such as the flagship store, the official de flagship store, the official flagship store of Wangfujing department store, and so on. The sales volume of its single item is far more than that of the COACH official flagship store.

COACH's own channel management is chaotic, resulting in some direct or indirect authorized shops selling in Tmall and pricing confusion.

Is aunt brand already OUT?

In fact, a netizen posted a post about "Kate spade, Tory burch, COACH who you have chosen?" most netizens ranked COACH at the end.

When the fast fashion, light luxury brands such as Kate spade, Tory burch, Furla and so on began to challenge the old brand luxury brand COACH with a variety of styles, the latter became "aunt brand" slowly because of "too conservative".

Although COACH is also trying to reverse the current situation, it seems too late.

COACH's third quarter 2016 earnings report showed that net income in the third quarter was $113 million, compared with $88 million 100 thousand in the same period last year, up 27.7% from the same period last year.

Victor Luis, chief executive of COACH, has said that the rise in revenue has benefited from previous brand pformation, and the strategy has made good progress in the three categories of products, stores and marketing.

However, it can be clearly seen from the earnings report that the growth of COACH turnover is mainly due to the acquisition of shoe brand Stuart Weitzma, and profits are still falling.

According to the analysis of the insiders, many luxury magnates make mistakes in this regard. They use the brand reputation to expand their businesses blindly and retain customers with discounts. The negative effect is that consumers will no longer pay for the positive handbags.

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Of course, the sharp drop in profits has also been affected by some external factors.

Among them, COACH's 2015 financial year's earnings report in the part of the brand risk clearly points out: first of all, changes in the foreign exchange rate, which will affect the retail price of products, resulting in the annual decrease of international consumption and demand. At this time, the stock will continue to increase the supply cost, so the gross margin rate will inevitably receive negative effects. Secondly, the instability of the political economy and the changing macro-economy are also affecting the market of COACH sales. Thirdly, the worldwide anti corruption and anti bribery are also affecting the sales of products. Besides, it is worth noting that the popularity of outbound tourism with China as the main factor also gives users more choices than COACH.

Luxury brands are not suitable for electricity providers?

"From a user perspective, what is the difference between Chinese users who are willing to pay 50% or more above the retail price in a narrow range of products?" Mou said.

COACH's official flagship store offers almost no discount.

Previously, reporters had seen the promotional pages of COACH on Juhuasuan's Poly product channel, but the participating businesses were not flagship stores, but Wangfujing department stores.

Juhuasuan related small two said that COACH products mostly participate in sales promotion.

The price of its Tmall shop is the same as that of offline stores, and its sales are mostly over season.

The same price, few styles, compared to the users will be more willing to go to the shopping mall.

After all, a store can give consumers a sense of superiority in the consumption of famous stores.

It can be seen that prices and products determine the limitations of online luxury brands.

Mou Qing believes that the inventory allocated by the brand headquarters to the Chinese market is limited, which is optimistic about China. But it also worries about the small proportion of electricity supplier sales and inconsistency in input and output.

"The decisions and communication time of luxury brands are very long, but the Chinese market is changing very fast, and their decisions often take several years to implement."

Another important reason is that it is difficult to solve the problem of localization of luxury brands.

The international brand has limited understanding of the domestic electricity supplier environment and online shopping habits, and it needs a long time to explore.