Even Gucci Is Trying To Curry Favor With Young People. What Does Fast Fashion Company Do?

Last month,

The giant H&M group announced that it will soon launch a new retail brand called Arket, which will provide basic products for men, women, children and families. The price will be slightly higher than that of the group's core H&M brand.

In addition, Arket will also have a "New Nordic" gastronomic cuisine cafe, making this modern store an ideal destination for shopping and eating.

Probably the main products of the company are less and less powerful. H&M can only promote the new brand to restore the bleak performance.

In the past year, the sales volume of H&M group has increased by 7%, but gross profit margin has dropped from 59.5% in 2012 to 55.2%, and the operating profit rate has decreased from 18.01% to 12.4%. Two indicators are the lowest level in five years.

"After 80" is old, so fast fashion can not sell?

Since 2016, the number of fast fashion brands in the world has seen growth slack.

Many fast fashion brands, including UNIQLO, H&M, GAP and Mango, reported that their profit growth has declined to varying degrees.

GAP, a clothing retailer in the US, has seen a decline in profits since the first quarter of 2015.

In 2016 alone, GAP closed 75 Old Navy and Banana Republic stores outside North America; GAP's store in Chunxi Road, Chengdu, was closed, the second store opened in Chengdu and opened in 2012.

According to earlier reports of New York Times, Instagram and other social media platforms have put a damper on GAP's experience, and many comments that GAP brand is out of date.

Japan's fast fashion giant UNIQLO also admitted that its net profit of its parent company XXX group 2016 declined by 16.9% compared to the same period last year.

Among them, Japanese domestic performance and overseas market performance based on Greater China were not up to standard, and operating profit decreased by 12.4% and 14.2% respectively.

Spain

The brand Mango is even on thin ice. Its parent company MangoMNGHoldingSL2015 net profit is only 4 million euros in the fiscal year, down 96% compared with the previous year.

Zara seems to be better.

As of July 31, 2016, the total sales volume of Zara parent company Inditex was about 10 billion 500 million euros, up by 11% compared with the same period last year, with net profit reaching 1 billion 260 million euros, of which Zara contributed 66.5% of sales.

But the situation is also not optimistic: since last year's 3 months, Zara is reducing the number of new stores every year and intends to slow down the expansion rate. The annual new store area plan has been reduced from 6% to 8% from 8% to 10%.

The excessive expansion speed and price increase will eventually lead to an increase in product inventories and a decline in gross margins.

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In the past few years, fast fashion has always been a limitless sight.

In 2006, the first fast fashion brand Zara entered China, began to enter the Chinese market vigorously (ZARA 2006 entered the Chinese market, followed by H&M in 2007, and 2010 also came to the GAP). In the retail market dominated by department stores and supermarkets, huge waves broke out.

In addition, the extremely fast product update speed meets the "80's" mentality of pursuing fashion and novelty.

But after a flash of over 10 years, after the 1980s, most of the fast fashion brands were plunged into the mire of "declining performance" after they entered the age of 30.

Fast fashion or fast?

Online shop has been rapidly developed by net red.

In 2016, known as the "net red year", the anchors and live broadcasting platforms have been growing blowout. The annual income of the first line network has been even tens of millions, and these 70% large and small red nets all have Taobao stores: clothing, shoes, cosmetics and so on.

In the Taobao Platform 2015's "women's clothing C store annual sales ranking", half of the top 10 are net red shops.

The rise of the electricity supplier has changed the way people live. Nowadays most of the Chinese people rely on online payment and online shopping.

Net red explosive force unexpectedly, business operation mode is also more mature.

The sales volume of these net red shops is even more amazing. Almost all sales of clothing are over 10000, which has caused great pressure on fast fashion brands.

Zhang Dayi, who is the first person in the business network, opened a Taobao store. It had five crowns in a year and a turnover of nearly 2 in 2 hours. The sales volume of new days was over 60 million in a single week, and the annual sales volume was over 300 million. It was rumored that it earned more than Fan Bingbing.

Last year, double eleven, Zhang Dayi through micro-blog live two pronged, Taobao store performance record again, the average passenger price reached 2000 yuan, double eleven turnover amounted to 1.2 billion yuan.

When prices are almost the same and the quality is almost the same, with those who are bright and tall, the net red people are advocacy, and of course people tend to buy those "net red".

Fast fashion "quality" is hard.

Another reason for the decline of fast fashion is to pay attention to speed but neglect quality.

In order to attract people to buy, fast fashion brands often have promotional activities.

Many consumers take this point, basically follow the principle of "no discount, no clothes".

Because the fast fashion update cycle is relatively short, almost every week there will be new products on the shelves, and last week's stock can only be promoted to sell at a low price, many of the original price of 70 euros or so jacket after discount can usually be reduced to about 30 euro.

In order to maintain a high speed of renewal, retailers seem to be losing control over the quality of clothes.

ZARA, H&M, GAP and other brands in China have repeatedly fallen into the door of quality, which is a frequent visitor on the blacklist of the industrial and commercial and quality inspection departments.

From 2012 to 2015, a total of 30 items of H&M were notified.

UNIQLO was also fined nearly one million yuan in 2015 because it continued to sell unqualified products.

The pursuit of product renewal speed is important for fast fashion, but with the competition between more and more fast fashion brands, quality has become the magic weapon of winning.

Can only wear a quarter of clothing to keep the hearts of consumers?

Even Gucci is trying to curry favor with young people. What does fast fashion company do?

From the perspective of age structure, the majority of the fast fashion crowd is 26-35 years old, accounting for 51.7%. In addition, 25 and below 00 and 90 are the second groups of fast fashion crowd, accounting for 23.6%, which is 22.3% higher than that of mainstream business people.

After 80 and 90, support the fast fashion buying force.

Carlo Beretta, director of marketing at Gucci, said: "now there is a new shopping behavior in the market. The millennials are more individualistic. They want something unique, not mass produced."

Times are changing, and today's millennials are more young and individual, and individuals who have their own unique ideas.

Consumption is upgrading, they not only consider the cost performance level, to a large extent, they refuse to collide with others, bump shirts.

At the beginning, fast fashion attracted a large number of young consumers who wanted to follow fashion because of its fashionable style and low price. But with the rising prices of fast fashion, the quality that does not match the price, and the "same money" that can be met in all streets, young people naturally don't want to spend the wrong money again.

More and more young people are more interested in trendy cards, hoping that they will become unique when they follow the trend.

According to China's Youthology, a market research expert, in the late 90s, audiences wanted a lifestyle including "material consumption and growing cultural consumption".

More importantly, quality life must be built around individual choice and full of personal characteristics.

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In addition, the relationship between consumers and brands is not deep.

Most fast fashion consumers do not buy clothes because they like this brand, but in the range they can afford, Zara, H&M,

It's the only choice.

Once the relationship between brand and consumer is weakened, consumers will easily lose.

The backbone of the fast fashion consumer group has already been tired of wearing only one season's single product. They have passed the age of pursuing fashion or freshness. What they need is a more low-key and durable clothes.

If fast fashion does not intensify innovation and reconsider its position, it will not escape the fate of being eliminated.

How can we attract young people again?

Launch customized services

This year, UNIQLO's Fast Retailing plan is only 13 days from design to delivery, roughly the same as that of its rival Zara.

Its goal is: by the year August 2021, total revenue increased by nearly 70% to 3 trillion yen ($26 billion).

This new integrated facility will help UNIQLO directly tailor the garment to consumers and improve the delivery efficiency in Tokyo area.

UNIQLO billionaire Tadashi Yanai said UNIQLO sold its products to people's daily lives and launched customized services based on customer feedback.

In the next four years, UNIQLO will open 100 new stores in China and 100 new stores in Southeast Asia each year.

In addition, uniqo wants to automate as much as possible, including tracking products from packaging to delivery, and using artificial intelligence to predict sales patterns.

Development side line

Already has more than 2050 stores in 88 countries worldwide fast fashion brand Zara, in 2003 set up a household product line Zara Home, the new brand soon became the Zara parent company Inditex group's fastest growing sales brand.

According to the financial report, in 2016, Zara Home sales rose 17%, while the Zara growth rate was 13%. In 2014, the growth rate of Zara Home was once more than 30%.

In addition to Zara, H&M also cast its sights on the home market in 2009. It plans to add 50 family stores in 2017 to sell home series, and will open an independent store for the family series in the future, and turn home series into an independent brand.

For fast fashion brands, the development of furniture lines may be a good time.

In addition to developing home furnishing lines, fast fashion brands also focus on the beauty industry.

Recently, Inditex group's sub brand Bershka has launched the first beauty series Beauty by Bershka. It is reported that the series includes more than 100 products, covering beauty, skin care and body care. It is now on the line of its global stores and official website, priced at between 2 pounds and 15 pounds.

Last fall, Oysho, the underwear and clothing brand of Inditex group, also tried perfume and body care products for the first time. The group also adjusted its other brand Stradivarius's makeup business.

As early as 2009, H&M launched the HelloKitty series of lip gloss make-up test water. In May 2015, a total of 700 sets of cosmetics and skin care products of SKU SKU were officially launched, not only stationed in 900 global and e-commerce sites, but also launched a new independent e-commerce website H&M Beauty.

There are two reasons for attracting fast fashion to sell cosmetics: first, the price of cosmetic products is easier to bear, which enables fashion brands to expand the target audience and attract a large number of consumers without affecting the brand image. Two, when providing cosmetics with these fresh things, the physical store can also become a "one-stop shopping environment".

Actively expanding overseas markets, India has become the "new continent" of many brands.

In the face of the weakness of brands in Europe and North America, fast fashion brands can only be hoped for in Asia, and China and India are their focus.

Despite countless stores in North America, GAP has increased its pioneering efforts in the Chinese market, saying that 40 new stores will open in China this year. UNIQLO also said it will maintain 80-100 stores a year in China.

However, the rapid development speed has made the top fast fashion brands close to saturation in China's first tier cities, and the impact of the Internet on offline sales. Fast fashion brands can only target two or three line cities, or even four line cities.

In addition to China, another market for fast fashion is India, which has proved to be an attractive emerging market.

A report from Euromonitor International predicts that the luxury industry in India will grow by 86% in 2013-2018 years, faster than China, Malaysia and Indonesia.

Zara entered India in 2010, and now has more than 10 stores in India, and became the first clothing brand in India that exceeded 100 million US dollars in July 2015.

In the autumn of 2015, H&M opened the first India store in New Delhi, covering an area of more than 25 thousand square feet (about 2322 square meters).

In May 30, 2015, GAP opened the first shop in India, New Delhi SelectCitywalk shopping center, and announced its entry into the India market.

H&M chief executive said he hoped his brand could meet the needs of India's growing middle class.

Fashion is a big business, but it is often criticized by fashion public figures. Fast fashion production makes the price more affordable, but the "disposable" clothing has caused huge waste of resources.

Journalist Elizabeth Cline wrote in her book "Overdressed": Disposable Clothing causes devastating damage to the environment and economy.

We may need to invest more money in dealing with these discarded fashion clothes.

According to the EPD, textile waste generated in 2013 amounted to 15 million 100 thousand tons, of which 12 million 800 thousand tons were discarded.

Prior to

And so on, when the fashion brand is constantly showing up to young people, then there is a network of red electric providers catching up and blocking. Now, in the face of increasingly competitive market, if fast fashion can get the best shot, it is really dangerous.

For more information, please pay attention to the world clothing shoe and hat net information report.