Will Traditional Department Stores Withdraw From The Stage Of History?

Rising in recent years

Under the impact, physical channels have been alarmed. Almost every mainstream department store brand has been closed, including Messi, Kohl 's, WAL-MART and so on. In the past few years, these brands have closed hundreds of stores and tried to reduce losses from unprofitable shopping malls.

Since its establishment in 1886,

(Sears department store) has a history of 131 years.

In 1989

Before that, it has been the largest retail store in the United States.

In 2004, Sears department store and Kmart jointly established the Sears department store group, set up an electronic business platform, once against WAL-MART.

But it didn't last long.

With the rise of Amazon, the days of Sears are getting worse and worse. Over the past 4 years, the total loss has been $7 billion.

5 years ago, Sears stores also had 2073 stores, and now this number has been reduced to 1200.

Sears the retail carrier has sunk rapidly.

US Department Store giant Sears recently announced that the company will lay off 400 people and streamline its organizational structure.

It is reported that layoffs will save about 1 billion 250 million dollars for the company.

At the same time, Sear announced that the original 180 stores will be expanded to 246.

Sears's stock has fallen by more than 41% in the past 12 months, down about 25% from the same period last year.

The Sears CAnada, a Canadian branch that was split from the Sears department store, filed for bankruptcy protection at the Supreme Court of Ontario Province in Canada on Thursday, while closing 59 branches and reducing 2900 jobs.

After the news, Sears CAnada's share price plummeted 22.5% to 62 Canadian dollars per share.

According to the world clothing and shoe net, as of April 25th, Edward Lampert, chairman, chief executive and largest shareholder of Sears, has 45% of Sears Canada shares, Edward Lampert.

Sears Holdings has only 12% of its shares, which is much lower than 95% in 2012.

Sears CAnada said that the current debt hindered the restructuring process, and bankruptcy protection could help companies get more time. It is expected that the reorganization could be completed by the end of this year.

Sears Canada has been losing money since 2014. The company said in a court document that the reason for its predicament is that the traditional retail industry in Canada is generally weak, the Canadian dollar is sluggish, the directory business is down, and the cost of real estate is high.

Compared with the same quarter last year, Sears CAnada lost 144 million 400 thousand yuan in the first quarter, and its revenue dropped by 15.2%.

After applying to the court, Sears Canada may then start liquidating and selling assets. Its most valuable asset is real estate, but many locations are located in low-end shopping centers, making it difficult for them to find buyers.

Moreover, in the bankruptcy reorganization process under the supervision of the court, only creditors can get one hundred percent repayment, and shareholders can retain certain rights and interests, so once the company submitted a bankruptcy petition, the stock of Sears Canada might become worthless.

As the physical retail industry is experiencing a serious "closing shop boom", Sears, which has been hovering on the verge of bankruptcy, has begun to sink like the Titanic.

Behind schedule, missed the opportunity to attract young customers.

Ten years ago, the market value of major retail entities in the United States was as high as $400 billion, when Amazon's market capitalization was only $17 billion 500 million.

By the beginning of 2017, Amazon's market capitalization had reached US $358 billion 100 million, more than the total of eight retailers (about US $297 billion 800 million).

Although Canada's online shopping is about two to three years behind the United States, it can not compare with China.

But Canadians are more and more fond of online shopping. In the past few years, e-commerce sales in Canada have increased by 6% to 10%. The sales volume of traditional stores is even difficult to maintain. Therefore, it is obvious that the retail pattern of Canada will become the United States after a few years, and online shopping will become the mainstream.

In recent years, a wave of shops closing tide is sweeping across the retail sector.

Since 2014, there are so many stores in Canada declaring bankruptcy or withdrawal from Canada, and even the Big Mac companies Target, Future Shop, SONY and so on.

As for clothing brands, they include: Juicy Couture, Jacob, MEXX, JonesNewYork, Esprit, Parasocu, Aeropostale, Danier and so on.

In May 2014, Jacob, a women's clothing brand from Montreal, Quebec, Canada, announced its completion after 35 years of operation.

In December 2014, Holland's high street fashion chain brand MEXX went bankrupt. The company has 315 stores in 50 countries including Canada.

At the end of 2014, luxury goods retailer Holt Renfrew announced the closure of its stores in Ottawa and Quebec, and will focus on expanding important markets such as Vancouver, Calgary, Toronto and Montreal.

In early 2016, Canada's largest leather clothing store, Danier, filed for bankruptcy protection.

In 2016, Aeropostale, headquartered in New York, entered the bankruptcy protection process and withdrew from Canada.

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Because of the changes in people's shopping methods, these retail stores are still at the wrong place, or have become outdated in size and layout.

As a traditional retail magnate, it failed to keep pace with the times and missed the opportunity to attract young customers.

Sears's so-called fashion brand has never been popular among young people, and even young people disdain it.

So it has almost become a shopping place for grandmothers consumption groups.

Sears CAnada has only recently begun to strengthen online shopping, but it is too late and too slow to do so.

With the continuous development of the online shopping industry, when the online shopping becomes the mainstream, the survival space of the traditional retail industry is bound to be compressed.

Will the traditional department store mode withdraw from the stage of history?

After the emergence of the electricity supplier, the initiative has changed, and shoppers have the right to choose locations for shopping, shopping and pricing.

Traditional retailers are unable to compete with the convenience of electricity suppliers and low price competition.

According to the calculation, in the US business penetration increased by 1%, the operating profit margin of clothing stores dropped by 600 basis points.

The simplest explanation for the demise of the store is that Amazon is swallowing the physical retail industry.

From 2010 to 2016, Amazon's sales in North America increased by 5 times, from $16 billion to $80 billion.

Sears's revenue last year was 22 billion dollars, so it can be said that Amazon has increased the volume of three stores in the past six years.

After catering to the consumer's habits and preferences, the electricity supplier has gained huge online dividends, which has eaten a lot of online stores.

In order to compete with the online market, the price war is not the best policy, or even an egg attack. It only sees the price factors, without reflecting on the lack of cost, supply chain and logistics.

For physical retailers, the biggest challenge is how to get cash flow through online and offline integration mode.

And online traffic dividends may soon come to an end, or there will be no new retail outlets.

It is not hard to see that today's electricity supplier enterprises are becoming entity retailers.

And their offline competitors want to embrace the line.

Online and offline integration is inevitable for the future development of department stores. For the pformation of traditional department stores, the layout line has only one purpose, that is, to provide consumers with a better shopping experience.

The men's clothing brand Bonobos's physical store does not sell clothes at all, customers go there to try on clothes, and then go online.

For online retailers, such as Amazon, big data is an important part of its retail revolution.

In the same way, for big retailers, big data can not only help them compete with online rivals, but also become a survival tool for them when profit margins are very narrow.

For example, Unilever will buy consumer data, which can help them determine which commodities are tight and when consumers will buy them, so as to update their inventory more efficiently.

That's what offline retailers should learn.

The innovation of the department store industry is firstly the innovation of positioning and profit mode, and the innovation of theme and format orientation is based on the target consumer group.

The future department store needs to focus on young people. They are not only masters of the main wealth, but also the main force of future consumption.

In short, the department store industry will not die out, but the traditional department store mode will withdraw from the stage of history.

The department store operation team takes the management of consumers as the main work, takes the "traffic" as the core indicator, and improves the consumer experience as the ultimate goal.

It is expected to meet the needs of experience and participation when buying goods.

In a market environment with a level and boundless environment, a businessman who can grasp and conform to the trend of the times and focus on and satisfy the consumer experience can become a winner.

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