Hai Lan'S Home Makes A Flashy Report Card Retail Business Model Analysis

First, a gorgeous report card.

Hai Lan's market value exceeded 60 billion, surpassing Coach, Prada, Burberry and other world famous brands.

In the environment of the cold shoulder of the garment enterprises, the Hai Lan home of the A share listed companies has become an "alternative".

Standard & Poor's announced the list of the top 25 list of the world's largest apparel accessories and luxury goods companies, ranking fourteenth from Hai Lan, China, with a market capitalization of $9 billion 498 million.

The top ranked list is LVMH, a luxury giant, whose market capitalization is 80 billion 700 million dollars, and Hai Lan's home market is equivalent to LVMH's 1/8.

With online shopping becoming a trend, the business of clothing entity shops is becoming more and more difficult.

Many offline retailers are deeply feeling the pressure, often setting up online sales or developing the 020 mode.

In the closed shop tide, Hai Lan's home was in a crazy way to open shop. In the first three quarters of 2016, there were 972 new stores, equivalent to an average of more than 100 stores a month. At the same time, there were more than ten billion revenue in the three quarters, ranking the top of the total retail revenue of the national garment retail industry in the first three quarters of 2016.

There is no doubt that in the face of the winter of the industry, Hai Lan's home has turned up a gorgeous pcript.

In addition to its brilliant sales, brand sponsorship has been sponsored for three consecutive seasons, such as running brothers, exclusive naming "Guinness China Night", sponsoring the strongest brain, and a series of domestic influential programs, so that the brand influence of Hai Lan home has been effectively promoted. "Men's national brand" has won popularity among the people, and "men's Wardrobe" is more familiar.

Some people ask Anta founder Ding Zhizhong who can survive in the retail industry under the tremendous impact of the Internet.

Ding Zhizhong said that besides himself, he also talked about a brand: Hai Lan's home.

Zhou Jianping, founder of Hai Lan's home, said: "we are not a clothing company, because we do not make the difference.

So, what Hai Lan's house sells is not clothing. What is it?

Two, the analysis of retail mode - the business model of Hai Lan's home.

Behind business performance, there must be a constant profit logic as a support. What is the advantage of Hai Lan's business model compared with other peers?

The business model describes the basic principles of how to create value, deliver value and acquire value.

The author describes and analyzes the retail mode of Hai Lan's home with the Business Model Canvas of Alex Osterwalder, a Swiss business model expert.

The nine modules of the business mode canvas answer 5 questions about what the enterprise provides, why, how, and how much it costs.

1. clear value proposition: the overall solution for men's clothing.

Men's shopping habits are quite different from that of women. Their consumption behaviors are more purposeful, and they hope to accomplish the established goals in a quick way.

Hai Lan's home provides the overall solution for men's clothing to help customers reduce and save time on clothing choices.

Existing clothing categories include suit suits, casual suits, jackets, coats, down garments, sweaters, knitwear, shirts, T-Shirts, trousers, casual pants, jeans, underwear and underwear. Accessories include belts, neckties, scarves, socks, leather shoes and so on. There are plenty of clothes for adult men.

The products cover all products that adult males need from head to toe, from inside to outside, from winter to summer, from formal to casual wear.

Each store displays a rich array of men's clothing products. Customers can buy a full set of clothes, fully cater to Chinese men's consumption habits, save time and simplify decision-making.

2. accurate customer segmentation: urban white-collar men.

Generally speaking, it is impossible for a garment enterprise to occupy all the market share, but on the basis of market segmentation, it chooses several markets as its target market.

The target customers of Hai Lan's family are men who are 25-45 years old and earn an annual income of 5-10 yuan. This is a "blue ocean" market with relatively small competition but large market share in the brand men's wear market.

In order to make product prices reasonably, we must adhere to the objective of obtaining normal profits.

The price of each suit is only between 480 and 1680 yuan, which is much lower than that of the same grade brand suit, which perfectly realizes the brand ideal of "high grade, medium price".

The "high price method" based on customer segmentation can accurately locate the target market of the brand, develop the middle and high-end market with a positive attitude, and strive to expand the market share on its market level, and shape the image of the everlasting prosperity of the enterprise.

3. affinity customer relationship: "no interference, self selected" men's wardrobe.

Men shop only if they want to buy it. They buy it when they see it, and do not like someone to follow and stare at it.

The family of Hai Lan abandoned the traditional "man to man" shopping guide mode, but provided consumers with an undisturbed and free buying environment.

Clothing products are classified according to their varieties, sizes and specifications. Consumers can choose clothes according to their height and shape.

It is this relaxed and convenient purchase experience that makes more male consumers willing to come to Hai Lan's home, choose a shirt for a suit, choose a shirt and choose a tie, choose a tie and choose a leather belt to avoid the tedious shopping in many stores, and become a fashionable and convenient "one-stop" consumption.

At the same time, catch the characteristics of men shopping directly, do not love too much bargaining, for all goods are sold at one price, according to the tag price.

In addition, we insist on no discount and no price cuts throughout the year to maintain brand image.

4. standardized channel access: managed franchise, standardized operation.

Franchisees do not participate in the management of stores, and all their work of goods delivery, store management and business operation are standardized by Hai Lan's home, and even the location of stores is determined by them.

In the specific operation, unified image, unified price, unified management, unified procurement, unified distribution, unified decoration, unified recruitment, unified training, unified settlement, and unified chain operation and management are carried out. Truly, both "Lian" and "lock" and "Lian" have lived in the brand. "Lian" has lived in the image, "Lian" has lived in the product, "Lian" has lived in the service, and has "locked" the management so that every store can operate according to the standardization mode of the company, and every department of the company can also serve the store according to the standardized business process.

The indoor shopping environment of Hai Lan home store is the display environment of products. The design of interior space interface is changed from complex to simple, and the customer's attention is pferred to the display itself.

In the combined design of space function zoning, we should pay attention to the comfort and comfort of the sales environment, and create a buffer and meditation for consumers who are tired of shopping.

The design of the fitting room creates a sense of home. The unattractive daily necessities on the wall are tools for fitting the clothes. Hanging clothes hooks meet the hanging bags and clothes that are brought with them. A pair of slippers, a protective hairstyle and makeup headgear bring convenience to the consumers trying on them, but also reflect the meticulous concern of the businessmen.

In the design of lighting environment, lights are gathered on a main garment to guide the attention and attention of consumers, reduce the intensity and change of light, and avoid consumers' tension and disgust.

Clothing stores are the most direct appearance of sales. In the commercial environment where shops are built, the design of Hai Lan's home is reduced to the same similarity and similarity. It highlights differences and stimulation, and produces a refreshing visual impact on consumers' visual fatigue, highlighting the style and personality of clothing brands.

Standardized store management and humanized design create a comfortable environment for consumers and make the whole experiential shopping session enjoyable and relaxed.

Zhou Jianping, President of Hai Lan's home, once said two small stories: "a franchisee wants to set a Fortune Cat on the counter. We say no, because this does not match the image of Hai Lan's home.

Another franchisee was not at ease about the salesperson's ability. He moved a small stool every day to supervise the shop, so that he sat away in less than a week.

5. key cooperation of high viscosity: "offline millet" joint mode.

The supply chain management mode is a bit like millet. In the upstream, there is no factory on its own. It is a foundry agent. All the clothing designs and styles are supplied by the designers of the suppliers, and they are not directly involved in the design.

However, after the design of the supplier is completed, the headquarters of the Hai Lan home will be selected by the designers of the headquarters. The designers at headquarters will assess which styles are likely to sell well and place orders according to the prevailing fashion trends.

Behind the close cooperation between Hai Lan's home and suppliers is the benefit sharing mechanism, which combines the interests of suppliers and branding parties through the combination of sales payment, unsalable goods return and the two purchase.

The relationship between the supplier and the supplier is a "returnable pool" relationship, and two products that are still unsalable after the good season can be returned.

In this way, suppliers are no longer simple OEM manufacturers. In order to improve the sales rate and profit margin, we must understand the market trend and seamlessly link up with the brand Fang Hai Lan's home to produce marketable products.

Of course, Hai Lan's home is not appropriate to "hand over the shopkeeper". It needs to help suppliers improve the sales rate and improve the efficiency of the store.

Through the establishment of a mechanism of sharing interests and risks, the suppliers, franchisees and branding parties should be set up as a community of interests so as to realize the various links of the industry chain and their respective benefits and common development.

6. efficient key business: supply chain integration.

In the supply chain management, Hai Lan's home is a typical SPA (own trademark clothing store) enterprise, that is, having its own original brand and realizing self production and self marketing.

From production to sale, the whole process is unified management to reduce intermediate links and reduce costs.

For the first time, a new concept of clothing production was put forward, that is, garment development started from primitive wool, and the whole industry chain from wool to clothing finished products was first taken shape in the domestic clothing industry.

From farms to workshops directly into stores, all of them use their own resources, without any middlemen involved, effectively control costs and quality, and directly give profits to consumers.

At the same time, no matter from the print design, fabric selection, quality management to strictly implement the international garment industry production standards, in this process, experienced the most pure circulation.

Hai Lan's home is a highly flattened platform in the entire supply chain. Like an interface, it organizes all kinds of resources and eventually forms a unique product and brand. It does not own too much resources, but all kinds of resources play the biggest role in him.

At the same time, Hai Lan's home continues to expand online traffic, integrate online resources, match the pricing strategy under the line without discount, and do not cut prices, and strictly guarantee the same price on the same line.

And with Tmall, vip.com and other platforms, independent innovation planning shops in line with brand tonal activities, enhance brand online influence.

Through the precise shopping experience and service, we can enhance the consumer shopping experience.

In the first half of 2016, online revenue of main business was 416 million 901 thousand and 700 yuan, an increase of 99.11% over the same period last year.

7. core resources: Men's clothing national brand intangible assets and high realized offline flow.

While doing the product well, we should strive to create a brand image.

Through the selection of popular variety shows such as running, brothers, the great challenge, the strongest brain and other columns to enhance brand awareness.

To increase the net red characteristics of star Lin update as brand spokesperson, consumer interaction improves stickiness and repurchase rate.

Seize the "father's Day", "Spring Festival" and other festivals for emotional marketing, causing consumers' emotional resonance.

Strategic cooperation with Oriental DreamWorks, inject more themes and cultural connotations to products and brands.

Huge sums of money are broadcast in CCTV news broadcast, weather forecast, evening news and dialogues.

The slogan of "Hai Lan's home, man's Wardrobe" is known to everyone and has become popular among the people. It has also established the status of "men's clothing national brand".

The more than 3000 franchises under the Hai Lan home line are located in the core business circle with large traffic volume, which brings huge traffic entry. Moreover, stores have a higher purchase rate and a higher liquidity rate.

Why can a clothing store become a gateway to circulation?

Clothing consumption frequency is high, seasonal is strong, is directly related to people's daily consumption related business.

Why shopping centers are willing to make good location for famous clothing enterprises, because they can bring the flow under the line, and after having traffic, everything else is easy to handle.

So Zhou Chengjian said that Hai Lan's home is not a garment, it is a flow under the line.

8. the cost structure of light assets: low proportion of advance payment.

Hai Lan's home is a typical "light asset" mode. It mostly outsource or completely outsource production links and part of sales channels. The focus of its operation lies in the links of brand operation, terminal channel and supply chain management.

Seize the commanding heights of the industrial chain and value chain, and then weave a smile curve.

On the specific operation, the production link is outsourced to the manufacturer by means of labor contract, and downstream products are sold through franchised stores, shopping malls and direct stores.

When goods are initially put into storage, the amount paid to the supplier will not exceed 30%, and the subsequent funds will be settled monthly with the actual sales of the goods.

9. low risk revenue sources: franchise fees and profit sharing.

When the franchisee enters the Hai Lan home distribution system, about 2 million yuan will be needed, of which 1 million will be charged for shop rents, utilities, decoration, industrial and commercial taxes and fees, personnel salaries and logistics pportation. The other 1 million is the goods that are delivered to Hai Lan's home, which can be returned in 5 years.

In addition, 60 thousand of management fees are paid annually.

Hai Lan's home and affiliate stores distribute their business income according to a certain proportion, and they will settle accounts every day.

According to public data, the annual return on investment of Hai Lan's franchisee is about 20%. According to the industry's theory, it is a way to make clothing brand. In the past few years, its closing rate is only about 2%, far lower than that of other garment enterprises in the same industry.

Three, hidden dangers under icebergs: seven injury boxing in business mode.

Behind the gorgeous pcripts and advantages of business models, there is also a huge hidden danger.

Financial data show that inventory and data reveal the company's worries as revenues and net profits continue to grow at a high speed.

The company's inventory reached 9 billion 580 million yuan, an increase of 57.4% over the same period last year, accounting for over 40% of total assets.

In the first three quarters of 2016, the inventory turnover rate was 1.05, lower than the historical average level of 2.81, and the inventory operation efficiency continued to decline. At the same time, it was far below the industry average level of 3.21, and the inventory operation efficiency was in the downstream industry.

The sales strategy of Hai Lan's home without discount and no price reduction is a double-edged sword. Although it has maintained the brand image, it has also caused high inventory. It is called "Cheng ye Xiao He, also defeated Xiao He".

1. over the past quarter, the efficiency of commodity sales is low and inventory is large.

Seasonal discounts are almost universal promotional methods for every clothing company. A large proportion of consumers are always watching the season changing. They can buy their favorite costumes at a very low discount. At the same time, this is also an efficient way to deal with tail goods.

Hai Lan's home does not discount prices for maintaining its brand image throughout the year. Even in the network channel that vip.com specializes in handling tail goods, it does not allow price cuts.

If the demand forecast is inaccurate or the sales of some styles are not smooth, and there is no effective way to digest inventory, this will inevitably lead to high inventory.

It was the first time that IPO was defeated, that is, 3 billion 800 million stocks accounted for 56% of total assets.

2. lack of consumer data and fans community.

Although each store terminal obtains one dimensional sales data through the POS scan code, it does not extend the data collection to consumers, and establish a two-dimensional database.

Hai Lan's home has a large number of loyal consumers, but has not established a direct connection with it, and has not been playing with consumers like WeChat.

This has led to a lack of accurate cognition of consumers, and can not really penetrate the consumption trend. The bullwhip effect of supply chain highlights that demand forecasting has low coincidence rate and high inventory pressure.

More importantly, there is no established loyal fans community, lack of channels to interact with consumers, and consumers' opinions are difficult to convey, resulting in the loss of loyal consumers and the repurchase rate.

3. light assets lead to lack of core competitiveness.

China's garment industry is very competitive. It is a full market of Red Sea, and the barriers to entry are not high.

The "light asset" mode of Hai Lan home is very effective at the moment, but like many people criticised Xiaomi, it does not have the core competitiveness of the industry and is easily copied by its competitors.

At present, many enterprises in the market have begun to adopt this business mode. There are many clothing enterprises such as wedding birds, seven wolves, and American state clothes. When competitors continue to copy this pattern, they continue to swallow up the expanding market space, and their future profitability is also doubtful.

Once the shop slows down, it will affect the cash flow of enterprises. At the same time, the growth of traffic will also slow down, which will directly affect the sales volume and lead to the failure of the whole business mode.

Four, prepare for the rainy day: make up the short board and remodel the business mode.

The retail business model must adapt to changes in the sales environment and consumption trends in order to consolidate a consistent profit logic.

As the growth rate falls, social inventories increase, competition in the same industry becomes bigger, and e-commerce encroach on the industry, the four difficult problems are highlighted. What serious impacts will the future bring? Can high growth continue?

What opportunities will the coming of the new retail era and the development of the Internet, especially the mobile Internet? How will the business model evolve?

How can the traditional retail business mode be reconstructed to meet the demands of development?

The author believes that the reconstruction of the retail business mode by Hai Lan's home can start from the following four aspects: prepare for the future:

1. develop the key business of data mining and deep ploughing the core resources of the flow.

Using two-dimensional code and other means to establish a large consumer database, on the one hand, real-time collection of consumer size, purchase frequency, single purchase amount and other consumer data.

On the other hand, efforts should be made to collect identity information such as occupation and age.

Through multi-dimensional data analysis and mining, continuous consumer portrait, accurate description of consumer preferences, and prediction of consumer behavior, for enterprise production, design, inventory management, marketing and other aspects of decision-making to provide data support, reduce supply chain management "bullwhip effect".

More importantly, the store is equivalent to acting as an undercover "Yu Zecheng". By importing user data through the terminal, it gets the most important information, and then finds business opportunities, and more matches the paction, and deep ploughs the flow value.

In the era of big data, information resources will become the core assets of enterprises. The terminal of Hai Lan home is convenient to connect with consumers, so it is a suitable data entry.

2. building community to improve customer relationship and continuously deepening value proposition.

Use WeChat public address, micro-blog, forum and other ways to establish information channels directly connected with consumers.

By joining members, we strive to develop the consumer community, interact with consumers, establish closer customer relations, and develop loyal fans. Like millet company's "rice noodle", we disseminate the brand concept and product characteristics through self-organization through word of mouth.

It can even let fans participate in product design, research and development, and iteration, constantly enhancing consumer loyalty and improving repurchase rate.

In his inter Year speech, "friend of time", Luo Zhenyu said, "robbing cognition will become the next battleground. The most scarce resource is the consensus reached in curing broken pieces. Whoever can put forward new cognition and reach a consensus will occupy the future."

Businesses should be like a nail in other people's cognition, squeeze in their own space, and implant a concept you define in the user's head.

"Men's Wardrobe" is the cognition of Hai Lan's home, which has been implanted in the minds of consumers. On this basis, through the development of fans in the community, we can continue to deepen and strengthen this kind of cognition.

3. broaden the channel access and realize the integration of all channels.

Whether the store that brings offline traffic or the online traffic network platform can capture the channel access of consumers.

At present, the volume of offline terminal channels is large enough, and online network channels can be further expanded.

More importantly, to achieve integration of offline stores and online platforms.

With entity stores, e-commerce, big data cloud platform and mobile Internet as the core, the integration of online, offline, commodity, membership, paction, marketing and other data can provide a cross channel and seamless experience for customers.

Consumers can try the online store experience, synchronize online orders, direct distribution to the home, to achieve D2D (Door to Door) door to door services, channels will become online and offline O2O operation of the whole, common, efficient and convenient service to consumers.

In this way, the line can also serve as a channel for handling tail goods, and it does not need to discount prices. It only needs to plan some red envelopes or "full reduction" activities in the payment link, which will not affect the brand image, but also find an effective way to promote the sale of goods in season.

4., promote flexible production and rebuild the key cooperation of the joint venture.

The product strategy of Hai Lan House decides that it is more suitable for flexible production mode of multi variety and small batch.

Flexible production is a market-oriented production mode of on-demand production to meet the changing market demand and fierce market competition. Its advantage is to enhance the flexibility and adaptability of manufacturing enterprises, shorten the production cycle, improve the utilization rate of equipment and labor productivity, and improve the quality of products.

Based on terminal consumer database, flexible production can get more data support.

At the same time, on the basis of strong control of the terminal and full familiarity with consumers, we can carry out "backward integration" through investment or merger and acquisition, cut into product design and raw material research and development links, occupy another commanding point of smile curve, forge new core competitiveness, and control the supply chain more effectively.

Through the above four aspects of business model elements reconstruction, Hai Lan home will have new competitiveness, business model canvas will also have a new pattern.