The Impact Of The Epidemic On Shopping Malls Is Hard To Recover.

During this special period, the retail industry of luxury goods has been hit by large sales volume and supply chain bottlenecks.

According to the European investment bank, the global sales of luxury goods will decrease by 8% in the first quarter, with the spread of pneumonia. The Chinese market will drop by 40%. At the same time, Burberry, Ralph Lauren, Coach parent group Tapestry group and Michael Kors parent Capri group luxury company have issued a notice on the impact of the epidemic, temporarily closing nearly 50% of the Chinese mainland stores, sales loss or up to tens of millions of dollars.

　 01

A cool line

With the gradual recovery of the express industry, the rise of the "home economy" led to a general rebound in the offline retail industry after resumption. At present, the major commercial real estate groups and their stores are actively using online strategies to save themselves, so as to reduce the losses caused by the epidemic.

The 2019 research report jointly published by Sybarite and GlobalData shows that Beijing SKP ranks the second in the world in terms of sales per square foot, dominating Asia, and second only to the UK luxury goods department Harrods. Today, the SKP mall in Beijing is another scene.

Looking at it, despite the fact that stores are open in the daytime, there are only a few queues in the area where there is a layer of imported supermarket masks, and there are only sporadic customers among luxury brand stores such as LV and Prada.

Cosmetics and skincare products are almost empty before the counters, and only shop assistants are free.

Compared to the grand ceremony of three months ago, the SKP depression is really a bit of a sigh.

According to the fashion business express, Beijing SKP held its annual celebration in from November 14th to 24th last year. According to the company's revenue data provided by insiders, the SKP single store sales reached 1 billion 10 million yuan during the activity, and once again refreshed the highest record, which attracted the attention of the industry.

As China's second largest personal luxury market in the world, the epidemic has had a huge impact on the sales of luxury brand domestic stores. The Italy luxury goods association Altagamma and the Boston Consulting Group Bernstein surveyed the original shipment to China. Up to 10 million to 15 million products may not be sold at present, forcing companies to transfer products to other regional markets.

Mr. L has had several years of work experience in a Hong Kong commercial real estate company, but it is the first time that such a cool Spring Festival shopping mall has been found. According to the performance of the store after the resumption of work, he said: "half open shopping malls, passenger flow rebounded faster, but overall sales did not reach the level of rebound. In order to prevent the spread of the epidemic, the major activities planned by the mall have been cancelled, and the business hours have also been reduced considerably. It is impossible for us to return to the original level at once.

For different types of shopping malls there is a difference, he added: "the community type shopping mall is more obvious, so it is possible that everyone tries to get out and let it go. However, as the Hangzhou Tower resumed business in February 20th, the 5 hour sales break 11 million is still a case, which is unlikely to happen frequently.

Mr. L estimates conservatively that the impact of the epidemic on offline retail will last until the third quarter of this year. "But in order to alleviate the pressure of store performance as much as possible, many shopping malls under the outbreak began to focus on WeChat group and shop WeChat cloud shopping. After that, online shopping centers and micro stores could also be opened."

Some beauty brand sales staff also improve their performance through various online channels. Taobao, once seen as the "thorn sister" eyesore, has now launched the "nail smart shopping guide" function by combining nails to open up offline stores and online consumption channels. Shopping guides only need to bind sales ID and Taobao accounts, recruit consumers to become members, and members can even count as salesmen's sales results even in Tmall mall.

In addition, a series of "cloud sales" operations, including online live broadcast, have also seen the endless possibilities of retailing.

So in the short term, the reduction of passenger flow due to the epidemic will, to a certain extent, affect the business of physical department stores. In the long run, it is just like the report of the consumer report on the impact of the new coronavirus on Chinese consumers, which is launched by WWD Fashion International, especially with Re-Hub. To lay a good foundation for online marketing, more consumers are gradually getting used to the "cloud shopping" mode of shopping guide sales, group sales, and friends' circle, which are booming due to the closure of physical stores, and sales results even bring more opportunities for transformation of many real businesses.

02

Overseas micro businesses facing challenges

The relationship between luxury brands and overseas micro businesses has been inextricably linked. In the early stage of luxury goods entering China, overseas micro businesses have opened up shortcuts for all brands to connect Chinese consumers, and have also made brand recognition. In the spread of the explosive commodities, the merchants have also gained huge potential customers.

From past precedents, the impact of overseas micro businesses on luxury brands is also very direct. After the news of China's crackdown on the sale of luxury goods in 2018, shares of luxury brands such as Gucci, Herm s and Louis Vuitton also fell sharply.

In the current special stage of the epidemic, overseas micro businesses are also facing a series of tests. For them, the biggest difficulty lies in the front end of the market supply chain. So far, there are three main channels for their delivery:

Cooperation with overseas buyers

Foreign duty-free shops and physical stores

Inventory of first class overseas micro dealers

Due to the strict control of "exit from the first place, first entry quarantine", there is little hope for the first class micro dealers and buyers in the foreign countries, while the shortage of foreign duty-free shops and the sharp decrease in sales also result in partial closure. For a variety of reasons, overseas retailers are in short supply due to insufficient volume.

Yuki is a small overseas businessman who has worked for 12 years. She also has several views on her current industry: "in fact, for the current consumers, the demand for new products has been relatively saturated, and the desire to buy is not particularly strong. Before shopping, goods will be sold more than three. At the same time, coupled with the fierce competition in this industry, there are many new colleagues coming out every year. Micro traders want to get the best quality products at the cheapest price, and seize the supply channel at the first time.

The main products of Yuki come from the buyers of various countries. After picking up the goods, the buyers will go back to showroom to order. The transportation part of the supply chain is the buyer's responsibility. She only takes the back end sales. At present, the goods purchased from buyers are mainly sold on the two platforms of WeChat and micro-blog online.

At present, because most of the customers are home idle, they will spend more time paying attention to their friends circle, so the sales volume of the online part will increase by 15-20%. However, because of the restriction of human meat and transportation, transportation has been hit hard. At this stage, she can only sell goods on hand. Because some goods are out of stock and can not meet the needs of customers in time, there will be a refund from time to time.

But in general, Yuki did not feel depressed. She also said that after the outbreak, as the life of everyone returned to normal, the market would usher in a wave of retaliatory consumption, so she is now communicating ahead of time with scheduled commodities to meet the next wave of supply.

"Natural disasters and man-made disasters are unpredictable. It is the best way to seek development as soon as possible and adapt to the market."

　　 03

　 Online business confidence

Most of the luxury brands are concentrating their services and sales on line because the offline business can not be carried out normally.

For example, just over the past Valentine's day, Louis Vuitton opened WeChat small program flash store, through the action of the public number, plus online sales staff to share with old customers, double sales last year.

In the Consumer Research Report of WWD, it is mentioned that the epidemic will not affect the purchase intention of luxury goods too much.

In addition, because of too many negative information on social media during the epidemic, the "good" brand story may cause some consumers' interest and ease the psychological state of consumer anxiety and pessimism, so the aggravation of the epidemic is more likely to promote the behavior of online shopping luxury.

Due to the cancellation of offline activities, brands began to spend time researching and "testing" online sales mode, thus giving consumers a better online shopping experience. And in this link, some brands choose to use the power of the electricity supplier.

After the SARS outbreak in 2003, Alibaba and Jingdong quickly welcomed the explosive growth. During the 2020 Spring Festival, most of the retail entities were forced to stop business. According to statistics from the Industry Research Institute of Shanghai Jiao Tong University, Tmall, Jingdong and other electronic business platforms became the main source of consumption.

Although most of the consumers' online shopping products are mainly related to epidemic prevention and other daily necessities, with the increase of traffic volume, the exposure of luxury fashion brands has also increased. According to the latest report released by Bain consulting agency and Alibaba, many luxury brands also joined Tmall to open up online and offline channels during the epidemic, attracting consumers' attention by live and flash mode.

Angelito Tan, founder and chief executive officer of RTG Consulting Group, also pointed out that in the current environment, platforms like Jingdong and Tmall have more advantages than online channels of official brands. While ensuring fast delivery, they can also optimize the online experience of consumers.

Recently, Prada quietly landed at Tmall to open its official flagship store.

In terms of make-up, the new brand new online marketing forms are also emerging, such as customer group online auction rush, online WeChat mall one click purchase, consumer WeChat care, employee live broadcast sales, etc., so sales during the epidemic period still obtained good growth. Top ten.

For the development of the fashion industry under the epidemic, Xiao Qin, managing director of the luxury electronics platform Farfetch Greater China, said in the interview that he is still very confident. "Consumers' enthusiasm is not diminished. Their preferences are changing seasonally. Now it is time for spring and summer to go on sale. The core consumers still love the new season, big brands and fashion designers. Confidence in the market is still there, and consumption habits are stable.

Recently, Farfetch has also completed a new round of financing. Tencent invested $125 million to support the company's growth in China and enhance its customer experience and products in the region.

"We will play a technological advantage in China to promote the development of luxury fashion industry."

Next, from April this year, Farfetch will also launch the "Farfetch BEAT" new product launch project, giving full play to the existing cooperative brand matrix (including New Guards Group's brand: AMBUSH, Opening Ceremony, Off-White, Heron Heron and so on), and create and launch a few rare, valuable collections and popular fashion products.

Overall, the department stores are still not getting warmer, and this situation may remain in the second or third quarter. To speed up economic recovery, we need to lay a good foundation for online marketing. As for overseas micro traders, although the online sales volume has risen slightly, but due to transportation constraints, the increase in the volume of returns has not increased overall revenue. The situation of luxury electric business is relatively stable. They are playing the technological advantage to promote the process of brand digitalization.

It can be seen that the Luxury Retailing industry can not be restored to normal in a short time, but some consumers will not sit still when consumers are still shopping enthusiastically. After all, any growth is not coming from the sky, nor will it be lucky enough to just wait for the "explosive" businesses and brands. The current difficulties may be temporary, but opportunities will always be left to the most prepared participants.