Global Vision: Japanese Department Store Bubble Consumption Caused By Epidemic Situation

Epidemic situation, uncover flashy, reveal the nature of business.
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Signs: cold jokes around Isetan department store
On the evening of January 22, 2021, Fuji TV station broadcast a message that the first hostess spent 17 million yen in the Shinjuku shop of Isetan. Several Internet media reported the news the next day, but it was not seen in the morning of the third day.
Hostess is a service item which rose in the inflation bubble consumer economy in the 1980s, commonly known as "キャバ嬢". She does not sell herself, but her income is very considerable. There was a legend in the past that Shinjuku Isetan's super performance was brought by these heroes. However, in the bitter days of the epidemic situation, it doesn't feel like positive energy. No wonder it was deleted quickly.
On December 8, 2020, an economic analyst named Ma minmolizi wrote an article to analyze the life span of several department stores. Based on the actual performance in February and March 2020, it was estimated that there would be 28 months for Isetan, 170 months for Takashima house and 19 months for Sakyamuni. In fact, by September 2020, the proportion of its own funds was 43 1%, high island house 33.2%, big pill 28.1%, there is no crisis of closing soon.
However, this kind of cold information always revolves around department stores, especially Isetan, which is the most popular fashion brand. In the situation that everyone is facing the disaster since World War II, bad word-of-mouth will degrade the brand and make people shudder.
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Reality: the main cooperation mode of department stores begins to collapse
Japanese household consumption expenditure supported more than half of GDP. During the epidemic period, the overall consumption expenditure decreased, but the recovery was also obvious. In March, the consumption decreased by 6%, 11.1% in April, and 16.2% in May. By October and November, the overall consumption recovered to 1.9% and 1.1%. In contrast, the department store industry fell heavily and recovered difficultly. After October, it will be alleviated, and it will be more severe after 2021. According to media analysis, except for underground food and catering, others will be struggling.
In 2020, the sales volume of Japanese department stores will drop by 25.7%, with a total performance of 4.2204 trillion yen, falling to the lowest level in 45 years since 1975. The sales volume of the main categories of clothing decreased by 31.1% to 1.1409 trillion yen, of which the sales of women's clothing decreased by 32.2%. From the perspective of the proportion of various categories, the sales volume of clothing category decreased to 27.0%, and the sales volume of food category was 1.3193 trillion yen, which increased to 31.3% in each category, becoming the performance category of the company. Cosmetics sales decreased by 39.1%, and the proportion of household goods increased from 4.0% to 4.2%.
The main cooperation mode of department stores is embodied in the "digestion" cooperation mechanism with clothing brands. This cooperation model is based on the high bubble period in the 1980s, when the department stores were purely profit-making, while clothing brands were playing the big game.
When the performance reached its peak in the early 1990s, it began to be questioned. Some international brands gradually turned to leasing channels, but some famous clothing brands, such as Weishan and Sanyang chamber of Commerce, still maintained cooperative relations with department stores.
After 2000, the quantity of clothing production and supply quickly began to exceed consumption, and the market digestibility was only about 40% in 2019, which did not cause enough alertness and transformation. The epidemic situation has opened the foam of cooperation mechanism in department stores, and the cooperative relationship between clothing brands and department stores has collapsed. A large number of clothing brands closed stores.
In 2020, 3100 stores will be closed in five major clothing brands, which are mainly engaged in department stores, supermarkets and shopping centers. Including: onward 700 stores, world 450 stores, TSI 210 stores, Sanyang chamber of Commerce 160 stores, renown 1700 stores. Among them, Sanyang chamber of Commerce shut down stores and pressed to continue to lay off 150 employees, a decrease of nearly 40% in four years compared with about 1350 stores at the end of 2016. "From now on, I won't be in the department store business anymore," said Dajiang Shenzhi, President of Sanyang chamber of Commerce
The problem is not limited to clothing brands. Since 2019, Shiseido, Gauss and other major cosmetics brands will get rid of the channel dependence of department stores, and set up independent flagship stores. With the compound mode of beauty, make-up, consultation, fitness, catering, etc., and with the independent digital system, a complete brand gathering effect will be created.
The stalemate and aging Xiwu department store has reduced from 28 stores in February 2011 to 10 stores in the spring of 2021. According to media analysis, if it goes on like this, there will soon be a store in Ikebukuro. Under unavoidable circumstances, the Xiwu department store decided to break the digestion type cooperation. In the past, it only implemented the "regular loan contract" mode in the suburban stores, and introduced this fixed time limit and fixed rent cooperation mode in the central stores of the city to speed up self-help.
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Behind: high cost bubble consumption mechanism is difficult to sustain
Some media pay attention to the withdrawal information of Ginza "gsix" tenants and put forward various analysis. The author analyzed this composition not long ago, and thought that the inherent reason was that the product portfolio that created value was not enough to transform and conclude transactions under the situation of too much emphasis on luxury form and large production cost. This paper continues to put forward the following three views as a supplement:
First, the epidemic situation directly blocked the flow of passengers, resulting in "food shortage" of shops in major commercial areas.
Epidemic situation is a disaster and cannot be analyzed from the perspective of conventional management. Nearly 2021, more than 1000 people were infected in Tokyo. Taking Shinjuku as an example, as of January 20, the total number of infected people was 5720, including the Shinjuku shop of Isetan. Since last year, there have been a series of infections. In January 2021, nine infected people were announced. Many customers said that Shinjuku yishidan store had a serious epidemic and did not dare to patronize. In this case, it is necessary to close the shop according to the strict control standard, and it is lucky to keep the business in limited time. Not only the "gsix" in Ginza, but also other stores in Ginza, restaurants and clothing stores in the six benki and Harajuku areas have seen a large number of vacant shops. Other flagship stores and image stores also suffered.
Second, Japan's young high consumer groups are shrinking.
One of the important reasons why Japanese retail businesses rely so much on inbound tourists' consumption is that the strength of the new young high consumption groups in Japan is insufficient, and the overall high consumption groups are shrinking. Sustained high consumption or bubble consumption market needs continuous cross layer young consumer groups (fast-growing leek) support. The basic characteristics of such consumer groups are that, under the multiple pressures of social life and individual physical and mental growth, they pursue new consumption hot spots and release bad psychological emotions. Their consumption desire is like a spark, which often exceeds their actual consumption capacity.
This feature is not obvious among Japanese young people, who are popular with the Buddhist ideas of simplicity, self, return to nature, de materialized consumption and even anti materialized consumption. Among them, some Nordic consumer groups are influenced by simplification and naturalization, and some are characterized by the transformation of psychological and spiritual needs and the return of humanism, which desalinates material consumption.
Third, the bubble consumer market formed by high cost mechanism is facing to burst.
After 2015, under the background of the accelerated increase of inbound tourists' consumption, the operating rent of Road shops and main business districts in the city center continues to rise. The rent of many flagship stores and image stores is even close to half of the sales volume. The conventional ideal rent and other cost levels are about 12%, and the comprehensive cost is close to 30% of the sales volume, which has become unbearable. Under the extreme state, the operation bubble is formed.
After the epidemic situation blocked the flow of passengers, it was difficult for shops to support high costs. Originally, they had dreamed that the epidemic would end quickly and could be recovered by the market gimmicks of the Olympic Games. However, the epidemic situation worsened again, and the dream of making money in the Olympic Games became vague and disillusioned, and the shop closing was like breaking the dyke and canal.
Not only Tokyo, but Osaka and Kyoto, which benefit from tourists' consumption, have also spread shop closures. Saiwu department store's business dream and hope advertising language, cruelly reverse the cost of real tragedy.
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Empty Mirror: the main business district is facing the threat of no support.
Under the diversified consumption network, it is not the consumers who are hit by the epidemic, but the commercial front-line service groups standing opposite to the consumers. More than 60% of the non regular front-line labor groups, such as shop managers, shopping guides and catering waiters, will directly bear the consequences of the epidemic secondary depression, and may become one of the topics of commercial humanization in the next few years.
In May and June 2020, Tokyo's population shows signs of evacuation, turning to the surrounding three counties. 400000 people are evacuated throughout the year. The government subsidizes 1 million yen, hoping to move to further places and create local economy. Such measures have led to a decline in urban population.
Among the evacuees, in addition to the families actively evading the epidemic, part of them had to leave due to the recession of retail and catering shops, resulting in unemployment, poverty and even loss of rental housing. There is also a part of the new class group, due to social control, working mode from commuting to remote work, consumption mode from shop purchase to online click purchase, and the life scene converges to the neighborhood of community residence.
With the large-scale transfer of consumer groups and the "evaporation" of inbound tourists, the consumption market in urban commercial districts may face hollowing out, or even the extreme view is that the "field" civilization of trading malls may collapse. The bubble consumption scenarios created by all kinds of incitement leave only empty mirrors when bubble consumption declines.
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Two optimistic revelations:
First, the traditional model of department stores has come to an end, and the new model needs to be innovated. Still taking clothing as an example, how to sell the clothing category leaving the department store? surf the internet. In terms of the market share of the United States, the proportion of online sales of clothing in the total market share is 29.9% in 2017, 34.0% in 2018 and 38.6% in 2019. Online sales channels have become a major trend to guide the growth of clothing categories. Japan's online sales drive is relatively late, and the proportion of online sales of various clothing enterprises is about 15%, and that of * * is only 20%. There is a huge space for development. At the same time, each department store retail enterprise is aware that the network growth has no strength, and the prospect is promising. The marketing channels of clothing categories in domestic department stores are rapidly differentiated. Regular clothing brands have formed their own channels independent of department stores. How to innovate the cooperation mode has become a must answer question in front of department stores.
Second, the domestic consumption market resources are multi-level and multi-level, which is relatively optimistic compared with the Japanese market. Two examples are listed: compared with the Japanese consumer market, the irrational consumption concept of the follow-up young cross layer groups in the Chinese market is stronger, and the attachment to material consumption can relieve the psychological pressure, which can strongly support the selective commodity market.
From the analysis of Ali Research Institute, the past two years are an important node for the further transformation of the consumer market and the launching of aging demand. From the perspective of some of the city's streets and communities with distinct attributes, the demand for the elderly has shown a systematic growth trend. All kinds of retail stores, including department stores, have ushered in strategic opportunities to choose and combine new business products.
In history, department stores are the king because of the full characteristics of commodities and the characteristics of content. Today, we still need to work hard on the innovation of business content combination. We should not simply think that the cooperation mode degenerates, and we are willing to eliminate them.
Wang Yao, vice president of the China Federation of Commerce and industry, said well: department stores should be excited and turn from the traditional function of selling goods to the added value of social emotions. People should change from commodity shopping guide to life tutor; goods should be led from brand goods to lifestyle, just like seeing the story field of commercial health scenes in western Beijing, rather than the same primary community shopping malls and regions Aolai stores to open the value difference with the East, and create new stores and scene business service mode.