How Can The Department Store Industry Go Out Of Difficulties?

The foreign capital department stores, which have lost the market, have more than one family, and the department stores have developed thin ice.

It is a fact that the overall growth of department stores is weak.

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Besides the impact of the "three public" consumption and other factors, the mode of affiliation with suppliers has become a stumbling block for the development of department stores.

The department store industry is facing the important reshaping problem of supply chain. It should redefine its position in the supply chain, gradually realize commodity self operation, and realize the extension of upstream and downstream supply chain functions.

Sluggish growth

Last year, in the top 100 enterprises of China's chain store associations, 50 sales enterprises, mainly department stores, grew by 9.6%, far from the compound growth rate of 25% in 2006-2011 years.

At the same time, the growth rate of stores was only 0.4%, down 8 percentage points from last year, and lower than the overall level of 100 companies, reflecting the weak growth of department stores.

In the industry, new formats and networks such as warehouses, electrical furniture stores and shopping centers are emerging.

The rise has brought about the diversion effect.

From the lower point of view, new formats and shopping channels provide more consumption choices, thus diverting the slow growing consumer groups; from upstream, brand dealers and distributors have reduced their dependence on department stores because of more sales channels.

The bargaining power has been greatly weakened.

In addition, the rise in rent and labor costs further squeeze profit margins in department stores.

At the same time, the Department Store adopts the joint operation mode, which is seriously homogenized and the competition is fierce in the industry. The price war has become the usual competition, thus reducing the sales revenue of department stores.

Finally, limiting the consumption of "three public" also inhibits consumption to a certain extent.

Reshape channel value

Most department stores in China carry out joint operation mode, which makes department stores reduce the cost of procurement and sales and effectively avoid operational risks, but the core technology of commercial operation is also weakening.

It is urgent for department stores to redefine their position in the value chain and realize functional pformation.

At present, department stores are still indispensable offline sales channels for most brands and distributors, and they can get information from suppliers and consumers at the same time.

On the basis of unswervingly joint operation, we use information technology to realize the pition from category management to data based single product management.

Through single product management, on the one hand, enterprises can realize the docking of commodity and consumer information, increase sales force, thereby achieving the extension of the function of the upstream and downstream functions of the value chain; on the other hand, most department stores in the future will "touch the net", and digitalized commodity information and price information will also lay the foundation for enterprises to achieve online docking.

Another way to improve core technology by becoming a department store is to become a self-employed company. For example, the acquisition of House of Fraser by Nanjing Xin Bai is a mixture of its joint, buyer and private brand business models. Based on the steady cash flow of the joint mode, we get high returns from buyers and brands.

According to statistics, in the United States, Europe and other regions, self employed department stores have a gross gross profit margin of 40%.

Differentiated management

Homogenization is a common problem in China's department stores.

On the one hand, the joint venture mode of department stores has led to the final competition for a single high-end brand, creating a "thousand stores side" situation, so that price war has become a way to attract customers in most department stores. On the other hand, in recent years, shopping centers have sprung up, which coincide with department stores in brand structure, and have advantages in functional planning and environmental design.

How to break through the "homogenization" and seize the mainstream customers become an important subject of general merchandise.

According to the development experience of foreign department stores, the department stores need to properly locate, identify target customers and set up a unique business image in the minds of customers, so as to achieve the goal of differentiated management and expand their living space.

Enterprises can pform to specialized shops with high gross margins, such as hardware professional department stores launched by Sears in the United States, and can pform to branded stores, such as the sale of their brands by Martha stores in the United Kingdom, and the pformation to cheap department stores, such as the department stores in the US in twenty-first Century.

Based on proper positioning, enterprises can form their own characteristics through special brand matching, especially when regional leaders are gradually formed. Scale formation helps to improve the ability of department stores to introduce brands and achieve synergy brand effect in cities.

At the same time, enterprises can provide targeted products and services according to the needs of consumers by increasing the proportion of their own businesses. They can not only enhance the visibility of the whole department store brand, increase customer stickiness, but also raise the gross margin level.