Yes, just like all other department stores that are losing money - Macy's, Sears, and Neiman Marcus in the United States - Marks & Spencer from the United Kingdom, although not losing even the aunt, but also facing almost the same performance The dilemma of standing still. According to Marks & Spencer’s financial statements, in 2016, the Group’s sales increased by 0.8% to 10.04 billion pounds, but pre-tax profits fell by 19.5% to 483 million pounds. Among them, apparel sales fell by 2.2% to 3.9 billion pounds, while food sales rose by 3.6% to 5.4 billion pounds. Both of these figures are also based on the conclusion that online sales rose by 23%. Selling your own home goods is the direction of the retail industry Marks & Spencer’s performance illustrates two things: 1. Compared to department stores that sell other people's homes, department stores that sell their own homes live a little better. In other words, you have to provide uniqueness. In 1926, Martha started to implement the policy of “direct purchase from manufacturersâ€. This not only can reduce the intermediate links, reduce costs, but also can achieve the greatest degree of control over the quality of goods. In the UK headquarters, they also have a special procurement center, which can “outsource†production to the world according to the needs of different categories, and then coordinate the transportation of finished products from the production site. If you visit Marks & Spencer Department, you know that more than 80% of the products sold in this department store are self-produced and self-owned brands. In other words, retailers and brands are the same - you can even treat Martha's clothing department as ZARA. Click to learn immediately about cashmere sweater manufacturers Just on the merchandise display, Martha's clothes hang more “department storeâ€â€”the front of the clothes is towards you, allowing you to see a piece of clothing at a glance; instead of going to ZARA, every piece of clothing is “sideways†facing you. To open those clothes, to see clearly what this dress looks like. Different display methods directly led to the same area of ​​business. ZARA's clothes can be hung more, and the rental cost for each piece of clothing is relatively low. And Marks & Spencer's display method makes the rental cost of each garment more expensive - the world is fair, you have to pay the "clothing out" labor force, and you need to pay a lower price. However, if you compare in the department store industry, of course, self-produced and sold this model to ensure that Martha's profit margin is much higher than other department stores. 2, clothes have become more and more unable to sell, then what is the future of the department store industry, what is the life-saving straw? High-end foods. The clothes are getting more and more This point is that I want to talk to you today. We started with the issue that Marks & Spencer and even the entire department store faced - "The clothes can't be sold." Look at the environment, clothing consumption in mature markets is getting weaker and weaker - China's market may also experience this stage in the future - the economy has now actually recovered to 7788, but the official data show that the United Kingdom The clothing consumption has entered the weakest sales cycle since 1991. The per capita annual consumption of clothing reached 32 in 2015 and has never risen since then. Even in the future, there will be a downward trend. Let's take a look at the changes in the clothing market. Although Marks & Spencer is still the number one clothing retailer in the UK, its market share has been declining. This has made Marks & Spencer’s market share in the British apparel industry accounted for from 16% of the development period in 1997. It fell to 11% in 2010 and fell to 9.9% in 2016. The shrinking market share shows that Martha's clothing business is being snatched by competitors. Compared with competitors, Marks & Spencer’s apparel business has a few problems: 1. The problem of reverse inventory, which is a new word created by myself. In other words, when customers go to Marks & Spencer, they often find that the style they want to buy cannot be found in the desired size. The problem behind this is that Martha's team of buyers often does not accurately estimate the market and does not dare to make large orders. This not only makes Martha unable to do business, but also reduces the stickiness of customers. Click to know immediately how to classify cashmere sweaters Of course, there is a moderate and delicate balance among them, because if there is too much inventory, it will cause the pressure of clearance and promotion, and will detract from profits. 2. It's too difficult to visit, and customers are not efficient enough to visit the store. To a certain extent, the reason why the department store industry has been challenged unprecedentedly is because its business model can no longer meet the consumption habits of the new generation of customers. Department stores generally display products according to brand names. Of course, brands are still important to customers. However, in order to save time and effort, the order of choice for everyone becomes - look at the category/function and then pick the brand. 3. Positioning problem, this problem is the most deadly. In the past, the most perceptive image of Marks & Spencer was a mid-priced department store that mainly provided clothing for middle-aged women. According to Marks & Spencer’s financial reports, 58% of Martha’s customers are women, 54% of customers are aged 50 years or older, and 22% of customers are under 35 years of age. After opening a few words, Marks & Spencer entered the Chinese mainland market. At that time in 2008, Martha opened a 3-storey shop in the prime location of Nanjing West Road in Shanghai, and later it was successively in Shanghai Huaihai Road. The Beijing World Trade Plaza has opened stores of varying sizes but ultimately ended in failure. Marks & Spencer himself said that overseas expansion is not going smoothly and it is necessary to close 10 stores in the Chinese market. Many people who have visited Martha have complained that the clothes are too old-fashioned, the models are too large, and they are not localized... Now you should understand that this is caused by the core positioning of Marks & Spencer itself. Clothes are sold to middle-aged women. However, in China, this age-old woman compatriots either dance for a square dance in a non-brand dress with a range of 30-200 yuan at the side of the street, or use a local brand name in a mall that is not named. At this point, wearing a purple-tone T-shirt with Armani on the chest, it is estimated that Outlet from Italy. There is a 30-year difference between the consumption of Aunt China and British Aunt. Moreover, Marks & Spencer's stalls were not made much, and marketing was not so vigorously done. It had not yet been cultivated into a deeply rooted brand that the Aunt might take a look at. Come back to the British home market. Martha's apparel products, on the one hand, lack precise targeting of the core customers; on the other hand, in the merchandise display, most of the Martha's department store product display does not appear logical, neither is it as conspicuous as other fast fashion stores. Popular elements, like some mid-to-high end clothing stores, do not display products with style types or colors. It's easy for a customer to step into the store and glance at it, find it unappealing, and go out. Those customers who are interested in clothes will find that the middle price of Martha's main clothing is a bit ambiguous. Martha said that his family's things are “a cost-effectiveâ€. A skirt inside is probably sold for more than 300 yuan, but is lower than this price. 100 yuan, you can buy a more fashionable style in ZARA. If you look at the clothing brands on the market, you can probably know how the market is split: cheap brands, or selling fashion trends, say ZARA; or else it's good quality to sell quality Necessary funds, such as Uniqlo, were caught in the middle, and H&M, which sold some basic models with poor quality, proved to be in crisis from same-store sales. Click to learn immediately about cashmere type Those cheaper clothes go directly to grab youngsters' pockets, such as Primark. For clothing brands with a unit price of more than 600 yuan, even if the quality is not good enough to be worth the price, it is selling a story or lifestyle that everyone is willing to pay for. And think of Marks & Spencer, one of the competitors' low prices, fashion, good stories or lifestyle. In response to the above three issues, Marks & Spencer's responses are: 1. Adjust the distribution of goods, the goods to store rate from 61% to 84%; 2. Change the display of goods: not by brand, but Distinguish display by type of product, such as shirts, skirts, and pants; 3. Reduce prices. Behind the price cuts, Martha’s former CEO Bolland hired a pair of brothers specialized in purchasing from apparel retailer Next in 2014: Neal Lindsey and Mark Lindsey, who ended their cooperation with many long-term suppliers. Suppliers are often middlemen and work with suppliers of the most origin fabrics. This of course directly reduces the cost, but risks and opportunities coexist: In cooperation with new suppliers, quality monitoring has to be re-established. Should customers not be satisfied with the quality of the clothing produced, reducing costs will also outweigh the benefits. Speaking of this, I think you have always had a question in your heart, why would you spend so much effort to save the clothing business? Since the environment is not strong, and the business share of the food business has exceeded the apparel business (58:42), what is this? The answer to this question is why Marks & Spencer has been hesitant to develop the food business. The unit price of apparel products is high and the profits are higher. If the apparel business is reduced at once, it will be a blow to sales and profit. Food is the future of department stores However, the historical trend has been irreversible: clothing sales fell for three consecutive quarters, while food sales continued to increase for 25 quarters; when the market share of apparel fell, the market share of foods rose, currently Marks & Spencer in the British food market 4.3% of the shares; 42% of customers who purchased Martha's in-store food, this figure is 4 times that of the department store competitors. In April 2016, Marks & Spencer's new CEO, Steve Rowe, took office and worked at Martha for 25 years. Before that, he was responsible for the food business. This is a clear indication that Martha has begun to attach importance to the food business. In the year of 2016, Marks & Spencer opened 75 stores in the United Kingdom called Simply Food, which have a small store area and specialize in selling food. There are also seven overseas markets. For the existing Marks & Spencer Department, the floor area of ​​food has also been expanded. In Martha's largest store, the area of ​​food is now about 1,500 square meters, the size is almost an imported food supermarket; in the medium-sized Marks & Spencer In the shop, the food area is about 700 square meters. In the future, it is also possible to expand 30%. (btw is also funny, about 10 years ago, Marks & Spencer also reduced the area of ​​food sales in the store.) In 2016, Marks & Spencer introduced a total of 1,700 new food products, accounting for 25% of the total food product. This amazing rate of innovation has resulted in only about 10% of Martha's stores being similar to their competitors. It is also distinguishing Marks & Spencer from supermarkets. In the new product, cooked foods including Greek, Lebanese, and Spanish flavors were also upgraded; Indian foods and Italian pizzas were also upgraded. Italian pizza sales increased by 28% year-on-year. According to the data provided by the Barclays Bank Credit Card Center in the UK, British consumption in restaurants and bars increased by 14.4% and 10% respectively in 2015, but in fact, the sales of whole food and beverages only rose by 1%, proving that the British eat food. the trend of. British supermarkets Sainsbury's, Waitrose and Tesco have already opened up more fast food and deli areas. Click to learn immediately about cashmere type In addition, Marks & Spencer also intends to further expand the business area of ​​coffee and fast food. I don't know if you had any impression of Martha's Shanghai Nanjing West Road shop. At that time, the well-decorated coffee shop on the third floor was actually quite popular, and the taste of coffee and sandwiches was fine. But at the time, Martha regarded the cafe as a stop-gap place and did not further tap into its ability to drive people or even drive food sales. In fact, even in China, Marks & Spencer’s food has attracted the attention of many young people. One of my friends used Martha's own chocolate, and often went to Martha to get a few pieces. At the Martha store in Shanghai, there were more than 100 bucks worth of good-quality red wine and fruit wine. Later in the World Trade Plaza store in Beijing, fresh bakery bread was also provided. In short, if Martha treats the Chinese mainland market with a little more patience and uses food to open up the hearts of Chinese consumers, it may not be the end now. 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Why department store clothes can't be sold anymore. Where is the direction of the retail industry?
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