Department Stores Are Struggling Everywhere. Upgrading Of Department Stores Is Imperative.

In June, Wuhan's business department store was pformed. In March, Shanghai's first department store was closed. At the end of last year, Beijing Pacific Department Store withdrew.

Nowadays, it is difficult to eat the "rice" in the general merchandise industry.

At the beginning of 2012, retail sales were seriously affected by the objective economic environment.

And the department store industry, which mainly manages non life necessities, is the first to bear the brunt.

This traditional format, which used to satisfy consumers' shopping as the main goal, is gradually away from us.

Sales continued to decline

Wuhan Zhongshang group announced that the adjustment and renovation of Zhongshang square will bring adverse effects to the current management of the group. However, facing the continuous acceleration of urban development process and the continuous improvement of consumption mode, the upgrading of China general merchandise department is still urgent.

This year, the Ministry of Commerce announced the operation of the circulation sector in the first quarter of 2012.

Sales growth slowed significantly.

In the first quarter, the volume of retail sales of Enterprises above designated size increased by 15.6%, and the growth rate slowed by 6.9 percentage points over the same period last year. The rate of decline was 5.4 percentage points higher than the national average.

As the department stores operate mainly on jewellery, cosmetics, clothing, household appliances and other non daily necessities, the department store industry is more significant under the background of the general performance of retail business.

Reporters interviewed Wang Xianqing, director of the Institute of circulation economics, Guangdong University of Business. He believed that the continued decline in department stores sales was triggered by two factors, both internal and external factors.

"From the internal analysis, the most important thing is the aging problem of department stores. The traditional department store management pattern does not match the modern consumption patterns, ideas and habits.

Secondly, the rise of new urban lifestyle.

Most of the department stores are located in the center of the city. With the pace of urbanization, a large number of people move to the suburbs. The establishment of new urban areas has led to new shopping establishments, such as shopping centers, large supermarkets, commercial streets and other formats, which has weakened the competitiveness of the department stores.

Again, the impact of e-commerce, more and more people are willing to accept flexible and convenient shopping methods.

Wang Xianqing continues to introduce: "from external considerations, first, the state's macroeconomic situation is in a state of depression, and the manufacturing sector is in a downturn."

Second, the price level continues to rise and consumption power is insufficient. "

If the economic situation is sluggish and consumer confidence is insufficient, it will naturally cling to the "money bag".

In addition, while sales are slowing down, the rising cost of manpower and rent has become another pressure on the department stores.

Compared with the same period last year, labor costs rose by 20%, plus the cost of water and electricity and rents increased. The overall business cost rose by 20% to 30%.

Department stores need to be changed

The department store was once a lighthouse for shopping convenience, but now it has become a tedious and sometimes frustrating shopping place.

Evolution has a simple and correct concept: either to adapt to the environment or to exterminate.

In the competitive environment where only the strong can survive, the managers of department stores must consider carefully and seize every opportunity to recover their lost territory.

Wang Hai, deputy general manager of Wuhan Zhongshang Group Co., Ltd. believes that at present, the whole domestic department store industry is in a state of weakness. If department stores want to get rid of agents, they should gradually dilute the traditional way of joint operation, grasp the pricing power of commodities through "direct operation", and raise gross margin at the same time, and reduce intermediate circulation links. This will reduce the cost of goods purchasing by 10% to 30%, and bring benefits to consumers.

In addition, Wang Xianqing reminded department stores to actively integrate logistics, distribution and e-commerce.

Traditional department stores have obvious advantages in e-commerce. On the one hand, they have suppliers' resources. On the other hand, they have many years of accumulated brand advantage and retail management experience.

With the growing consumption of online shopping groups, the development of e-commerce is the general trend. As a traditional retail industry, department stores must adapt to the new development.

In spite of the poor performance of e-commerce, e-commerce is still the first choice for department stores to find new profit growth points.

Facing the internal and external troubles, the department store industry is going to have a clean sweep.

The department store should seize the last chance to survive and recover the market share before it becomes too late.

Department stores should learn to use for reference.

In the eyes of consumers, goods in department stores are usually expensive, innovative, and services and products are very common.

Compared with the state of department stores, the fast rising shopping centers and brand stores become the biggest winners.

Consumers prefer to go to shopping centers and stores to find specific products and services.

Shopping centers have grasped the idea of "buying, eating and playing" Trinity, implementing the one-off purchase method, integrating various consumption purposes and promoting each other, plus the convenience, comprehensiveness and comfort of shopping centers to adapt to the change of consumer behavior, and naturally attract large numbers of passengers with different needs.

Franchised stores take large market share from department stores by targeting and catering to well-defined market segments, improving operations and improving efficiency.

Many franchised stores have quite a few skills to provide the latest styles and use advanced inventory management systems to accelerate the speed of goods shelves.

Nowadays, more and more department stores tend to be shopping centers and stores. They aim to segment the market, no longer meet the needs of all shoppers, but redefine the target market according to their best customer types, so that they are different from other department stores.

In the US, Messi stores locate in relatively young shoppers.

It has pformed some shops into more modern and fashionable shops to provide quality private brand goods at lower prices.

It is now promoting the "This is It" brand for young people, and has launched an interactive website. Visitors can download music from the website, watch the latest trends, and get to know the latest exclusive news of celebrities.

Wang Xianqing also believes that the department stores face the new competitive environment. If they want to survive, they should absorb the advantages of the new formats such as shopping centers and franchised stores, and start with the sales way, and create a featured and differentiated theme department store by improving the display of goods, so as to improve the shop experience.

In addition, greatly improving executive power and improving supply chain efficiency is very important in the field of clothing, because the fashion trend is unpredictable, which often leads to price reduction (from excessive inventory) or out of stock (stock shortage).