Things in the man-made garment industry

If the status quo of the apparel industry is summed up in one sentence, it may be more appropriate to use “one-place feathers and gold on the floor”. First of all, the apparel industry is bad enough: Some clothing listed company executives run the road, the capital market does not wait to see, the stock price is in the doldrums, some listed companies even make transitions to mobile games, piles of mountains, indigestible stocks, commercial real estate deduct points, Rents are pressing harder and harder, and soaring human resources costs, a large proportion of operators in the area of ​​e-commerce are earning and losing money. Many companies in the industry have used various means to improve the predicament (such as O2O) but the effect is not obvious.

On the other hand, some enterprises have developed rapidly, such as homes in Haishu, internationally, such as Uniqlo. In addition, there are a number of emerging models that are rapidly developing with emerging business models.

We believe that the current predicament lies in the fact that existing business models cannot adapt to changes in current social conditions and business conditions. The current hope lies in grasping and developing the key factors in the current social conditions. Those who cling to the existing model are faced with guilty feathers. When they see the new model, they are faced with gold. This article will focus on the field of apparel brand operations.

One feather: the inevitable inevitability of the gradual failure of the brand operation model and model In the brand operation, the competition for consumption flow is the core of brand competition. This is true for online and offline brand operations. Changes in social conditions have led to a rapid collapse of the basic conditions of current distribution flows.

We know that the distribution mechanism of offline traffic is centered around the location in commercial real estate (for convenience, the mall will replace different types of commercial real estate below). In a shopping mall, location is sales, location is profit, and location is advertising. How to allocate the location of the mall? The basic principle is to allocate different locations according to different brands' ability to attract consumers—the most attractive to the consumers, bring traffic to the mall, give the best location, and the lowest rent. And even subsidize such brands as LV. Those brands that need shopping malls to provide traffic will be given poorer positions, higher rents, and even rejected.

In a similar vein, agents also adopt a strategy for the brands they represent: to attract good brands to a good position in the mall, to allocate the best people to such brands, and to Brands don’t make too much money or even just be content to maintain such a business, while brands that don’t have the ability to do it are “blooded”.

Then, why is the existing operating model gradually failing? The reason is that the social environment and the commercial environment have undergone three changes.

For one thing, the Internet has changed the ecology of apparel brand operations. First, the ratio of consumers to offline consumption has been drastically reduced and people have flowed to the Internet. Looking at the active customers disclosed in the Ali and JD.com IPO documents, as many as 234 million people, the proportion of the population of the country’s urban population, and the proportion of the city’s population that has the ability to consume are enough to illustrate the problem. The second is to change the way information is disseminated. Past transmissions rely on media such as newspapers, television, radio, and various street signs. The more effective route of transmission nowadays is an Internet-based tool. The third is to change the way the brand communicates content and content production. Spreading content must be emotional, entertaining, and easy to spread. Good content will have a good spread, with no or only minimal transmission costs.

Second, there is an irreversible change in consumer psychology and behavior. After 80 has slowly become the main force of consumption, has appeared after 90. As they grew up with the Internet, they were more assertive, liked entertainment, and social demands were stronger, and their appeal for experience was even stronger. If you can rely on the Internet to solve, the proportion of online solutions is very low. To cite just one example: "offline try-on, online purchase" commonly encountered by apparel brands. With this trend, prevention is unstoppable.

Third, changes in commercial real estate will have a greater impact on the apparel industry. According to public statistics, there are 10,000 commercial complexes that China will open by 2025, and the excess will be self-evident. This indicates that commercial real estate will inevitably undergo major changes. In the near future, Wanda said that it is necessary to refer to four directions for future development: entertainment, sports, social networking, and shopping. Many shopping centers have adjusted the proportion of apparel retailing in the portfolio. This trend continues to intensify, in the foreseeable time, will give the clothing brand a great challenge.

The above three factors affect each other and continue to strengthen each other, and jointly destroy the current traffic distribution logic with storefront as the core, fundamentally destabilizing the existing ecological foundation of clothing brands.

Next, analyze the problem of clothing suppliers.

The principle of online traffic distribution is more clear: either attract consumers to take the initiative or buy traffic from platforms such as BAT.

The reality is that those who have the ability to attract consumers to take the initiative to come to the door and have brand bargaining power are infrequent and incapable of climate.

The e-commerce that depends on purchasing traffic and price wars is divided into two situations. First, traditional offline companies’ operations on the Internet, with de-stocking as their core, their products are inferior to the offline in terms of quality and delivery, and it is inevitable that low prices and purchase flow are the core of operations. At the same time, the competition between brands will inevitably increase the cost of traffic and gradually lead to unprofitable collective dilemmas. Second, the vast majority of e-commerce companies that have grown up in the Internet environment simply regard the Internet as a “higher efficiency” channel and have no innovation in branding, product design, dissemination methods, and dissemination of content. Therefore, the only way to survive is Can sell at a low price, buy traffic.

In short, the essence of both types of companies is to simply move the storefront to the online market. The brand content does not meet the requirements of consumers' personalization, entertainment, and interaction. The communication does not show the characteristics of the Internet. They do not Representing a new business model does not represent new productivity. If you look at BAT, etc. as a commercial real estate, its operational logic, problems faced, and the issues under the line are exactly the same.

In summary, it can be concluded that the Internet, changes in consumer generations, and changes in commercial real estate are the environments in which apparel brands survive, and their changes jointly shake the foundation of existing apparel brand models. In recent years, the inventory problems, rental problems, and e-commerce problems that have occurred in the apparel industry are just a result and an appearance. The reason why the existing model has not yet seen avalanche collapse is that the new model has not yet formed a sweeping trend, the energy of the enterprises running in the current model has not yet been exhausted (many enterprises have sufficient savings for a period of time), and the critical point of the new and old alternatives Not yet arrived.

Montreal Gold: Brands that meet changes in the business ecosystem will gain opportunities for the development of a space-based apparel industry at several levels: changes in the brand's operating model; reorganization of stock assets based on brand model changes; related cross-border related apparel Innovation (mainly in the material and wearable sectors); Value-added value due to reorganization of existing assets brought about by brand model innovation and cross-border innovation; capital market opportunities.

The changes in the brand operation mode are the closest and the opportunity for other opportunities. The gradual failure of the old model stems from the fact that changes in the Internet, consumers, and commercial real estate have shaken the foundation for the distribution of traffic. In other words, as long as the three business models are satisfied, a larger living space is available.

According to the analysis of changes in the Internet, consumers, and commercial real estate, one or several of the following features may become the key to the future clothing brand operation model:

1. Design, dissemination and sales are carried out simultaneously to reduce or even eliminate intermediate links. 2. High-quality content is equal to dissemination. The dissemination process is part of content production. 3. Consumers participate in the design process in some form, and fundamentally solve the problem of quarterly product inventory. The derivative result of this feature is the qualitative change in sales methods, and the ordering system will no longer exist. 4. Online leading communication and sales, offline becoming a base of super experience, creating a new experience form, cross-border operation. 5. Strong, interactive, and emotionally sustenance, consumers gather together, and the brand is highly viscous. It builds a value chain around consumers, and carries out diversified product operations. It has a brand operation model with one or several of the above features. The surface has been confirmed by the practice of different companies in different locations and situations. Once these enterprises “surprise” to obtain the “catalyst” for extraordinary development, they will have the following advantages for the old brand operation mode:

Eliminate stocks at the end of the season. This is the dyslexia of the old brand operation mode. The reason for the end of season inventory is that it is difficult to grasp the ratio of money, and the reason why the ratio of money is difficult to grasp lies in the fact that design and production can not accurately predict whether the style is selling well and how much the specific model is sold. The tools provided by the Internet and the characteristics of consumer behavior after 80s provide operational means for solving specific money and quantity problems. Business startups based on this concept have emerged and have grown rapidly.

The content is king. The Internet naturally solves the problem of information asymmetry. Poor design, poor quality, high prices, and created images can't be tampered with on the Internet. One of the reasons why the old model has encountered problems lies in the fact that the composition of insatiable excesses is too great, and bad designs and poor services abound. This is related to the birth of information asymmetric environment. The Internet and the post-80s will make the market mechanism more effective, and the apparel industry will usher in an era of “exquisite content”.

Precisely master consumer data, data operation. Under the existing brand operation mode, due to the obstruction of agents, the high cost of storefront terminal operations, and the difficulty of management, it is difficult for brand operators to grasp detailed customer information. The Internet, like electric power, roads, and television, is the “infrastructure” in the business environment. The tools it provides are sufficient to provide detailed records of necessary consumer information. As an example, there is a APP for apparel applications. In just 2 years, it has 25 million fans, with more than 2 million daily active members, with a valuation of 1.2 billion. This is a completely new logic and a new way of operation.

Frequent interactions and cross-border operations based on crowd-based value chains. In the old model, it is impossible to interact with consumers frequently and drive frequent interactions between consumers. After the Internet and the 80s, the natural soil is interactive, and the cost of constructing the community's soil is low. Whoever grasps this key can build a value chain based on people. An example of this in the apparel industry is Threadless, although it is still not complete.

High cost performance. That is, with the same quality and design, the price is extremely low and the response speed is extremely fast. The reason why the current brand markup rate is high and the net profit margin is not high is that the intermediate link is too long, the efficiency of communication is low, and the investment cost of offline stores is high. Under the new model, sales can eliminate the need for intermediate links, spread almost free of charge, and save a lot of offline storefronts. According to the survey of related companies, similar quality and design of domestic second-tier brands can be achieved, and about 20% of net profits can still be sold at half the price of the line.

Companies with the above characteristics have already emerged. Their relationship with the old model is similar to the year's ships and sailboats, trains and carriages, telephones and telegraphs. The outlook is worth looking forward to.

In the process of the development of the new model, various elements of design, production and dissemination will be re-integrated with new rules, which will constitute new opportunities for creating wealth. As the new model grows, big data, cross-border, cultural industries, wearables and other hot spots will no longer be missed by the apparel industry. The use of the power of capital to promote the development of the industry is not the fulcrum of incitement such as hand travel, which is rarely associated with clothing, but the actual input and output.

The time is near and things are artificial. This is where the “gold” lies in the apparel industry.