Is There Any Future For Department Stores?

How long have you been shopping in a department store? I still remember that when I was a child, the most anticipated thing was to go to the department store with my parents to buy new clothes.

Today, the department store industry seems to be disappearing.

Starting from 2012, the volume of passenger traffic in China's department stores began to increase.

In 2013, the department store industry went through the golden period and ushered in the tide of closing stores.

In 2016, according to statistics, more than 70% of the department stores in the whole country suffered a drop in revenue, and the revenues and profits of the whole industry generally fell sharply.

　　 Is there any future for department stores?

In 2017, intime department store was formally acquired by Alibaba, and then launched a new retail and digital transformation breakthrough battle. At present Yintai submitted transcript, does it mean that the spring of the department store is coming?

The break out battle of department stores is not easy to fight.

　　 First of all, we are facing the problem of commercial stocks.

Since 2018, the entire commercial real estate market has begun to turn from incremental market to stock market. On the other hand, it is a huge commercial surplus. On the other hand, a large number of shopping centers are still entering the market, and the market competition is increasing.

Secondly, it is difficult to transform the volume and hardware condition of department stores.

There is a big difference between department stores and shopping centers. Nowadays, the shopping center has more than 100 thousand square meters of floor space, and the area of department stores is generally less than 50 thousand square meters.

When people are used to shopping in big atrium and wide indoor pedestrian street, the volume of department stores is obviously difficult to meet the needs of people's upgraded consumption experience.

Third, the transformation of thinking and business mode is very difficult.

In the business mode, the department store is only a joint venture. The judgement of the commodity, market and trend depends entirely on the business brand, and its business operation ability is gradually degraded.

In terms of space creation and customer marketing, it still follows the set of theories more than 10 years ago, with little innovation, which is no more than a shopping mall. So the department store is in a rather awkward position.

If we want to change our old thinking and business model and get out of the current predicament, we need to be determined and bold. Next, I make an analysis of several directions of department store transformation.

　　 Shopping centralization

The shopping center of department stores is the most important innovation path for department stores. That is to say, on the basis of the original department stores, shopping centers are innovating in terms of environment, moving lines, formats and brands, but there are also many traps and blind spots.

First of all, we must recognize a fact: the shopping center of department stores is not simply a simple form of adding food, children and entertainment on the original department store.

I've seen too many department stores before, but I've been thinking a lot about the innovation of the industry, imitating the shopping center to produce specialized floors for dining, children's entertainment, cinemas, fitness and so on, but consumers are not buying it.

Because in the consumer impression, you are still the original department store, still not aroused in the current life scene, people still shopping shopping mall choice. Mao ye, a maid department store in many places, is caught up in this misunderstanding.

Therefore, the shopping center of department stores is not as simple as imagined. When commercial volume is fixed and has no advantage, if we want to compete directly with the shopping center in the market, we need to have a clear market positioning, and make business transformation and format adjustment based on positioning and target group segmentation.

If you want to do a shopping center department store, you need to understand the concept of "third living space", make changes from positioning, moving line, environment, public space and format, and strive to create a theme space suitable for consumers' leisure.

Next, we need to make good use of the concept of precision marketing, community and IP at the marketing level, attach importance to business operation, and really create a cohesive urban space instead of relying solely on commodities to win the market.

For example, Beijing SKP, although classified as a department store, has achieved or even exceeded the shopping center standard from the commercial volume, shopping environment and format combination.

Therefore, department stores should not only envy others, but also see their efforts.

Applicable format: new department store shopping center, department store with large volume and modified conditions.

　　 topicalization

In recent years, a new trend has emerged in the commercial market, namely, the thematic of business, and the flourishing of various thematic businesses and theme blocks.

Compared with shopping centers, the commercial area of department stores is smaller, and the demand for commercial thematic is more urgent. If we can focus on specific target customers, make thematic scenes, and use market segmentation and meticulous operation, we can win the market.

Many of thematic transformations are carried out in the vacant areas after the original department stores have been rented out, such as creating indoor theme commercial blocks, including Wen Chuang theme blocks, children's theme blocks, sports theme blocks, and women's theme blocks.

In addition, some independent department stores are actively seeking this way of adjustment and transformation in order to win part of the consumer group in the fierce competition.

This transformation has changed the commercial form of department stores to a certain extent. Starting from experience, by adding various business forms such as interaction, entertainment and leisure, plus a theme oriented environment, we create a space scene that meets the needs of specific consumer groups.

But thematic blocks are not able to cure all diseases at present. Too many thematic blocks bring aesthetic fatigue.

There is not enough accurate target audience positioning, only focus on landscaping, and the lack of product and marketing level leads to insufficient popularity, but no increase in passenger flow after major investment, all these are thematic business problems.

At present, as an important branch of thematic business, the theme business of children located in family parent-child groups has become the biggest trend. Next I will take an analysis of children's theme business:

Children's thematic businesses include children's theme shops, children's thematic neighborhoods and children's theme Mall. Of course, this classification is not based on body size, but according to management form and expression form.

For example, the candy city of CBD Wanda in Qingdao, the British town of Tianhong shopping center in Shenzhen, etc., all use the theme block of the scene, combining all kinds of formats such as children's retail, catering, entertainment, teaching and training to satisfy the one-stop consumer service of parent-child families.

The combination of this form and department stores can be part of the regional transformation of department stores, replacing the original department stores with target customer groups, and complementing the formats with the whole project and sharing the passenger flow, so as to increase the characteristic advantages of the whole project.

Children's theme Mall, such as Xi'an Zheng Rong Rainbow Valley, is a complete commercial complex. The area of about 100000 square meters includes four modules, including industry matching, parent child amusement, education and training, pregnant and infant retail, providing a comprehensive and customized training environment for children.

The combination of this business form and department store is mainly after the whole department store project is closed, repositioning, planning, designing and attracting investment, completely changing the original commercial form and style, and revitalize the stock business of the market.

The thematic of business projects is not only simple as project positioning and investment promotion, but also involves various aspects such as scenario creation, community operation and IP thematic. If department stores want to get rid of the limitations of the original single commodity operation, they must have the product thinking of creating a one-stop space experience to make a real theme business.

Adapt to commerce: department stores that have closed or partially retired from vacant department stores, department stores, rented shopping centers, and surrounding specific target groups.

　　 Community-based

The third direction of department store transformation is community-based. This also caters to the overall trend of the current commercial development. Relying on community residents, doing all kinds of community life services and supporting community businesses, has gradually become a new growth point of commercial development.

At the same time, the demand for commercial area of community business is not as large as that of shopping center. So some stores began to transform into community business, and a new breakthrough in transformation can be found.

This transformation still requires the determination of the department store to make a radical change. It is necessary to pull the Department Store from its high position and go deep into the community to fight for business with those community stores.

The brand must be changed from the big card to all kinds of merchants. The format will change from simple department store to supporting service for the community residents. The whole department store should also turn from the commodity supplier to the space provider. It will become a community business thoroughly from the department store.

Community business is more like a commercialization of lifestyle. It needs to meet the needs of family life and meet the needs of people living in a kilometer.

From this point of view, community commerce must have a full understanding of the lifestyle, living habits, consumption needs and consumption level of the target customers. It is the most important feature of its close proximity to residents, convenience and comprehensiveness. In addition, it should improve the connection between community residents and lead people's lives to a certain extent.

Although community commerce is a trend, the transformation of department stores to community businesses is not simple. First of all, it is limited to regional factors, and not all department stores are suitable for community business.

Second, the transformation of business thinking is very difficult. Although community business is smaller in size, we must understand it as a shopping mall, and the department store is transformed into a shopping mall.

Third, to some extent, this kind of adjustment needs to be redesigned for the overall structure of the project, space creation, location packaging, format matching, external promotion and so on. It is necessary to revitalize the stock business as the core and satisfy the residents' life as the core. These elements are indispensable.

At present, there are few cases of transforming from department stores to community businesses, but this is a reference path for stock mobilization.

Applicable business: department stores that are deep in urban communities and have the conditions of transformation.

　　 Ole Lai

The commodity strength of department stores has always been an advantage that it is proud of, but in today's business environment, we find that department stores are completely outdated in terms of commodity strength.

In terms of commodity discounts, it is not as cheap as Oteri J and electricity providers. In terms of fashion and trend, it is not as fast as those of fast fashion stores and brand flagship stores. In a department store, the rental area and counter of a brand of tens of square meters are far from meeting the needs of fashion masters, and also can not satisfy today's consumers' shopping experience needs.

Thus, a discussion on the strength of department stores began to be mentioned, becoming a new weight for transformation of department stores, which is mainly divided into two directions, one is autheres and the other is proprietary.

The format of oorlies has been in existence for a long time, so far it has nearly 100 years history, but its true rapid development is in the recent thirty or forty years.

In China, Oteri J has made rapid progress in the two wave of development of department stores and shopping centers. Especially during the rapid development of shopping centers, all kinds of town outlets have springing up all over the country, such as Beijing, Tianjin, Florence, Shanghai, Qingpu and so on.

Otter, because of its advantage in merchandise discount, has not been affected too much by the development of e-commerce and shopping centers, especially in various luxury discounts.

Similar to Oteri J, this has also become an important direction in the transformation of department stores, such as Bailian, Lufthansa, Wangfujing and so on. The layout of OLE has been arranged, and the transformation from general merchandise to ole has been realized by utilizing the resources superiority of its high-end department stores and luxury brands.

Now many department stores have started orter's transformation after changing their business difficulties, changing their name from a certain department store to a certain otter, but the result is not good.

The true meaning of the outlets lies in the low price of famous products. First of all, it must be low price, can not lower the price, do not talk about ole; secondly, it is not the low price of the goods, otherwise its competitors will become those small wholesale cities, and they have no advantage over the low price.

The department store wants to transform itself into orlies. It's not easy to change the name. It's so simple to use the tail goods to promote sales. The most important thing is whether you have the resources of famous brand, can you decide to recruit them and make the terminal price down.

Applicable business: department stores with strong domestic and foreign resources.

　　 Self run

In addition to otlis, another direction of innovation in department stores is self orientation. The discussion on self-management of department stores has existed for a long time. This is also a re exploration of the return of commercial property after the department stores gradually lose their ability to operate commodities.

For example, intime department store started its own brand in 2012, and has built "I'M", "collect goods" and "West have" a number of self name collection store brand, and cross-border commodity self brand "West election".

There are also new world department store self built brand "LOL original life" concept store, "N+ natural baking", main small dress "new" and "N+baby" children's theme supermarket.

The major department stores have launched their own brand names, testing the water department stores and finding their own commodity losing power.

But opening self shop and buyer shop is not smooth sailing. First of all, the biggest problem is that if department stores want to be self-employed, they must grab business with those retail brands. From fashion control, commodity screening, store operation to lifestyle guidance, they need to start making up lessons from scratch.

Secondly, doing proprietary products and brands means increasing investment. It must change from the identity of the landlord to the identity of the operator, and then bring various pressures of capital, procurement, sales, promotion and service. Self employment will also bring inventory problems, and it is not easy to find the right buyer.

Third, the department store itself is only a single shop exploration, and occupies less in the whole department store business. It is difficult to fundamentally change the status quo of department stores from the perspective of revitalize the stock of commercial stores.

Therefore, the self-management of department stores should be considered as a transformation of department stores. We can not hope to transform the existing department stores into self run businesses. If we do not operate properly, we will plunge ourselves into another pit.

It is certain that the future business will favor the people who do business well, return to the essence of business, return to the operation and service of commodities, and improve the commodity strength of department stores.

Applicable business: department stores with certain brand and buyer resources.

　　 Electronic commerce

After the impact of the electricity supplier in the department store, the department store industry has gradually developed a trend to learn and transform the e-commerce platform. This includes the self built e-commerce platform and the cooperation with the electronic business platform, from the offline to the online, opening the full channel business mode.

The first is self built platform. For example, Tai Shang department store's Tin dog network, Yintai department's Yintai network, and rainbow rainbow mall's "Rainbow scarf". Or use the advantage of offline stores to integrate online or offline, or use their own brand resources to do online platform sales.

The second way is the grafting platform, such as Wangfujing department store, Messi department store, intime department store and so on, settled in Tmall, relying on the huge flow of Tmall business platform, increasing the display and sales channels of goods, and bringing traffic to the real business.

Another example is Suning, from the original pure line appliance stores to the current line of integration, from the Tmall platform to suning.com, suning.com online platform sales in 2018 reached 208 billion 354 million yuan, online business sales scale accounted for 61.80%, realized the perfect transformation from offline to online.

Faced with the same market environment and e-commerce platform, why did the department store industry rarely smoothly integrate transformation? In the final analysis, it is the shortage of merchandise in department stores.

The department store itself is the landlord, does not operate, the hand does not have the product which can manage, does not have the core competitiveness, also has lost the right to speak from the line to the line.

Therefore, the department store's electric business is a channel supplement based on the operation ability of commodities. In the final analysis, department stores only improve their commodity strength.

Applied Commerce: department stores with certain commodity strength.

　　 epilogue

The first ten years of twenty-first Century were the period of rapid development of department stores. It took ten years to become the king of the whole business market and the second ten years. It experienced prosperity and decline, and this is also a quest for self-help.

Starting next year, the Chinese department store industry will soon usher in its new ten years. Whether the department store industry will rebirth or withdraw from the arena will probably no longer matter.

Because in any case, the essence of business will not change. It will always be iterative on the way of meeting user needs. Department stores are also becoming a new form and continue to exist.