Department store crisis
Thirty years of Hedong, thirty years of Hexi.
The department store industry, which was once in the limelight, is now welcoming the store. Is it a full retreat, or is it a beast? The situation of the department store industry, which was reversing in a decade, not only affected the entrepreneurs, but also tortured the future of commercial real estate.
Under the sweep of the Internet + wave, the economy has entered a new normal, e-commerce has become popular, and mainstream consumption patterns have changed dramatically. On the other hand, rising costs such as rent and manpower have overwhelmed traditional retail businesses, including department stores.
When well-known shopping malls are also difficult to escape the fate of the store, in the face of the changes of the big era, how should the physical business transform? How to get out of the dilemma? How to adapt to the adjustment of the new economic structure?
In this issue of "East Real Estate Finance Weekly", we try to decode the development difficulties faced by this huge industry through the tip of the iceberg in the tide of department store giants. By visiting the traditional shopping malls that have stood up in these years and the international perspective, Looking for the commonality and characteristics of success and failure, so that the industry industry can see through the fog and see the future.
Transformation into deep water
Popular rent double kills traditional department store
Where do traditional businesses go when the continued downturn in traffic is experiencing increasingly high rents?
East Real Estate Yan Wenjuan
The traditional department store industry encounters Waterloo seems to be expected.
A few days ago, Huaihai Road Pacific Department Store reported the closing of the store. Under the impact of the Internet wave, traditional consumption patterns are being deconstructed, and the old department stores that were once popular have been entering a critical moment of survival.
Closing the store
Pacific Department Store has occupied two floors on the ground floor and six floors above ground in Rui'an Square. It has always been the old department store of Huaihai Road shopping district.
In response to the closing news of this former landmark project, "East Real Estate Finance Weekly" (hereinafter referred to as "East Real Estate") conducted on-the-spot visits.
Before entering the door, the reporter found that two signs of “clearing and selling†were posted at the door, and a huge summary of the coupons was posted on the side of the door, marking the discounts on various items from the first floor to the fourth floor of the mall. The price of brand shoes on the negative layer starts from 199 yuan, and the discount on the rest of the floor is basically less than 50%. There are also many big brands that offer special price, including GUESS, PRADA, D&G and so on.
After entering the mall, "East Real Estate" found that almost all stores are undergoing various degrees of discounts. The entire mall can be seen everywhere in the slogan "Enjoy a cool holiday 50% off."
A clothing store staff told "East Real Estate": "I personally think that the clothes here are too expensive, so there is basically no one to buy if there is no discount. Recently, the discount is strong, so someone will continue to buy clothes." When asked if they want to move out of the Pacific Department Store, the staff said: "The leaders are negotiating, because the Pacific Department Store's lease is about to expire, and our performance is not very good, so the possibility of closing the store is greater."
Although Pacific Department Store faces the dilemma of closing stores, consumers do not have much to pity. A consumer working nearby said to "East Real Estate": "It's off. I don't usually buy things here very often. I often take a look at it and then place an order online. After all, here. It's more expensive, it's cheaper online. I recently heard that the discount is quite big here, so let's see if you can get some good things."
"East Real Estate" learned that in 1997, Pacific Department Store Huaihai Road opened its business, and it signed a 20-year contract with Shui On Group. Next year (2017), the contract is about to expire. Obviously, in the case of rising value in the downtown area, the current rent of Huaihai Road is not the same as that of 20 years ago, and the substantial increase in rents is basically a matter of course.
As early as last March, the Pacific Department Store Huaihai Store had heard about property recycling and closing of the mall. To this end, "East Real Estate" interviewed Liu Mengjie, general manager of Shanghai Xintiandi Commercial Co., Ltd., the other party said that after the expiration of the Pacific Department Store lease, this part of the retail area will be recovered, and Xintiandi will operate it by itself. "We will make it a more With its own characteristics, young fashion and diversified shopping malls, although the hardware form is still a shopping center, the format will be more innovative, making it the gateway to the entire Xintiandi business district."
For the fall of traditional department stores, Liu Mengjie believes that it is the general trend. However, in her view, physical business needs to be transformed and innovative, not only to see the experience, but also to fall into the products for food and clothing. To the offline, the commercial products of their own should be done."
Encounter winter
In fact, the decline of the Huaihai Road Pacific Department Store is not an accident, and its signs of decline have long been traced.
"East Real Estate" noticed that before the Pacific Department Store, there were 9 stores nationwide, located in Shanghai, Chengdu, Tianjin, Wuxi, Chongqing and Dalian. In October 2013, Chengdu Pacific Department Store's 20-year-old store closed its business because the lease expired. During the cooperation period, there was a disagreement with the owner and no agreement was reached. In addition, Tianjin store and Wuxi store closed the store last year for similar reasons. If the Huaihai Road store is closed next year, the department store operated by Shanghai under the name “Pacific Department Store†will only have two Xuhui stores and the Everbright City store.
The failure of Pacific Department Store is only a microcosm of the decline of the traditional business community. In 2012, the first department store that opened the store for 19 years was replaced by the BMW flagship store; in 2013, two hundred Yongxin, which opened the store for 20 years, was located in the global flagship store of Uniqlo; in 2014, Huating Isetan, which opened the store for 15 years, was replaced. Appliance store Wande City. Today, Wande City has withdrawn, and replaced by the new Sunshine 527 shopping mall, but it is still very deserted. Although the three floors and four floors are marked with various types of food gourmet tenants, many are unmanned. On the fourth floor of the main dining area, which is supposed to be lively and extraordinary, only a single-digit flow of people can be seen.
According to the statistics of the China Department Store Business Association, the total sales of 80 member companies increased by 9.3% in 2015, but the profit margin decreased by 19.53%. According to the statistics of the Internet of Things, in 2015, 114 department stores have closed stores, including many famous department stores such as Marks & Spencer, Parkson Department Store and Far East Department Store.
According to the “2013-2017 China Department Store Retail Market Analysis and Research Report†released by Shangpu Consulting, traditional department stores have ushered in the transition period of industrial adjustment after nearly 10 years of rapid development. The traditional sales operation model has not been able to solve the problems faced by department stores. In the future, if a department store can find a new operating model, then the department store can compete with the online store.
Du Bin, director of Ruiyi Service Department, told Dongfang Real Estate: “In recent years, the average profitability of traditional department stores has continued to drop by about 30%, a large part of which is due to the rise of e-commerce, and on the other hand, the same products. Qualitative, the brand in the department store is basically the same as the brand in the shopping mall, and everyone prefers to go shopping in the mall instead of the department store."
Hong Kong New World Department Store (00825.HK), which operates Paris Spring Department Store in Shanghai, recently announced its interim results as of the end of December 2015. The total sales revenue of New World Department Store's counter sales decreased from HK$7.073 billion in the same period last year to HK$5.986 billion. Dr. Zheng Jiachun, Chairman of New World Department Store, made it clear that the economic downturn, the competition brought about by network and mobile consumption, the shift in consumption patterns and the rising operating costs have made the physical retail business environment very difficult. New World Department Store closed its Beijing fashion store on January 1 this year and continued to use a prudent and conservative attitude to slow down the pace of its own stores and concentrate on improving operational efficiency.
Transformation breakout
In the face of increasingly cruel survival dilemmas, traditional department stores have to find new development paths.
According to the relevant report released by Shanghai Commercial Information Center, in the face of the adverse market, Shencheng Department Store seeks new breakthroughs in transformation and development. Large-volume department stores are developing in a “big and complete†direction, gradually becoming a shopping center, attracting passengers and boosting performance by increasing entertainment and entertainment formats such as eating, drinking, and playing. Small department stores are “small but fineâ€. The direction of development, relying on market segments and differentiation strategies, transform into a specialty store of a certain category or several related categories.
At the end of last year, Wangfujing Department Store Group removed the word “department†from its company name to show its firm determination to transform, and announced the establishment of a shopping mall company to enter the shopping mall format with a new partnership system. According to the plan, in the next five years, Wangfujing Group will have 15 to 20 shopping malls with a single area of ​​not less than 100,000 square meters. In addition, Outlets is another mode of development of Wangfujing.
Referring to the successful transformation of the department store, Du Bin recognized the transformation of Parkson Yoko City Plaza. “Although the operating area is only 45,000 square meters, the sales on the day of trial operation broke through 16 million. Parkson Youke completely subverted The traditional department store concept turned to the concept of the city Ole."
"East Real Estate" reporter learned that Parkson Yoko City Plaza is the first City Mall City Plaza jointly established by Parkson Business Group and Korea Yilian Group. Yilian Group is Korea's largest fashion circulation specializing company with huge brand resources. This advantage allows Parkson Youke City Plaza to bring together a number of Korean first-line brands, international big-name discount stores, including Korea's super popular cartoon park COCOMONG PLAY GROUND, clothing love's first-line luxury brand LUXURY GALLERY, and the main fast fashion BACTORY Brand. In addition, there are fashionable fashion brand HALYANG, which is run by Gary Man, and South Korea's popular online brand, NANING9, TWEE. In addition, Parkson also introduced the group's own brand BOMBO FASHION.
Some insiders told "East Real Estate" that before the renovation, Parkson's annual performance was less than 400 million yuan. After the transformation, according to the existing performance of Parkson Yoko City Plaza, it is expected to be 700-800 million yuan or even higher. Performance granules, and may become the industry's first in the industry in the next 1-2 years.
Du Bin told East Real Estate: "Many department stores are attracting people by adding some functions such as catering and leisure, but many of them are 'half-hangers' projects, and they cannot change the essence of department stores, and the effect will not be very good. The success of Parkson Yoko is due to changes in the model."
Class shopping center is the direction
Drawing on the successful experience of the upgrade of Parkson Yoko City Plaza, Du Bin strongly agrees that traditional department stores will enhance their appeal to customers by introducing self-operated brands.
However, "East Real Estate" also learned that Martha's Department Store, which once closed five stores in Shanghai, has always been a model of self-operated model, and has signed long-term exclusive production contracts with major manufacturers in the UK, including clothing, food and other products. "St. Michael" brand sales. Like other self-operated department stores such as Lane Crawford, they buy out brands, sell them at stores, make their own pricing, and rely on commodity spreads to make profits.
Some insiders analyzed that the reason why their business situation is not satisfactory is not that there is a problem with the self-operated department store model, but whether the advantage of this model is combined with the local market and whether it is fully and effectively utilized. The industry believes that: "Self-operated products-based department store operating profit comes from the efficiency of de-stocking transactions, so the precise target of the target customer group, the flexibility of product adjustment and the maintenance of customers become a crucial factor. Under the impact, the richness of goods no longer occupies an advantage. The fast fashion that dominates the mainstream under fast economy and fast culture is a huge competitor to the department store industry. If it cannot be adjusted in time, it will affect the overall operation of the brand."
When it comes to traditional department stores, many people are impressed by the crowds, not the comfortable shopping. In fact, this is also the drawback of traditional department stores. When consumers shop in traditional department stores, they must go to the unified shopping mall cashier to pay, mainly for retail goods; in the shopping center, consumers can complete the payment directly in the brand store, and through the combination of multiple formats to meet Consumer leisure and entertainment needs.
Du Bin told “East Real Estateâ€: “The way out for traditional department stores is to develop into shopping malls. On the one hand, it cooperates directly with various brands to attract consumers through discounts; on the other hand, it can create its own unique Brands to enhance their competitiveness. At the same time, strengthen the ability to create innovation, to create a beautiful perspective to attract consumers' attention and extend their stay in the mall."
"East Real Estate" understands that in order to broaden the income channel, New World Department Store has expanded its self-operated business to life boutique, fashion apparel and catering, etc., and developed joint venture catering projects, and expanded the leased area of ​​living facilities to increase self-employment. Goods sales and rental income. New World Department Store's self-operated goods sales for the first half of FY2016 were HK$515 million, which was up 37% from HK$375 million in the same period in 2015. Rental income also increased by 1.2% from HK$321 million in the first half of FY2015 to HK$325 million. .
E-commerce and shopping malls complement each other
In addition, "East Real Estate" noticed that with the popularity of e-commerce, some department stores are actively guiding online brands to land, and importing online people into offline stores.
"East Real Estate" noticed that New World Department Store has recruited the top three women's wear brands and cotton and linen artists in the online market - Inman has set up its first O2O experience store in Shanghai Pujian Store, breaking through the online and offline styles. And the price is synchronized in real time.
At the same time, New World Department Store also carried out cross-border cooperation with technology companies such as China Mobile Games and Mai Sing, and launched offline activities such as “New Hundred Dance Season†and “Mobile Studio†to attract online users to visit physical stores. It is reported that New World Department Store is building an iBeacon platform to push messages and coupons to customers at a fixed point to increase sales conversion rate and further increase the mobile payment methods that can be accommodated at the branch.
Xie Jingyu, director of Colliers International China Research Department, said that e-commerce and shopping malls have gradually transformed into complementary relationships. "Successful offline retailers have begun to switch to online stores, such as Jinqiao International Plaza. Dream Bazaar at 818 Plaza and the cracking of flagship stores in the first-tier cities; at the same time, more and more online retailers are also opening up online and offline synchronization operations (into Tmall, Jingdong and other e-commerce carriers), The owners of major shopping malls have also begun to use the offline platform such as WeChat public account and Alipay to conduct marketing and attract customers."
Looking for dawn
Department store innovation and redemption have a long way to go
What kind of common genes do survivors have behind several happy department stores?
East Real Estate
Online shopping and purchasing are all the rage. In the current situation of traditional business models, the traditional department store industry, which is mainly engaged in the display and sales of goods, has encountered development difficulties and is constantly seeking transformation. And why are the well-known department stores in Shanghai, such as Jiuguang, Liubai and Raffles, still standing still? The reporters of "East Real Estate Finance Weekly" (hereinafter referred to as "East Real Estate") conducted a field visit and found that the success of these shopping malls has a lot to do with location, theme format and price positioning.
O2O test water
As a veteran department store in Shanghai, Jiuguang Department Store has received extensive attention from the industry.
At noon, it is the lunch time of the office people around the Jing'an Temple business district. The "East Real Estate" reporter came to the Jing'an Temple rail exchange hub, still full of people. Jiuguang Department Store has long been the first choice for many office workers in the business district. The restaurant floor in Jiuguang Department Store is full of seats. Even the cake shop bakery is lined up for customers. The Hong Kong-style restaurant is lined up with long queues. On the floor workdays such as cosmetics and clothing, there was not much traffic, but when the reporter visited the weekend, I found that there were still many customers patronizing.
The reporter visited and found that the Jiuguang department store project is located in a relatively small area of ​​Shanghai with relatively large commercial areas. The positioning is more pragmatic, fewer competitors, and consumer demand is recognized. However, the commercial volume of areas like Huaihai Road is relatively large, and too much emphasis on luxury projects, but it is vulnerable to the impact of the industry.
"East Real Estate" interviewed Ge Ling, director of the research and development department of Ruibo Huijia Commercial Real Estate, he analyzed: "Jiuguang has always been strict in commercial site selection, transportation, environment, commercial atmosphere, infrastructure facilities and population living around the plot. Density and other factors will be strictly investigated. In terms of business layout, general large department stores, counter locations, and merchandise display are divided by functional areas. On this basis, Jiuguang is also subdivided according to the style of merchandise, forming a theme-style exhibition. â€
Earlier, Jiuguang Department Store transformed its user experience with its long-standing customer base. With the increasing impact of “Internet+†on physical business, Jiuguang Department Store tried to set up electronic fitting mirrors and interactive screens in shopping malls to increase consumer interaction. Colleagues, Jiuguang also provided functions such as Alipay and WeChat payment. A more convenient shopping experience.
Adhere to popular popularity
At the weekend, Xujiahui was crowded and bustling. When many shopping malls were popular, the Shanghai 600, which was established in 1952 as the Xujiahui business district, is also the oldest retail enterprise in Xuhui District, and has become the first choice for many old Shanghainese. In the transformation of the national economic system, Shanghai 600 experienced a series of reforms, such as public-private partnerships, corporate restructuring, and parent company listings. When physical business was hit, Shanghai 600 continued to seek innovative reforms.
The reason why Shanghai Six hundred can successfully stand in Shanghai for more than 60 years, the six hundred person in charge of Shanghai once said that this is the result of the misplaced operation of the business circle, and the six hundred will also insist on the long-term unchanged positioning of their “popular popular†products. , insisting on providing a wide range of apparel products and thoughtful services for the most extensive mass consumer groups.
"East Real Estate" reporter learned that Shanghai's six hundred unique middle-aged and old-fashioned clothing is very popular, and it has become the first choice for shopping for middle-aged and elderly people in Shanghai. At the same time, six hundred are also constantly improving their VIP membership services, regularly publishing promotional information to the members to attract popularity.
Financial support
After the impact of the large-scale shopping malls that have been springing up in the late stage, Raffles City’s benchmark position in People’s Square remains untouched. It can be said that the flow of Raffles has never been reduced, whether on weekdays or holidays.
Zhong Qi, a recent graduate of Shanghai University of Applied Sciences, told “East Real Estate†that Raffles is the first choice for her and her classmates to go shopping. When a friend comes to Shanghai, she will also bring to Raffles to eat. “Because Raffles has more choices, the price is Can also bear."
In the view of Ge Ling, who has been focusing on commercial real estate for many years, relying on Asia's largest multinational real estate company, how to maintain the vitality of Raffles City is also one of the benchmarks worthy of reference for physical business.
“The main reason for the success of Raffles is that there is a Singapore national sovereign fund model behind the Cade commercial financing channel, so it has financial support with sufficient funds and low cost.†Ge Ling pointed out.
Success or failure
Yan Yuejin, research director of the Yiju Think Tank Research Center, said that the current department stores are also commercial real estate to some extent, but the nouns and business models of such department stores have been inherited from the past. “The success of such properties is partly related to location advantages, and also to their better political and business relationships, which can lead to better matching between subsequent commercial projects and urban planning.â€
Ge Ling told "East Real Estate" that he is also optimistic about the commercial plazas such as Joy City, Daning International and Dragon Dream. In the past, some commercial projects were positioned too high-end, which made the strategic transformation of commercial projects more difficult, and the property management costs will not decline, which will make the business risks of such commercial projects greater.
He analyzed that the business of these entities can be brilliant so far, basically related to the better price positioning of products and the relative cost of rent. “The development of better physical business has four commonalities, all in the core area, emphasizing experiential consumption, focusing on thematic business model, combining online and offline.â€
Entity business dilemma
International Revelation of the Masses and Market Segments
The market positioning of popularization and segmentation determines different business strategies and execution paths.
East Real Estate Yang Shukun
In the era of mobile Internet, how can the traditional business model break through? "East Real Estate Finance Weekly" presents a competitive sample of two different paths: seeing the core competitiveness of the business model in different models of mass and precision markets.
Wal-Mart's Pan-Retail Revelation
On the evening of July 20th, the world's latest Fortune Global 500 list was released simultaneously. Wal-Mart ranked first for three consecutive years, with revenues of $482.1 billion in 2015. It is worth noting that, on January 15, 2016, Wal-Mart announced that it would close 269 stores worldwide. However, contrary to this tone, “We plan to add about 115 stores in China in 2015-2017, including hypermarkets and Sam. Member stores are expected to create more than 30,000 jobs."
Wal-Mart quickly expanded and occupied market share. Later, under the situation of e-commerce shocks and falling profits under the pressure of rent and labor costs, it began to adjust its strategic deployment, preparing to reduce the number of preparations and save costs. The most direct measure is to close unprofitable stores. .
Wal-Mart Co., Ltd. said that after a comprehensive evaluation of about 11,600 stores around the world, it decided to close 269 stores, including the US small format and other business stores that did not meet profit expectations, to concentrate resources to better develop Wal-Mart shopping malls and Sam's member store and other major formats.
In stark contrast to the closing tide of the store, Wal-Mart China proposed the development goal of “accelerating and surpassing†at the beginning of this year. It plans to open more than 300 new stores worldwide in the coming year, and will invest about 400 million yuan for about 60 companies. Upgrade of the store.
Regarding the difference between the new store and the old store, an industry insider told the “East Real Estate†reporter that “as the overall growth of the retail industry slowed down, the once-popular hypermarket format gradually faded, and the small and beautiful business model became more and more popular with consumers. Holding, community shopping centers have gradually become the transformation direction of supermarkets.
Two months ago, Wal-Mart opened its first community-based shopping mall in China, “Le World†in Zhuhai. This move marks Wal-Mart's move from leasing to land acquisition and property holding, from supermarket hypermarket expansion to downstream shopping malls. With its own development, construction and operation, Wal-Mart is moving from a traditional retailer to a commercial real estate operator.
Recently, Wal-Mart also announced a number of strategic cooperation with Jingdong Group. According to the agreement, Wal-Mart will receive approximately 145 million shares of Class A common stock issued by JD.com, accounting for approximately 5% of the total issued share capital of JD. Jingdong will take over the No. 1 store of e-commerce platform owned by Wal-Mart.
In fact, cooperation with e-commerce is a breakthrough in many physical businesses. At the beginning of 2014, Alibaba Group became the single largest shareholder of Intime Business Group with a price of HK$5.37 billion. In August 2015, Alibaba invested US$28.3 billion in Suning Yunshang Group as the second largest shareholder; in August of the same year, Jingdong shares in Yonghui Supermarket, accounting for 10% of the shares. In June of this year, Ali and Suning revolved around “brands, retailers, consumers†and announced the “three-body breakthrough†strategy to promote strategic cooperation and upgrade.
The precision of the British Liberty department store
Different from department stores such as Wal-Mart, there are many successful cases abroad. Because of their good operation mode, they are still a long-standing one. There are many unique commercial brands. These department stores also have many brand new designer brands. They will specifically support some of them so that people can have no one and others. For example, the British liberty department store, their goods are very attractive, there are some buyers, but also some special purchases, but also VIP customer service is done very well, won a lot of consumers.
In 1875, LIBERTY Department Store opened as a symbol of “exquisite lifeâ€. For more than 100 years, it has been insisting on noble quality, continuing its independent design tradition of art and business. All categories are maintained with modernist innovation series and classics. Traditional series of goods.
The window display, display and display of Liberty Department Store are beautiful. Different goods correspond to different displays, different displays map different themes, different themes tell different stories, and finally different stories attract different customers. In such an environment, the customer does not buy it for buying, because it is attracted and impressed before buying.
The founder of Liberty Department Store started out as home accessories, fabrics and art in the Far East, so the home accessories and fabrics are the biggest highlights, especially the floral pattern fabrics are unique.
Liberty Mall has its own design team, which not only uses traditional pattern fabrics in various clothing and household items, but also pays attention to creative design and keeps freshness. The shirts, dresses and handbags made of floral fabrics are the most Popular items.
In addition, Liberty Mall has always been committed to working with many cutting-edge designers, and street fashion labels from all over the world can be seen everywhere to ensure that customers are the first to contact and purchase the most fashionable brand design.
European department stores mostly adopt a buyer's system in terms of product mix. The department store's buyer team knows who the target consumer is, who buys the goods, what goods to buy, and what goods to sell can meet the needs of these users. Thereby creating a difference. This is what is lacking in domestic department stores. Many traditional department stores have left because of lack of features and staying in the hotel.
Enter [Sina Finance and Economics Unit] Discussion
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