Unlocking the secret of the rapid growth of clothing enterprises (2): quickly boycott goods and embrace personalized consumption

Clothing enterprises with strong store scale and sales scale have gradually become the leading enterprises in various sub-categories of clothing. However, with the entry of international brands into the domestic market, the rise of e-commerce channels, and the rise of emerging consumer groups such as post-90s and post-00s, the consumption environment of China clothing market has become more complicated and unpredictable.

No, on 20 12, China garment enterprises collectively encountered a high inventory test.

In 20 12, the inventory of six domestic sportswear brands (Li Ning, Anta, Kappa, 36 1, Xtep and Peak) reached 3.323 billion yuan, and the loss of Li Ning alone reached/kloc-0.979 billion yuan, mainly due to bad debts generated by channel inventory. At that time, the inventory of leisure clothing brand Metersbonwe Bang Wei Bang Wei was as high as 20 1 100 million yuan; The inventory of women's clothing brand prodigal son is 548 million yuan, and the annual sales of prodigal son brand this year is11.1.70 billion, and the inventory accounts for more than 20% of its assets. After that, many brands such as Bosideng, Seven Wolves and Red Bean also broke the news of high inventory.

Although the waste of inventory is regrettable and sad, what is the "culprit" that leads to the high inventory of clothing enterprises? It is precisely to bring the clothing industry from the production-oriented "fixed sales by production" to the market-oriented "fixed production by sales" futures ordering model. In recent years, the futures ordering model has helped garment enterprises to establish the first-time commodity management model, which has contributed greatly and has suddenly become the chief culprit of high inventory. What is the reason?

This should also start with the futures system.

Futures ordering system is a commodity grouping mode widely adopted by brand-operated service enterprises. Every year, brand manufacturers will hold a commodity ordering meeting for the next sales cycle. During the ordering meeting, the seller pays a deposit to the brand manufacturer to place an order, and the brand manufacturer places an order with the manufacturer, and the manufacturer delivers it to the seller in batches after completing the production. With the further refinement of the division of labor in the clothing industry chain, the futures system has become a criticism of the clothing industry because of its long period from ordering to listing and pre-sale.

The cycle from ordering to listing is long, which leads to the reaction between the production end and the market end can not be linked. In order to ensure that the ordered goods can be delivered on time, an order meeting is usually held 4-6 months in advance to ensure that the goods have enough preparation time. The advantage of this is that it leaves enough preparation time for the production factory, but it also makes the sales terminal seem unable to cope with the rapid changes in the market. For example, the weather suddenly turned cold, the order quantity of down jackets was not enough, and the factory showed that it could not produce and supply in time.

Pre-sale leads brand manufacturers to do pre-sale, which turns the transfer of inventory risk into brand wholesale and loses agile market ability. Domestic clothing brands are mainly franchisees, and the proportion of direct sales is small. As long as the futures order is completed, this part of the goods will be pre-sold, and the pre-sold goods will no longer be the inventory of brand manufacturers, but become the inventory of retailers, which is also the reason why many enterprises disclose the performance of the order meeting directly affects their stock prices.

In order to seize market share and attack competitors, many clothing brands impose aggressive ordering targets on franchisees, and at the same time throw out high ordering rewards to franchisees. When the external consumption environment changes rapidly, the goods that have been booked have been produced in factories, but these goods are no longer suitable for market demand. These futures need to be paid by franchisees, but when franchisees are unable to execute futures, they are forced to become brand inventory, which is the source of the 20 12 inventory avalanche in China garment industry.

In order to improve commodity management and retail efficiency, garment enterprises have to re-adopt the way of commodity assembly to operate. This time, their goal is to respond to market changes in a shorter time and more efficiently, so that goods can change with the market and do refined retail.

Li Ning's prescription is a rapid response supply chain model, and Anta proposes the transformation from brand wholesale to brand retail.

Let's talk about Li Ning's rapid response mode. 20 12 10, Li Ning established a big data center, collected 80% data of Li Ning stores, and established representative experimental stores all over the country. Then, Li Ning adjusted the commodity supply mode from futures orders to the guided' futures orders+quick replenishment+quick response' commodity supply mode. Li Ning's quick reaction product portfolio was first tested in the experimental store. If the sales response is good, it will be put on the market immediately. If the sales are not good, stop production.

For futures commodities, on the one hand, Li Ning reduces the proportion of futures, on the other hand, he requires the supply factory to produce in stages, while the conventional basic funds can predictably reduce the terminal inventory by rolling replenishment. In this way, the combination of regular basic funds of futures and seasonal trend funds with rapid response forms a rapid response mechanism of the market, which meets the needs of consumers, increases the control of opportunities for retail investors, and makes up for the defects of long futures system cycle and risk sinking to terminal stores in the past. According to the information disclosed by Li Ning, fast-reverse goods account for about 20% of store sales, but the gross profit is much higher than that of goods placed in bulk in futures, indicating that the retail discount rate is well controlled.

Let's talk about Anta's brand retail model. Anta believes that the "brand wholesale" of futures pre-sale in the past could not meet the market demand. Under the brand wholesale mode, it is difficult for brands to really understand the needs of consumers. Once the macro economy is depressed, it is easy to have inventory problems, because the terminal goods can't be sold, the sellers have no money, and they can't purchase goods, which leads to the backlog of brand goods. Anta leads Anta Company and its distributors to transform from brand wholesale to brand retail. Anta's sales channel manager sank to the front line of sales, directly grasped the retailer's sales performance and in-store inventory level, assisted the retailer in formulating retail strategy and guiding orders. At the same time, Anta provides a flexible supply chain system to reduce the proportion of futures and emphasize flexible replenishment in spot batches.

(Originally published in Historical Records Business Review 20200 1)