What are the challenges facing the modern department store industry?

2018-11-24

 

It seems that the transformation exists in the surging traditional retail market. In the face of double attack from the consumption upgrading and e-commerce in recent years, both entity and e-commerce have focused on "new retail" and attempted to seek new play that the retail industry adapts to the age development demand more in the post-internet era.


Since 2014, general merchandise industry performance has declined sharply, but it hasn't been adjusted properly all the time, and part of industry insiders have put forward the de-merchandisation opinion.

How will the general merchandise be constrcuted?



It is necessary to seek for problems from the essence of general merchandise. As the traditional retail, the general merchandise embodies the relation among the people, field and goods. The e-commerce could achieve the change among people, goods and field, and could change the virtual scene so that the consumption channel of external environment could change, while the general merchandise's business model isn't evolved in change.

Go back to the root of the problem




From the development pattern of general merchandise, at first, the general merchandise has the same positioning and stereotyped brand portfolio, lacks features, and gradually breaks away from the demand of target customers;

Secondly, general merchandise pursues area effectiveness excessively, and lacks the improvement in shopping environment and user experience, as a result, the consumers are poor in experience;


Thirdly, most of general merchandises focus on the joint operation, so they are difficult to achieve the "management of single item" and couldn't master the commodity information first time; Fourthly, general merchandise has a single brand promotion, only in simple and crude promotion mean, it always attracts the customer group by reducing price, in lack of other appeals.

From the external environment




At first, as the e-commerce and shopping center rapidly rise, the consumers gradually prefer the online shopping with more price advantages, and focus on the dining and entertainment and the shopping center with stronger experience feeling. So the traditional general merchandise industry is greatly shocked;


Secondly, under the broad environment of new retail, new economy and consumption upgrading, the young middle class gradually rises so that the general merchandise is difficult to keep pace with the consumption concept of the 1990s and 2000s as a traditional retail industry;


Thirdly, lots of Chinese travelers leave the country for travel and gradually tend to select higher service and richer in-store experience, subsequently, the domestic retail service improved as expected. Such tendency accelerates the decline of traditional general merchandise industry to some extent.