Traditional Retailers' Collective Anxiety And Promotion Can Hardly Conceal Consumption.

Major electric providers are continuing to open up new territories to feed the entire retail market. The promotion war is no longer just a short period of "double 11" and "double 12" in previous years, but from the beginning of the year until the end of the year, every month is pleasantly surprised. This brings only surprise to the entity retailers who were originally at a competitive disadvantage.

"The growth rate of China's fast moving consumer goods market has slowed down in the past three years, and its growth rate has dropped from 15% in the second quarter of 2011 to 4.6% in the first quarter of 2014, the lowest in three years." In July 1st, management consulting firm Bain and the Kay consumer index released the 2014 Chinese shoppers report.

Through a large number of interviews, the reporter found that since the beginning of this year, China's retail market has seen a slack consumption. From department stores, large businesses to chain convenience stores, from brand manufacturers to agents, they feel a strong chill.

Jiang Dinggen, President of Nanchang commercial and trade suppliers association, told reporters: "the effective way of promoting sales to reduce inventory quickly is not obvious this year. Sales driven by promotions are reduced by 30%, and consumers are becoming more rational. Both agents, manufacturers and terminal retailers are in a very anxious state."

Promotion is normal. Customers are hard to buy.

A manager of a department store in Hunan told reporters that almost all department stores felt obvious performance pressure under the influence of this year's macroeconomic situation. In order to boost sales, the franchised stores have worked hard in terms of service and promotion. He told reporters: "a brand." clothing The owner of the shop is selling one piece. clothes In the face of a woman's choice of clothes for her husband, she was entangled in size, and sent salesmen to different sizes of clothes for door-to-door service.

"Providing this kind of service, on the one hand, shows that the store is working hard in terms of services, and on the other hand, it shows that business is sluggish. If the business in the store is busy, is it necessary to send it to the door to serve?" he believes that the slowdown in the retail industry is already an indisputable fact.

The Department Store feels very accurate in the middle class. Wangfujing, the domestic retail representative enterprise, achieved 5 billion 240 million yuan in its first quarterly report in 2014, down 4.97% compared to the same period last year. Wangfujing department store's revenue growth has not reached its business goal for two consecutive years, and its revenue growth target in 2014 has dropped to 5% from 10% in the previous two years.

Not only is Wangfujing department store, Sanjiang shopping 2014 quarterly report shows that in the first quarter, operating income reached 1 billion 267 million yuan, a negative growth of 7.12%, net profit of 38 million 969 thousand and 800 yuan, a decrease of 28.90%. Beijing's urban and rural quarterly report in 2014 also showed that 1~3 monthly operating income was 724 million yuan, down 6.89% compared to the same period last year, net profit 32 million 703 thousand yuan, down 7.47% from the same period last year.

According to statistics, 14 of the 21 listed companies in the department store had negative revenue growth in the first quarter of this year, of which, Hangzhou's 100% year-on-year decline was 20.56%, 13 companies showed negative net profit growth, and Nanning department store's year-on-year decline of 88.19%.

In July 8th, CB Richard Ellis released two of the series of reports on the evolution of China's retail industry. The development trend of department stores pointed out that "domestic department stores are facing various difficulties and difficulties." As a traditional retail channel, the department store industry is no longer in sight. Sales growth is exhausted, and the profit level goes from bad to worse. In 2013, the operating profit margin of major listed department stores recorded a decline for the third consecutive year since 2010.

A number of listed department stores have mentioned that the pressure on performance comes from the decrease in operating income and the increase in promotional expenses. The sales expenses of 14 department stores in Rudong hundred group and Hangzhou Jie Bai are increasing. At present, many department stores have stopped expanding due to the pressure of performance.

It's not just department stores, but also big business super companies. In 2014, a quarterly report showed that revenue in the first quarter was 3 billion 419 million yuan, down 3.64% compared to the same period last year. Sales expenses and management expenses increased by 23.28% and 21.94% respectively over the same period last year. Cai Huiming, President of Ren Ren Yue, publicly stated that factors such as intensified market competition, rigid rise in operating costs and risks of market expansion will affect the performance of 2014.

The entire retail market is in a growth dilemma. Zong Xianlin, chairman of the Handan Federation of agents, feels very deeply about this. He told reporters that "nowadays consumers are more accustomed to buying goods near the community. The small community shops are better than the large stores in the commercial circle, and the shopping habits of the public are more rational, and the discount rate is greater. It is not a necessity for consumers, nor will it be lightly bought." Promotional efforts are greater than ever, but agents do not make money, or even marginalized.

An agent stationed in a number of business super enterprises in Beijing told reporters that today, sales promotion has been normalized. The effect has not been good in previous years. From big supermarkets to small convenience stores, there are promotional products almost everyday, and people are used to buying goods that they need.

"This year's supermarket promotion efforts are much larger than in previous years, but the effect is much worse." The above reason told reporters that since this year, some supermarkets have increased the cost of promotion such as heaps and posters, while promotional costs have increased by about 50% compared with previous years. In the past, sales promotion had a slight profit, and now it is basically a losing state. Now he has withdrawn many products.

Brand agents at both ends

Compared with the previous year's peak season, the pace of pushing new products has slowed down. Marketing expert Li Zhiqi said, "this year is a small year for the beverage industry."

"Although there are such events in the world cup this year, the promotion rate in summer is no more than that of last year." A famous Taiwanese beverage Hunan company marketing manager told reporters. According to some dealers' response, many brand manufacturers' marketing expenses have been reduced. And Procter & Gamble removed the company's marketing position from this month, further focusing on the brand, and also caused various conjectures.

Zong Xianlin said that due to the pressure of operation, the terminals are constantly moving and more vigorous and frequent than ever before, which means more for the agents, but on the other hand, many manufacturers do not have so much resources to support these activities, and even reduce the cost compared with the year. With the increase of labor and transportation costs, many agents are struggling. "What is harder to face is that although the selling price has been reduced, the volume is not good." He said this dilemma is hard to crack.

The above agent in Beijing confirms the above statement. He is under great pressure at present, and all costs and risks must be borne by himself. The market cost of manufacturers to agents has not increased this year, or is supported by past performance percentages. In the eyes of the buyers of the supermarket, only the gross profit figures are seen. The promotion cost of the retail terminal is also generally rising. The two dealers are under pressure. As the more they sell, the more they sell, the more they sell. Several agents of the agent also have the action of withdrawal. The sales of these goods before these supermarkets are very good.

Jiang Dinggen told reporters that this year, department stores, daily necessities and clothing retail pressure is greater, whether retailers or agents and brand manufacturers are racking their brains to find a way to break through, but in such a market is in a slowdown in consumer demand, supply of market supply exceeds demand, zero supply relationship and the game between brand manufacturers exacerbate industry adjustment is imperative.

"In the environment of slowing market growth, brand The growth of its market share is crucial to the improvement of brand performance, and improving market penetration is the magic weapon to boost market share. Increasing market penetration means that brands need to see every consumer as a new consumer and try their best to attract them to buy products on every purchase occasion. Bain global partners, chairman of consumer goods and retail industry in Greater China, said Bruno Lanna.

The research of Bain and Kayu consumer index suggests that brand manufacturers should focus on increasing investment in key marketing contacts, as far as possible to let more consumers understand brand information and help consumers establish effective brand memory; launch a reasonable product mix, pay attention to innovation and focus on Star products for products or packaging, achieve reasonable and effective display and store marketing at retail terminals, and ensure sustained and sufficient investment.