Why does Bailian Group want to open a boutique buyer's store in an old oriental commercial building?

Standing in Xujiahui, Shanghai and looking at it at a glance, the Oriental Commercial Building may not be so conspicuous in this commercial area where many shopping malls gather.

But for the older generation of Shanghainese, Dongfang Commercial Building is as unforgettable as the old taste they often say. The phrase "Rites in the East" is the advertising slogan of Oriental Commercial Building that they are most familiar with. Just like these four words express, it used to be a landmark in this city.

The flagship store of Oriental Commercial Building is located in the Xujiahui business district, and it is surrounded by the large crossroad hub of Xujiahui, like Grand Gateway 66, Metro City, Pacific Department Store and other shopping malls. The slightly outdated shopping mall building and the words "Oriental Commercial Building" in big red and small round fonts make this shopping mall not stand out among the high-density modern buildings, especially at night, it is a bit dim.

However, the Oriental Plaza is actually backed by Shanghai Bailian Group, a large state-owned retail enterprise. It is not an exaggeration to be called a leading enterprise in the retail industry. It has 70 department stores in Shanghai, and its retail sales account for 28%. market share.

In addition to large shopping malls such as Oriental Commercial Building, No. 1 Department Store and No. 1 Yaohan, medium-sized supermarkets such as Century Lianhua, Hualian Jimaisheng, and small community convenience stores Kuaike, there are more than 4,700 stores nationwide. outlets, about 70% of which are located in Shanghai.

However, when you walk into the Oriental Commercial Building now, even on weekends, the customers in the shopping mall are a little deserted. It seems that this old shopping mall cannot escape the fate of decline—but if you pass through the makeup counter on the first floor and go up to the second floor from the escalator, the customers A space of different styles may be found through a layer of metal gauze.

This is a new work brought by Bailian Group - the bálancing, a multi-brand collection shop. After more than a year of preparation, this shop, which looks a bit fashionable in comparison, finally opened in early September.

The decoration of several local women's clothing brand stores at the stairway on the second floor of the Oriental Commercial Building is still the same as it was ten years ago. The highly saturated color scheme and casual display make it difficult not to focus on the bálancing next to it. Above—the combination of large areas of gray and small areas of pink reminds people of the new concept store opened by Acne Studios in Milan, which is cold and without a strong sense of distance.

"Our setting for the bálancing is a '0.5' design, because we are in a shopping mall, and when the surrounding colors are already very complicated, we hope that this buyer's store can 'float' in the entire retail space." Responsible So Studio, who designed the store this time, told Jiemian News, "Because the property of the Oriental Commercial Building is also very old-fashioned, there are many restrictions on space permeability, and the style of the buyer's store is too different from the shopping mall. If it is separated by stone strips, it will be A heterogeneous existence, so in the end we chose translucent metal gauze as the physical partition."

As an international financial center and a fashion landmark, Shanghai has never lacked international brands. Jing’an Temple, Nanjing West Road and the Bund have always been popular areas where luxury goods abound. This has resulted in fierce competition and a crisis of oversaturation.

When other brands are operating together, the bálancing avoids these competitions with the help of the location of Oriental Commercial Building in Xujiahui. They are also very willing to develop a new area in Shanghai to do business.” Zhuang Lvyi, head of the buying team of the bálancing, explained.

She further said: "Xujiahui's location is perfect for us. Those big international brands or Hong Kong-funded brands choose to stay in the 'safe zone' of Jing'an Temple because they don't know the city. Our entire group and team Most of them are locals from Shanghai. They are very familiar with the city and the temperament of local consumers. Xujiahui is actually a very mature business district. Personally, when I was young, my friends and I would take many stops to visit here. subway."

The "temper of local consumers" in her mouth shows the difference between customers in the northern and southern regions. Having also worked and lived in Beijing, she found that Shanghai consumers are exposed to more new concepts and have a more international vision. It will inevitably lead to Shanghai customers knowing how to compare when shopping, unlike Beijing customers, who may be more forthright.”

But on the other hand, the Xujiahui commercial district, as the sub-center of the city, has significantly lower consumption power than the commercial district in the city center. This is largely due to the aging of several traditional department stores in the area, which are difficult to attract customers, and Oriental Commercial Building is one of them. one. For the new generation of young people, the name Oriental Commercial Building is too unfamiliar, and the brands stationed inside are not to their taste.

This may be the reason why people in the industry are confused about the location of the bálancing's first store.

"Our positioning is family-style shopping." Zhuang Luyi pointed out that they did not only target young people. "Considering the existing old customers of Oriental Shopping Center, their loyalty and consumption power are actually very high." Zhuang Luyi observed the customers in the store in the past few days of trial operation, and she found that many children accompanied their parents to go shopping.

Also because of the mixed positioning of new and old customers, the bálancing has made a corresponding ratio for the more than 150 brands introduced. For more mature customers, there are 35% high-end luxury brands, such as the Italian brand Brunello Cucinelli, which is famous for its cashmere; as for the young millennials, 55% are equipped with contemporary designer brands, such as Acne Studios, Maison Margiela and Delpozo, and the remaining 10% are lifestyle home decoration and home brands.

In terms of style, the bálancing did not set a specific direction when choosing, but only had a horizontal control standard - that is to say, the design and product itself need to reach a certain level before they can settle in. "We have weird ones like XU ZHI, and streety ones like Juun J." Zhuang Luyi said, and the home furnishing category will be in harmony with fashion brands. "This sofa is a product of the Italian brand Moroso. We customize it with the designer. I bought this color." She patted the sofa we were sitting on and said that all the furniture in the store was for sale.

"In fact, our brand list has already attracted a group of young people." Zhuang Luyi said.

The appearance of the bálancing can be regarded as a member of the department store industry undergoing a wave of change. Before Bailian Group’s action, SKP under Beijing Hualian and Shanghai’s Rui’ou Department Store had already launched such boutique buyers. For consumers, they may only see changes in the facade decoration of traditional department stores, but in fact the core of this wave of reform lies in the introduction of a new business model - direct purchase (Direct buy).

The original traditional department stores used the model of renting out shops and joint ventures—the department store played more of a role as a landlord, and its profits mainly depended on collecting rent, management fees or joint venture commissions. However, in recent years, the revenue of department stores has gradually increased. The decline shows that as consumption upgrades, the disadvantages of this model are beginning to emerge.

According to data from the School of Finance and Economics of the Chinese Academy of Social Sciences, there are currently more than 4,000 shopping centers in China. A previous report by "Women's Wear Daily" pointed out that in the next five years, one-third of the domestic market will face closure due to oversupply in the market. This is mainly due to the fact that under the leasing model, a large number of luxury brands have entered shopping malls with good locations and good reputations, resulting in serious homogeneity of the brands settled in. Most shopping malls can only increase customer stickiness through price reductions, but this is obviously not a long-term strategy.

So for many years, there has been such a consensus in the hearts of the public-all shopping malls are the same.

The advantage of direct buying is that each shopping mall’s own buyer team dispatches to purchase brands and styles that meet the vision, and responds to current trends faster, thereby creating a difference from competitors. At the same time, direct sales purchases have high flexibility - shopping malls can give up badly sold brands at any time, and in a market dominated by fast fashion, they can respond to changes in a timely manner, and because "the goods you buy and sell yourself" , the profit is also more substantial.

"It's a trend (the introduction of direct-sale purchasing mode for department stores) and it's a matter of course." Jennifer, the brand manager of Translatio, a Shanghai-based brand management consulting company, said in an interview with Tongjie News. She is currently in charge of direct sales of SKP women's clothing in Beijing. Purchasing business. "Just like after SKP has developed to this scale, they will consider how to squeeze out higher floor efficiency."

From the perspective of turnover, Beijing SKP has become the most profitable department store in China, but in fact, there are still a large area of ​​the mall that has not been fully utilized. At the same time, the popularity of niche designer brands among young people is rising. , all made SKP make changes last year-introducing some empty locations into direct stores. "SKP department store itself is a big sign. The advantage of being a direct buy now lies in its own customer base. SKP has always been in the leading position in the customer flow of high-end shopping malls. At the same time, this part of the customer base has high consumption power. Customers In the shopping process, you usually go through the select (selected buyer brands) part, so you save a lot of effort in the initial stage." Jeniffer said.

On the other hand, Bailian Group, which has set foot in the fashion field for the first time, has a certain difficulty in attracting customers to the buyer's store inside the mall when the image of the bálancing does not match the Oriental Commercial Building. , Thinking that there is a boutique buyer's store that is worth visiting, it may need to work harder in the market. In this regard, the bálancing also said that it will focus on digital marketing. "

Like many traditional department stores that have set foot in the field of buying and handmade for the first time, they may have a complete and mature set of experience and methods in the field of joint operation and leasing, but they are still newcomers in terms of self-operated retail.

"First of all, foreign brands have no concept of Bealead." Zhuang Lvyi told Jiemian News that as a Chinese local retail group, foreign brands are not familiar with its status and sales capabilities in the Chinese market, so they will be very cautious.

Zhuang Lvyi gave several examples of docking with foreign brands, such as the men's clothing brand AMI. In their selection of retailers, they also looked at the store design in addition to the conventional location and competitors. "We started There are no store photos, only renderings, and it is very difficult for the brand to trust us based on the renderings alone.” But in the end, AMI was still won by the bálancing.

In addition, the brand side will also test whether the buyer really understands their brand, "For example, Nina Ricci asked me who I planned to put them with - because they just changed designers and started to adopt a young style , if I still say to put them in traditional luxury brands, they won’t sell to me,” she added.

But the relationship between brands and buyers is also a mutual choice. The bálancing also needs to ensure that the products in the store have their own uniqueness, so the team tends to choose some "difficult" brands. Zhuang Luyi pointed out that Chinese buyers A large number of stores have appeared in the past two years, and some stores in second- and third-tier cities and even first-tier cities will have irregular operations, "For example, if you organize a group to purchase, for example, if you can't meet the minimum order quantity, they will put together orders, but the current economic situation in Europe is not good. , so many brands turn a blind eye. Even if two or three buyer stores come together, or the image of the store is not good enough, in order to do business, some brands will not have such strict control over the choice of distributors. "

Therefore, the bálancing will repeatedly confirm with each brand that they have several sellers in China. If she sees that a store outside the scope of notification is also selling the brand's products, then she is very likely to give up this brand, "because I don't I am willing to compete with some buyers who are not at the same level, and their operations and purchases are not standardized, so they must have a great advantage in price." Zhuang Luyi said.

As Zhuang Luyi said, the competitors of department stores transforming into handmade retailers are not only major department stores that are also transforming, but also foreign or Hong Kong capital entering the mainland such as 10 Corso Como, Lane Crawford and Joyce. The market and the development of relatively mature buyer stores.

However, the requirements for capital and the risks brought about by buyers cannot be ignored.

"It is true that many shopping malls want to switch to direct buying, but what they see is the tip of the iceberg of this model." Zhuang Luyi pointed out that the buyer system is by no means a panacea for the transformation of all shopping malls, and this kind of business model is not as easy as imagined Simple, you need to have a strong capital chain and cash flow, "because your clothes are your money", once you can't sell them, they will be accumulated into inventory, and the inventory will hold down cash flow. Using the bálancing as an example, she said: "I haven't made any money yet, I have already bought the two seasons, and I will buy the third season in May next year."

It is precisely because of this that Zhuang Lvyi chose Bailian Group as the backstage support - the background is strong enough, and she will not focus on performance at the beginning, which relatively relieves part of her pressure.

Jennifer also expressed concern about the current prospect of department stores scrambling to transform into a hand-made system. Essentially, Chinese department stores are rushing to build superstructures on the basis that the foundation of their thinking has not changed. "Department stores are real estate developers. The two different industries of fashion industry and real estate have led to two different ways of thinking." Jennifer told Jiemian News that when real estate developers who were originally just "landlords" began to truly become a part of the fashion retail industry , the flexibility of the original system takes a long time to get used to, but fashion is an industry that requires speed, and real estate developers are likely to be delayed in this regard.

"Even with the right time and place like SKP, in order to play the cards in our hands well, we need to make changes every step of the way." Jennifer said.

For all the difficulties before us, the bálancing only gave a unified countermeasure - to keep the product special. But special does not mean "exclusive", and Zhuang Luyi said that he doesn't care about exclusive brands-there are no real exclusive brands in the market now. "Exclusiveness is actually a restriction on the development of the brand itself. Significance. We are more willing to compete with competitors in terms of picking level and market response speed.”

In addition, it is the comparison of shopping experience. The wave of consumption upgrades has eliminated the consumer habits of "explosive models", and the explicit consumption has begun to be internalized. This is the reason why lifestyle brands have become popular——Lifestyle It is difficult to share the experience and experience with others. This is an upgrade of oneself and inward.

Both intuitively and after a deeper understanding, it seems that everything is right now for the bálancing. All that's left to face is time.