Luxury Brands Use All Kinds Of Means To Save The Declining Trend.

2016, China

The market is still on thin ice. Along with the decline of China's market economy and the continuous progress of anti-corruption action, the market share of high-end consumption is shrinking, and the performance of major luxury goods groups has declined to varying degrees.

In order to break through the downturn, luxury brands use all means to save the decline.

Among them, the electricity supplier can be regarded as the highlight of luxury goods in 2016. From Dior to WeChat, WeChat sells the package to the initiative to embrace the electricity supplier. The luxury brand has changed from the previous sniffing business channel to the initiative embrace attitude.

The change of attitude is mostly due to the pressure of achievement. Although some of the luxury goods are getting better, they are far from the glory of the past few years.

At the same time, in order to better expand the channel of e-commerce, many luxury brands began to make an issue on the price. The ultimate goal is to achieve global price integration, and prepare for the brand's electricity supplier on the price.

From the above, we can see that the luxury brand is self redemption in the domestic luxury market after the pressure of performance.

Embrace the electricity supplier

High end business and high-end stores have always been the main selling channels for luxury goods, and brands are spending too much money to open flagship stores on luxury roads in the first tier cities.

With the rapid development of Internet and the rising cost of opening stores, luxury group began to reconsider the way of development.

Earlier, the luxury goods groups were dissatisfied with the counterfeit goods on the e-commerce platform, and considered that the brand positioning of the group did not match the positioning of the e-commerce platform, so they chose to refuse to cooperate with the e-commerce platform.

But this year, luxury brands have gone against the norm, and have begun to test the emerging marketing channels such as water electricity providers, WeChat and so on to win the favor of the consumer market.

In August of this year,

Become the first luxury brand to enter WeChat boutique, and push the Dior core product, Lady Dior Small limited edition handbag, and the entire purchase link is completed online.

Previously, it has publicly expressed its firm intention not to enter the electronic business platform.

In the WeChat circle of friends launched the 2016/2017 early spring vacation series; always high cold Prada, also began to fight the electronic business platform, entered the luxury electric business Net-a-porter, launched the Prada autumn T platform products, footwear, bags and small leather items, Prada autumn senior garment fashion also started selling on the internet shop.

It is noteworthy that the luxury goods giant LVMH group also has new moves in the e-commerce platform.

LVMH group's brand Guerlain, Make up forever cosmetics brand, and so on to join the Tmall e-commerce platform.

In addition, there is news that LVMH group will create its own e-commerce platform to meet consumer demand.

There are signs that luxury goods are joining the Internet in different ways.

Strategy shop

Due to the downturn in the overall luxury market environment, luxury brands have changed from storefronts in the past few years to strategic stores, with a view to reducing the increase in operating costs brought by manpower and rentals.

In the first half of this year, luxury brands such as LV, Gucci, Burberry, Dior, Cartire, MontBlanc and so on set off a frenzy in stores in China.

According to the world clothing and shoe net, in the short span of one year in 2015, there were 34 luxury stores, including LV, Gucci and Burberry, with only 14 outlets opening up to 11 stores.

The number of outlets is over two times that of newly opened stores.

Among them, with LV as the prominent representative, it has said that it will close all the stores in the two or three tier cities, and only stores in the first tier cities will be established in the future.

LV shut shop first and opened Guangzhou, closing LV's first store in Guangzhou.

In just a year, LV has closed many stores in Harbin, Urumqi, Shanghai, Tianjin, Taiyuan and Suzhou.

In addition, Burberry closed the flagship store of Wenzhou fortune shopping center in February this year.

Due to the weakness of Hongkong market, Burberry also closed flagship store in Hongkong pacific place.

In the wake of the craze for closing stores, the backhand is actually a continuous decline in performance.

In the three quarter of this year, LV's main business, the fashion leather Department, plummeted to 1% to 3 billion 106 million euros, which directly led to the group's real revenue growth from 18% in the same period last year to 4%.

Burberry showed a weak growth momentum in the earnings report at the beginning of this year. Although Burberry's retail sales in mainland China increased by 3%, in fact, Burberry profits have been backwards for two consecutive years, and Burberry has cut costs by closing off the poor sales shops.

Narrowing the spread

With the increasing pparency of commodity prices and the arrival of the "hot" global tourism, the electricity supplier channel as the main sales channel in the future, we must achieve global price unification. Chinese consumers, as the main force of luxury consumption, fail to enjoy the most preferential consumption treatment.

Therefore, luxury goods frequently enter the electronic business platform. Undoubtedly, it is trying to test the global price integration strategy for luxury goods.

According to the world clothing and shoe net, China is still the world's highest luxury goods country. 23% of the luxury brands in China are priced at 16%-25% higher than foreign countries.

Among them, Burberry has become the biggest commodity price difference between China and Europe, and the price difference is nearly 40%.

In addition, LV's speedy 30 shopping bag sells for about 1100 US dollars in China, and only about 800 dollars in the UK. Balenciaga's dress costs US $1665 in China, but it only costs US $1312 in the UK.

The price difference of nearly $300 of these luxury goods makes it difficult for Chinese consumers to buy locally.

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In addition, Gucci and Prada have cut prices and discounted prices in China this year, trying to make up for the spread of prices in different regions by means of discounts and price cuts. This also shows that luxury goods are preparing for global price integration.

Besides, besides the adjustment of the brand, consumption outflow has become an important reason why luxury brands have to choose the global price integration.

However, China's high-end consumers are becoming more rational and will plan ahead for luxury purchases.

For luxury goods groups, global price integration has become an inevitable trend. Especially in the period of rapid development of the electronic commerce platform, the strategy of global price integration of luxury goods has also been put on the agenda.

Expert presentation

Zhou Ting, President of the Institute of wealth studies

Since last year, 95% of luxury brands have chosen strategic shops. This behavior is initiative. This is the premise of brand seeking new layout, and the future O2O format will become the mainstream.

Activity oriented sales promotion will be more and more important in luxury marketing, and individual categories will exceed 30% of total turnover. Meanwhile, activities will also lead to real retail O2O.

In 2017, luxury brands will embrace the Internet in an all-round way. The third party Internet platform will become the main body of luxury Internet, and the luxury official website will become a display because of traffic restrictions.

In 2017, luxury retail Internet will become the biggest growth point of luxury goods market, and will produce a number of high quality luxury Internet platform projects, especially the luxury retail O2O project, which will become the biggest growth point of luxury Internet.

In addition, in 2017, the total retail sales of luxury goods will account for 11% of the total sales of luxury goods.

More interesting reports, please pay attention to the world clothing shoes and hats net.