From The Perspective Of New Retailing, What Is The Value Of "No More Boxes"?

Last week, China's largest original designer clothing brand.

JNBY launched the WeChat Mini program "more than boxes", a customized service that is customized, fresh and imaginative. It aims to rebuild the relationship between people and clothing through professional experience and digital operation of collocs.

Jiangnan Buyi is the first clothing brand to explore the clothing purchase and subscription service in China.

On the one hand, "more than boxes" explore new sales routes from "people looking for goods" to "goods looking for people", which is a typical "new retail" exploration of clothing brands.

In contrast, the recently launched Hai Lan's home has been taken away by the US regiment for takeaway, and it is still in the traditional retail sale of "people looking for goods" within one hour.

On the other hand, Jiangnan cloth dress takes the lead in the low cost mode innovation through the WeChat applet, which provides an innovative sample for the brand side to use WeChat.

Take WeChat as a core social media interactive marketing service platform, serve and operate members, explore new channels, and increase sales.

New retail? Not "people looking for goods", but "goods to find people".

Simply speaking, Jiangnan cloth "more than box" is a clothing purchase and subscription service, consumers pay 199 yuan annual fee (if they are members, you can enjoy 3888 points exchange), you can enjoy 6 times a year fitting out service at home.

By filling out the questionnaires and matching the collocs, the "box" will be tailored to the consumers and will be sent out in a special box.

Consumers have to try them on 5 days and choose the clothes that they like to pay for them.

The originator of the business model of "first try and buy later" is the American company Stitch Fix, founded in 2011.

Subsequently, many similar businesses appeared.

It includes makeup box service provider Birchbox, dog toy and gift box service Barkbox and sportswear company Fabletics.

In June 2017, the US electricity supplier giant Amazon launched Prime Wardrobe, allowing Prime members to pick 3 or more eligible costumes on their own websites and distribute them to Amazon by Amazon.

Users can try them on within 7 days, leave what they like and return unsatisfied ones.

In October last year, the US sports brand Under Armour also launched monthly subscription service ArmourBox, similar to the "no more box" of Jiangnan cloth.

Amazon's Prime Wardrobe, with Stitch Fix, ArmourBox and Stitch, is the two category of clothing subscription service. The essential difference is whether the clothes in the box are selected by consumers themselves.

In Amazon Prime Wardrobe mode, in the box

They are selected by themselves, while "not only boxes" and Stitch Fix, ArmourBox users receive the clothes from the boxes, but they are recommended by professionals and big data algorithms.

Obviously, the latter model has professional services and technical support, and greater uncertainty may lead to greater surprises or beyond expectations.

From the point of view of the path, the innovation of "no more box" in Jiangnan Buyi is similar to "many spells".

For a long time, whether the platform type Taobao or the self operated electronic commerce Jingdong, the traditional electricity supplier's pattern is "the human seeks goods", the consumer searches searches the commodity which oneself needs, this and the traditional retail does not have the difference, is only moves the scene from the line to the line.

Prime Wardrobe is mainly aimed at the pain spot that can not be tried and touched on clothing category line. It is a kind of improved innovation.

In contrast, the new business of e-commerce is "spelling a lot" and has achieved a new path of "finding goods by people" through sharing and recommending friends.

In the "retail krypton" view, Jiangnan cloth "more than box" and "spelling more" are "goods to find people".

But the difference is that

Category non-standard products need professional advice and big data to promote this kind of "goods looking for people".

Online accumulation of cloth in the south of the Yangtze River

Founded in Hangzhou in 1994, it has JNBY clothing, CROQUIS, men's wear, less, children's wear JNBY by JNBY, Peng Ma Pomme de terre, JNBYHOME, SAMO men's clothing, and several major brands.

Today, it has spread to the second tier cities in China and has entered the international market since 2004.

At present, in Japan, Singapore, Canada, South Korea, Thailand and other countries have their own sales network.

According to CIC statistics, in 2016, Jiangnan Buyi group was the designer brand in China.

Occupy the largest market share, close to 10%.

We have been paying close attention to the exploration of Jiangnan Buyi online, especially on the display and membership service of WeChat public link, which is very different from other clothing brands.

In 2017, Jiangnan cloth Yi put forward the development direction of using fans as the core and using Internet thinking and technology to continuously strengthen and improve the construction of all channel interactive platform.

According to Jiangnan Buyi financial report, by the end of 2017, the proportion of retail sales contributed by the members of the south of the Yangtze River accounted for 67.4%, up 3.8 percentage points from the same period last year.

In other words, members contributed 14.6 billion to the total revenue of 2 billion 332 million in the 2017 fiscal year.

The number of members under the line is 2 million 400 thousand, the number of WeChat accounts is 1 million 900 thousand, the number of micro-blog fans is 800 thousand, and the number of Tmall stores is 2 million 300 thousand.

According to the earnings report, the online channel is the direction of the current effort in the south of the Yangtze River. In the first half of fiscal year 2018 (the 6 month ended December 31, 2017), the sales volume of the Jiangnan cloth clothing line reached 140 million yuan, an increase of 45.1% compared with the same period last year, accounting for 8.5% of revenue, compared with 7.4% in the same period last year.

With the expansion of the scale, the profit margins of the channel in the south of the Yangtze River have also been greatly improved.

In the 6 months ending December 31, 2017, the gross profit margin of Jiangnan cloth line was 60.3%, compared to 50.6% last year.

The improvement in gross margin is mainly due to the growth of online retail sales of new products.

In our view, Jiangnan Buyi "more than box" is the latest attempt based on the brand diversification and online operation accumulation in recent years.

Therefore, it is not surprising to become the first fashion brand in China to explore the new subscription service mode.

In the Jiangnan Buyi integrated channel interactive platform in recent years, it is mainly composed of three parts: physical retail stores, online platforms and interactive marketing service platform based on WeChat social media.

WeChat is not only a supplement to online shopping channels, but also an important way to interact with consumers in Jiangnan.

Consumers contact through the company's public numbers, receive new product information, art fashion consultation, brand concept and life vision.

The fans on WeChat may be the most recognized group in the south of the Yangtze River. They can be regarded as "experimental fields" after "first try and buy" services, which can be said to be very reasonable and a deep operation service for their members.

Is the new retail of "more than boxes" groping for success or failure?

In the United States, enterprises often lead consumers to leave more clothes through discount. Meanwhile, the cost of return is very high, and customers, especially women, are choosy in nature. Therefore, how to reduce the return rate and reduce the cost is the key to this mode.

In the context of the retail krypton star, the challenge comes mainly from two points.

First, improve the accuracy of recommendation.

This can reduce the cost of return, which involves the accumulation of stylists and algorithms.

According to the latest financial results, Stitch Fix has 6300+ employees, including 3700+, who can work at home and complete the customer's collocation through back-to-back orders.

When the number of users has increased to a certain extent, the whole artificial mode is obviously not sustainable.

It is the only feasible route to alleviate labor cost by algorithm.

Stitch Fix currently has nearly 90 big data scientists.

Let's look at Jiangnan cloth. By the end of July 2016, there were 800 employees in the south of the Yangtze River, half of whom were sales, and only 23 of them were in the direction of information technology.

By the end of 2017, the number of employees in the south of the Yangtze River had increased to 930.

In contrast, Stitch Fix is serving 2 million 700 thousand users with 3700+ stylist and 85+ Big Data Researcher, and 1 million 900 thousand fans of Jiangnan Buyi WeChat fans (without considering other channels), but the total number of employees is only more than 900.

In other words, even if the early promotion of this new service is successful, users will have a high degree of acceptance. However, due to the shortage of backend stylists and researchers, it will be difficult for them to grow bigger in the short term.

When the accuracy of recommendation is not significantly improved in the short term, reducing the cost of return is the key to success.

This is the second key point to be discussed.

In retail supply chain management, reverse logistics has always been famous for its high cost and complexity.

On the surface is only the courier pick up the goods, the actual back-end inventory, warehousing system needs a series of modifications, very cumbersome.

In the trial run phase of Prime Wardrobe service, Amazon allows customers to purchase 15 goods at the highest level, encouraging users to leave more products by offering discounts.

But Amazon downgraded the commodity cap to 8 and cancelled the discount because they found that the cost of logistics and return was too high.

Compared with Amazon or Stitch Fix, in the net, Jiangnan cloth may have its own unique advantage in return: large offline stores.

As of the end of 2017, 1728 were in the south of the Yangtze River.

Along with the online order, store delivery / extraction of new business, the store is expected to become a valuable asset of Jiangnan cloth, reduce their logistics costs.

As a clothing enterprise, the R & D in Jiangnan cloth clothing financial report refers to the "design and research and development", that is, the research and development of clothing category, and its scientific research input is mainly the input of information system, such as customer management system, inventory system, etc.

Therefore, in our view, the greater meaning of the "more than box" business in Jiangnan is that it is a test of the new retail path of "clothing for people" by the domestic clothing brands.

If successful, it is possible for apparel brands to build new online channels of interaction and sales through technology and services, not just from the offline store and the third party retail platform.

In addition, the innovation of any new retail mode and service depends on the upgrading of technological capability.

In terms of improving the efficiency of subscription service, the technology reserve and development capability of manual recommendation service and big data algorithm are indispensable.

This is not just for the south of the Yangtze River. I am afraid the whole Chinese apparel industry is a new challenge and opportunity.