Septwolves, which started out as a business casual menswear brand, has discovered that in recent years, Chinese consumer preferences have shifted significantly towards sports, leisure, and outdoor pursuits.
Founded in 2006, UR, a Chinese fast fashion brand, spares no effort to pursue product diversification and fashion, maintains a frequency of new releases twice a week, and develops tens of thousands of fashion items every year.
In 2021, Hongxing Erke’s “unintentional act” of donating money to support Henan’s disaster relief made them popular all over the country again in a very short period of time. The digital department that supports Hongxing Erke’s omni-channel sales said that 2021 is equivalent to one more “double” eleven”.
In November, tens of thousands of people flocked to La Chapelle’s live broadcast room to grab discounted clothes. Behind this grand occasion was the news that La Chapelle was filed for bankruptcy liquidation by creditors.
Chinese clothing brands are undergoing drastic changes. Changes in consumer aesthetics and brand preferences, more intense external competition, the disconnect between one’s own corporate strategies and the market, and even occasional external events and emotions may affect the fate of a Chinese clothing company that has been established for more than ten years.
Various surveys on Generation Z, who represent the future consumer trends, show that when it comes to their choice of clothing, Generation Z is exposed to international luxury brands earlier and has respect for brands with deep brand heritage; they are also willing to accept high cost-effectiveness. Popular international fast fashion brands; at the same time, Generation Z is also more bold and directly expresses its appreciation and love for national fashion brands. The premise is that national fashion brands can meet the needs of Generation Z in terms of design, quality and emotion.
Clothing consumption is no longer limited to functionality. “Fashion”, a seemingly elusive thing, is the invisible hand driving the clothing industry. Understanding fashion and catching up with it at a faster speed is the first step to becoming an excellent clothing company.
How to make “fashion” traceable? Digitalization has become a common solution for some clothing companies. Behind this is the maturity of digital infrastructure and the emergence of innovative tools. More importantly, in an industry that is becoming increasingly “involved”, digitalization can help companies and consumers rely on each other. Get closer, understand and listen to the voices of consumers. The national trend can break through the time cycle and remain popular for a long time. A core question that needs to be solved is, “for whom?”
In all aspects of digitalization in the apparel industry, “people” are always the key link.
The 1% curse of Chinese clothing
China has become the world’s largest clothing consumer and producer, but it has never hatched a truly international clothing brand. This is also a scar that has been difficult to erase in China’s clothing industry.
Data from the National Bureau of Statistics show that in 2020, enterprises above designated size in China’s garment industry achieved annual operating income of 1.36 trillion yuan, with the overall scale shrinking by 11.3%; the loss rate of garment enterprises above designated size nationwide was as high as 23.16%, and the losses of loss-making enterprises increased by 62.41% year-on-year. %.
At the same time, overseas clothing brands are making a lot of money in China. In fiscal year 2020, UNIQLO Greater China’s revenue accounted for 22.7%, becoming the second largest market after Japan, and its number of stores in China has also exceeded Japan.
The core reason for this phenomenon is the difference in market awareness between domestic and foreign brands. Take fast fashion as an example. When people think of fast fashion brands, the first thing they think of may be overseas brands such as Uniqlo, ZARA, H&M, etc., but they lack a deep impression of domestic brands.
More research shows that at present, China’s high-end clothing market is almost occupied by clothing brands from France, Germany, Italy, Japan, the United States, the United Kingdom, South Korea and other countries, while domestic brands are mainly concentrated in the mid-to-low-end market.
When domestic clothing brands are labeled as “cheap”, their market share is further reduced. In overseas markets, the concentration of local top clothing brands can reach 20%-30% or even higher. In China, the concentration of top domestic clothing brands is very low, and single brands have a market share of more than 1%. few.
Therefore, how to break the 1% curse is an urgent problem that China’s clothing industry needs to solve. In the past two years, the rise of domestic brands has emerged. In 2019, in the 2019 fast fashion brand rankings jointly released by Internet Weekly and eNet Research Institute, Handu Yishe surpassed H&M and ranked among the top three for the first time, following Uniqlo and ZARA.
Handu Yishe’s success is mainly related to the increasing penetration rate of e-commerce in China’s apparel industry and the increasing development of online shopping live streaming. China’s mature e-commerce market is indeed a shortcut for domestic clothing brands to break through sales bottlenecks, but it is far from enough.
One very good news is that Generation Z (young people born between 1995 and 2009), who represent the future mainstream consumption trend, are extremely enthusiastic about the “national trend”.
The “2021 Generation Z Youth Consumption Trend Report in New First-tier Cities” recently released by the 21st Century Economic Research Institute shows that 43% of the post-95s surveyed prefer national trend co-branding, ranking first among the co-branded categories “most likely to trigger impulse orders”. In contrast, the “pre-95s” group prefer celebrity idols for endorsements.
Growing up in an era when the country’s comprehensive strength is rising, Generation Z youths have a stronger sense of pride in the national trend. Seizing such opportunities to truly understand and meet consumer needs is the key for domestic clothing brands to enhance their hard power. And behind this, we need to start from lifeGenerally speaking, how to ensure the fashionability of a product will determine whether it has core competitiveness.
However, fashion has no standards, so who defines fashion? Guo Jiang, head of the information technology business of Chinese fast fashion brand UR, said that fashion will be viewed differently from different perspectives, but from the perspective of fast fashion brands, fashion must ultimately be tested by consumers.
The consumer groups that UR faces are mainly young consumers aged 18-35. They have their own judgment standards and distinctive characteristics. What UR has to do is to provide more products and faster updates to satisfy as many people as possible. The fashion needs of different groups of people.
Currently, UR can develop tens of thousands of products every year and maintains new releases twice a week. More importantly, UR not only has many styles, but also attaches great importance to originality. This poses a great challenge to UR’s product design, production and sales capabilities.
In the past, many clothing brands suffered from inventory backlogs, which eventually led to operational crises for the brands. In Guo Jiang’s view, high inventory is due to insufficient sales capabilities. UR’s current small order quick return model will make all product planning in advance. For example, if 1,000 pieces of a certain product are to be produced, 200 pieces will be produced initially and placed in different stores for trial sales. If the effect is satisfactory, the product will be produced quickly.
Behind this, there are several abilities that are very critical. One is the ability to predict products, because every step of a product from research and development to production requires costs. If the product cannot be sold after it is produced, the cost loss will be very large; in addition, One is the fulfillment capability of the supply chain, because the life cycle of fast fashion products is short. If the production time is not fast enough, the product may have missed the best sales period when it comes out.
In fact, in order to achieve accurate product prediction, we must rely on big data. Guo Jiang said that within UR, big data has been defined as the “enterprise brain”. Based on massive data, it can review the production and sales of products in the current quarter, and then feed back the results of analysis and insights to the business department.
In addition, UR is currently building a consumer big data platform (CDP), the first phase of which will be launched in the first quarter of next year. The core purpose of this platform is to create a label portrait system for all UR consumers, including customer journey data from various channels, customer interaction data on corporate WeChat, etc. These continuously improved label portraits will eventually be applied to On the sales side, provide better services to consumers and recommend better products.
Therefore, behind UR’s fast fashion, technology is a booster that supports it in catching up with and even predicting fashion, and consumer insight is one of the key factors.
Hong Chen, head of UR’s consumer operations department, is also the head of UR’s CDP platform. She joined the apparel industry from the mobile phone industry. Her feeling is that the digital foundation of the apparel industry is relatively weak and it also has its own characteristics in consumer operations, “UR There are more than 10,000 SKUs and more than 10 million members every year. Based on consumer operations, it is quite interesting how to combine the needs of people and goods so that both parties can be satisfied.”
During the 2020 epidemic, UR’s operations team used Enterprise WeChat to establish a unified consumer community and undertake transactions through the mini program mall. On days when offline stores are unable to open their doors to welcome customers, this is one of the ways to increase sales.
However, in 2021, UR has made significant adjustments to the functions and positioning of the community. “No harvesting, only warmth” has become a principle repeatedly emphasized within UR for the community. The specific manifestation is that the original official push in the community 20-30 times of messages are now changed to 3-4 times. At the same time, sales are no longer the goal of the community. Try-on benefits, maintenance knowledge, and dressing skills have become the main part of the content.
After several months of operation, the most intuitive effect is that consumers have begun to chat in the group. Some people will directly @brand operations staff to find products, some will give feedback on the clothes they purchased, and some will give feedback on the stores they visited. Thumbs up for the service, and some people spontaneously responded to the complaints.
Hong Chen is optimistic about the future connection between the CDP system and the community.
“In the fashion industry, we hope to present products to consumers faster, and then quickly get their feedback, so as to optimize according to their needs; but at the same time, we also hope that in the process, we can put the design The concept behind it is conveyed to consumers, allowing them to feel and accept this thing, thereby bringing each other closer to each other. Unlike other industries, this is a two-way thing.”
The “2021 New First-tier Cities Youth Consumption Trend Report of Generation Z” also shows that Generation Z prefers national fashion, while mercilessly criticizing the homogeneity of national fashion products. “They want to accumulate loyal customers, increase customer stickiness, and ultimately… Go back to the product itself.”
This simple truth remains unchanged forever.
For the apparel industry, these are the best and worst of times.
</p
