CHINA FASHION BUSINESS

▼The following discussion in the cold fashion circle is a discussion and summary of industry issues. These shares are the crystallisation of collective wisdom. (They do not represent the personal views of Leng Yun). It is hoped that this method will benefit more industry professionals!

1. Analysis of the development potential of the fast fashion women’s clothing industry

The current fast fashion women’s clothing market is undergoing a transformation in retail formats. In the field observation of the Hangzhou market, the warehouse large stores show unique operating characteristics. These stores focus on serving the small-sized female customer group, and the product style tends to be gentle, versatile, and practical for commuting. Each shelf is dominated by best-selling products, with clear product classification, covering clothing, bags, accessories and other categories, allowing consumers to complete their purchasing needs in one stop.

2. What is the background of the rise of membership-based warehouse large stores and their market acceptance?

The rise of this new format stems from multiple market factors. The traditional mass women’s clothing market is highly competitive. Early brands represented by IEF and their followers adopted an almost unrestricted store opening policy to quickly expand the market. The average monthly income of working women is about 8,900 yuan, of which clothing expenditure accounts for 15% of income. This data outlines the basic plate of consumption capacity. At the same time, street shops and shopping malls generally face the problem of high vacancy rates, and are in urgent need of new formats to bring in customer flow, especially in the entire rental area.

3. What is the background of the rise of discount warehouse stores such as Huipin Warehouse, Yipin Warehouse, and Shengdao Warehouse? What are their similarities and differences with Vipshop Warehouse and JD Outlets? Where are the channel opportunities?

Some successful cases show the development path of large warehouse stores. Brands such as Guangzhou’s cocozone women’s clothing and Xiamen Meiyang have achieved GMV exceeding 10 billion. Most of these brands first accumulated traffic through online celebrity models, then began to lay out offline channels when facing inventory pressure, and at the same time started brand building to form a business closed loop. In Hangzhou, some internet celebrities have opened warehouse stores, offering customers products at wholesale prices to create an approachable and cost-effective image. This model avoids the dilemma of high investment in traditional brands while maintaining product quality.

In terms of specific operations, large warehouse stores adopt special operating methods. They usually adopt a joint operation model, where the sublessor can get a sales rebate of 38%-45%, and the cost of goods per square meter in the store is controlled at about 500 yuan. The main way to attract customers is to rely on LBS marketing technology to target customers within 3-5 kilometers of the store. The product structure includes new products such as the common and ever-changing hot girl clothes, as well as improved inventory products. The joint operators cover the inventory cost in the store through product deposits and unsettled rebates to reduce the risk of default.

1.What are the core restrictive factors for the incubation of large warehouse stores representing different categories?

Consumer behavior research shows that this format meets specific scenario needs. Some consumers shared that when preparing for their trip to Universal Studios, they found clothing at reasonable prices in warehouse stores. The stores adopt a service model where staff do not take the initiative to disturb customers and allow them to choose freely. In addition, the integration of online and offline membership benefits creates a good shopping experience. This experience is different from traditional brand stores such as ZARA and H&M, which pay more attention to brand tone.

2. What points should be paid attention to in the location selection of large warehouse stores? How to ensure stable customer flow? What quantitative strategies are there to ensure correct location selection?

In terms of location selection strategy, industry insiders believe that we should not pay too much attention to rent costs, but focus on the accuracy of customer positioning. Accurate customer positioning can bring precise customer flow, which in turn supports subsequent marketing. The decoration style mostly adopts fast luxury or industrial style, emphasizing large-area display and repeated sampling, and the overall layout is designed from the perspective of the 5C marketing theory.

Compared with other warehouse formats such as second-hand luxury stores and cosmetics sample warehouse stores, women’s clothing warehouse stores have relatively lower operating risks. Second-hand luxury goods face the problem of authenticity certification, and most cosmetics samples come from hotel channels, which have certain risks. The transaction chain of women’s clothing warehouse stores is clearer, and there is more room for optimization.

The future development direction should focus on the optimization design of the supply chain. Super large warehouse stores need to do a good job in the design of both ends of the supply chain – goods supply and location operation. This model, with the smile curve of the supply chain as the thinking framework, will determine whether large warehouse stores can achieve sustainable development. As industry insiders say, “Businesses are designed”, and the key to the success of large warehouse stores lies in making each link more precise and efficient.

3. What points should be paid attention to in the commodity operation of large warehouse stores? How to improve operation efficiency and benefits?

Fast fashion women’s clothing warehouse stores show obvious differences in customer groups in different regional markets. Some operators shared that their relatives’ warehouse stores in counties are operating well and are planning to expand to big cities.

However, according to field research data in Yunnan and other regions, county consumers are mainly mothers with children, and their body characteristics and consumption preferences are significantly different from urban customers. Although the hot girl style can attract attention, the actual transactions are mostly concentrated on conservative styles, which requires corresponding adjustments in the product structure.

The development path of the Outlets format reflects Chinese characteristics. Take Shanghai Bicester as an example, although it is located in the suburbs near Disneyland, overall, domestic Outlets are still dominated by urban ones. This is closely related to domestic parking conditions and private car ownership and other practical factors.

In this context, discount warehouse stores such as Huipin Warehouse, Yipin Warehouse, and Shengdao Warehouse have found a market gap between cities and suburbs, adopting the strategy of “surrounding the city center from the urban-rural fringe”. These stores not only avoid the high investment in opening independent Outlets malls, but also pay more attention to image and product variety than Vipshop Warehouse and JD Outlets.

4. How to balance the store area and product placement in large warehouse stores? What quantitative strategies are there?

The scale of warehouse stores varies greatly, ranging from 3,000 square meters to 20,000 square meters. In a city, the same brand may open multiple warehouse stores. This format stratification strategy allows brands to find suitable market opportunities in different locations. Membership systems, private domain operations, and self-owned brands have become the core assets of these enterprises.

Location selection is a key factor for the success of warehouse stores. In addition to traditional on-site observation and retail weekly weight calculation, advanced operators also use GIS software to analyze customer portraits and preferences based on map data and National Bureau of Statistics data. Professional tools such as Huff model, Reilly’s law, and retail saturation index can help judge the suitability of location selection. Considering that large-area stores usually need to sign a 3-year contract, and shopping mall leases are about 2-3 years, scientific location analysis is particularly important.

In terms of commodity operation, some brands have shown excellent practices. For example, Arirsim’s 500-square-meter store can achieve monthly sales of 8 million yuan. However, more warehouse stores face the problem of insufficient sales continuity, and some have to change the tags of old inventory to maintain operations. To solve this problem, it is necessary to accurately set the distribution coefficient and display renewal rate, and make plans for different product series.

The growth strategy needs to be multi-pronged. In terms of “expanding the range”, some stores will invite internet celebrities to serve as one-day store managers, and produce video materials to guide traffic on platforms such as Douyin and WeChat Channels. Brands such as BF, BM, and WM choose to hire model-level clerks to accumulate popularity on social platforms such as Xiaohongshu. “Specialization” focuses more on the professional division of labor of store employees and the construction of digital infrastructure. However, it should be noted that an overly long operation chain may lead to a decline in execution.

In terms of pricing, most warehouse stores focus on the fast fashion field, emphasizing scene creation and fast luxury style. Brands such as Chafuxiang and Liangmuli are trying to enter the mid-to-high-end market. Warehouse formats of different categories are also learning from each other. For example, the newly opened bake fun bakery has made innovations in improving the shopping experience. This shows that the warehouse-style retail model is becoming an important trend.

By observing the operating characteristics of warehouse stores in other categories such as home furnishing, baking, cosmetics, and second-hand luxury goods, we can gain more innovative inspiration. However, in actual operation, retailers tend to pursue “one move to defeat the enemy” to avoid the impact of overly complex operation chains on execution. Therefore, comprehensive planning is needed in the initial design to ensure that all links can be effectively connected.

PS：文章由AI翻译而成

---