How Does Daichmann Shoe City Win?

There is no superior position advantage, nor eye-catching advertising signs, but it can not stop the traffic. Among the shoe stores in the capital, I'm afraid that only a few can get this treatment, and Daichmann Shoes City is one of them. Its business secret is written on the shelf of its own store: the method of shortening the supply chain to ensure that customers can buy low-cost "brand" goods. Roy, assistant general manager of Daichmann Shoes City, said: "We have created a territory with price war." Daichmann Shoes City is one of the more successful cases in the national retail industry in 2007. Only one year after its opening, it had a great impact in the industry because it was lower than the price of similar goods by nearly 50%. I have to admit that this is a bit of legend, and the reporter decided to find out. Following the escalator, the reporter came to the fifth floor of the shopping mall where Daichmann Shoes City is located, walked through several corridors of commodity rooms, and then climbed a slightly narrow staircase to reach the location of Daichmann Shoes City. In the huge commodity exhibition hall, there are many signboards hanging in conspicuous places about "low price due to few supply chain links". After checking the price of shoes, the reporter found that the price of shoes in Daichmann Shoes City was indeed cheaper than the general market price. According to the common sense in the retail industry, the higher the floor, the more difficult the operation will be, but this has been resolved by the "price war" fought by Daichmann Shoes City. "Because we really grasped the needs of customers," Roy told reporters. The reporter learned in the interview that the reason why Daichmann Shoes City quickly occupied the territory in the fierce competition environment is that it completely relies on a new supply and marketing model?? No joint venture, no rent, no rent, completely self operated to reduce operating costs. Yang, the general manager of the shoe city, told the reporter that as a channel sales platform, Daichmann Shoes City is fully self-supporting in the circulation link and store operation. It shortens the supply chain by purchasing cash from manufacturers, effectively reducing operating costs. The manufacturer only appears as a single supplier in the process of participation. This can not only avoid the contradiction between zero supply and supply, but also allow customers to buy low-cost goods. It is understood that the number of people in Daichmann Shoes City reached tens of thousands during the peak sales period. This new business model has brought considerable economic benefits to Daichmann Shoes City, realizing the goal of small profits and quick turnover. General Manager Yang said that the reason why Daichmann chose this channel operation mode was that, on the one hand, the "contradiction between zero supply and demand" was becoming more intense, and the internal driving force of the market was driving it; On the other hand, we have seen all kinds of problems existing in the operation of businesses in other channels. More importantly, Daichmann is a new enterprise. It chooses the zoo as the traditional wholesale business circle. In addition, the current retail market is highly homogeneous. If there is no lower price, it is impossible to participate in the competition. It is an inevitable trend to take the "self-supporting" path. Professional hypermarkets like Daichmann are known as "price killers" in foreign countries. They quickly gain a foothold in the market with prices significantly lower than those of similar goods. Industry insiders pointed out that price war is the only way for the rapid development of professional stores. If Daichmann wants to develop rapidly, he cannot bypass the price war. To straighten out the "zero supply relationship" is a way for Daichmann Shoes City to come from behind. The practice of reducing supply chain links with "self support system" has been proved to be a way to win the market. The "self support system", which is not a common business model in China, has already occupied the mainstream position in the world. It is understood that at the beginning of the opening of Daichmann Shoes City, the relevant responsible persons investigated the consumer market and found that customers attach great importance to the brand of footwear products, but the price of footwear brands in major shopping malls is too high for customers to accept. With an understanding of the domestic consumer market, the responsible person turned his perspective to the foreign market, and went to Europe and the United States to investigate the consumer market. After investigation, they found that the price of footwear products also produced in China in the European and American markets was far lower than that in the domestic market. The reason for this situation is that China's channel operation mode lags far behind that of European and American countries. Roy told the reporter that not only footwear products, but also clothing of some brands sold at a much lower price abroad than at home. The key is that there are few supply chains for foreign products. "The business model of the retail sales market in Europe and the United States is mainly self operated, which can reduce the supply chain links, while the joint venture system commonly used in China's retail sales market cannot do this." General Manager Yang contrasted and analyzed the advantages and disadvantages of the two business models, "Compared with the self-supporting system in the supply chain, the joint venture system adopted in China has led to high purchase costs and high selling prices. For shoes, more than half of the selling price of shoes is occupied by various expenses and hard withholding (flow reversal), and the value of goods purchased by customers is unequal." General Manager Yang gave an example: "For example, if a manufacturer wants to enter a large shopping mall in Beijing to sell shoes, it needs to spend a lot of public relations fees first, and then a series of expenses such as entrance fees, seat selection fees, management fees, decoration fees, etc. Faced with such huge expenses, manufacturers tend to add this amount of fees to the price of shoes, so the price will be higher." Seeing the shortcomings of other businesses in the business model, Daichmann decided to adopt the "self operated" business model. "Because there is no smooth 'zero supply relationship', there is no stronger competitive strength." General Manager Yang is confident about this decision. Industry insiders believe that the joint venture system not only leads to high commodity prices, but also tends to intensify the "zero supply conflict". As a result, some department stores often default on payment to suppliers, and the zero supply conflict is increasingly prominent. However, the self-supporting system can effectively avoid the contradiction between zero supply and demand on the basis of reducing supply chain links. The insiders of professional channel logistics trend said that it is not easy to open stores on the sixth and seventh floors without closing down, and it is even rarer to achieve such performance. The success of DSTC depends on the innovation of logistics model. This mode not only enhances the competitiveness of enterprises, but also realizes a win-win situation for businesses and customers. "The self operated business model is likely to become the future development direction of China's retail industry". Yang, General Manager of Daichman Shoes City, foresees a promising future for the self operated business model. He believes that professional channels will become the main channels for people's consumption in the future. General Manager Yang said that at present, all major shopping malls are developing in a comprehensive way, and the previous large shopping malls that mainly sell commodities have undergone fundamental changes. As a result, with many luxury goods becoming the protagonist of shopping, similar to those popular in shopping malls in the past, many consumer goods, including shoes, have been withdrawn from the market in an all-round way and the trend of developing professional channels has emerged. Among them, "cost performance" is one of the main reasons for the emergence of professional channels. Nowadays, as people's consumption attitude tends to be more rational, they need a more cost-effective consumption channel. Therefore, Daichmann Shoes City, which reduces supply chain links and commodity prices with its own business model, has been recognized by many people. In short, the consumption trend determines the market direction. Professional channels will be the main channels for mass consumption in the future, and professional channels will also affect the flattening of the distribution supply chain.