Source: Beijing Business Daily
As underwear is a product that women just need, consumers have gradually begun to pay attention to product quality and details. While a variety of brands have appeared in the underwear industry, it has also led to a decline in the performance of underwear stores. In order to break the singleness of traditional underwear brands, most brands are now developing horizontally and vertically, not only many homewear, leggings and swimwear, but also launched plastic clothing, plastic pants, etc., non-underwear products account for more than half of sales. Industry insiders pointed out that with more and more participants in the underwear industry and market share being segmented, in order to highlight the influence of the brand, underwear brands need to constantly innovate and develop derivatives to attract consumers.
Weak growth of underwear
With the strong competition of domestic underwear brands, homogeneous products have gradually saturated in the market. A reporter from Beijing Business Daily visited a number of underwear brand stores and found that in Victoria’s Secret store, fragrance products and body lotions were welcomed by consumers. In the first quarter, L Brands Group Victoria’s Secret’s same-store sales fell 1% year-on-year, while its bath brand Bath & Body Works sales increased by 5%, the company said in a statement that Victoria’s Secret’s underwear sales were weak, or hit the brand’s overall sales. As a result, L Brands has announced plans to restructure its beauty business and increase publicity of its beauty business in the future to make its cosmetics business more prominent.
The future underwear industry is also full of uncertainty. As more specialty underwear brands join the competition between major underwear brands, the underwear market may face a reshuffle at any time. Austrian luxury underwear company Wolford recently released data for the first three quarters of the 2017/2018 fiscal year, although it has been halved from 5.08 million euros in the same period last year, the company’s after-tax loss is still as high as 2.57 million euros, and wholesale channel sales fell 4.4% year-on-year.
With the gradual maturity of the consumption concept of domestic consumers, the function of underwear is no longer single. Underwear will be segmented more deeply according to the user’s different scenarios, ages, functions, preferences, etc. Taking women’s bras as an example, the diversity of colors and styles is not a problem, and the steel hoop gathering bra that has been popular for many years has also shrunk sharply in the past two years under the dominant trend of “health”, and was quickly seized by the headless bra.
Derivatives become the main force
The young series underwear brand 6ixty8ight derivatives are almost the same as the main product category. The brand’s Beijing branch market related personnel introduction, 6ixty8ight products mainly include underwear and casual wear two categories, of which casual wear sales performance accounts for about 43% of the total sales, at the same time, underwear and casual wear sales ratio of 5:1, and physical stores and online stores often have 115 yuan 5 pairs of underwear and other preferential activities, in such a strong sales method, most consumers will buy 5 pairs of underwear each time.
For example, the above-mentioned Austrian luxury lingerie company Wolford said that the decline in wholesale business is mainly due to the hosiery brand being moved from the original main location to the upper floor of the department store, at the same time, the decline in department store traffic is also a business phenomenon in recent years. While it should have focused more on self-operated stores in this case, the nature of Wolford’s business meant that it could not be completely separated from department stores. Conversely, it shows that the sales of homnity products directly affect the company’s performance.
Since Victoria’s Secret cancelled its derivatives swimwear business, its performance has declined. According to the December 2017 sales performance report released by Victoria’s Secret’s parent company, L Brands, the exit of swimming and clothing categories led to a decline in sales of the company and Victoria’s Secret, respectively. In December 2017, the company’s net sales were $2.516 billion, up 3% year-over-year. At the same time, in the third quarter of 2017, the company’s sales were $3.84 billion, down 11% year-on-year. Among them, the main brand Victoria’s Secret, same-store sales fell by 13% in the month. In response, Victoria’s Secret CEO Jan Singer responded that it is currently readjusting the brand’s core products while accelerating the improvement and enhancement of in-store services. In fact, Victoria’s Secret’s downturn has been in the doldrums for a long time since the elimination of its swimsuit and ready-to-wear business at the end of 2016, with its same-store sales falling for 12 consecutive months.
Share reduction seeks differentiation
The “2018-2023 China Women’s Underwear Industry Market Outlook and Investment Planning Analysis Report” pointed out that the trend of women’s underwear segmentation is more obvious, and the segmentation of the underwear market for different consumer groups will be the future development trend. The report also shows that as consumer needs gradually become diversified and personalized, the proportion of consumer choices of mass brands declines, while niche waist brands gain a larger market share. The entire market meets the diversified and personalized needs of consumers through differentiated brand strategies.
Chai Li, a senior fashion designer and brand consultant of the expert judge of Italy International Fashion Week, said that the prevalence of underwear derivatives is also due to the increasing number of competitors in the underwear industry, which has divided the market share to a certain extent. In order to highlight the brand benefit, the development of derivatives is also one of the measures of brand innovation. But the current underwear is no longer one of the accessories of clothing, but as a trend, fashion mainstream, can even be worn outside. Underwear will be healthy, fashionable, personalized and differentiated in the future, but brands need to carry out deeper precipitation and further segmentation according to customer preferences. Therefore, many large brands are currently at risk of customers being cut away by market segments.
Shen Yuan, research director of “Luxe.CO”, said that the emergence of derivatives is based on the natural product extension of companies with certain brand power when seeking new growth points, and the specific good or bad mainly needs to return to financial report data. On the whole, the recent decline in the performance of traditional brands mainly stems from the fact that the brand used to be an extensive channel-driven business model, which was relatively weak for brand building and user management, while the new generation of consumers will actively find more suitable product brands through more information and channels, so it is also one of the reasons why consumption is dispersed. In turn, it has created more opportunities for new brands for many new generation entrepreneurs.