The Causes Of Chanel'S Performance: Change And Scarcity

It has always been a scarce industry.

According to the world clothing shoes and hats net, compare LV, Gucci and

And other luxury brands.

For a serious loss.

Its performance continued to decline in 2016, and sales revenue and profits recorded a sharp decline for 2 consecutive years.

According to the annual financial report submitted by Chanel to the business department of Amsterdam and Holland in the past year, Chanel sales fell 9% to 5 billion 670 million US dollars over the previous fiscal year, operating profit fell 20% to 1 billion 280 million US dollars, net profit fell 35% to 874 million US dollars, and the profit margin was 15.4%, a sharp decline compared with 21.5% in 2015.

For the landslide of performance, Chanel explained in the report that it was mainly caused by frequent terrorist attacks in Europe last year, especially in France, resulting in Weak Tourism and low consumer desire for shopping.

In addition, Chanel sold its British subsidiary Chanel Limited UK last year to another entity controlled by Chanel group, which also damaged its performance to a certain extent. Chanel Limited UK contributed about 11% of its total sales.

However, comparing the performance of LVMH, Hermes, Kai Yun and other groups last year, the impact of this reason on Chanel performance is likely to be overestimated enough to arouse group vigilance.

For the current Chanel, it is more important to look for reasons from within.

Some analysts believe that in addition to product innovation, Chanel's biggest problem is to start losing brand scarcity.

Attracting overseas consumption of Chinese tourists has been a "kill trick" for luxury brands. In fact, many of the sales of luxury brands in Europe, the United States, and even Japan and South Korea have come from the contributions of Chinese tourists.

However, because of the European terrorist attacks and other security problems since 2015, the European luxury industry is shrouded in shadow. With a series of regulatory measures to combat the outflow of capital, a lot of funds from the gray channel exit have been restricted, which also directly hit the local market.

To stimulate revenue growth in China's domestic market, Chanel became the first luxury brand to cut prices in China.

In April 2015, Chanel finally put aside its shelves and set off a storm of luxury brands, announcing a 20% reduction in the prices of some commodities in mainland China and a 20% rise in European commodity prices.

As the luxury industry has entered a period of slow growth and changes in global consumer habits, Chanel, which has always been cool to the Internet, also said that it had entered the electricity supplier market in the same year.

However, LV, Gucci and Hermes are still cautious about the price reduction storm.

Some analysts believe that this is a dilemma, which may attract some entry-level customers, but will dilute the brand value. Scarcity has always been the only way to luxury.

At present, the rapid expansion of Chanel has damaged the premium and scarcity of its brand to some extent, which will lead to its loyal customers away.

On the other hand, Chanel has been increasing its social marketing investment in China to increase its brand exposure due to its inability to sell products.

According to informed sources, Chanel China's public relations strategy is to maintain its exposure at least once a month in major media.

Especially in this year's Gabrielle year, Chanel has done enough publicity for Gabrielle handbags and perfume.

At the end of last month, Chanel opened the "Chanel Chanel perfume show" in Sanlitun, Beijing. It also launched a star audio program with SuperELLE and Himalaya FM, participating in stars including Xun Zhou, Hu Ge and Bai Baihe.

Earlier, in May this year, the J12 watch also held the J12 multidimensional experience exhibition at the Lafayette Art Center in Shanghai.

Since this year, Chanel China has made more and more investment in media exposure.

But the industry has mixed opinions about Chanel's communication strategy.

Some analysts believe that although social media is a good medicine for many brands, overexposure is not good for Chanel.

In fact, Chanel headquarters does not have a unified guiding ideology internally.

In less than a year after Chanel announced the price cut, Chanel announced the resignation of CEO Maureen Chiquet worldwide, and the reason for leaving is because she had a disagreement with the company.

For luxury brand marketing strategy, "let's not think about how big it can be," said the former global head of Chanel. "Instead, we should consider how to make it unique."

Chanel is one of the largest and most mysterious luxury brands in the world. This may imply the strategic hidden danger of Chanel brand. Some analysts even point out that Chanel has made strategic mistakes in China and even in the global market.

Some analysts pointed out that the real uses of luxury goods are two. The first is to create social distance. The second is the expression of values. To create social distance, they can not be bought at will, so the first key words in the field of luxury goods are hard to get, so luxury goods can not be reduced easily.

In the Internet age, how to maintain the uniqueness and scarcity of luxury brands has also triggered the industry's vigilance.

Italy luxury cashmere brand Brunello Cucinelli's naming and CEO said earlier that Brunello Cucinelli is being seriously affected by the Internet and gradually losing exclusivity and uniqueness. He believes that brands should not blindly conform to the trend of the Internet. In the future, Brunello Cucinelli may not be able to shut down the business of e-commerce channels.

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There are still a handful of skeptics about the Internet. Among them, Johann Rupert, the chairman of the group, has completed the merger of Net-a-Porter group and Yoox group in order to create a brand new fashion business tycoon. The merger will bring 1 billion 300 million euro income to the company. Even so, he still doubts the role of e-commerce in the luxury world.

He thinks that the electricity supplier is more like a service facility for customers. Besides, it has no other role. The electricity supplier represents only 1% of the turnover for the group. Frankly speaking, this is not a great contribution to any luxury company.

In addition, he added that it is difficult to link the "electricity supplier" with "luxury goods".

Trust is still a big problem for electric providers, because fake commodities are rampant nowadays.

In fact, Chanel is also aware of the danger of this problem.

Now Chanel seems to be picking up scarcity.

After a continuous test of the electricity supplier, the luxury brand Chanel is likely to be divided on whether to further enter the electricity supplier or even turn back.

In May this year, Bruno Pavlovsky, President of Chanel fashion department, told the German media that he was still cautious about the electricity supplier. He stressed: "the best experience of Chanel is in the boutique. We are not sure whether consumers can fully understand us through the cold electronic screen. For Chanel, the most important thing is to serve our customers with boutique consumer experience."

Contrary to the fact that other luxury brands have slowed down or stopped increasing physical store practices, Chanel continues to expand its physical stores.

It is reported that in 2018, Chanel will open a 600 square meter new shop in the suburb street of Saint orange, Paris. At the same time, shops on the 57 block in New York are also being renovated, and new stores will also be opened in Seoul and Tokyo.

Some analysts believe that so far, Chanel has already tested jewelry, glasses and cosmetic products on some electronic business platforms, but has not yet pushed the core business handbags and garment business as brand soul to the electricity supplier.

Now, Chanel's attitude towards the electricity supplier tends to be conservative. This means that in the short term, Chanel is unlikely to push the core business including garment accessories to the electricity supplier channel, and the strategy of entering the electricity supplier will be limited to some parts of the business, such as beauty makeup.

In earlier reports, we have pointed out that the overemphasis on products and excessive emphasis on show layout are making the Old French brand lose consumers, and Chanel is clearly in swing and contradiction in pricing and e-commerce strategies.

It is not that there is no need for better clothes and handbags. As long as the gap between the rich and the poor still exists, the desire and ability of the rich to yearn for a more sophisticated life will not disappear.

But it is clear that luxury goods need to be redefined when the rich people of the Internet, 80, 90 or even 00, take over the consumer dominance from the last generation.

But the only thing that remains is that people who buy Chanel handbags know that they are not buying practical products, but buying social distance and expression of values.

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