Where Is The Chanel Problem Of Declining Performance?

According to the world clothing shoes and hats net, Chanel What's your first reaction to Chanel? Is it the classic 2.55 sheepskin handbag? Is it No.5 classic perfume or a tweed coat? Of course, there are many entry-level buyers from their pearl necklace, earrings and sunglasses.

You see, even the classical Chinese singer Faye Wong, who has already sold the concert tickets to 1800 pieces, has murmured in the song "Chanel..." Chanel... " It's a tribute to the status of Chanel's live advertising, and of course, it may be, "Hermes... Hermes... " It sounds like, uh, weird.

All of this is pointing at Chanel. Luxury goods The classic status of the world. It follows Hermes The similarity is that there is a classic handbag that can not be added to each other, and the "hunger marketing" approach is adopted. Chanel2.55 is not what you want to buy at the store, you can buy it anytime, anywhere. Many people must wait on waiting list. In doing so, more people will yearn for products and brands.

Chanel's handbags with a unit price of more than 25 thousand yuan, though expensive, can be preserved and sometimes even appreciated.

Natural spokesperson

Chanel has another advantage: there is a clearer brand image, and the spokesperson of this brand is the founder of Chanel, Coco Chanel.

It is easier to attract the attention of contemporary people that Chanel has such a natural spokesperson in this era when the media has been flying all over the sky and the personal charm has been enlarged unprecedentedly and the star effect is also outstanding.

Chanel is also aware of this advantage. Therefore, in the series of videos "Inside Chanel" which began to be released in 2012, Chanel restored the story of Coco Chanel with black and white video and fast forward mode: the launch of No.5 perfume, the background of what advanced clothing was born, and the "creativity" represented by Chanel.

There are several videos that do not express their meaning in real terms, which seems to speed up the pace in pursuit of short videos, but in general, they convey the passion, longing and innovation represented by Chanel.

This way of restoring classics is a typical luxury marketing method. Luxury is nothing more than history, classics and design. So we can see that Chanel still wants to shape itself into Hermes.

But is this a successful continuation of the classic, or is it actually announcing that there is some lack of innovation? Most importantly, what exactly do buyers think of Chanel? What is the position of chanai in the current market?

Let's read the earnings report.

However, Chanel's earnings for two consecutive years have made people feel that the old luxury goods have encountered some problems.

According to media reports, Chanel's 2016 annual earnings report compiled by DDT consulting showed that Chanel's sales fell 9% to 5 billion 670 million US dollars compared with the previous fiscal year, and net profit fell 35% to $874 million.

This trend has emerged in the last fiscal year. Since 2015, Chanel has faced challenges in its performance. In DDT's earnings report for Chanel, Chanel's operating profit fell 23% to 1 billion 600 million dollars in the fiscal year ended December 31, 2015, and total sales fell 17% to $6 billion 240 million. Cosmetics and perfume business, which accounted for much of Chanel's profits, sold $2 billion 910 million in 2015, down 21% from the same period last year.

As for the reasons, from the official point of view of Chanel, it is mainly divided into two parts:

One is the changes brought about by the internal portfolio and organizational structure: the brand in the United Kingdom is divested and sold to another entity; on the one hand, the beauty business Bourjois was sold to Coty Inc. Coty group in 2015, resulting in a decrease in the 2016 hairdressing business income.

Two, the external macro economy, industry environment and regional political factors: Paris's terrorist attacks and the consequent changes in tourism consumption pattern in Europe, and the low consumer desire for shopping in the first half of the year brought negative effects to the company.

Of course, the reason for the drop in profits can be very complicated, one of which is, of course, the reduction of prices. But in the recent year of the revival of the luxury market, it seems that Chanel's performance is not ideal.

Look at other first-line brands in the past second quarters, the growth trend is considerable. For example, Hermes, Burberry, LVMH and other groups achieved net profit growth of 9%, 13% and 15% respectively.

What's wrong with Chanel?

Shouldn't we lower the price?

In 2015, Chanel began to implement the strategy of "global coordinated pricing". This strategy is mainly aimed at China, a luxury consuming country, maintaining the same price between China and Europe through discount reduction. And this strategy did promote sales in a short time, which made a big hit and caused a big queue in stores.

When Chanel's performance has just come out, some people have been tucking away the price, which has weakened Chanel's advantages. The strategy of "global coordinated pricing" has made Chanel popular. It also deviated from the high-end luxury brand positioning. Luxury goods have always been increased and not depreciated. Another point is that the price difference in foreign markets should have existed, representing the rarity of luxury goods in non origin countries.

In January 2016, when Chanel CEO Maureen Chiquet stepped down, it was said that it was also because of the move of lowering prices, and was considered not in line with the long-term interests of the company.

But if we think about it carefully, if we insist on "customer centred", in the long run, this price adjustment will not affect the degree of brand positioning. The practice of the same price between China and Europe is the most direct way to catch Chinese customers. Buying products through purchasing will make Chanel never understand who its customers are, what they like and what they pursue. In the luxury industry, it is often the main loyal customer who contributes most of the revenue to the brand.

With such a price cut, customers can be recruited back to the local stores in China, and it is natural to say that the business logic of such series can be achieved by satisfying the needs of customers directly, serving customers better and attracting them to buy back again.

However, this practice is obviously "hurt" to the heart of Chanel's old customers. The original domestic price is high enough for Chanel to stay high. The long queue buying bags is suitable for Adidas's trend brands, which is not suitable for Chanel.

So, recently, I found that Chanel is closing this point. Other products are not clear, but bag products continue to rise in price. A friend bought a Le Boy in the first half of the year, when the domestic price was 28800 yuan, and now it has risen to 32800 yuan.

Style needs innovation?

In addition to the price, the degree of innovation is also the reason why many people mentioned the decline in Chanel's profits.

Tweed small coat, but almost every season is in the basic style of deformation, lack of big innovation; in the aspect of accessories, Chanel is actively promoting the sale of J12 series of black and white watches, but in fact, it has also introduced similar styles before. In handbag products, except for Chanel 2.55 and other classic items, Chanel began to push the new Gabrielle handbag. As for women's shoes, in addition to the classic two color shoes that were popular in the 4 month 2015 autumn and winter series, its classic style also includes straw canvas shoes, but these popular styles have been launched for some time. Besides, in perfume business, the new perfume series is less popular than No.5's classic perfume. It has been mentioned that on the clothing products, Chanel is still pushing its classics.

But objectively speaking, the product innovation of luxury goods is very difficult. For example, Alessandro Michele's spanformation of GUCCI style is definitely not a normal event. It is estimated that it will come back once in 10 years. What's more, the classic image of Chanel is so popular that there can be no subversive design like GUCCI.

How did LV learn to collaborate with Chao brand Supreme? In 2016, Chanel actually searched for the American musician Pharrell Williams to make joint design, but people who knew this matter... Or the Chinese... Not many.

It also wants to maintain the pride of high-end luxury brands such as Hermes, and wants to approach young people and marketing topics. Once again, Chanel's practice is very wobbling.

Marketing "high cold"?

Others feel that many of the old luxury goods, including Chanel, still represent a "high cold" gesture with consumers. On the one hand, due to their positioning and the conservative style of management, they are lagging behind in trying new things. Their biggest challenge is not taking into account the changes in the habits of new generation consumers.

Since the fall in profits in 2015, Chanel group itself has clearly realized this problem. The marketing highlights launched in 2017 were placed on young consumers. The three young stars who were popular with Quan Zhilong, Liu Wen and Willow Smith came to publicize the new Chanel Gabrielle:

A lot of money has been invested in social media and digital communication. Only recently, 21 small videos have been released to publicize the new Gabrielle Chanel perfume. The latest statistics from foreign media show that Chanel's video uploading and viewing are far more than the industry average.

From the data, the results are gratifying. In the statistics of foreign media on social media fans, Chanel has become the most luxurious brand of fans - more than fifty-seven million of the number of fans worldwide (Facebook, Ins, Youtube and twitter), while the second is Louis Vuitton.

Making so much noise and fans' popularity, if only from the marketing investment for young people, Chanel can be said to be "nothing wrong" in this respect.

However, it is not a fresh idea to invite celebrities alone. How to tie up with stars and stir up the waves together is the fashion of brand now.

Awkward position?

In fact, Chanel hopes to add more strength to shop layout, create classics and create scarcity. Chanel has always been cautious in terms of digitalization.

For the electricity supplier, Chanel has been on the watch and cautious attitude, so far no electricity supplier has been set up. By contrast, Chanel is more likely to continue expanding its stores. In 2018, Chanel will open a new 600 square meter store in Paris, and new stores will also be opened in Seoul and Tokyo.

Moreover, Chanel's physical stores have maintained a very small number. By the year February 2016, Chanel had 11 stores in mainland China, far less than 42 of LV, or even fewer than 24 stores in Hermes. To do so, of course, is to make great efforts to maintain the scarcity of its luxury brands, and maintain the influence of luxury brand culture.

On the other hand, the low price strategy we mentioned earlier, the marketing approach to young people and the exposure of social media also make Chanel scarce.

Insisting only on classics or choosing to change young people, Chanel seems to be thinking deeply. Weiss, the two brothers of the French family of Weiss, said in an interview: "we may be the last to adopt a business model based on creativity, and we hope to continue."

After experiencing the marketing of price increase, price increase, "restricted purchase" and a large number of close to young consumers, is Chanel still the original Coco Chanel, which wants to be replaced?

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