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The winter is coming, the days of furniture practitioners seem to be not so good. The industry believes that “the consumer upgrades are also there, and the “selling” people are also everywhere, but these are not important. In fact, always putting the user experience first and continuing to meet the user’s fundamental needs is the most noteworthy thing for furniture companies.
Recall that at the beginning of this year, several commercial media have spoken with big data, pointing out that in 2017 China’s per capita disposable income increased, and national consumer demand emerged from “the public to” “niche, from” Product upgrades to the service;
One time, “upgraded to become the main theme of the consumer market, brands and businesses have tried to increase the added value of goods to meet the growing consumer demand for consumers. The pursuit.
However, in the blink of an eye, the growth rate of total retail sales of consumer goods in the country has reached its lowest level in 15 years.
The July consumption data released on July 14 showed that the total retail sales of consumer goods was only 8.5%, not only far lower than expected, but also the lowest in 15 years since May 2003. In the 2008 financial crisis, 8.8% of the total retail sales growth in July was even lower.
“Consumer downgrading has become a frequently mentioned word, and we are shocked: the Chinese did not have the money to blow the money!
Did we mention it for many years? Consumption upgrades have been a scorpion from the beginning?
Consumption downgrades have forced us to consciously reduce the frequency and price of consumption.
Compared with the previous “to spend tomorrow’s money, today’s dream, now people began to consciously manage their wallets, pay more attention to the status quo and control of the future.”
01 The emergence of consumer downgrade momentum
So where does the consumer downgrade trend come from? There must be a lot of dark horse e-commerce.
According to the data released by Cheetah in December 2017, the company has surpassed Tmall, Suning Tesco, Vipshop, and Jingdong, becoming the e-commerce app with the weekly penetration rate second only to mobile Taobao.
Less than three years after its establishment, the number of registered users has reached 300 million. In the case of the prevalence of consumption upgrades, the fight is mostly based on 9 pieces of 9 slippers, 19 pieces of 9 jeans, 39 pieces of 9 down jackets, etc. Price products have become the third largest e-commerce platform in China!
The same situation has appeared in many similar e-commerce platforms or physical stores, such as Netease strict selection, Beijing-Tokyo, Taobao selection, etc. The network platform is also based on the concept of “high quality and low price”, integrating market resources and launching its own self-operated brand.
The 3,000 famous products that opened in the past three years are also imitating the big store model of MUJI, which has swept the major cities.
Their customers are undoubtedly extremely price sensitive, and the most interesting thing is that there are many young people in first-tier cities.
Is it wrong to judge the modern people who are not sensitive to price before? Otherwise, why the consumer upgrades have been called for so long, and the star companies that ran out are all “slow-down enterprises”.
It’s not just a lot of work. This year, Fuling mustard has released semi-annual report data. In the first half of the year, it achieved operating income of 1.064 billion yuan, a year-on-year increase of 34.11%; net profit of 305 million yuan, a year-on-year increase of 77.52%. Also in the first half of this year, the overall sales of the instant noodle market increased by 5.9% year-on-year, and sales increased by 10.1% year-on-year.
From the mustard to the instant noodles, these seemingly low-end consumer goods suddenly became popular in the first half of this year, and were widely considered by the masses to be a typical case of consumer downgrade.
02 What are the possible factors that caused the consumption downgrade?
The skyrocketing housing prices and rising rents have become the main culprit in squeezing consumer spending. In order to buy a house, the loan group will naturally reduce expenses in daily necessities. Recently, with the skyrocketing rents in major cities, many people have to tighten their belts to live, which will also curb consumption.
And the house is a rigid expenditure, and its importance is prior to the daily consumption, it will certainly occupy the personal consumption power, so downgrading in daily consumption has become a lot of people’s helpless choice.
It is expected that the continued increase in future spending will also be a major force in combating consumer confidence. Housing, education, medical care, and old-age care are in front of everyone. No one dares to spend a lot of money. Saving money has become a must-have plan for many people. If this atmosphere is widespread in society, it will inevitably Suppress market consumption.
Personal income growth cannot keep pace with spending growth. The slowdown in economic growth in the past year has been very obvious, and the wage increase is not obvious. This is a real feeling for everyone.
At the same time, the role of internal and external factors such as Sino-US trade war, population aging, etc., makes our various expenses essential, and the end result is that consumption has to be downgraded.
03 Very few people’s consumption upgrades and most people’s consumption downgrades
Since consumption is degrading, why are there still calls for consumption upgrades?
Is consumption going to be upgraded or downgraded? If we upgrade, why is our consumption data showing a new low in 15 years? If it is downgraded, why is the stock price of Maotai so high, why Chinese people in overseas luxury stores & ldquoBuying and buying?
At present, China’s wealth is concentrated at an unprecedented rate of 1%, and debts are concentrated at an unprecedented level in the middle of the sandwich layer, eventually forming a strong top, weak in the middle. The structure of the underlying big ".
That 1% of people are upgrading their consumption, and the so-called middle class, under the circumstance of high housing prices and other factors, gradually withdraw from the echelon of consumption, and downgrade their own consumption standards.
The shortage of many high-end consumer goods in China is actually the result of the widening gap between the rich and the poor, rather than the result of the upgrade of middle-class consumption.
Therefore, this is a very small number of people’s consumption upgrades and the vast majority of people’s consumption downgrades, while a few people’s consumption upgrades have brought overall consumption upgrades to the whole people because of their huge purchasing power. The illusion of.
Real estate and other mountains have drained the power of the real economy, distorted the resources in the market, and frozen the mobility of the people. The winter that the furniture companies feel is also coming.
Therefore, talking about consumption upgrading and consumption degradation cannot be separated from stratum and structure. At present, consumption demotion and consumption upgrading occur at the same time. More is just a description of the polarization of wealth, and the essence of consumption degradation is actually It is the performance of the polarization between the rich and the poor.
04 What is the trend of a consumer-depleted “high-indebted middle-class product?”
More and more middle-income people are no longer just In the mid-range market, they tend to move up and down, sometimes close together, that is, they are willing to spend a lot of money on the higher-priced products that they think are worthwhile, and in other basic lifestyles. Consumption is more rational and frugal (lower consumption).
And the combination of these two consumer trends, we have seen what we are seeing now: a “high debt middle class” “lower consumption, but also “optimized consumption”. I am willing to spend money on housing, education, and medical care, but I tend to consume less in physical consumption such as clothing, food, and daily use.
And this part of the initiative “consumer downgraded groups have formed such a new consumption habits: the choice of goods often only to meet the basic functions; for price sensitive, often shop around;
Consumer behavior is more rational, turning a blind eye to any flashy brand of aura; vanity is not strong, compared to brand premiums, prefers the satisfaction of high cost performance.
Therefore, the success of many fights has hit the needs of this group of people. With low customer price and cost-effective business model, a large number of powders are used in a short time.
But as a furniture practitioner, we should not overlook the fact that there is a kind of “Chinese character is very interesting. When a concept has not been really understood, everyone flocks. In the case of complete loss of reason, it has become another way, as if it is too late to think about the essence of the concept (the furniture industry seems to do this often).
Under this feature, “consumer upgrades are gradually being used as a marketing tool. Merchants have increased prices and created perseverance. The energy spent on the products themselves is not much, consumers are more It is paying for the premium that the function is not practical, and this has violated the essence of the consumption upgrade.
Many consumers have been fans of consumer upgrades and have had various illusions about high-quality life. However, in the past few years, the concept of consumption upgrade has been used by many merchants to do business gimmicks, and many people cannot afford to bear the cost of the upgrade.
On the other hand, many products that have raised the price have not brought corresponding benefits to customers, and they have eclipsed consumers’ confidence in products.
Consumers find themselves being “made” and not stupid until they are harvested.
05 and its reliance on “selling the consumption”, consumers are not as good as the cost-effective furniture.
From the outbreak of the fight, it can be seen: Acceptable After all, the high-margin consumer price and high-margin consumer groups are a minority, and the broad masses of the people are still sensitive to prices.
But low consumption does not mean that low prices are omnipotent. Judging from the reality, “cost-effective products are still the first choice for consumers.
If you want to give a practical example of a cost-effective product, Uniqlo should be counted as one.
& ldquo;High quality and low price, this is definitely what consumers want to see, but these two words are contradictory to the company, how does Uniqlo do it?
Historically, Uniqlo has risen in Japan. In the decade of depression, the bubble economy burst and the Japanese with poor economic ability began to save money. Uniqlo became their first choice, Uniqlo’s “high quality and low price, Essentially a consumer downgrade.
The same is true for MUJI MUJI in the same period. By selling “unbranded goods”, it simplifies the packaging of products and reduces the cost of products, so that it has a value for the same period of products. The value of ".
Always put the user experience first and continue to meet the user’s fundamental needs, which is the most noteworthy thing for furniture companies.
Constantly understanding the needs of users and using new ways to meet user needs, furniture companies can truly grasp the turmoil of industry change and truly achieve new development.
Adding new technologies, continuously researching and developing new technologies, enabling new technologies to empower traditional industries, with newTechnology to optimize the operational logic of traditional industries and improve the efficiency of traditional industries, in order to take the lead in future changes.
Therefore, merchants should provide consumers with better and more cost-effective products by optimizing all aspects of production and sales, making them more efficient, or working hard to develop newer technologies. It is by no means simply raising the price and creating a so-called force to fool consumers. Furniture companies should not take the opportunity to lay out in advance in terms of price/performance ratio.
Now, do you understand why it was called “winter” in 2018 by the furniture people? The bad news is that this winter may last for a while, as for how long it lasts, who said Not allowed.
Oh, yes, the price of oil has risen recently. Does this prove that the people of the country are welcoming consumption upgrades instead of downgrading?
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