Sun Yihui, Bojun Software: The epidemic will impact the footwear industry throughout the year, and digitalization should be put on the strategic agenda

The epidemic has impacted the retail industry, and the recovery cycle may be long

Love analysis: What impact has this epidemic had on the retail industry's shoes, clothing, FMCG and other categories as a whole?

Sun Yihui: On the whole, the impact is negative, and there are not many positive factors. Because of the development of retail, the total proportion of online retail is only 20%. Although the growth has been rapid in the past few years, in fact, the bottleneck or ceiling has been more obvious. Under the impact of the epidemic, the retail growth of online platforms is not particularly obvious, but the offline is basically directly reduced to zero, that is, 80% of the performance is equal to directly gone. Therefore, most of our customers are through private domain traffic, through small programs, wechat, member services in the self rescue. The impact is not just the immediate impact that we are seeing now, but will continue for some time to come.

In the supply chain, inventory links, basically from the shoes and clothing category, the spring directly stranded. Of course, spring is fine, because the clothing of the year is in the winter. It was fortunate that the winter sales were almost over when the outbreak occurred.

But the spring grounding will affect the fall, because this year's spring goods will be sold in the fall, and autumn goods are less likely to be mass-produced. The summer production will also have an impact, so the impact will continue. If the epidemic can pass in March in the short term, the impact will be better eliminated in the winter, and the impact cycle will be longer.

Love Analysis: Why is the supply chain recovery cycle of retail brands longer?

Sun Yihui: Because spring and summer are the key production cycles, but now the factory can not resume work, which is a relatively big problem. Although each business situation is not exactly the same, but under normal circumstances now and summer should be the production of this year's winter clothing products. But now because manufacturing enterprises can not resume work, so the entire industrial chain will be affected. Whether it is manufacturing, supply chain or logistics, it will be affected and passed on layer by layer.

Analysis: What is the production cycle of the clothing industry?

Sun Yihui: The general situation is half a year ahead of production, that is, off-season production. About half of them are produced half a year in advance, and about 20% to 30% are produced one year in advance. Winter clothing is produced in summer and summer clothing is produced in winter. Of course, there are also some brands will quickly reverse, for example, when winter clothing is soon listed, half of the pre-produced winter clothing is produced, and the other half depends on the sales situation. However, the requirements for the supply chain and other aspects will be relatively high.

Love analysis: In addition to the apparel industry, Bojun software also has customers in other industries. What are the differences in the impact of the pandemic on other sectors?

Sun Yihui: There will be some differences, and the impact of the clothing industry will be greater. Because clothing is more need to experience, its goods are not standard products, need to try on. This is why it is difficult to reach more than half of online sales in general, and only about 20% in general.

Therefore, the online sales of shoes and clothing such as strong experience needs more innovation. For example, now through the sharing of a picture, after customers place an order, is it possible to let customers try it on at home first? If you are not satisfied with the fitting, can you directly ask the Courier to take it back? The proportion of reverse logistics will be higher. After reverse logistics goes back, it also needs to carry out more complex processing, whether it is disinfection or sorting, all aspects will be complicated.

Love Analysis: Will the epidemic prompt changes in the competitive landscape of the retail industry? Will there be mergers and acquisitions?

Sun Yihui: I think industry consolidation is very likely to happen. In the first 10 years or so, including retail, IT, Internet related industries, are relatively hot, or to put it poorly is more impetuous, the limelight of national entrepreneurship and innovation is relatively fierce. So in the whole market, I personally feel that the brand is a little too much.

Through the impact of the epidemic, many entrepreneurial companies are actually not enough cash flow to support more than three months, and the current situation is unlikely to get money. In addition, even some large enterprises also need to unite, from the perspective of cost, research and development design and other aspects can be combined, there is a better efficiency improvement.

We also see that many brands have independent research and development, independent design, independent products. However, from the point of view of the product, the degree of homogeneity is very high, and if the trademark is covered, it is impossible to tell which brand it is. Even many brands are produced by the same manufacturer. The current epidemic is also an opportunity for the entire brand retail industry to consolidate. I believe that brands that can survive this round will have stronger vitality in the future.