The decline of traditional department stores seems to have become a trend. From the farewell of Isetan, Pacific Department Store and Landmark Plaza in Meilong Town to the closure of the Sixth Department Store, Huilian Commercial Building and Shanghai Women’s Products Store, the old department stores have "left" one after another. At the same time, shopping centers are experiencing rapid development. In 2024, Shanghai plans to open 52 shopping centers (including old renovation projects) with an area of 3.8 million square meters, a five-year high.
There are e-commerce platforms chasing online and shopping centers encircling offline. The traditional department store format has long been "no transformation and no survival". A survey by Xinmin Evening News reporter found that in recent years, a number of department stores in Shencheng changed their faces to seek nirvana and rebirth, and a number of shopping centers used their brains to create hot topics frequently. Everyone has a consensus that there is no longer an era of "lying and winning" in physical commerce. It is necessary not only to stand up and run, but also to compare who runs faster.
Time is stagnant, and traditional department stores are closed.
On March 25th this year, Shanghai Meilong Isetan Department Store Co., Ltd. announced that it would officially terminate its business on June 30th, 2024. This closure has made many Shanghai residents feel embarrassed.
As one of the earliest foreign department stores in the mainland, Isetan was once a symbol of fashion and trendy, and took the lead in introducing a number of Japanese and overseas brands. In particular, Isetan in Meilong Town, where it is located, and CITIC Pacific and hang lung plaza around it once formed the "Mei Taiheng Golden Triangle", which is the representative of Shanghai’s high-end business.
During the Qingming small holiday, Isetan in Meilong Town launched a clearance promotion to speed up the retreat. However, compared with the "nostalgia" with different opinions on the Internet, the heat in the shopping mall is not so high. Only some counters have welcomed groups of customers who sweep goods, and most of them are Japanese-made goods with high cost performance.
"Time seems to have stopped here." Ms. Lu used to work in an office building on Nanjing West Road. At noon, she had lunch in Isetan, Meilong Town, and then went shopping with her colleagues to see the new clothes and cosmetics. It was her daily life. But I haven’t been to another company for about seven or eight years. "I heard that I was going to close the store, so I just wanted to come back and have a look. I didn’t expect that the brand and layout here have not changed, or they were the same. Traditional, low-key but lacking in new ideas, no wonder there are no people now. "
Beauty cosmetics on the first floor, beauty cosmetics and underwear on the second floor, and clothing, shoes, bags and accessories on the third floor and above. Many brands make young people feel strange. Grocery, restaurants and beauty shops are randomly distributed on each floor. Except for the dessert on the fifth floor, other restaurants are hidden in the corner, with few guests. Only the supermarkets and food streets in the basement are popular. Xinmin Evening News reporter saw on the Internet that some young consumers who heard the news bluntly said after punching in, "The sense of sight of old-fashioned shopping malls seems to have returned to the last century."
Not just Isetan. On February 18th this year, Shanghai Sixth Department Store officially closed its store after closing its business. Next to it, Pacific Department Store Xuhui Store, which has been operating for 30 years, bid farewell to Shanghai consumers last year. Prior to this, Pacific Department Store Huaihai Store, New Railway Station Store and Landmark Plaza were closed one after another. In other cities, it is not uncommon for department stores to close.
Focusing on the experience economy, shopping centers have risen.
Shanghai is the birthplace of modern department stores in China. Xianshi Department Store, one of the four largest companies in Nanjing Road, is the ancestor of Shanghai department store industry. In 1995, First Yaohan opened, which is the first large-scale department store with Sino-foreign joint venture in China. Since then, the department store format has ushered in a "golden age."
However, with the rise of e-commerce, people can easily shop through mobile phones without spending time in physical stores. In addition, large shopping centers are opened in all corners of the city, providing diversified shopping, dining, entertainment and experience places, attracting a large number of consumers. The competitiveness of department stores has been seriously challenged.
According to industry insiders, many old department stores have been in business for more than ten years or even decades, and their decoration is often relatively old, and the proportion of formats is relatively traditional, mainly based on traditional goods such as clothing and household department stores. With the changes of the times and the upgrading of consumer demand, this traditional business model has been difficult to meet the needs of modern consumers. "Now consumers need not only the goods themselves, but also the comfort, convenience and fun in the shopping process, which is precisely the shortcoming of department stores."
Compared with the traditional department stores, the shopping centers in Shanghai are opening more, bigger and farther. According to the statistics of Shanghai Shopping Center Association, by the end of 2023, there were 381 existing shopping centers (over 30,000 square meters) in Shanghai, with a total construction area of 2,825.76 square meters. Among them, there are 16 super-large shopping centers over 200,000 square meters, including Lujiazui Shanghai Center, Shanghai Global Port, Wujiaochang Heshenghui and Nanxiang Impression City.
Nowadays, shopping centers have become the main force of physical commerce. In 2024, there will be 52 more shopping centers (including old renovation projects) in Shanghai, with five new towns as the main layout areas, and 40 new projects are small and medium-sized shopping centers with a floor area of less than 100,000 square meters, which will cut into many sub-sectors such as parent-child, elderly, food, sports and entertainment training, focusing on community commerce close to the needs of citizens.
Enrich the combination of formats and harvest offline traffic
The core advantage of high-energy players in shopping centers is to provide consumers with good space environment services through the collection of different formats, create highlights of scenes and topics, attract and retain consumers, and become a gathering place for offline traffic.
As the largest shopping center in the downtown area of Shanghai, in 2023, Shanghai Global Port ranked first in Shanghai’s commercial sales with a good annual sales income of 20.3 billion yuan, surpassing the 17.1 billion yuan of Shanghai hang lung plaza. From the "big and earthy" that was ridiculed by the crowd ten years ago to the "king of popularity" today, what did Shanghai Global Port do right?
Entering the global port, its large area and complete functions are breathtaking, as if it were a giant aircraft carrier with commercial functions. According to reports, Global Port is constantly adjusting and upgrading its brand format every year, with an average annual new rate of nearly 10%. In 2023, it introduced more than 30 first stores, including the tomato pocket of Chaowan Collection Store, DIY handmade brand HOOWD2Y, and Zhiqu Hanfu, which injected full momentum into the consumer activity index and also harvested huge traffic for shopping malls.
Breaking through the traditional shopping center model, Shanghai Global Port has also integrated diversified artistic activities into daily business operations, and has gradually mastered the happy password of young people’s "interest consumption". The performance hall on the 4th floor was upgraded, and the National Figure Skating Champion Team was ushered in at the beginning of the year. Symphony concerts and popular stage plays were also introduced, and exhibitions such as the Louvre Collection Art Exhibition and the Legend Picasso Art Exhibition were even more popular and well-received, becoming a cross-border blend and trend gathering place of Shanghai’s multiculturalism.
Also focusing on all-age customers, Hongqiao Nanfeng City takes the parent-child format as the entry point, and uses the "baby economy" to drive the consumption demand of the whole family and increase the consumption stickiness. After 9 years of opening, the atrium of Nanfeng City in Hongqiao has to make 6 to 7 IPS every year, and the well-known cartoon authorized IP has been basically used once. Around the parent-child, the mall has a variety of formats from retail, catering to education and entertainment experience, and the brands are quite complete. In the process, it has established the benchmark image of "Puxi Parent-child Shopping Mall".
Nanfengcheng’s IP exhibition "Exploring the Wonder Leopard Hidden Forest" is very popular.
In order to let the parents of "Walkers" settle down to shop and really turn "flow" into "reserve", Hongqiao Nanfeng City has also used a lot of brains. For example, while doing IP in the atrium, it has created a flash zone for car brands, realizing the consumption experience of "Mom Walkers, Dad Watching Cars" and creating traffic for its own physical stores; For example, in non-winter and summer vacations, introduce art IP to attract surrounding white-collar workers, enrich the source of customers, and create opportunities for non-catering shops.
Finding its own position, the department store still has something to do.
Based on the present situation, how should department stores be transformed and broken? After ten years of struggle and exploration, the way out for department stores is very clear. There are only two ways, one is to be big, and the other is to be specialized.
The so-called big, not only to expand the area, more importantly, to expand the format, to provide more tricks, so that customers continue to do repeat business; The so-called specialization is to locate more accurately and closely. The elderly, urban white-collar workers, mothers and children, and the second element are all market segments that can be deeply cultivated.
Last weekend, First Yaohan held an annual special thank-you meeting to warm up the "May 5 th Shopping Festival", taking "the sales promotion with the biggest discount in the whole year" as a gimmick to attract consumers to "buy in buy buy" in advance. Wang Jia, deputy general manager of First Yaohan, said that department stores are purposeful consumption places, which are different from shopping malls. However, in order to meet customers’ diversified needs and personalized preferences, brand changes have never stopped. Making beauty bigger and stronger and increasing catering brand drainage are the two main lines. "After the adjustment, the number of planned cosmetics brands on the first floor increased from 34 to 45, and 27 beauty brands were renewed and upgraded, further confirming the head position of Yaohan beauty category in the Shanghai market. Next month, the renovation of the fa? ade project will be started, and the big curved wall and spiral staircase will be made into’ online celebrity punch point’. "
When it comes to restructuring, New World Daimaru Department Store will start a high-rise renovation this year. Inspired by "Crown", it will create the "Eye of the Bund" and set up bright spots such as cultural art galleries, interactive spaces, wild gardens and brand shows, aiming to become the punching point of online celebrity in the eyes of citizens and tourists. Ye Yifan, executive director of New World Daimaru Department Store, said that the renovation is not only an upgrade of the physical space of the mall, but also an innovative attempt of the traditional department store format, hoping to attract more fashionable and young consumers, so that they can find their own consumption scenes at different times.
Bailian ZX on Nanjing East Road became the second sacred place of Shanghai.
There are also some old department stores that cut into market segments and transformed from comprehensive department stores into theme department stores. Among them, the most successful case is undoubtedly Bailian ZX Creative Fun Field, the first commercial building in China with the theme of "Secondary Element" transformed from hualian department store. Every detail in the shopping mall is "embracing the second element", which is based on the "Z generation" culture and circle recognition as a whole. Starting from the construction of a common discourse system, we will convey the attitude of "knowing you" to the second element lovers and create a community space gathered because of their common love for the second element culture. Only one year after its opening, Bailian ZX Creative Fun Field has become the "Secondary Cultural Holy Land" for the younger generation of social consumption in Shanghai. During the Spring Festival this year, its single-store passenger flow increased by 63%, and its sales scale increased by 175%.
There are also established department stores such as the First Department Store Commercial Center and New World City, and some floors are also taken out to create a "second-yuan" theme block and performing arts space. With the help of business travel and cultural exhibitions, more young consumers are attracted to the store. "We hope to attract more young customers by upgrading our products and services." Zhao Weigang, general manager of the First Department Store Commercial Center, said that the First Department Store has built a 4,000-square-meter "star space" on the seventh floor of the mall, with 12 immersive theaters, which has become a new landmark of Shanghai’s performing arts. "According to our research, female consumers born in the 1990s are the main force of’ Star Space’ to watch the drama idolize, and they are also the main customers we are trying to attract."
There are many volumes in the market, and Shanghai’s business will work hard. With the continuous advancement of the times, whether it is a department store or a shopping center, business upgrading and adjustment has always been a constant proposition, and it is also an important measure to maintain competitive advantage. Only by aiming high can Shanghai become the gathering place of new consumer brands, the source of model innovation and the vane of consumption trend, and accelerate the promotion of the attraction and influence of international consumer center cities.
(The original title is: "Young people punch in Shanghai Old Department Store: Like going back to the last century! "No transformation, no survival", who can run faster → ")
