Research On Department Store Buying Mode Based On The Value Chain

Department store industry grew rapidly with the reform and opening-up in China, but in recent years the average net profit rate of the department store industry was at a low level due to the impact of other types of retails especially the impact of e-commerce business industry that the average net profit rate in China was only half the foreign counterparts. The main reason is that foreign department stores get higher profit and are more competitive by using buying mode than China department stores which are mostly operating by joint mode, and now the disadvantages of joint mode is shown gradually. We can see the very low gross profit ratio and the serious homogeneity of merchandises in the current department store industry in China.This thesis research China and abroad department store business modes through methods such as expert interview、case study and deeply analyze every link of the department store value chain, analyze the key elements of the success for buyer mode and try to build a China customized, market tailored, scientific and perfect buying mode to help Chinese department stores getting rid of homogenization competition and help them enhance differentiating abilities. The main content for this thesis includes:Firstly, this paper deeply analyze the disadvantages for joint mode in the present domestic department stores from the operation mode based on the issue that the profit rate in domestic department store is relatively low, comprehensively compare the advantages and disadvantages for joint mode and self-run mode, and put forward the main problems for the domestic department stores to use buying mode at the present stage.Secondly, this paper sums up three buying mode through research and a number of case study to the American, European and Japanese department stores. They are: buy-out operation, sole distribution, own-brand operation. From the apparel commodity circulation value chain in department store, this paper also analyze the different characteristics in profit source, operation way, capacity requirement, inventory risk, product brand operation for the three kinds of modes above. The apparel commodity circulation value chain is also confirmed by the interview data.Thirdly, based on the apparel commodity circulation chain, domestic department store value chain, this paper innovatively put forward a value model for buying mode in domestic department store. Buyer is the core in this value model which is supported by a coordination mechanism and a risk dispersive mechanism. The value model for buying mode was constructed mainly start from the value added links of domestic department stores, and this paper clarify its function setting, organization coordination, people development and the specific content of each key area. Combined with the mode, dissect and re-factor the department store value chain, develop a new department store value chain based on this buying mode.Finally, this paper specific to domestic department stores under different market conditions and put forward a series of construction strategies such as Brand differentiation and Commodity characteristic as well as a series of constructional strategies such as buyer organizing, buyer team building and concept improving. Giving practical suggestions to domestic department stores to up integrate commodity chain, help them to turn their role from retailers to Franchisees, distributors even Brand Owners.