Chapter 10 Section 3 Industrial Chain of Women’s Shoes Retail

The industrial chain of an industry includes seven parts: product development and design, material procurement, manufacturing, warehousing and transportation, order processing, wholesale distribution, and retail promotion.Among them, the three on-line industrial chain links of product development and design, material procurement and manufacturing are responsible for manufacturing products, which are also the input part of the industrial chain, and the last four offline industrial chain links are responsible for delivering products to customers, which is also the output. Harvest part. In the branded women’s leather shoes industry, due to the changing nature of the industry, the rapid circulation of product information, and the great changes in the market, operators must fully grasp the market dynamics and customer feedback information, so that the investment in new products can complement the harvest information of old products in a timely manner.In the traditional layered wholesale sales model, due to factors such as multiple levels of offline channels and rapid changes in sales and markets, information is often not fed back to the online development and design department in a timely manner, and the layered structure also hinders most of the sales. exchange of information.Therefore, branded fashion and women's shoes generally own or directly control the marketing department, avoiding the congestion structure of wholesale and then resale to retail, while the offline only includes three parts: warehousing and transportation, order processing, sales and promotion.

In the entire industrial chain, the focus of the online part is to manufacture products with stable quality and low cost in the most effective way.The main strategies include optimizing the internal operation of each link to reduce time loss; vertically integrating information exchange in different links, increasing the transparency of work information, reducing errors and duplication of work caused by information loss, and reducing costs; establishing efficiency management as the main The management structure and system strengthen the overall control ability of the online industry chain and meet the essential requirements of the industry.

In the downline segment, the focus is on efficiently getting the finished product into the hands of the customer.It's not just about putting the product on the shelves, it's also about effectively communicating information about the product to consumers.Efficient order processing and transportation, low-cost warehousing, marketing strategies in line with product characteristics, effective delivery of product information, etc., are all indispensable. Under the premise of changing the nature of the industry, it is possible to control the time and information loss in the entire industrial chain (product launch time, sales market information feedback speed, etc.), and it has also become the "vertical integration" of the combination of online and offline main target.

The production cost of a pair of OEM leather shoes mainly has five parts (see Figure 2-4), among which the cost of leather is the largest, followed by the cost of production tools and other materials, and finally the cost of wages for workers.The design part of the online industry chain determines the needs of the above four costs, so for products, the added value is the highest.The procurement part can only affect three costs other than labor, so the added value is relatively low compared to the design.The production part can only control wage costs, so the added value is the lowest.

Therefore, the integration and optimization of the online industrial chain is dominated by the design part with the highest added value, and the integration into the two parts of procurement and production is the main strategy, while the other two parts of procurement and production focus on cost control, listing, and production. time. From another point of view, the price of a pair of leather shoes (product harvest part) is determined by the link of sales and promotion.This also determines the final return of the entire product, so it is the focus of integration in the offline industry chain, and it is also the most important field that reflects the nature of the industry. A set of "vertical integration" integration strategies is also launched from here.

From this part, the enterprise receives customer demand and market situation, transforms the information into internal supply and demand arrangement through the order processing part, and then manufactures suitable products through the online industrial chain, and delivers them to the marketing point through the warehousing and transportation part to launch the market. In the following chapters, we will look at how these three leading companies integrate their own industrial chains and compete with each other in the market according to the nature of their industries.