In 2019, the “war” of the new retail and digital transformation finally “burned” into the home furnishing industry, and the different participants in it were unable to escape and could only face the violent turmoil.
Starting in the [New Retail Business Review] public account, dictation: old, finishing: Zhang Weijun, Li Jianhua
In 2019, the news of dealers’ withdrawals from various building materials stores, including the old dealers who have been operating for more than 3-4 years, the status quo of “going into a dead one” is the shrinking of new business, stock The market gap in the industry that has yet to be developed is coming.
Old, a senior industry insider with more than ten years of experience in building materials, in one of the largest home chain stores in Shanghai, his store expanded from the first store to four stores. This year, he decided to close. Three of them…
After experiencing difficulties such as shrinking channels, declining traffic, and sluggish performance, he was “forced” to transition to new retail. Here, he seems to see the hope of a new continent.
The whole sentence he said during the interview was that “demand is still there”, finding demand, moving forward is a challenge and an opportunity.
Bearing the winter: the customer has changed
I am engaged in the distribution of doors and windows of high-end imported brands. Two or three years ago, our customer price was above 100,000 yuan, and the turnover in half a year could reach 8 million. But since last year, the situation has been very obvious changes. In the first half of this year, the sales price of our similar products was less than 50,000 yuan, and the turnover business was only maintained at around 3 million yuan. From the turnover, it should indeed reflect that our industry is “cold winter”.
But I have always believed that this round of “winter” has nothing to do with the economic environment. As a terminal seller, my biggest feeling is that consumers have changed.
In the past, in the building materials industry, for the consumption of high-end building materials, we will call it irrational consumption, which is the so-called consumption upgrade. But this year, the “consumption upgrade” in this industry is gradually being replaced by “consumption grading”.
For example, to buy a bed, in the past everyone preferred Simmons spring mattress, now has a latex mattress, palm tree tatami, and even a bed, more and more consumers are no longer blindly pursuing big names, our market is experiencing just from the people The shift to self-requirement cognition.
The most obvious performance of me is that the order of big orders has dropped directly from more than 1 million to more than 200,000 yuan.
The pattern of traditional business and the composition of customer sources are changing. From last year to this year, I made a statistical comparison of data:
Last year, the proportion of new business customers accounted for 70% of my entire business system; this year, the proportion of customers with improved business has risen to 50% – the demand for partial renovation of walls, windows and doors has increased significantly; Said that the golden period of the new market has beenAfter going, the era of stock market is coming.
The demand is still there, as I have always believed, not that the industry is going downhill, but that market demand has changed and we need to make changes to adapt to new changes.
Stagnant building materials store
It has been more than 10 years since I entered the building materials industry. For so many years, there has been no significant change in the channels of this industry. From the brand side to the home store, our model is at least 10 to 20 years behind.
Taking custom building materials products as an example, our main sales channels are three, one is the home store, one is the decoration and design company, and the other is the repurchase of the old customers or the new customers introduced by the acquaintances. The proportion of those is 3:5:2. Among them, the investment in the home market is the highest, but the return sales account for only 30% of the total sales.
The home building materials store I am stationed in is a large chain store in Shanghai. Although the scale is very large and the reputation is very loud, at present, my biggest customer channel is from the interior decoration company.
The designer introduces the candidate brand to the customer during the decoration design process and guides the customer to the store experience. The proportion of transactions completed through this channel is 50%.
We are different from home-based products, which have begun to shift the focus of the channel to the Internet, such as bathrooms, faucets, showers, and even floors. However, the overall home, cabinets, doors and windows need to be measured at home, the Internet channel is still difficult to reach, we still rely on the “brand display” of the home store.
At present, the brand stores in the home store are directly operated by agents, accounting for 70%-80%. For small and medium-sized dealers, the investment in the home store is much higher than other channels, only the decoration and loading. The cost is in the hundreds of thousands to millions, which does not include the expenses of marketing and marketing.
The reason why it is difficult to give up, one is because the home industry pays great attention to the particularity of the offline experience, and the second is that the brand “endorsement” effect that can be played by large-scale home sales places is difficult to replace.
Now the new retail, refactoring the concept of people, goods, and field, but in the traditional home store, the biggest challenge we have to face is that people have changed, the field has not changed, and the goods have not changed.
In this way, the new retail can’t be played in the field of home building materials. The home store is a “field”. Its shortcoming is that it is difficult to guide the merchants; it can’t provide valuable user portrait data; the current layout of the store is Do notIn order to meet the customer’s consumption line for planning, more is to allocate different positions according to the traditional “rent” level. Therefore, the layout of the building materials store makes people feel that there is no logic.
Close the offline store and shake it up
As a home building material dealer, our traditional way of getting customers, in addition to through the home decoration design company, will also obtain customer information with renovation needs through newly opened real estate, property and construction companies, but these channels are in a new round. The change in consumer demand is shrinking.
Where to look for customers, it has become one of the pain points that make our industry anxious.
Since this year, I have done two things. One is to set up an independent door and window butler company, and the other is to transfer the funds originally invested in the traditional home store to the vibrato.
Now, in Shanghai’s high-end villas with an average price of more than 70,000 yuan, you can see the uniform of the “door and window butler” on the door to provide services to the community owners – no matter which brand of doors and windows are installed and maintained The door and window butler can guarantee not to destroy the original decoration in the home.
“Door and Window Butler” is a third-party service platform I set up to provide free door and window installation and repair services for high-end villas. I call this model “service front”.
In the new market, customers want to buy a home, he has to visit many stores for comparison. However, in the stock market, merchants can provide free services to customers first, and improve the current living experience of customers through this service. At the same time, they also first implant the brand concept and open a direct contact with consumers before the next purchase demand. channel.
As long as your service is good enough, customers will naturally hand over the order to you. This kind of practice, the customer price is small, but the profit is high, which is conducive to the formation of word-of-mouth communication. I think this is the new growth point of the business of custom building materials.
It’s not enough to rely on “ground push”. I’m also studying the short video channel.
I give an example. My parents have never visited Taobao or Jingdong. They occasionally put together a lot of spells, but they almost always read today’s headlines, with an average browsing time of 2 Hours, because of the regularity of push content, these older people are easily “addicted”. If the ad system pops up ads for products that they might need, the conversion rate may not be too low.
In order to find a suitable new retail space, I compared the WeChat circle of friends, Baidu and Vibrato three channels, and found that the new customers were acquired from these three platforms.The book is at 800 yuan, 1,000 yuan and 230 yuan respectively.
In the case of the relatively low cost of vibrato, in the last 30 days, I put a total of 73,721 yuan, and obtained 304 new customers. The cost per new user is 242 yuan, and the effective conversion rate is 30%.
In traditional home stores, the conversion rate is also maintained at 30% – the store receives 300 natural passengers a year, of which 100 are effective passengers; but the cost of offline stores is 600,000 a year, each The cost of getting a new customer is 6,000 yuan, and the cost of online and offline customers is 30 times.
Simply, if I can’t earn 6000 yuan from each customer online, I am losing money. This year I closed the stores in the three home stores and chose to transfer the funds to new retail platforms such as Vibrato.
Reviewing the traditional home hypermarkets, how will they change in the next 10 years? This is something that everyone needs to discuss together. But I am very clear that we must be brave in the future – the current offline store is still the foundation, and new online retail is an important direction that must be explored.