Offline retail still has to be a fine account.
Editor’s note: This article is from WeChat public account “ Inspur new consumption ” ( ID: lcxinxiaofei), dictate Zhang Sheng, organize Liu Ziqi .
In the past two years, China’s convenience store industry has been booming.
From the rise of unmanned retail, multi-billion-dollar financing of new convenience stores, to the combination of community group purchases and convenience stores, Convenience stores, which are closest to consumers’ daily lives and have a competitive potential, have achieved unprecedented levels. attention.
In Japan and Taiwan, It has become an entrance to consumer services, In China, It is also brewing huge changes, Japanese convenience stores, Local convenience stores, as well as new retail formats represented by convenience bees, are defining the future of convenience stores in contrasting forms and rhythms.
Apart from facilitating the new species of bee, it has often attracted attention because of its rapid expansion and the creation of new systems. It is worth mentioning that the transformation of Rosen China in the past two years also portends another long-term path that convenience stores may have to take.
100 stores from 1996 to 2002, 1,000 stores from 2002 to 2017, and 2017 to 2019, it has grown to more than 2,400 stores today, including the full-time East China store that has taken over in the past two years, holding hands with Shounong to enter the community, Sinking to second- and third-tier cities such as Nanjing, Hefei, and Changsha …
The speed and rhythm let me see that it seems that Rosen China’s slowness is not unreasonable, and fast is not without prerequisites, but is it really getting closer to the law of convenience stores in China?
Recently, Inspur New Consumer interviewed Zhang Sheng, Vice President of Rosen China. Under the leadership of Zhang Sheng, Rosen China increased the number of stores by 7 times in 6 years; meanwhile, the sales performance also achieved an annual growth of 30% for 5 consecutive years.
What’s the secret to the growth and operation of convenience stores? We are trying to find answers from Zhang Sheng from the front line.
Zhang ShengIt is believed that the development of the past few years has largely benefited from the in-depth integration of the Chinese and Japanese teams in business, which can achieve a constant balance in market expansion and refined management.
He emphasized that The retail industry always pursues the “book” of commodities. Above the model and technology, more importantly, product and service innovation. Let these troikas go together to get better.
Talking about the root cause of the poor living of many retail companies, he bluntly stated that it was because of the aging customer base. “The biggest factor in the survival of the retail industry is whether it can maintain the age structure of the existing customer base.” Therefore, Rosen now attaches great importance to seizing the 00s, that is, seizing “the first generation of consumers who have entered the society”.
Facing the new retail trials and capital influx of convenience stores in the past two years, Zhang Sheng believes that retailing accounting and paying attention to the rhythm of retailing does not need to overly believe in Internet play and IT The key is to understand and meet the real needs of consumers. At present, many traditional retail industries are dying on the brakes, and many new retailers are dying on the accelerator.
In-depth discussions around the above levels, sharing with more consumer entrepreneurs.
Rosen has developed in China since 1996 and has gone through three stages. We have a “two-round theory” to summarize the development process.
What is “two rounds”? Because Rosen is a foreign-owned convenience store, in terms of management, we will find that both Chinese and Japanese teams have their own strengths.
From a Chinese perspective, The Chinese team is better at front wheels, including government public relations, marketing, store expansion, and product negotiation. The Japanese team prefers rear wheels, including systems, store operations, refined management, and product planning.
1996-2002 was the first development stage of Rosen. Initially, it was directly managed by the Japanese team. They are better at playing the rear wheel, and the front wheel has not been strong. So you will find that by 2002, Rosen will have over 100 stores in China.
Into the second stage, that is, 2002-2010, the Japanese side took a step back and Rosen handed it over.Chinese team management. The result is that the rear wheel is broken. Even if the front wheel shop is expanding rapidly, data on revenue and other aspects are declining.
At that time, we encountered the rapid development of the Chinese economy. Everyone knows that the economic development of 2002-2010 was very fast, so in the process, rents and labor have increased significantly, and the end result is that the operating conditions are not so ideal.
After 2011, the Japanese side took over management again, and Rosen began to enter the third stage. With previous experience, we will now pay special attention to how to balance the front and rear wheels. Whether it is Chinese or Japanese employees, we can make everyone do their job well.
As a general manager, the most important thing is to constantly change roles. When the rear wheel becomes smaller, look more at the rear wheel; when the current wheel becomes smaller, look at the front wheel more. After balancing the two wheels, the back will naturally turn quickly.
In fact, the business philosophy of all enterprises is the same. Foreign-funded enterprises may be better at strategic level design because of their long history and rich experience. Foreign-funded enterprises are better at tactical level operations because of their grounding.
If you think too much about the tactical level, you will lose your direction. Similarly, if you only consider strategy, without good flexibility and front-line decision-making, it will result in a rapidly changing Chinese society. Changing situation.
How does Rosen embrace change? Many foreign-funded enterprises do not do well on the spot, which causes the headquarters to be uneasy about you and cannot fully authorize them. When the market size of Rosen in China gradually increased, a relatively large decision was made, that is, implementing different authorizations for various regions and continuously moving the decision-making authority forward.
Therefore, the management of the head office and Rosen China now conducts more careful and serious discussions on strategy; But at the tactical and combat level, we must quickly decentralize power. Let the frontline have more permissions, which is not done by many enterprises.
Of course, we have to catch the same things in the change. After the wave of new retail, has Rosen made a huge iteration? In fact, we haven’t changed much. Because the retail industry always pursues the “book” of commodities.
If the product is not good, other marketing and technical methods will not have much effect. Technology can only provide tools, and marketing can only create a sales atmosphere. In the end, if the product is not good, it will still not attract repeat customers.
So “Ben” will never change, todayMany of the new retail we see are model innovation and technology innovation. In fact, above the model and technology, the more important thing is the innovation of products and services. Let these troikas go together to get better.
Compared to “new retail”, “new crowd” is actually more important and practical for us. And the most representative among the new crowd is “after 00”.
I have done a lot of research in this area, which may be different from everyone ’s mainstream opinion. I think the people before the 00s have experienced an era of high desire, high-speed change, and novelty; Now as the consumption habits of the 00s gradually form, I find them This generation is characterized by low desire.
The era of post-80s and post-90s is exactly the era of rapid changes in China. For example, the consumption scenarios of these two generations are from offline, PC to mobile Internet, and the payment means are from cash, credit card to mobile payment, which has crossed several stages in the middle. This process may take decades in other countries, and China’s enrichment is completed within a few years.
This has caused the post-80s and post-90s today to change every day as they grow up, exposed to too many novelties. These two generations, when they were young, had memories of poverty, and the material level was not so rich. So for them, the material desires are actually stronger now.
But for the post-00s, their growth process is completely different. When the first generation started to be sensible after 00, it was already an era of full prosperity of Douyin, WeChat, and electronic payment.
After the 80s and 90s, when your family gave a gift, you will be anxious to take it apart, but today you do n’t have this feeling after 00. Because they’ve seen everything they’ve seen, they’ve got everything. I can’t say that this is true in all regions, but most of the coastal cities are basically in this state. So the generation of the post-00 generation is not very curious.
Because of the generation of low desire after 00, we have to give strong stimulation.
Take bottled beverages as an example. In the 1980s and 1990s, in the process of growth, they still mainly drink pure water, and they started to drink in the later stage. The taste buds of this generation have not been completely destroyed. But for the first time after 00, you may buy cola, sprite, 100% orange juice, etc. So after 00 is closer to today’s Japan, Europe and the United States, the taste threshold of their taste buds is higher and requires stronger stimulation.
This is just like a person. It may hurt if you pierce it gently with a needle, but after 00 you may pierce deeply to feel pain. This is completely different.
So, we will make new adjustments to product selection, marketing methods, product taste, and packaging for these new people after the 00s, including using IP, comics, and animation to constantly stimulate the consumers after the 00s. .
It should be clear that this adjustment is not to throw away the previous product line, but to add a special product line after 00. Rawson is now strategically divided into two paths, one is “before 00” and the other is “after 00”. These two lines will adopt different products and marketing methods.
Some people may wonder, from the perspective of consumption frequency and customer unit price, post-00 is not the main customer group for offline retail consumption at present, why does Rosen China attach so much importance to post-00?
In fact, offline retail has come to this day, and the root cause of many companies not doing well is the aging customer base. The biggest factor in the survival of the retail industry is whether it can maintain the age structure of the existing customer base. In other words, it needs to be constantly added by new consumers.
I still remember that the first Metro opened a store in Shanghai in 1996. It became a place for dating between the 60s and 70s, but today the 90s will definitely not go to Metro again. If you walk into all the hypermarkets today, you will find that it is still the same group of people that the aging of customers is the biggest problem.
So Rosen isn’t trying to catch the “post-00s”, but he is trying to catch the “first-generation consumers who are new to society.”
When will consumers spend money in convenience stores for the first time? It’s almost eleven or twelve years old, so the convenience store needs to constantly have new customers who are eleven or twelve in. Of course, the hypermarket is not necessarily, the home store may need to catch the group of people in their early thirties, but in short, it is necessary to ensure that the “source” of the customer base has “flowing water” constantly flowing in.
Only in this way can we grasp this entrance and strengthen the new crowd’s awareness of Rosen convenience stores.
Another topic is,The service requirements of new populations are also changing. Rosen has always insisted that “the deliciousness and peace of mind anytime, anywhere”, this “anytime” in the post-80s and post-90s, may correspond to the time of 20-30 minutes; After 00, they think that “at any time” means “give me right away” and can’t wait for a minute.
Similarly, our understanding of “reassurance” has improved. Both the post-80s and post-90s have experienced the era of fakes, and there are cases of food poisoning intermittently, so the “reassurance” they are pursuing is to focus on authenticity and hygiene; but now the “relief” after the 00 is not this concept , Their generation does not need to distinguish between authentic and fake in convenience stores.
So we see that the new population represented by the post-00s is bringing a huge opportunity to the convenience store industry, an opportunity to restructure and upgrade products and services.
In recent years, we have also seen a lot of so-called new retail and new business formats, which have entered the convenience store industry through huge financing, but not many of them can really survive. Some companies spend a lot of money and do not accomplish much. Their misunderstanding is mainly in these areas:
First, too many companies and capital have applied the Internet in the retail industry.
The Internet is a model of growth and scale by burning money online, which may not be successful in the physical industry. Why? What makes the retail industry different is that the scale is too large, and once there is no business, maintenance costs will be high.
This year we will see that many of the community group buying companies that have raised huge sums of money have collapsed overnight. The key point is that Most investors today have always been asset-light management. When he did not see the asset-heavy model, he must pay attention to every point in the financial statements.
I have told many investors that this business format is good. As long as you look at one place, it is its operating cash flow.
Operating cash flow represents its hematopoietic function. If the project itself does not have a strong hematopoietic function, it is definitely impossible to survive for a long time. Past internet playHow do you capture traffic? You can grab an audience by casting an ad online or by doing a big promotion today. This customer base basically has no maintenance costs. If you can’t catch it, it will be thrown away at most.
But traditional retail is not. You have already cast your net. The offline store’s rent and labor costs need to be maintained. Financing alone cannot support it without blood-forming functions.
Second, everyone only considers model innovation and technological innovation, but what is missing is the combination of local atmosphere.
What exactly do consumers want? Those people may not have figured it out. You said you were going to open an unmanned retail store. Have you ever considered whether consumers need these cold devices? Or would he prefer to meet someone? In turn, there was no serious reflection. Vending machines in Japan and the United States have been around for more than a decade, and they have not knocked down convenience stores.
People who are now technical people start from “Product” and think about how to make a product well; but in fact, the most important thing for retail is to start from “Market”. You must stand in the market. Think about it from the perspective, if the market inspection is not enough, you are wrong.
Third, everyone didn’t figure out clearly that there is an upper limit on the sales and profit of a store.
People who do n’t know traditional retail, when opening a store without restrictions and regardless of cost, he does n’t know that offline store sales cannot grow infinitely, This is completely different from the Internet. Offline retail cannot apply the exponential growth model of the Internet.
An advertisement on an e-commerce platform may help you sell your products from Shanghai to Xinjiang. But offline stores, after all, can only cover people within a range of 500 meters, 1 kilometers, 2 kilometers, and 5 kilometers, and the radiation crowd is limited. With the ceiling of sales and profits, if the rent during the early expansion is expensive, the store will naturally close later.
Fourth, overconfidence in IT.
Many people believe in IT too much, and some companies open a thousand stores and raise a thousand IT. Think about the question: Can the profits of a store support an IT? Not possible.
Even if the cost of IT staff is 30,000 yuan a month, it means that each store needs to generate a monthly net profit of 30,000 yuan in order to support an IT.