Under the “new retail” concept blessing, when e-commerce companies of the day cat, Jingdong, and Junma Fresh have adopted a new version of the commercial real estate model through the 'enclosure movement', how is the 'old player' of commercial real estate in the new one? Are you alone in the competition?
It is clear that when the overall retail environment and market demand are undergoing drastic changes, Gome’s corporate strategy has also been frequently adjusted in recent years. The positioning of Gome has changed from a retailer that originally sold a single household appliance to one that can provide family life. The service provider of the system solution also means that the past business model has failed to meet the diversification and high requirements of the current demand, and it also cannot sustain the growth of the business indicators such as national and US revenue and profit.
Today's Gome, the changes in the format of its stores, seize the layout of the 4th and 5th tier markets, broaden the flow of access, and even think about new growth opportunities, the doors are required courses.
Reconstructing the store-merging mode
In the last year, Gome launched a home-life strategy, which clarified the direction of the transition from a single appliance operation to an overall solution provider centered on 'home-life'. Gome's company name is also controlled by Gome Electrical Holdings Limited. The company officially changed its name to Gome Retail Holdings Limited.
The “Home • Life” strategy directly leads to the change of stores, 'This time we also have to revisit the store's customer model and growth points. We are on a two-handed' basis, according to a relevant person in charge of Gome Retail Holdings to the China National Grid Reporter. Introduction, Gome has grasped the changes in the status of existing first-tier and second-tier cities stores, and the other hand has rushed to the 40-tier market in which Gome has a short-term layout.
In a second-tier store, 'We went to cross-border with the home improvement industry, invited the designer to the store, moved his studio and negotiating room, and met customers here,' the person in charge told China State Grid Corporation. One hundred percent of the customers in their daily work are customers who purchase household appliances. However, in the renovation process of a rough house, they can actually work together with designers to undertake projects in the engineering category, such as HVAC, central air conditioning, central fresh air and central government. Influent water, these are the projects on the Gome industry chain. The projects of these projects just form a kind of differentiated benchmark with the online, because the online is the sales structure based on the standard products, it is difficult to penetrate the non-standard products. At the top, the engineering category was non-standard, and the customer base was a customer group that coincided with Gome. It merely advanced the sales process.
Based on this kind of groping may also become a trend judgment, Gome began to lay out in advance, in June 2017, Gome invested 356 million yuan to invest in a standard home improvement brand to love space, and built a home improvement experience scene in the store.
Gome's attempt to gather customers through non-standardized products and solutions at the store currently meets the needs of some large-scale factories to launch complete solutions. Haigang Group Vice President, China Chief Marketing Officer Li Huagang April At the inauguration meeting of GOME's 'Home and Life' Alliance on the 16th, the two parties expressed the need to strengthen their sales in complete sets. How can they meet the needs of consumers as a whole? At present, about 7% of Haier's kits are sold in Gome. There are three capabilities that are very important: One is the design capability of the package. It is the user who gives you a home, how long you are, and how to give him a family solution. The second is the sales ability of the package. You can Can not provide him with a one-stop solution at the site. The third is service capability. Can you provide him with a one-stop solution at one time?
The above-mentioned person in charge of Gome told the reporter that at present, Gome has introduced home improvement scenes and designers in 38 stores across the country. It achieved sales of 500 million last year, and it is expected that 100 stores will introduce home improvement experience and designers in 2018. About 2 billion in sales, this business is expected to achieve 50% annual growth.
There is also a long-term emphasis on the ability of Gome, which is its after-sales service capability. This is another growth point that Gome is trying to create. Accurately, this piece is called the post-service market, and Gome sells complete sets. The system solution is inseparable. 4. It is also an incremental market that GOME believes will follow.
'For example, the HVAC system that is very hot in the South, central fresh air, hot water circulation system, etc. These equipments are to be regularly tested and maintained, which means that families will have more and more demand for on-site services'. People believe that the post-service market will have a very high profit margin. This is a trend. As the demographic dividend gradually disappears, it means that the price of service products must increase year by year.
At present, Gome is still doing in-depth layout, including all the data with the factory, to establish a most complete database of sold SKUs, to do a good job selling SKU electronic manuals and electronic warranty cards, also includes a large number of system inputs.
'We hope to slowly create new profit space in this segment. We believe that in an era of over-consumption of retail, retailers must cultivate a profit model that depends on services to profit, rather than always relying on the gross profit of products. Space, this pattern of relying on product margin space will slowly have a bottleneck,' said responsible person thinks.
In the ambush of rural areas
In the 2017 performance report released by Gome last month, it was explicitly mentioned that it is estimated that 3,000 counties will be laid in the next three years, covering the top 100 counties in the country as well as other counties and townships in the country. This is another key point for Gome's planned stores. the amount.
For Gome, the more underdeveloped rural markets such as the fourth- and fifth-tier markets or county towns and villages have always been a topic that cannot be circumvented. When Jingdong Bang, Huitongda, and other channel dealers are in full swing in the rural market in recent years, Gome does not seem to have been able to catch up. This trend has not seen Gome’s achievements in the rural market. Why?
'There is a very big bottleneck for channel providers entering into rural areas. Your logistics costs will be very high. The cost of first-tier cities' orders will be very low. The average logistics cost rate may be around 1%, but if the next three to five lines, basically, household appliances In this industry, if it exceeds 6%, logistics costs exceed 6%, it will be difficult to consolidate. On the surface, rent and labor are cheap, but logistics cannot be diluted, and it is difficult to have scale effect.” Frankly speaking, because of the vast size of the rural market, it is difficult to achieve economies of scale. However, the fact that the proportion of total retail sales in rural areas is growing day by day, and it has never shrunk in recent years. If you do not do this, you will be ahead of time by your friend.
According to the "China Consumer Market Development Report of 2018" issued by the China Council for the Promotion of International Trade Studies, at present, the total retail sales of consumer goods in rural areas only account for 14.2% of China's total retail sales of consumer goods, and the proportion is still relatively low, which means that the rural market has great potential for development. The report predicts that in 2018, the total retail sales of consumer goods in rural areas in China will grow 1-2 percentage points faster than that in urban areas, and the growth rate will reach 12%.
It is reported that, last year, Gome has opened 100 stores in the fourth and fifth line markets. This year's target is 800, Gome chose to run together with the logistics hurry to support the distribution.
'First, the top 100 counties will go to layout stores, and also build regional warehouses, build stores around 300-500 km of regional warehouses, so that logistics coverage can support stores. Logistics warehouses and stores penetrate at the same time, gradually forming a three-dimensional supporting network' The above-mentioned person in charge further introduced that these stores are not large-scale stores, 1,000 square meters or five or six hundred square meters or even two or three hundred square meters. The stores will have new prototypes, there will be a screen wall, and products and sales will be presented through a large number of displays. .
Gome said that the person responsible for the decision, 800 stores completed on schedule this year, is expected to contribute conservative sales of 10 billion, if optimistic, then there may be 100-200 billion sales growth.
However, rural markets have great potential, but Gome is a latecomer. Before Gome, Jingdong, Suning, Alibaba, Huitongda and other channel distributors scattered their nets in the rural market several years ago. The outlets spread throughout the provinces, counties, and townships. market.
According to public data, Jingdong currently has 8,000 Jingdong home appliance stores in rural areas throughout the country, covering 100% of the country's administrative regions. Jingdong helps cover more than 80% of counties, 25,000 townships, and 600,000 administrative villages.
Suning covered rural areas by including Suning Tesco's direct sales stores and retail cloud stores (affiliated stores) in the form of Suning's Yichang County Town Store. The total number of Suning's direct sales stores in the township market has reached 2,281, and retail cloud stores Has covered 21 provinces and 85 county towns.
Ali's Taobao business in rural areas has covered more than 30,000 villages in more than 700 counties in 29 provinces across the country. It has more than 1 million farmer network operators, has hatched and cultivated more than 160 regional agricultural brands, and launched more than 300 agricultural products for poverty alleviation and 23 An Amoy Sweet Farming Demonstration Base, and more than 2100 Taobao Villages with annual sales of over 10 million RMB.
Huitongda has covered 18 provinces and 15,000 townships in China, accumulatively developed and serviced more than 8000 township and mom-and-pop shops (Huitongda member stores). The annual GMV exceeded RMB 220 billion, driving more than 400,000 farmers to start businesses, employment, and service networks. 67 million peasant families, covering 200 million rural people.
Behind these figures are the preemptive cakes and flow entrances that opponents have preempted. For Gome, the ambush in the countryside means that you want to leave a piece of cake. It is not an easy task.
Online and offline 'fitting'
In addition to the stores, Gome's online is also a topic that can't be undone. It can be said that Gome was the only retailer that did not have a team in the first few years after the channel merchants killed them. In the first few years, GOME Online dominated Gome Online. The platform has always followed the principle of not losing money. It has not blindly followed the example of Suning and devoted great efforts to online traffic. Therefore, the direct result is that the scale is very small. Now that traffic is being considered again, Gome looks inwards and chooses to use its own resources. Employees to develop traffic entrance.
'Initially, we used 100,000 Gome employees as a carrier of marketing. Let them send a little company's marketing information to friends every day. Can it affect more than 10 million people? Now we are further enhancing and tapping the potential of our employees. Is a carrier of traffic, in the operation of the social circle is not through the benefit-sharing, through the construction of the employee community, to explore the shared retail model', the above-mentioned officials believe that this is a new direction.
All online businesses do traffic business. No traffic entrance means no scale. Ali and Tencent basically occupy the e-commerce traffic runway. In the traffic-monopoly business environment, Gome's online business has been tepid. Selecting employees as carriers to drive traffic is not unexpected. However, today's huge purchase cost of traffic is a more economical way for Gome.
It is reported that currently the personal carriers of Gome employees and externally developed social circles have reached 300,000. From the third quarter of last year, the volume of traffic brought about by this part of the traffic is about 1.8 billion. .
Before Gome, online and offline were two separate systems. Now Gome emphasizes the integration of online and offline. President of Gome Retail Holding Co., Ltd. Wang Junzhou said in an interview with the China State Grid Corporation on April 16 that Gome is now implementing the future. The retail strategy, called Internet retailing, is actually the application of Internet retailing in every aspect of the entire retail customer experience. In the first half of 2018, Gome will complete the integration of physical stores and the Internet. In the future, the customers will be on the Gome's website or Gome's physical stores will be consistent with the customer's experience.
If you look at the essence of Gome's entire retail strategy, Wang Junzhou thinks that there are four points. First, apply the Internet technology throughout the entire process. Second, continue to take advantage of Gome's ability in the supply chain, which is mainly reflected in the ability to select products and accurately capture To the customer's needs, the supplier's order should be very accurate. Third, from a single appliance retailer to a service provider that provides customers with total solutions. Fourth, to be a best service provider.
Gome, Suning, who are not 'C bit'
If you compare with old rival Suning, Gome, Suning, have evolved from the same business model to today.
GOME's strategy of home improvement is that the customer groups are highly overlapping and can form a more likely transformation. Suning is gradually becoming more Internet-based, developing department stores, mothers and babies, and fresh products. The customers of each product category are related to the original home appliance customers. Not much. The Internet model is the standard model. Suning is close to Internet hotspots. Its category 3C is approximately 50% of retail sales. Gome currently accounts for 70% of household appliances and 3C category does not exceed 30%.
An observer of the long-term concern for retail companies has analyzed with the reporters of the China State Grid Corporation. The profit rate of the 3C category is relatively low, the profit of the mobile phone is about 5 points, and the profit of the digital is about 2 points. This kind of profit is hard to make money. In the process of Suning's Internetization, the product structure gradually develops toward standard products, and the greater the increase in sales, the less profitable the problem will be. The gross margin of two or three points will not be able to cost. Suning's profit at the operating level is very thin. There is a big relationship with this. This is also a problem that cannot be solved in the Suning report.
From the comparison between Gome and Suning’s 2017 financial statements, the gross profit rate of Gome's main business remained at 18%, excluding margins other than one-time factors, and operating profit was 530 million. Suning gross profit margin was 14.1%. If you remove the stock of buy Ali, financial and logistics profits, core profit from core business is about 160 million.
The gross profit margin is the lifeblood of the company, and the gap between the peers is a matter of a few percentage points. The changes in the gross profit margins of Gome and Suning are very worthy of attention.
Since 2013, Suning's gross profit margin has been almost 'sideways' at 14% to 15%, Gome's gross margin reached 18.4% in 2013, 14.9% in 2014, and its gross profit margin in 2015 remained at 17.8%. 2016 gross margin Declined at 16.1%.
Gome also took some detours in the process of restructuring and adjustment in the past two years and paid some tuition fees. The person in charge of Gome said frankly that in today's direction, the strategy of Gome is very clear. Now it is running. At the stage of data sales, this year, based on the maintenance of the advantage of the supply chain, we will seek to increase the sales volume and achieve a double breakthrough in sales and profits.
The market is a process of reincarnation. A few years ago, distributors were fighting for online battles. Today's traffic is getting more and more expensive. Everyone starts to plunge more towards the offline promotion experience, but the market is constantly changing. One day Maybe it will still be online. Regardless of Gome, which is rooted in strengths and related industries have changed, or Suning, who is closely following the Internet to improve its voice and exposure, it seems that no one has reached the end. At the time, nobody is the 'C position' in this round of new retail sales.