Why Can Traditional Retail Businesses Close To The Market?

Purchase order to measure price

"The reason why the electricity supplier is rising is very important. A selling point is low price. If my store is the same as the online price, even lower than it, most consumers will run to the line immediately." At the first meeting, Ye Guofu threw confidence in the price.

This is not a false statement. Take Eyeliner as an example. Domestic brands are mainly concentrated in thirty or forty yuan, while the name of the product is priced at 10 yuan. In Ye Guofu's words, only 1/3 of the average price level will have an impact on consumers.

Why can it be so cheap?

"Low cost, low gross profit and low price." Ye Guofu said frankly that the creation of good quality business philosophy.

"We cut off all the middleman links, and the products went directly from factories to shops, and mercilessly squeezed out the middle Commission." He explained that in the traditional supply chain mode, merchants use the "consignment system", and how much they sell to the factory. In other words, they transfer the marketing risk to the manufacturer. The latter, in order to protect their own interests, will certainly raise the purchasing price, which will eventually transmit to consumers.

The famous brand is purchased by the "buyout system". Mass customization procurement, selling or not are all self responsibility, not related to suppliers, and the goods are cleared quickly, so as to get rid of the supplier's control over the retail price and enjoy full free pricing power, so it is possible to sell at a low price. This is favorable for the suppliers who are facing long accounts and unstable orders. They are naturally willing to lower the price, and then select high-quality suppliers to choose high-quality suppliers. Ye Guofu told Nandu reporters that they preferred the foreign trade suppliers of the Canton Fair, especially those supplied to Europe, America and Japan, because the products would be more reliable in terms of design and quality, such as the eye liner, the name of the product, the supplier of L'OREAL, and the largest supplier in the industry.

As for the final price to sell to the market, we must also consider the issue of gross margin. His strategy is to make small profits and sell more, to win by quantity, and to add only 8% gross profit to each commodity. "As cosmetics, we all know very profiteering, a piece of 100 products, the cost may only account for 10 yuan, but in such a fierce market competition environment, it is very difficult to get through, I do not fight the" low quality "brand, how can it happen. He analyzed.

Streamline the category and win by quality

Traditional businesses like to use diverse styles to attract customers, but Ye Guofu does not. In his view, SK U is too much, not only for its own management, but also for consumers.

"You see Apple phones, each generation has only one model, but because the user experience is the ultimate, every time the new product is sold very hot." He also decided to learn the best thought of "subtraction". According to Ye Guofu, in the more than 3000 single products of the famous excellent products, many single products were reduced to only one or two models.

As mentioned before, the inventory pressure brought by the purchase of famous brand purchase is forced to work hard when developing products, so as to ensure that each of them is explosive. From the first step to pick the category, the team will do a lot. market research Online and offline products are finalized, and they are repeatedly demonstrated how to design and package. After the product came out, it was not immediately launched into the market. Instead, it sent a free trial to the experienced officials first, and many of these experienced officials came from about 9000000 fans of their WeChat public account. They had many backgrounds, but there were many "geek" cosmetics. For example, there is a fan who specializes in chemical engineering. He has a lot of experience in how to do eye makeup. According to the introduction, the product experience officer of the famous excellent product has recruited more than 1000, and it will be expanded several times.

In the online interaction with fans, natural dare not neglect. When the new product is on the shelves, the store manager and the shop assistant concentrate their firepower on pushing. Although they do not throw money into the advertisement, they can see the noticeable posters in the shop. On the one hand, they interact closely with the famous people in the industry on the one hand. On the other hand, they use the original knowledge of the product to absorb the powder and interact with consumers in the WeChat public.

"Our eyeliner is black, has sold 100 million, perfume is a flavor of 1, it is also sold out of stock, and many cosmetics factories develop thousands of products a year, in total, it also sells tens of millions." Ye Guofu told reporters in Nandu, "the energy of pushing 10 products is placed on 1 products, so that it is possible to produce excellent products. I also have the strength to place orders to the upstream suppliers."

Brand customization accounted for 20%

In addition to original design, there are still a small number of famous brand products that are customized to cooperate with existing brands.

For example, the socket of PHILPS, they chose two kinds of line length 1.5 meters and 3 meters, after the other side specially designs the style, after the name creates the superior product the channel exclusive sale. Because they are factory to shop and low margin mode, so the price is cheaper than the PHILPS outlet on the market.

In this way, the brand name endorsement can be obtained easily, but for the brand, what benefits can the cooperative customization make?

Ye Guofu told reporters: "I have 1000 stores, all in busy pedestrian streets, large shopping centers and other crowds of people, can help brands quickly run, and I do not press their money, goods into the warehouse immediately settled." He told reporters that the custom style is actually following the example of C ostco, one of the largest chain retailers in the United States. Luxury brand Only the daily brands, such as Disneyland, Garfield, big white and so on, are selling well.

At present, there are not many customized items in the shop, which accounts for about 20%. Ye Guofu said that the name of the best quality product plan will be raised to 50% in the future. His train of thought is that a category only chooses one brand cooperation, only develops one or two products, lets the consumer come here to obtain the very simple experience.

Management flat under stable line

"I now have at least 3 days a week to go to the store to see, keep close interaction with the terminal, what are not done, direct photos to management group improvement." Ye Guofu told reporters that there are now more than 10 thousand people in the name of excellent products, most of which are concentrated on the terminal. With the expansion of the scale, the difficulty of management is also increasing. His information channel can not be reported only by subordinates. He wants to hear the truth more directly to the consumers, and he is flat in the organizational structure. He has only three directors, regional managers and store managers.

For the grass-roots personnel, they have a specialized training institute, and for those above the middle level, Ye Guofu specially invited the largest human resources leadership training company in the United States to start the course.

On the basis of keeping the line, he said he would also open shop. His original intention was to protect the brand. The contribution of online sales can hardly be ignored.

Online and offline are all important.

Commentator: Tang Zhimin, Capital Partners of Tian chart

Whether online or offline, the key is to seize consumers and generate repeat purchases. The famous and innovative products can be simplified by C ostco and SK U. They also highlight the low quality and high quality. From the view of constantly opening new stores, the scale economy effect is obvious.

But I don't think any model will run through from the beginning to the end. It should be combined with the development stage of the enterprise itself. It is feasible to create a famous brand product, but we should upgrade the 2 version. Online sales Combination. After all, their stores are located in the high-end business district of a second tier city. The rental cost is quite high. What is unavoidable is that after 90 and 00, the number of shopping trips is getting lower and lower. Most businesses want to have channels to reach them.

I think there are several functions of the store, including product and service experience, sales channel and user communication. And the name of the product is a lifestyle collection shop, consumers do not need too much experience, the consumption of such products is medium frequency, young people or online direct purchase is very convenient. Of course, from the perspective of brand recognition, the famous brand products do need to shop, but when a certain quantity and consumers know it, I think we can consider turning to the online mall or entering the third party platform. This is actually equivalent to expanding the store space on the original basis.

The combination of online and offline is also important to tap user's consumption data and enhance interaction. The essence of the so-called retail is to get faster and closer from customers so as to get out in the fierce competition.