Interpretation of the successful case of traditional furniture companies on how to take the road of e-commerce

The fall of the Guangdong business into the e-commerce dumbbells has once become a hot topic in the industry. In terms of e-commerce, Guangdong is a big province in terms of the number of sellers and consumers. In terms of consumer manufacturing, Guangdong is also a big province; In a weak position. If you can get through these two links, Guangdong's manufacturing and e-commerce will reach a new level. The furniture industry is a classic example.

According to statistics from Taobao.com, the volume of Taobao home brand products in 2012 accounted for nearly 10% of the online shopping products. Some Taobao sellers who specialize in furniture have gone deep into the line and built their own factories. On the other hand, the profits of the furniture manufacturing industry are getting lower and lower, the rents of traditional furniture stores are rising, sales are falling, and the sound of business closures is endless. Under the impact of e-commerce, promotions, gifts, group purchases and other activities seem to have become a straw for traditional home stores, but consumers do not buy it. Therefore, traditional furniture companies are not doing or not doing e-commerce, but how to launch water.

How do traditional furniture companies take the road of e-commerce? How to coexist and develop online and offline? The road to solving furniture e-commerce enterprises can bring lessons to other industries.

Furniture e-commerce problem

According to industry statistics, China's furniture industry has exceeded the scale of one trillion yuan. It is expected that the output value of China's furniture will maintain an average annual growth rate of 15% in the next five years. From April 15, 2012, when the imported furniture ended the zero-tariff era, the tariffs rose to 10%-15%, driving the price of imported furniture. For the domestic high-end brand furniture and furniture e-commerce companies, the latter advantage is further highlighted. . Coexisting with so many good news is the pessimistic status quo of the furniture industry: the price of the bottom price clearance, the direct price of the factory price is endless, the news of the closure of traditional furniture stores, the closing of the store one after another, the furniture store is deserted all the year round, even the holiday traffic is not optimistic .

According to the data of the Circulation Industry Development Department of the Ministry of Commerce and the China Building Materials Circulation Association, the sales of furniture and home furniture stores above designated size in 2012 were 1,246.7 billion yuan, down 2.46% year-on-year; the cumulative sales from January to March 2013 was 213.6 billion yuan. It was down 2.43% year-on-year.

Where do customers go to buy furniture? Lin's wood industry, which started in Taobao, has several kinds of pastoral style furniture, and its sales volume has reached several thousand, which has received rave reviews. The O2O furniture e-commerce Merlot, which was founded in Foshan, is often crowded with offline experience shops in the suburbs of various cities. Many customers are not far from the store to pick up the goods, and go home to place orders.

According to statistics from Taobao.com, the number of online shopping people in Taobao has become more and more extensive in 2012. Buyers' demand for home quality and stylization has gradually increased. The volume of household brand products has increased by nearly 10% in 2011 compared with 2011.

For the e-commerce wave that has started from the wind and water, no matter whether it is a small and medium-sized enterprise or a large enterprise, it cannot be ignored. However, furniture companies have greater limitations in entering e-commerce. Most furniture products do not have uniform standards and models like clothing and electronic products, and they are also large in size and weight, and are not convenient for returning goods. Pure C2C or B2C can't meet customer's requirements. Therefore, at present, on the major e-commerce platforms, the most popular products are personalized home products and small assembled furniture.

The return rate of furniture e-commerce is also very high. During the "Double Eleven" period last year, the official flagship store of Quanyou Home had sales of over 100 million yuan, but after a month, the media broke out. The flagship store "service within 30 days of the store" showed that the refund rate reached 36.26%, of which There were 11,674 refunds due to the failure to receive the goods, accounting for 83.5% of the total number of refunds of 13,976. In addition, the return rate of Gujiajiao and Qumei Furniture has also soared.

Ploughing O2O mode

After continuous exploration, the O2O model became popular among furniture e-commerce. O2O, Online To Offline, combines the opportunity of offline business with the Internet, making the Internet a front-end for offline transactions. In this way, the offline service can be used to collect customers online. Consumers can use the online to filter services, and the transactions can be settled online, and soon reach the scale.

The core competency of e-commerce is the user experience. Gong Hai, Director of E-Commerce Operations of Guangfo Zhicheng, raised several questions: Taking 3C electronic products as an example, consumers often go to the online store after completing the experience of the goods in the traditional retail store. How long can this model last? Traditional retailers and dealers can't do volunteers forever. Expensive rents allow them to get an order without experience. How long can this model last? Apparel and footwear e-commerce now use returns and exchanges, consumers experience at home, expensive logistics costs entangled buyers and sellers, how long will this model last? What's more, innovative small companies have invested a lot of money in research and development. Their prices have no advantage on the Internet, while similar products attract viewers in a low-cost way and display them with beautiful pictures. They have no chance. Showing the true quality advantages of the product, it is drowned in the ocean of millions of businesses.

This problem is more prominent in furniture e-commerce. Because of the gap between online pictures and physical products, many companies are not satisfied with the after-sales warranty, which makes many consumers have doubts when they face furniture e-commerce. Melody CEO Gao Yang said that furniture is not like clothes and shoes, the price is not high, do not like it can be retired, can be exchanged, if you like, you can buy a lot. Furniture is generally bought only after buying a house, and it is bulky and expensive, and will not be replaced frequently. It is difficult for consumers to place an order for purchase only on the online photo display. After the offline experience, it is different. "When there is no storefront, (we) can only achieve 4 million sales in the official website and Taobao in one month. After opening the offline experience store, we can now achieve one hundred million in the off-season. The combination of online and offline mode is Very promising."

Founded in 2008, the Merlot Furniture Network, which was cut into B2C, was the first to introduce the concept of “furniture online shopping” in the industry. In April 2011, Melody's first offline experience store opened in Chengdu and began its O2O strategic development model of “online sales and offline experience”. Gao Yang said that user experience is the most important part of the O2O model. Melaleuca is involved in O2O to provide cross-border seamless and better service for consumer services. After the user has seen the renderings on the website, they can go directly to the local experience hall to experience the effect of the furniture.

Gao Yang has publicly revealed that the monthly efficiency of the Melaleuca O2O offline store is as high as 10,000 yuan. Some people in the industry helped Melody to calculate an account. "1 million yuan × 204 stores × 250 square meters = 500 million yuan, and the actual monthly sales of Melody is only 150 million yuan. If it is high, it will squeeze 70% of water, even if it is beautiful. Lele month is 3,000 yuan, and the annual efficiency is 36,000 yuan. The efficiency of the Merlot O2O store is more than 10 times that of Red Star Macalline." Thus, the person came to a conclusion: "If the traditional furniture store is Shaolin Kung Fu, then furniture O2O is a machine gun."

Hu Jin, the general manager of the new homes with the O2O model, also confirmed the excellent results of the offline experience store from his own practice: on April 30 this year, they opened the first office store experience store in Guangzhou, about 1500. Around the square meter, the rent is very cheap. Every night, many owners turn to the experience store after work, and they provide customers with a solution. The monthly sales of the 1,500 square meter experience store is equivalent to the monthly sales of 20 to 30 professional stores of other first-line competitors. “After the weekend, the number of highly accurate and interested customers is around 800, which constitutes a part of our core business competitiveness.”

Lin’s wood sales last year were five times higher than the same period last year. It is understood that Lin's Wood Tmall flagship store began to warm up on October 18 last year, with an average daily sales of about 1 million yuan. Before the “Double Eleven”, consumers had ordered 15 million yuan of pre-sold goods during the warm-up period.

In order to make up for the shortcomings of online sales, Lin's Wood has opened stores in Shenzhen, Beijing and Foshan. Lin Zuoyi, general manager of Lin's Wood Industry, stressed that Lin's wood industry store does not want to switch to offline, its offline store is not a hypermarket, but a warehouse-style sales experience center, providing display and after-sales service. They want to use the quality user experience offline to drive online orders.

Offline experience store opening low cost

Several O2O-successful furniture companies have a variety of offline experience stores, some of which are crowded with display, and some have a sense of design. What they have in common is that they don’t enter the urban hypermarket, and the rent is cheap. . For example, Lin's wood industry tries to reduce costs, chooses cheaper lots, does not enter the hypermarkets of several hundred yuan per square, and keeps the online and offline prices uniform. “The cost of a physical store is very high. The same product is sold for 10,000 yuan. The cost of a physical store is 4,000 yuan, and the online store is 3,000 yuan. The difference is about 10% of sales. Lin’s wood industry is entering. In the market, the slogan of earning 10% of the profit is now, and now the profit is less than 10%. Therefore, we will not vigorously expand offline stores, but continue to adhere to online sales, find suitable furniture network development path. Lin Zhuyi said.

Melody is also taking this route. Gao Yang said that they opened the store and the mainstream Red Star Macalline model is different. "The first point is that the store we opened is very biased. (Rent) is very cheap. There are more than 200 stores nationwide, 11 in Beijing and 11 in Shanghai. There is one in Foshan, the average rent per square meter is less than 50 yuan, and the cost is very low. In addition, this mode of e-commerce does not rely on geographical location to bring passengers, relying on the Internet to bring people to the line, (so ) We don't have to go to the expensive home store, we don't have to find a square or geographical location with a lot of traffic. I am looking for a place in the same area. The second point, we open the store very fast. Basic When you open a store, you know if the store is a success. The failure rate is very low. We have only closed four stores now, and the four stores with the most expensive rents have been turned off."

Gao Yang also talked about a more interesting detail. "We asked a lot of experts in furniture marketing to look at it. They think this is very amateur. The location is biased, the decoration is simple, the furniture is crowded, and this kind of practice will not sell. A piece of furniture. We have a business belief that cheap and good quality is the best user experience, the product is done well, the user buys this product at a relatively low price, this is the first user experience. In this case, You can go a little further, you can not have such a good shopping environment, give him a good enough cost-effective product, this is the user experience we do."

It is because of this mentality of many O2O companies that Guangfo Zhicheng, located at the junction of Guangfo and Foshan, has slogan for building the “E-commerce Experience Capital”. The geographical position is slightly biased, but the traffic is very convenient and the environment is very good. The rent is very cheap, and it has already attracted companies such as Sina Leju. Huang He, chairman of Guangfo Zhicheng, said that in recent years, China's e-commerce has maintained a rapid growth trend, and the proportion of online shopping in total retail sales of consumer goods has already exceeded the critical point of 5%. The e-commerce service market has become a new channel for traditional enterprises to expand their markets and reduce costs. Professional e-commerce operators form an effective stitching of the industry chain by citing upstream and downstream enterprises in the e-commerce industry chain, and provide integrated integrated e-commerce supporting services for traditional enterprises, assisting traditional industries and businesses to break through traditional marketing models and achieve The innovative format of online marketing and offline experience accelerates business upgrades and development.

Improvement of logistics and after-sales service

The O2O model that realizes online sales and offline experience sounds very good, but the rent, personnel, and water and electricity of the offline experience store are not a small burden for e-commerce companies that prefer “light assets” operations. Supply, inventory and logistics are the unavoidable challenges of the furniture e-commerce that takes the O2O route.

Logistics is very savage, which is a consensus among many businesses and consumers. Many easy-to-touch goods cause consumer complaints and even returns due to logistics. In Lin Zuoyi's view, the risk of damage to goods during logistics and transportation can be controlled by other means.

"You can't push responsibility to logistics." Lin Zuoyi told his subordinates. The person in charge of the factory does not want to include the "transport damage" indicator in his performance appraisal, which is considered to be the responsibility of logistics; but in Lin Zuoyi's view, if the factory package is solid enough, the damage should definitely be lower. Because the data shows that, in cooperation with the same logistics company, some furniture manufacturers have lower loss rate. Obviously, the other party has better packaging, so manufacturers should start from their own, improve packaging and control such risks.

Gao Yang believes that the Internet has affected the entire industry chain. The Internet can do a product in a short period of time. For example, a bed can be sold for at least 100 sets. If it is sold well, it can be sold for up to 1,000 sets. By focusing on the Internet, you can have a more Efficient production mode to produce products. “Foshan has a lot of soft bed factories, which are very large. We mainly sell two models, each one is nearly (sold) 1000 sets a month. The amount of single products is maximized, and the supply is from a small-scale production. The model slowly became a more efficient and stable quality model with a large output.” Gao Yang said that from 2011 to 2012, they made the conversion of this production mode, as well as the transformation of transportation. “Foshan has a lot of special logistics (company), especially in Jiujiang, there are Beijing and the northeast. Everyone puts the car in one piece. We will start to convert after the amount reaches a certain level in October. We mainly go to sea. They are all directly from Dongguan's export factory to Tianjin or Yingkou, and then to the user's home. From Foshan to Beijing, (logistics fee) is about 170-190 yuan, if you go to sea, it is only 70 yuan. After a certain degree, the transportation cost can be greatly reduced."

Hu Jin, who is still in the house, also expressed the same view. For the custom industry, cost and utilization are really a problem. Doing a custom industry is deeper than general production technology information. So many orders, and they are all different types of products, the colors are different, the styles are different. “After the order came, the digitized documents went to the central processing center, and we mixed the production. How do we achieve lower costs than the finished products? When the materials are opened, the most scientific development is carried out on one board. Can't make Zhang San's list, and can't do Li Si's single. Maybe Wang Wu's drawer panel can be used. So our material utilization rate is 10 points higher than traditional manufacturing companies."

In Gao Yang's view, the online and offline linkage of O2O is not only a problem of order conversion rate, but also a problem of local service. After the customer places an order, how to deliver the service such as delivery and on-site installation? Furniture as a large-scale durable consumer goods, after being sent to the door for installation, how to solve the after-sales problem? After the furniture has been transported from Guangdong to Beijing for a long time, if there is a problem with the product, how can it be solved in different places? He believes that with the offline experience store, these problems can be solved and more detailed services can be provided to customers. At present, the city with the experience store not only saves logistics costs for customers, but also customers can pay after seeing the goods on site. If you are not satisfied, there is no reason to return even 45 days. If the furniture is damaged during the logistics process, the staff can go to the door for identification, repair or exchange.

According to reports, at present, Lin's wood industry has completed logistics, installation, delivery and maintenance in the seven major cities of the Pearl River Delta; in 87 cities in all provinces and regions of the country, as long as the consumption of more than 3,000 yuan, you can enjoy free logistics Goods, home delivery service, free on-site service, lifetime maintenance service. At the same time, all goods have no reason to return within 45 days. This level of service is difficult for many traditional furniture stores and businesses.

Difficulties in precision marketing

Another key issue for furniture e-commerce is precision marketing.

Gao Yang believes that the biggest difficulty of furniture e-commerce is precision marketing. Furniture marketing and marketing of other products are different. For example, mobile phones and books are common products. Furniture is usually paid at a specific time, such as after buying a house. They have tried to copy the marketing experience under the offline line, which is almost useless. In addition, the display advertisement for the Internet is useless or inefficient. “In the end, we found that marketing with this precision is very efficient. But we need to pay attention to it. From the beginning of advertising, to the website, and finally to the offline, the whole process should be very clear, and there must be strong data tracking. We have done a lot of searches at present. We are a big customer of Baidu. Tencent is also very different. The effect of these two channels is very different. The conversion rate of Baidu's single traffic is three times that of Tencent. How to control it is very important. Seeing the transformation and jumping out of every link, it is very difficult for Baidu to change the different words. We have almost made hundreds of thousands of words, each of which has different bids. Observing, is it high? Is it low? How can we control the cost? At this level, we can invest one dollar to reach the sales of ten dollars. Only in this way can we ensure the healthy development of a company.” He stressed that there is no turning point in selling furniture. The cost of each order must be controlled within a manageable range to achieve sustainable and healthy development.

Hu Wei said that the e-commerce of the platform has been greatly developed this year, and the vertical e-commerce development of the industry is a bit lagging behind. He believes that the e-commerce platform of the furniture industry is not established. “The attention of this industry is very low. The general attention is half a year. A website is easy to establish the status of opinion leaders, but (people) pay less attention to building materials and furniture, which means independent industry platform. The traffic cost will be very high. So if there is no other unique competitiveness, some traditional industries have to enter the e-commerce, no experience in the Internet and software, I think it is (should) use a third-party platform. Now with a third-party platform, It’s hard to make money."

According to Gong Hai, there is another way of precision marketing is to do the marketing of QQ group. The employees of the furniture enterprise attract the owners to run into the QQ group, infiltrate them and sell their furniture.

The marketing method of Lin's wood industry is handled through losing money. Last year's "Double Eleven", Lin's Wood Industry will implement a 50% discount on several tens of thousands of pieces of furniture. Although this sale method has lost several million yuan, it has earned enough attention, which is equivalent to spending millions of dollars. The fee has received a lot of attention and word of mouth. Therefore, the industry commented that Lin's wood industry lost value, too much value!

However, on the whole, the collective marketing problem of furniture e-commerce is that domestic consumers have not yet formed the consumption inertia of buying furniture online. It is not an overnight success to guide the formation of this new consumer culture. At least, the industry is still Did not find a prescription.

The revolution has not been successful, this is the best portrayal of furniture e-commerce.

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