China's home appliance retail industry must learn to walk on two legs

After more than 20 years of development of the Chinese retail chain, it has reached a turning point in the business model. Unlike the appearance of the first few department stores, supermarkets, and home appliance outlets, e-commerce is a brand-new transaction model that even subverts the entire sales network. However, the traditional stores under the line will be on the decline, and will eventually exit the stage of history?

E-commerce and physical stores have their own advantages

Judging from the experience of the developed countries of the United States and Japan in the retail industry, although e-commerce has reached a relatively mature stage, physical stores still have irreplaceability, because offline has advantages that are not available online: Provide non-replicable on-site experience, return and worry. In addition, the huge cost advantages brought by the offline scale are also unmatched by current pure electricity suppliers. The most important thing is that the online and offline consumer groups are different.

In other words, this is similar to the debate in recent years on whether "the development of online media will lead to the decline of the paper media." In the end, it is still necessary to return to the basic point of a discussion: the needs of consumers. As long as the demand exists, the presence of the physical store is reasonable and competitive. This is the power of the “invisible hand” of the market. The US "Wall Street Journal" commented in a recent article that "Chinese physical stores (Gome, Suning, etc.) are faster and more powerful than their American counterparts."

"The physical store can't always be the role of working for people." Wang Junzhou, president of Gome, believes that first of all understanding your consumers, you can talk about effective business model changes. In accordance with the different orders of brand, function, price, and appearance, he divided Chinese consumers into four categories: fashion-conscious, cost-effective, rational, price-sensitive, and impulsive, accounting for 20% each. 23% to 24%, 17% and random purchases. Because of different consumer habits, e-commerce can not completely replace the physical store.

Online and offline can achieve a win-win situation

However, physical stores must be reformed. The retail market has entered a period of steady growth from rapid growth, and this economic environment is likely to continue in the coming years. Although we do not rule out the second half will be a little better than the first half and do not rule out periodic ups and downs, but the retail industry model should be designed in accordance with this continuous environment, including preparation of storefronts, operating costs, etc., can no longer follow the previous economic high Growth period to design your own business model. Wang Junzhou stated that this continuous business model is the integration of different channels and complementing each other's strengths, realizing “online + online” walking on two legs and integrating the experience of online shopping and physical store shopping perfectly. "The retail industry in the future must meet the needs of different consumer groups. Online and offline will surely have their respective advantages. Who can do this kind of double-line model? Whoever is the most valuable and outstanding enterprise."

At present, the penetration of digitization technology in various retail formats and the promotion of convergence are the preconditions for his assumption. For example, a person can place an order on Gome's e-commerce website and then go to its physical store to pick up the goods. Is this considered traditional retail or e-commerce? In fact, consumers do not care what kind of approach it actually belongs to, but instead produce positive results. As Wang Junzhou said, “From the point of view of category extension, e-commerce can nurture physical stores, and physical store offline procurement can support the development of e-commerce”, which is a result of a win-win situation. “In order to fully meet the needs of consumers, it also needs multi-channel development: including the combination of physical stores and e-commerce networks, as well as other better sales models that may emerge in the future.” Clearly, Wang Junzhou is online and offline. The combination of lines also implies a multi-channel retail idea that the information technology revolution will continue to bring about the renewal of channels. They will not necessarily replace the original business model, but it will surely set off a new round of adjustment in the industry. By then, the brand will be "walking on multiple legs." But this also depends on whether the company has the courage to accept change and innovation.

Gome is undoubtedly the choice to accept change. In Gome's view, the best endurance can be the last laugh.