Sophia released a new customized strategy, and Dwnews explored a way to grow from 1 to N"

In 2001, Sophia introduced the French SOGAL to China, realizing the 0 to 1 of the Chinese custom wardrobe. On December 19, 2021, Sophia released the whole customization strategy, which officially opened Sophia's ultimate exploration of "from 1 to N" while defining the whole customization for the first time. The user-driven strategic orientation, as well as the great potential that may be released by the ecological, platform-based transformation and in-depth marketing transformation, has made the capital market have more imagination and expectations for the new Sophia.

PART 1

Sophia's "From 0 to 1"

Not only is he the creator of the custom wardrobe, but also the representative of the whole excellent class in the custom home industry

In 1981, Hassenfratz founded sogal in France, and the european wardrobe map changed as a result. In 2001, the founder of the Sophia brand and Mr. Hazenfratz introduced SOGAL wall cabinet sliding door products into China based on the needs of Chinese consumers, which opened the era of China's custom wardrobe, and Sophia became synonymous with China's custom wardrobe.

From 2001 to 2021, in the past 20 years, Sophia has not only promoted the realization of China's custom wardrobe industry from 0 to 1, but also completed Sophia's brand precipitation and enterprise accumulation from 0 to 1.

According to public financial report data, as of 2020, the number of Sophia terminal stores has exceeded more than 2,700, and the annual order volume has exceeded 630,000, whether it is the number of terminal stores or the total number of orders, all of which are far ahead in the custom wardrobe industry.

As the "representative of the whole excellent class" of the custom wardrobe line, Sophia is the first listed custom home furnishing enterprise in China; has the industry's first CNAS nationally recognized laboratory, has a very strong research and development strength, mastered the 10 core technologies of the custom wardrobe, has 323 advanced patents of the group, and 10 scientific research achievements have reached the international advanced level. In addition, Sophia is the definer of China's custom wardrobe standards, participating in the formulation of a total of 48 major national/industry/group standards, not only leading the formulation of the first industry standard, but also being the drafter of the world's most stringent ENF-level environmental protection standards.

As a benchmark brand for home environmental protection, SophiaKang pure board is not only the first in the industry to obtain 5 international environmental protection certifications such as EPA-NAF and AMERICAN CARB-NAF double aldehyde-free exemption certification, Swiss SGS international measurement, Japan F★★★★ certification, FSC forest certification and so on. The excellent environmental protection strength makes Sophia a common choice for 3,000+ maternal and infant medical spaces and 5,000+ student dormitory spaces, and has become the first custom home furnishing brand in the industry to obtain the double certification of the two authoritative medical institutions of the National Pregnancy and Baby Network and Doctor Lilac.

In addition to the leading advantages in channels, products and environmental protection, Sophia also has Asia's first-class Industry 4.0 intelligent manufacturing, large-scale personalized custom home intelligent manufacturing system to reach the international leading level; through the layout of the country's "east, west, south, north and middle" 7 major manufacturing bases, can quickly meet the custom home needs of different regional markets.

PART2

Sophia's "From 1 to N"

——The new strategy means a new revenue level, but also means a new stage of development

In 2021, under the background of the rapid rise of new consumerism, the diversified transformation of home consumption scenes, and the accelerated evolution of the industry competition pattern, Sophia innovated and started with a new look. It has gathered a more aggressive and wolf-like trading team, and also opened a new chapter of more ambitious, but also more courageous and passionate - the whole family customization.

On December 19th, Sophia's "To the New, Soding the Whole Family" press conference was held in Guangzhou. At the press conference, Sophia wedged the "whole customization" into the brand LOGO and brand positioning, truly from the "user demand", for the first time from the design, environmental protection, quality and service and other six dimensions to define the whole customization, and based on Sophia's existing advantages and global advantages in the supply chain, released the "whole customization" new strategy.

At the sensitive node of impacting the tens of billions of markets, why did Sophia choose to release the entire customized strategy? What does the whole custom strategy mean for Sophia? In the view of home deep e degree, Sophia's entire customized strategy record may be difficult to reveal in the short term, but it is undeniable that compared with Sophia "from 0 to 1", Sophia "from 1 to N" is more worth looking forward to.

User-driven strategy – a significant increase in customer acquisition efficiency

Whether it is the scene of Sophia's whole custom strategy conference or the relevant reports on Sophia's entire custom strategy, the six words "based on user needs" have been repeatedly mentioned by Sophia and are regarded as the source point of Sophia's entire custom strategy.

According to Sophia's prediction, with the end of the old era of growth driven by real estate, the new incremental era driven by user demand is accelerating. Fueled by the new consumerism characterized by "home, lazy, busy and enjoy", the new consumer demand of integrated design, one-stop shopping, and package solutions have emerged in the terminal, and integrated solutions for multi-category integration have become the mainstream of home consumption, and have driven custom home furnishing companies to open a new round of iterative upgrading.

With the release of the whole customization strategy, under the concept of "category qi, ring excellent, professional enough", Sophia not only defined the connotation of the whole customization for the first time in full dimension, but also put forward 6 "true standards" of the whole customization - full class matching, integrated luxury, the whole family easy to live, space environmental protection, quality selection and tailor-made service.

In the view of home deep e-degree, Sophia's whole customized blockbuster street is another accurate insight into the iteration of custom home consumption upgrades, and it is also a self-revolution of Sophia herself in order to better meet the essential needs of consumers.

In the current situation of channel diversification and traffic fragmentation, whoever is closest to the needs of consumers will win the hearts of consumers and thus win the market. With the accurate card slot in the whole custom outlet, Sophia will significantly improve the efficiency of customer acquisition in the context of the rise of new consumerism.

Compared with the whole house custom track, the whole custom track has not only few participants so far, but also not many brands that have the ability to follow up the whole custom track. For Sophia, in the use of brand advantages, channel advantages and environmental advantages, not only can continue to harvest cabinet custom orders at the terminal, but also in the whole custom track, with a few head brands to share the whole customized cake.

Ecological platform transformation - geometric growth of customer unit price

With the release of Sophia's entire customization strategy, Sophia will transform from a manufacturing enterprise that "focuses on cabinet customization" to a platform-based and ecological enterprise that "takes the design soul, the channel and supply chain as the support, and the terminal service as the starting point".

The whole customization system proposed by Sophia includes 7 core categories: wardrobes, cabinets, wooden doors, wall panels, furniture and household products, floors, home appliances, etc., that is, "wardrobe doors and walls with local electricity" All categories are one-stop matching, so that home consumption is more time-saving, worry-free and cost-saving. Among the 7 core categories, wardrobes, cabinets, wooden doors, wall panels and floors are Sophia brands, and furniture and home appliances are the supply chain brands of Sophia's strategic cooperation. It is worth mentioning that the Sophia cabinet that has just completed the strategic debut, coupled with the previously officially released Sophia wooden door, under the leadership of the entire customized strategy, the multi-category brand cluster with the Sophia brand as the main body has begun to take shape.

While integrating the seven core categories, Sophia also proposed a three-in-one customization system of "integrated research and development, integrated design, and integrated collocation". Sophia's senior management revealed that Sophia's entire customized strategy, from the initial top-level design to the subsequent deepening and landing, will revolve around the idea of full space, full link and all big names. In addition to building a multi-category customization ecology internally, Sophia is also looking for like-minded "specialized" partners across borders, and strategically joins hands with leading brands in many sub-categories such as Shuda, Xilinmen, casarte and so on.

In the view of home deep e degree, with the promotion of Sophia's entire customization strategy, Sophia terminal will gradually transform into a chain retail terminal dominated by design and service, and will usher in a geometric increase in unit price. Referring to the analysis of the research institution, in view of the consumer's cognition of the whole customization and the landing of Sophia's entire customization strategy, in the short term, the short-term ceiling of the unit price of Sophia's entire customized customer will be between 40,000 and 50,000 yuan. Under the logic of "whole customization + base decoration = whole decoration", the long-term ceiling of the unit price of the whole customized guest will be between 150,000 and 200,000 yuan.

From the public data, it can be seen that in the past, the unit price of Sophia, which was the main "cabinet customization expert" and the main wardrobe, was relatively low, and if the whole customization strategy could increase the unit price of Sophia from 13,000 in 2020 to 40,000-50,000 yuan, for Sophia, it not only means a new revenue level, but also means a new stage of development.

In-depth marketing reform - maximization of entry effect and in-depth mining of traffic value

With reference to the analysis of industry insiders and the research reports of relevant securities institutions, Sophia's whole customization is not only a strategic upgrade, but also means a new round of in-depth marketing changes.

From the perspective of the demand pattern of the upstream real estate market for home consumption, rough new houses, hardcover houses, and stock houses, as the main force of home improvement consumption, will dominate the total amount and direction of downstream home demand. With the rise of new consumerism, whether it is in the process of rough house decoration, or hardcover house upgrades, or second-hand house transformation, consumers are increasingly inclined to be able to complete the whole package in one stop.

In the view of Yang Xin, vice president of Sophia, the base decoration + the whole customization = the whole house, and the whole house customization is the best path for the custom home industry to practice the whole house. With the release of the whole custom strategy, Sophia can not only easily realize the front of the entrance, but also can click the card slot rough house, hardcover house, stock house three large decoration demand entrance. At the same time, relying on the whole customization, Sophia can also carry out in-depth cooperation with upstream real estate developers and installation companies in addition to the traditional dealer channels, and then deeply expand emerging channels such as decoration, home improvement, and bag carrying.

In addition to the foreseeable entrance advantages, another expectation of the capital market for Sophia's entire customized strategy is to maximize the value of traffic and increase market share.

With reference to the revenue data of 2020, Sophia's annual order number exceeds 630,000, and behind each order is an accurate home customer. Before the whole custom strategy went out, the link between Sophia and the customer to the custom cabinet products were delivered, but under the overall camera of the whole custom strategy, the future home-related products can be customized and sold, so that Sophia's traffic marginal effect can be maximized, and in turn reduce customer acquisition costs, strengthen the profitability of terminal dealers and headquarters.

From a market share perspective, Sophia's market share in the whole-house industry is less than 3% as of fiscal 2020. The reason for this is, on the one hand, because of the homogenization of customized products, and the lack of sufficient competitive barriers between large brands and small brands; on the other hand, because the head brands expect to use low-price strategies to quickly increase market share, and there is an irreconcilable contradiction between the demands of terminal dealers to maximize profits.

Home deep e degree believes that with the evolution of the market competition pattern, under the strategic blessing of the whole customization, dealers can not only alleviate the operational pressure of the terminal through multi-point profitability and the increase of customer unit price, but also stimulate dealers to take the initiative to obtain customers through multiple channels, thereby achieving a significant increase in market share.

Comments

The opportunities and challenges behind Sophia's whole bespoke strategy

-- The demand is good, and the prospects are promising

Analysts pointed out that with the promotion of Sophia's entire customization strategy, Sophia will truly build a full-life cycle home consumption closed loop including "demand matching and decision generation - personalized life plan customization - offline store/showroom experience - full-process home improvement service and home product purchase - after-sales service system construction", by providing users with a full set of personalized "home solutions", thereby maximizing user conversion and retention, and ultimately promoting Sophia from 1 to N.

But in the process of moving from 1 to N, for Sophia, it will be a long-term process of both opportunities and challenges. Sophia is facing more than the potential market of four trillion yuan, the long logic of customized penetration, the infinite possibility of customer unit value improvement, the objective expectation of the increase of head brand share, and how to promote the transformation of enterprise organizations from the headquarters level, and how to achieve the delivery ability of the whole case through design and supply chain integration, so that Sophia's entire customized strategy can be accelerated at the terminal.

For Sophia, first of all, we must truly solve the problems of integrated research and development, integrated design and integrated collocation, in order to inject core competitiveness into Sophia's entire customization.

Secondly, Sophia must also investigate, summarize and classify the personalized needs of consumers through standardized product operation thinking, and collect them into a common home decoration design module with high-quality supply chain in order to provide consumers with customized solutions that meet the ideal lifestyle. On this basis, through the whole case design, supply chain optimization, flexible production and large-scale supply, we will further realize the "good looking", "easy to use" and "not expensive" expected by users.

At the same time, Sophia must promote the transformation of the corporate organization, form and cultivate a creative and innovative diversified team, in order to provide sufficient support for the landing of Sophia's entire customized strategy.

According to the latest research report disclosed by securities institutions, Sophia is testing the waters of organizational transformation, strengthening the construction of the empowerment team to assist dealers in need of assistance, including how to carry out activities, how to renew customers, how to land, how to deal, how to combine products, etc. At the same time, Sophia has also carried out extensive strategic cooperation with cutting-edge support forces outside the system, gathered all the superior forces to empower the terminal, and tried to win the entire customized track.

The whole customization is not only Sophia's "from 1 to N" growth path, but also the industry's growth path from "1 to N". The high entry threshold of the whole customization is destined to become a sharp weapon for the head brand to grab the cake, and the head brand that embraces the whole customization will be like a fish, absorb more nutrients, and become more and more leafy; while the second- and third-tier brands can only sigh with excitement, in the face of the insurmountable barrier gap, they have to change the direction, accelerate the transformation to the subdivision track, and become the mountain flowers under the big trees.

The whole customization is destined to become the historical coordinates of the development process of China's custom home furnishing industry, and the entire industry will take this as a watershed and enter the new era of "big trees towering in the sky and flowers in the mountains"!

This article originated from Blue Whale Finance