Most durable goods are facing the dilemma of low category attention, serious homogenization competition, and lack of mental leading brands, where is the key to solving the problem?
Wen | Jingxun
Edited | Evan
On New Year's Day 2022, a building materials market in Xiaoshan, Hangzhou, ushered in the peak sales season.
At five o'clock in the afternoon, the flow of people began to be sparse, the market stores closed one after another, And Luo Sheng (pseudonym), as the regional sales manager of a water purifier brand, counted the single-day turnover of this store point.
The situation is not optimistic.
"The impact of the epidemic is quite large, the customer flow in the store is less, the competition in the market is more intense, and every day I open my eyes and think about how to complete the sales performance assigned today." Rashom said.
Not only Luo Sheng alone, in the entire building materials market, the anxiety of domestic water purifier brands is spreading to each other. "Looking at the data, the entire industry is now declining, even negative growth. Approaching the New Year, it seems that it is still far from the performance target. Luo Sheng said.
Next door to the water purifier store he inspected, Xu You (pseudonym), the regional sales manager of a domestic brand, was particularly relaxed, and the store's shopping guide dared to "hard and hard" with international big names to convert high-end customers.
A year and a half ago, Xu You faced the same anxiety, thinking about how to increase the revenue of the store and how to compete with other brands. Xu You's brand is Angel, and the overall revenue growth in 2021 is more than 30%, which is extremely prominent in the water purifier industry.
What made Angel achieve qualitative change in a year and a half?
Silence: A durable goods market that is "hosted" by big names
Rashom's anxiety is a microcosm of the entire durable goods market.
Durable goods, usually those that have a long service life and can be used multiple times. Most durable goods categories are born with "shackles" - high customer order prices, long decision-making cycles, low purchase frequency, and high after-sales requirements. Affected by life and consumption habits, in addition to cars, common home appliances and other "large pieces" that the public is accustomed to, domestic consumers actually pay little attention to most durable goods.
Water purifiers are one of them. The data shows that the current penetration rate of water purifiers in the domestic market is not more than 20%, while the penetration rate in developed countries generally exceeds 80%, and even reaches 90% in European and American countries.
Since 2010, as people's requirements for quality of life have become higher and higher, the number of players in the water purifier industry has soared, and it has even been called "the last cake of China's home appliance industry in the 21st century". According to incomplete statistics from China Quality News Network, in 2017, there were more than 5,000 domestic water purifier brands, and the products were tens of thousands, and "homogenization competition" became a weak underbelly that was difficult to overcome in the water purifier industry. The most immediate consequence of this is that the market and consumers have a vague impression of the products produced by enterprises and their brands, and sales are difficult.
"Users don't know before they need it, and when they want to buy, they will find that there are too many choices, and the selling points are similar," Xu You said. Water purifiers are related to domestic water can not cope with things, when customers generate demand into the offline channels, they will always first step into the domestic and foreign home appliance giant brand stores.
This is also a long-term dilemma faced by the domestic durable goods industry - in addition to some categories with expert brands to stand out, most durable goods categories are still in a state of being "managed" by big home appliance brands such as Midea, Haier, AO Smith and so on.
Low category attention, serious homogenization competition, and lack of mental leading brands - such a competitive situation has become the core source of pressure on sales and channel layers such as Luo Sheng and Xu You.
Even Angel, a well-known domestic brand where Xu You is located, was also in the embarrassing situation of being "hosted" by a big name.
Among the many water purifier brands, Angel's corporate foundation is quite solid. In the 1990s, Angel took the lead in developing the first water purifier in China, and since 1995, it has ranked first in the clean drinking water industry for 11 consecutive years, and has been exported to 65 countries around the world. At the level of technology accumulation, Angel is almost the ceiling of domestic water purifier enterprises: it has accumulated 768 domestic and foreign patents, participated in the formulation of 14 national water quality standards, and independently developed long-term reverse osmosis filter elements to break the monopoly of foreign technology.
Angel long-lasting reverse osmosis filter
Even with a thick history and technical precipitation, it has not brought angel continuous glory. Angel's overall revenue is also difficult to exceed the two billion mark, which is not in line with the estimated capacity of 100 billion yuan in the water purifier market.
How do you win the competition? Angel turned to top international consulting firms for help. Unfortunately, they also failed to help Angel find a cure for lifting the "curse". By chance, Angel found Junzhi Strategic Consulting.
Breaking the game: "Build a water purifier like a technology product"
As a prominent representative of the local strategic consulting field, Junzhi has helped 5 well-known enterprises such as Feihe, Bosideng and Yadi achieve tens of billions of revenues in recent years with a systematic strategy style different from that of foreign-funded consulting companies.
In June 2020, Angel and Junzhi officially cooperated to start the journey of strategic upgrading.
Junzhi from the industry trends, competitive environment, business operations, customer cognition of the four dimensions, after several months of research and research, Junzhi for Angel to find its "one" - the brand unique differentiation value, set its strategic direction as "leading sales of high-end water purification experts".
So how should the all-important campaign be designed? Junzhi Innovation broke the situation, put forward the strategy of "building water purifiers like technology products", and planned a unique battle for the enterprise - "science and technology leading battle".
Why is it called "leading"?
On the one hand, it is Angel's own "leading" in technology and manufacturing strength. Angel has been deeply engaged in the water purification industry for 34 years, established the world's largest water purification industrial park, has a medical-grade sterile production line, and the annual investment in research and development costs are ahead of the industry; its core long-term reverse osmosis filtration technology, breaking the monopoly of foreign technology in one fell swoop, is the first "Chinese core" in the real sense of the water purification industry, and its strength far exceeds many foreign brands.
Angel is the world's largest water purification industrial park
On the other hand, it is the "leading" in Junzhi's strategic thinking. In the face of the low attention of the durable goods industry and the serious homogenization competition, obtaining the attention of the market and consumers is the key point of the campaign design.
Through the thinking of upgrading dimension, Junzhi will leap angel's "small household appliance category" to a higher degree of attention to the "electronic technology category", depart from the traditional durable goods small household appliance brand building paradigm, and come to a more imaginative display space, so as to reduce the dimension to gain a lead. This is completely different from the customary paradigm of the water purifier industry to make products, lay channels, and fight price wars, and it is also a bold innovation that Angel has not tried before.
Before the strategic report, Junzhi's strategic experts pulled Angel executives into the building materials market as consumers to conduct on-site research. Angel executives were surprised to find that "everyone's door decoration, store furnishings, shopping guide skills are basically the same, we think we are very unique, but from the customer's point of view, in fact, they are homogeneous, we have no obvious difference in the eyes of customers." ”
Entrepreneurs who have experienced the front-line perspective can better imagine the changes that the "technology leading battle" may usher in, and the two sides will soon reach a consensus on the "technology leading war". In order to ensure the realization of the proposition of "science and technology", Junzhi went deep into the capillaries of Angel's product end, channel end, transmission end, etc., and accompanied the landing throughout the process.
The first step in the science and technology war is to upgrade the product and consolidate the attributes of science and technology.
Junzhi suggests innovating product forms and strengthening product technologies. Angel iterated on the traditional white-based, "three-legged" products, and hired a professional design team to adjust the overall product design and color matching. At the same time, Angel and China Aerospace further deepened cooperation, jointly established the first domestic aerospace water purification joint laboratory, brought space-grade water purification to public life, and released a new black technology product - aerospace joint A7 Pro large-water water purifier.
Angel A7 Pro large water purifier
After the comprehensive upgrade, Angel A7 series products solve the pain points such as poor water purification effect at the user end, short filter time, small water output, and unchanged integrated installation, and rely on the appearance and technology to go out of the circle together. According to the statistics of the offline market data of Zhongyikang, from January to June 2021, Angel A7 large water volume series water purifier won the double material champion of single product sales volume and sales in the price range of more than 4500 yuan.
Synchronous progress is the upgrade of the channel side and the propagation end.
The change on the channel side spreads throughout the store system. Angel has more than 1,000 stores nationwide. Previously, most of the stores were about 60 square meters in size, dimly lit, old in display, and the age of shopping guides was mostly in their fifties and sixties, which was obviously inconsistent with the attributes of technology products and high-end experts.
Angel's old store real view
Junzhi suggested that Angel invite a professional design team to upgrade the store, and guide the upgrading of display materials and words. Walking into the current Angel store, you will be surprised that this store stands out in the building materials market, with a high sense of technology decoration style, with black technology sense of furnishing products, and the surrounding counterparts have an illusion of "dimensional wall breaking".
Real view of Angel's new store
At the same time, the communication end actions such as comprehensively combing the brand communication painting and inviting Gong Li as a spokesperson are also constantly advancing, with communication channels such as CCTV, local satellite TV and fashion network media.
What really "blew" Angel was a press conference in March 2021.
This is the industry's first live AR conference, at which Angel announced its own unique two water purification black technology long-term reverse osmosis filter 2.0 version and nanocrystal whisker bacteriostatic technology, with the characteristics of aerospace science and technology civilianization released aerospace black technology water purifier A7Pro, causing a sensation in the industry.
Angel AR press conference site
This is a key node of the whole battle, from the product side to the channel end of the image upgrade, with such as flash mobs, stars to the store and other marketing end of the innovation activities, the systematic play of the brand mentality accumulated in this itself is full of science and technology in the conference concentrated detonation, the assembly of the company's internal operation of all aspects of the force out of a hole, the technology label firmly attached to Angel.
The final result is extremely out of the loop.
Investors who pay attention to technology companies see the possibility of water purifiers as a large health pan-field technology product; there are several head dealers of competitors who visit angel stores after this conference and immediately choose to negotiate cooperation with Angel.
Peer feedback was particularly strong. At the scene of a home expo, a foreign friend brand chose not to go after hearing that Angel wanted to participate in the case of having paid a deposit, and the organizer asked the reason, which was that it was worried about leading customers to the home expo but was converted by Angel.
From the data point of view, this "technology leading battle" Junzhi and Angel have won the initial victory. The data shows that the compound growth rate of the entire water purifier industry in the past three years (2017-2020) is -1%. After one year of complete service in 2021, Angel's performance increased by more than 30%, and the total revenue exceeded 2 billion for the first time.
In addition, the proportion of its high-end product line business increased from 42.9% to 50%, and the overall market ranking climbed from fourth to second, and domestic brands ranked first.
As xu you are in the store described above, although there is no shortage of international brands and high-end brands on the side, the shopping guide has the courage to talk about the brand with the customer, "Before the sale of goods will only talk about the product, now know that in fact, customers are more important to see the brand, now many people know us, plus our current materials and products, itself is particularly impressive."
Enlightenment: Why does the "Hidden Champion" stand in front of the stage?
A double dance made Angel, the "hidden champion", stand in front of the stage. This is the crystallization of Junzhi's strategic guidance and key campaign design and Angel's own desire for change and efficient execution.
A strategy formulated only from the macro level does not touch the real body temperature of a company. As Angel executives frankly said: "In the past 33 years, Angel has cooperated with a number of international consulting institutions, but Junzhi still gave me a great inspiration to open my horizons, formulate a good competitive strategy, pry my mind, see the market pattern, and win." ”
Angel is a microcosm of the durable goods industry, so what experience can consumer resistant companies gain from it?
Junzhi strategy experts pointed out that enterprises often fall into two major thinking traps:
First, internal thinking, enterprises often feel that as long as the product is better and the price is lower than that of competitors, scale growth can be achieved;
The second is benchmarking thinking, accustomed to referring to leaders and forerunners, and more imitation than innovation.
In Junzhi's view, durable goods companies that can persist in the market pattern and grow generally have some common characteristics:
The field of view is from the inside out. The "two eyes" of the enterprise should focus on consumers and competition, and look at corporate strategy and operations from an external perspective.
From tangible to intangible. From operation-driven to cognitive-driven, mobilizing customers' feelings about the brand is the way to win.
Get rid of homogeneous competition. From benchmarking to nothing, benchmarking is only infinitely close and can not be surpassed, out of nothing is from the consumer side insight into the new machine, to achieve curve overtaking.
From looking at the problem to looking at the highlights. Businesses need to focus more on how to chase the bright spots, rather than falling into the "perfect trap".
This is the era of Chinese manufacturing towards Chinese brands, and it is also the era of local brands catching up with foreign brands. The former, such as Angel, is successful because it has won the favor of consumers; the latter, like Junzhi, has gained because it understands the Chinese market and Chinese enterprises better. Behind the worldwide reputation of "Made in China", there are many "industry champions" like Angel who are in charge of the cattle ear in the sub-category, but in the public vision, although the company has achieved the first share of the industry, but the user still will not buy it, which is not only a product or industry problem, but the lack of "strategic vision" and "brand highlighting" of the enterprise. Some people are hidden behind the scenes, fluctuating in the tide of the times, or the big waves of sand and sand have begun to see gold, or the iron that has not been sold; there are also people who come to the front of the stage, dressed in fresh clothes and angry horses, and enjoy the glory of belonging to a champion. Hidden champions, it's time to think about how you stand in front of the stage.