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Companies need some new ideas for "wintering out"
Written by/Meng Huiyuan Star Evening
Editor/Lee Ha-lin
The shouts that exist in the memories of "post-80s" and "post-90s" have gradually faded away in time. In the golden period of nearly two decades of development, the home appliance industry has developed rapidly. Today, the penetration rate of home appliances is approaching the bottleneck, the incremental demand dividend is nearing the end, and the industry has changed from an incremental market to a stock market.
Affected by this, the release of replacement demand has become the main problem of insufficient market demand and weak growth of home appliances. At present, in the face of the continuous downturn in market demand, enterprises need some new ideas for "wintering".
On March 10, at the 2022 Suning Tesco Home Improvement Industry Spring Conference held in Nanjing, a new point of view was born: under the era of houli, the hard core strength combined by digging deep into user needs, demand-oriented selection, home improvement pre-interception, scenario-based shopping experience, and professional integrated services is the "market heavy weapon".
In the face of the upgrading and redevelopment of demand, e-commerce platforms have gone all out, short video platforms have accelerated penetration, life platforms have been eyeing the tiger, and enterprises have selected their own stores to open stores... How home appliance companies can exert their unique value to cope with the fierce competition is still a top priority at present.
The "All Things to the Soviet Union, New Electricity" conference conveyed a new trend in the industry
After the outbreak of the epidemic in 2020 and the impact of normalization, the consumer confidence of Chinese consumers has been affected to varying degrees. Despite the recovery of the economy and the gradual recovery of consumption, consumers' spending on consumer durables has weakened significantly, and higher requirements have been put forward for their product design and supporting services.
Xiao Li, a "post-90s" girl in Dalian, finally got her new house at the end of 2021. In order to decorate the small home into her favorite look, she did a lot of preparatory work on various social platforms, and finally decided to use embedded home appliances and whole house fresh air system to save space as much as possible and make the whole home decoration appearance full of design.
However, the tedious comparison between home appliance categories and procurement, installation and other issues still make her have no clue, "especially hope that the merchant can provide a complete set of packaging solutions, control the entire link, so that I can save time and worry a lot." With this idea, Xiao Li put forward requirements for Suning Tesco's customer service when consulting related products.
He Wen, the "post-85" who has just been promoted to the second-born father, has different needs from Xiao Li. After years of hard work, I finally bought a house in Nanjing, but the arrival of the second-born baby not only made the space a little cramped, but also the functions of many home appliances were no longer enough. The refrigerator capacity began to be urgent, washing clothes for several days are difficult to dry, under various difficulties, He Wen decided to create a smart balcony, and add a special washing machine for mothers and babies. I also wanted a modern kitchen with built-in appliances that would disinfect, wash dishes, and more.
However, busy work and family chores are destined to make it difficult for this dual-career family to have the conditions for major changes, so suning Tesco proposed a product portfolio purchase plan, hoping to achieve partial light reform.
"The house is rented, life is your own" The classic "chicken soup" is a life guide for many migrant workers who are wandering away. Zhang Song, a "post-95" who graduated not long ago, is currently renting a 40-square-meter one-bedroom apartment in Shanghai and becoming a "Shanghai drifter".
But looking at the old furniture and the style of the tube building in the last century, Zhang Song felt that the quality of life had seriously declined. After communicating with the landlord and obtaining consent, Zhang Song was granted permission to renovate, but the premise was not to destroy the house pattern. Through rough calculations, Zhang Song decided to take out 10,000 yuan of savings to replace home appliances and home improvement supplies. Therefore, he proposed to Suning Tesco the need to replace the old with the new, hoping to create a new living space with 10,000 yuan.
These three different life scenes spanning the north and south show that the current consumer demand has changed from the previous functional type to the enjoyment type, and from the subsistence type to the quality type. In the face of demand, Suning Tesco has achieved "more accurate demand, more comprehensive service and more surprising experience" by formulating relevant plans and procurement plans, controlling product entry and installation, etc.
As Chen Fengbo, president of Suning Tesco's major appliance business line, concluded at the meeting, "The high-end experience is not only to provide high-end products, but also to match more high-end services to users." The price war can not leverage more demand, but to build a super cost-effective product between the platform and the supplier. Self-operated good service is the basic disk, and in the future, differentiated services should be used to meet more personalized needs of users. ”
Chen Fengbo, president of Suning Tesco's major appliance industry line
Under the new cycle, the demand, products, competition and channels of China's home appliance market are undergoing tremendous changes, the market demand is constantly stratified and the formation of a characteristic circle economy, product set, combination, through the brand combination and product matrix to cope with the specific needs of different circles. Competition is becoming increasingly fierce, head brands are accelerating the first market, price wars are completely transformed into value wars, channels are diversified and fragmented, and emerging channels are gradually expanding their influence. Overall, the home appliance retail market has shown new ecological characteristics under the new cycle.
However, the reduction of traffic dividends does not mean that the development of e-commerce has reached the ceiling, but has transitioned from the stage of barbarism and extensiveness to the era of deep operation of consumers. Improving quality, adjusting the structure, doing a good job in product selection and new product delivery, improving overall services, and expanding new development space are also the solutions that Suning Tesco has come up with at the moment.
According to Guo Liang, president of Suning Tesco Kitchen and Bathroom Home Improvement, Suning Tesco 'Scene Purchase' is accessing the service butler, providing users with full-link services from product consultation to set purchase solutions, improving user experience and scene transactions.
"This strategic signing with Suning Tesco is a service practice that integrates the whole scene of home appliances and home improvement." Chen Hang, a representative of Kujiale, said that since the two teams docked, they have been fully connected in terms of interface, technology, data, content and designer resources, "Equipped with The technology platform of Kujiale, Suning Tesco's 'scene purchase' scheme has been able to meet the home improvement set purchase and custom matching personalized scene." Discussions are now focused on improving the consumer experience. ”
Suning Tesco "scene purchase" operation interface
At the conference, Suning Tesco and Cool Jiale completed the strategic signing, and the two sides will jointly create a professional scene shopping guide platform based on the strategy of "Suning Tesco home improvement integration", and make efforts to buy scenes and set purchases. At present, the two sides have completed the construction of online model rooms and product libraries, and the "scene purchase" port of Suning Tesco's main station has begun trial operation.
How Suning Tesco leads the era of "product is king"
It is not difficult to see from the dynamics of the industry that the domestic home appliance market has ushered in a cyclical inflection point - home appliances are no longer a simple post-cyclical real estate market, but a weak cyclical market under the resonance of consumption and real estate.
In other words, with the end of the real estate cycle, the household penetration rate of home appliances has slowed down, the incremental demand dividend has ended, and the industry demand has completely entered a new cycle of stock replacement. Under such a new cycle, the slow release of replacement demand has become the main problem of insufficient market demand and weak growth of home appliances.
After all, household products are typical durable consumer goods, the general life cycle is 8 to 10 years, belongs to low-frequency consumer goods, its own replacement cycle is very long, coupled with the deep impact of the epidemic in the past two years, further restricting the release of consumer replacement needs. This point is more intuitive with the data: even if the retail sales of China's home appliance market in 2021 will be about 760.3 billion yuan, an increase of 3.6% over 2020, it has not yet reached the pre-epidemic level, and it is still down 7.4 percentage points compared with the same period in 2019.
In the period of stock competition with weak market demand and insufficient consumer confidence, those home appliances that tend to homogenize their design and technology, as well as traditional forms of promotion, have been unable to sting consumers and pull demand release.
In times of trouble, think differently. As a result, the business logic of China's home appliance market has changed, that is, from the past "channel is king" to today's "product is king". Only through product innovation and functional iteration, continuously enhance product value, and create greater consumer value in the limited demand space, can we gain the favor of consumers.
Data source: Aowei Cloud Network (AVC) research collation
At the same time, the channel logic of China's home appliance market has also undergone new changes, that is, from "diversification of home appliance channels" to "channel upgrading and integration of the pan-home industry". The current competition in the home appliance market has long been no longer the initial downstream channel-led competition form, and the channel has gradually moved from the downstream of demand to the upstream of demand, and the channel has accelerated integration and upgrading.
Integrating these two changes together is actually a set-up sales solution. In the face of the turbulent home appliance consumer market, this is also a good solution to the problem, Suning Tesco and the "WE Home Alliance" jointly established by the top 100 brands is the market practice of the program.
The brand and the platform cooperate, through a complete set of sales solutions, first of all, the distance between the terminal personnel and the user is narrowed, the price sensitivity of consumers to the unit price is reduced from the perspective of the overall plan, and more attention is paid to the overall experience and program presentation, while improving the overall unit price and highlighting the service value of the channel. Of course, this also means that higher requirements will be put forward for home appliance companies and home appliance product design.
Of course, it is not enough to focus on the hedging sales plan, or take Suning Tesco and its cooperative brands as a sample, let's see what aspects we should start from to break the ice.
First, aim at the "scenario" of the development of the home appliance industry, and keep up with the general trend of sustainable development in the future. Its essence is to use the element of the scene to trigger and connect the needs of customers, and the competition between companies/channels is who can stimulate the purchase needs of this potential consumer.
Through years of running-in with home appliance brands, Suning Tesco has realized a real long-chain cooperation model, built its own capabilities in an all-round way, and under the premise of ensuring product quality and pricing, the product design difference positioning of the supply chain system, the timely and efficient production and supply, the precise marketing reach, the efficient and convenient distribution and transportation, and the sound and effective after-sales service are the core advantages of the platform and the brand.
Second, in order to adjust the change of user consumption preferences from "subsistence consumption" that meets basic functions to "quality consumption". In order to adapt to the new preferences of users' consumption, high-end home appliances put forward higher requirements for consumer experience and services, so more and more brands are more inclined to sell high-end product resources offline.
Through the rapid development of these years, Suning Tesco has realized the layout of new retail models in online and offline omni-channel, stores, department stores and convenience stores, each format takes Suning Tesco smart retail as the center, professional collaboration and resource integration and sharing, and realizes comprehensive traffic realization through smart retail, which is perfectly compatible with the new needs of users and the new tendency of high-end products.
Third, aim at the huge space of three trillion yuan of home improvement channels, and penetrate the family consumption scene dominated by home appliances and home improvement. As consumers' needs for personalization, scenario-based, whole-house customization, and improving space utilization become more and more clear, and the intersection of home appliances and home furnishings is becoming more and more close, the dividing line between the two is becoming more blurred, which promotes the integrated supporting sales of home appliances and home furnishings to gradually become the mainstream product form.
Therefore, cooperation with home improvement companies and design companies to accelerate the layout of building materials channels has become an important strategy for home appliance companies and home appliance advantage platforms. From the latest positioning announced by Suning Tesco, that is, to build Suning Tesco into a vertical professional home appliance 3C preferred consumption platform with family life consumption as the core, it can also be seen in its determination to operate home appliances and home improvement.
Fourth, in the face of the rising cost of obtaining traffic, the online market has entered the era of in-depth operation of users. That is to say, if you want to turn the purchasing user into a loyal user, the most essential way is to strengthen the post-maintenance of the purchasing customer and keep it in a state of revitalization.
In terms of after-sales service, in addition to providing routine daily maintenance, Suning Tesco is committed to bringing "value-added" returns to users for a long time. For example, the recent special "Peace of Mind 315" plan for the protection of 315 consumer rights and interests has issued 15 guarantee plans from three aspects: timely, professional and transparent, with such a service attitude, the renewal rate of Suning Tesco service merchants has remained at a high level of 95% over the years, and the new merchants have maintained more than 50% growth.
Aowei Cloud Network (AVC) research collation
Fifth, after the "double cycle" prelude has been rapidly opened, the development potential of the sinking market is still very large. From the official implementation of the home appliance to the countryside policy in 2008, and the products sold during the "energy-saving and benefiting the people" and "old-for-new" policy periods, it has reached the safe service life of household appliances, forming a huge replacement purchase base.
Suning is the first in the industry to break down category barriers
As the "old for new" service of Suning Tesco Moat, the joint brand has established a standard for replacing old appliances with new ones, providing services such as old machine deduction price difference for new, major appliances receiving old and sending new one-time door-to-door services, coupled with the strong performance of 10,000 retail cloud stores covering the whole country, Suning Tesco channel force will undoubtedly glow with new competitiveness in the sinking market of the new line.
It is not difficult to see from the above that in the current era of "product is king", the integrated platform represented by Suning Tesco is trying to bring a new paradigm of development to the home appliance industry.
From the strong combination of home appliances and home improvement to the win-win situation of users, brands and platforms
Responding to the still weak home appliance sales market with a set-up sales plan, this bold move that has just started in China, in fact, has many years of successful operation experience overseas. Relevant data show that in developed countries in Europe and the United States, more than 30% of households choose to buy home appliances in sets.
Moreover, whether it is the home appliance industry or the home furnishing industry, itself is very suitable for making integrated changes: home appliance companies hope to rely on the home business, strengthen service attributes, enhance the stickiness with enterprises, and get out of the "headwind" of the current market; while home furnishing companies hope to rely on home appliance business to hedge the dead cycle of sluggish home improvement demand caused by the sluggish real estate market.
More importantly, for consumers, brand owners and home appliance platforms, this combination of home appliances and home appliances is an absolute win-win-win move.
From the perspective of consumers, it is conducive to the coordination and unification of home appliances and home improvement styles, which is more convenient and labor-saving in terms of delivery and after-sales than single products, and can also enjoy the overall packaging discount in terms of price;
From the perspective of brand owners, set products can increase the overall unit price, avoid consumer outflow, and help drainage between strong and weak categories;
From the perspective of home appliance platform, the future cooperation between home appliances and home building materials will be more and more in-depth, and the high-end, customized, intelligent and complete sets of home appliance products will be easier to evolve into new product forms in the building materials channel to achieve sales.
Taking Casarte as an example, according to Haier Zhijia's 2021 semi-annual report, Haier's various industries have achieved high growth results. Among them, the transformation of scene brands and ecological brands has become an important reason for Haier Zhijia to create new increment space. This high growth is also reflected in the three-winged bird Haier Zhijia Shanghai Experience Center 001 under the blessing of the scene brand strategy, which has reached 312 million in the two years since its opening, under the support of scene and ecology, of which home appliance sales are 140 million, the rest of the home sales are 80.78 million, and the project sales are 87.23 million, accounting for more than half of the scene.
It can be seen that after the sales of home appliances enter the scene, the key role played by the set of home appliance products in it. After all, as the market enters the stock period, when the industry and enterprises encounter bottlenecks in scale growth, the model of single product sales will only pull consumers into the vortex of price comparison, and the set of sales solutions can avoid this problem very well.
However, as mentioned above, the sales of set-up products also put forward higher requirements for home appliance companies and home appliance product design. For example, for brand owners, there must be cross-category design and production capacity, otherwise the set is just a beautiful plan and vision; at the same time, the enterprise should have the ability to promote marketing in all categories, especially the terminal construction and promotion capabilities; finally, the scene and category in the set design have been fully integrated, so the appearance, function, experience, and interconnection between the product put forward higher requirements.
In this process, home appliance platforms like Suning Tesco have once again played an important role in connecting upstream and downstream. When home appliance enterprises and sales channels change from single home appliance products to full-process smart scenario solutions, it is crucial to integrate resources such as e-commerce, micro-businesses, and physical stores to improve operational efficiency and service levels.
Thanks to the integrated operation of the platform online and offline, traditional stores can not only continue to play the advantages of offline sales of real-time, convenient and good service, but also obtain traffic from online and promote sales growth; on the contrary, offline physical stores help users experience products and promote their consumption after the experience of online channels.
At the same time, through the integration of online and offline operations, it can not only create private domain traffic for stores, continue to operate in depth, fully occupy the fragmented consumption scenes of consumers, but also use online stores to break the restrictions on space, so that store operations can radiate to a longer range, reach more consumer groups, and achieve shuanggui parallelism, coordinated development and high-frequency docking with customers.
It is foreseeable that the set of systems must be a new and can not step on the battlefield of home appliance sales, and Suning Tesco, which has made sufficient preparations, should not be underestimated.
END
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