Recently, under the guidance of the Furniture Decoration Chamber of Commerce of the All-China Federation of Industry and Commerce, the "2023 Home Service Industry Insight Report" (hereinafter referred to as the "Report") produced by Master Wan was released. The report makes a judgment on the industry background, development status, subdivision pattern, pain points and development trends from the perspectives of the consumption side, supply side and demand side, which triggers in-depth thinking of the industry.
The correlation with real estate has weakened, and the competition in the industry has intensified
The report shows that since 2023, the home building materials market has been stable and improving, gradually picking up, and the overall trend is on the rise. On the one hand, the home furnishing industry needs to tap more stable new growth points, such as bureau reform, old reform, stock housing renovation, etc.; on the other hand, the industry competition is more intense, enterprises want to seek a larger market, must walk independently, play differentiation, attract more customers.
Based on the advantages of large scale and supply chain, home furnishing giants can make profits on the basis of guaranteed costs. However, for small and medium-sized home furnishing enterprises, if they want to follow up the low-price strategy of the giants, it means that they have to sacrifice certain product quality and service quality to make up for profit margins, or directly transfer the profits due to the enterprise.
In this way, customers who rely on reducing quality and sacrificing profits will continue to decline due to poor consumer experience, and the cost of customer acquisition will increase in the future, making it more difficult to attract traffic, forming a vicious circle.
The report pointed out that in the face of fierce competition in the industry, small and medium-sized enterprises must not fight for price and sacrifice service quality. It should be based on the perspective of consumers, ensure the consumer experience from the whole transaction process, and rely on differentiated quality services to win word of mouth and repeat customers.
The concept of consumption changes, and the service experience wins
The ultimate purpose of the change and adjustment of the marketing strategy of the enterprise is to attract customers, occupy the market and improve profits. However, with the changes and development of the times, the span of consumer groups has increased, and consumers have become more cautious in their purchase decisions.
According to the report, in 2023, consumers will be more rational about shopping festival promotions, with more than 7 percent of users choosing to buy on demand. Moreover, large furniture is not a high-frequency consumption, and consumers do not have a strong perception of fine-tuning the price of enterprises, and pay more attention to brand value, efficacy value, quality value and service guarantee when purchasing products.
In addition, in recent years, the home consumption process has become more and more transparent, and consumers are increasingly disgusted with the "routine" of home furnishing companies to attract traffic through low-cost packages and increase the price of value-added items, and the "price war" has not brought stable revenue growth. It can be seen that price is not the only factor affecting the purchase, but the experience and service are fundamental. Rather than launching low-priced packages with low profits and easy to bring negative word-of-mouth, it is better to let consumers choose for themselves.
According to the latest data from the report, the purchase channels of home users have changed, with more than 4 percent of users choosing online channels to buy because of more transparent prices, more time-saving experiences and more comprehensive protection. The timeliness, professionalism and safety of the service are the main decision-making factors for consumers to choose online home services.
The home furnishing industry has the natural attributes of emphasizing decision-making and experience, and now from the channel era to the service era, the main decision-making factor affecting user purchase is obviously service experience.
Optimize the service model and effectively control the cost
In recent years, the home furnishing industry has accelerated its online transformation, and home furnishing companies of different sizes are laying out omni-channel construction.
According to the report, due to the non-standard, large, fragile and other attributes of household products, consumers will pay special attention to whether merchants provide perfect and comprehensive after-sales service when shopping online to ensure that "what you buy is what you get". Therefore, building a sound service network covering the whole country has become a mandatory requirement for every home furnishing enterprise to participate in the competition.
Many leading brands have set up offices in major cities to cultivate and build independent self-operated master teams. To a certain extent, this model meets the after-sales needs of consumers in a limited area, and at the same time brings relatively high labor costs, insufficient supply capacity in the peak season, and high pressure to support people in the off-season, which is easy to cause problems such as low service efficiency, and is not suitable for small and medium-sized e-commerce enterprises based on online channels.
Therefore, the third-party professional service platform as the preferred service solution has gradually become the mainstream of the home furnishing industry. Among the many service models, the crowdsourcing service model has the advantages of coverage and efficiency, and can be described as the most universal and affordable solution in the current development cycle.
The report proposes that the attributes of the service industry determine that this is an industry that relies on people, and the final service quality and service effect are basically determined by people. Both service providers and service experiencers are highly subjective. As the most intuitive and profound part of home consumption perception, service delivery is directly linked to the brand image. The image of the service provider determines the consumer's first impression of the brand. Therefore, in the selection of cooperation platforms, home furnishing companies tend to ensure comprehensive, safe transactions, and high-quality service supply platforms.
According to the report, Master Wan is the only official IKEA recommendation service platform, and the NPS customer net promoter score is as high as 92%. As a benchmark platform for the home service industry, Master Wan selects 2.6 million professional masters, accurately reaching 99.8% of the country's urban districts and counties, covering furniture, home appliances, sanitary ware, smart homes, lamps, whole house customization and other household products, and continues to output high-quality service supply for the industry.
At the same time, as a digital representative of the home service track, Master Wan's self-developed intelligent push system relies on LBS, big data, cloud computing and AI technology to deeply analyze the portraits of users and masters, and accurately screen and push them to professional home furnishing masters with a double match of "skills + positioning" according to order needs.
Based on the intelligent push order algorithm, the distance and time cost before the master's service are greatly reduced, effectively improving the service efficiency. On the one hand, the master can reasonably arrange the working hours according to the demand positioning and take orders in an orderly manner, and on the other hand, aside from the pre-service factors, the master's quotation is more pure, so that users can enjoy efficient and cost-effective fulfillment services.
The report pointed out that in order to break the "low price curse" of the industry, enterprises need to find ways to increase revenue while increasing prices, and more industry giants need to stand up and set an example.
On the product side, it is necessary to break the traditional pattern, improve the added value of products, and let consumers feel the value of "you get what you pay for"; on the production side, it is necessary to reduce costs and increase efficiency through digital upgrading, and improve the cost advantage of products; on the channel side, it is necessary to continuously improve the service level, less routines, and more sincerity.
In order for home furnishing companies to win the market, the price of the volume is not as good as the volume service. Establish trust with consumers through brand building, gain a firm foothold in the market by relying on high-quality products, create a long-tail effect of the brand by relying on differentiated services, shorten the user decision-making cycle with service experience, and create a "consumer brand". What is certain is that no matter how the times change, improving the service experience will be an eternal issue after all.