"Grasp the brand DNA"
On March 19, the 2024 (9th) China Cosmetics Trend Conference, hosted by Qingyan, Qingyan Intelligence and CHAILEEDO, and jointly supported by Meidd, was held in Hangzhou, with the theme of "offline reconstruction". At the meeting, Wu Yifan, general manager of Yangshengtang Cosmetics, delivered a keynote speech on "How to Win-win with Cutting-edge Brands Offline".
The following is a transcript of the speech:
Greetings distinguished guests.
Yangshengtang is actually a relatively new brand in the cosmetics industry, although it has grown rapidly in the past two years, it is still on the way to start. This time, I will mainly share what Yangshengtang has been doing in the past two years, and I hope I can give you some reference.
China is the country with the highest proportion of online beauty sales in the world, and the proportion of domestic brands on the Internet far exceeds that of international brands. So, why are more and more domestic brands choosing to start with the Internet?
The reason is very simple: because a lot of people think that offline can't be done.
On the one hand, the channels of large shopping malls have long been occupied by international brands, and on the other hand, the unit price of brands cannot support counter sales. Therefore, when domestic brands are unable to support the high unit price of customers in large shopping malls, they can only choose to start from CS channels or collection stores, and first increase sales and let enterprises survive. However, it should be noted that sales volume is not equal to brand power, and if a brand does not have brand power, sales volume is like a house that will fall when it is said.
At this time, the bonus period brought by the rise of the Internet has made many emerging brands see the opportunity and begin to build brands with the Internet as a starting point. However, with the tightening of Internet policies, the network business environment will definitely advance to the stage of strict management and complete laws and regulations, the dividends of the Internet will become less and less, and the brand power will become more and more important. At this time, the brand needs to figure out: where is the brand power, and where is the larger market?
In Yangshengtang's view, when we make a brand, we need to think first: who I am, what I have, and where do I start.
In fact, each brand seems to be on the same track, but each has a different brand DNA. For example, some brands may be better at marketing, some may be more focused on products, and some may have exclusive experience in user development. Therefore, it is very important to choose that path at the beginning of brand development. Therefore, for emerging brands, it is important to first identify their strengths.
At the beginning of its development, Yangshengtang was very clear about its advantages. In fact, when Yangshengtang was just starting, many people mentioned that they could not start from the CS channel, but could first enter the CS channel from the department store channel. However, for Yangshengtang, CS is an advantageous channel, because the brand has the ability to ensure the stability of the price and the stability of the supply chain, as well as the ability to ensure the unity of online and offline.
However, behind the "ability" also means that there is a huge price to pay, if there is no strong group behind the brand, it may never dare to put "price control, channel control" in the initial stage of the brand. This is why each group and each brand has its own DNA, and choosing a development path that suits you is the most important thing to start offline operations.
It should be noted that no matter what channel you start from, offline will eventually face the same group of consumers, and brands will encounter an inevitable problem next: how can online and offline work together?
This is undoubtedly one of the most headaches for brands. Because the cost structure of offline and online is different, if you choose online with a higher price, it is easy to cause online consumer dissatisfaction, and if you choose offline channels with higher prices, then offline stores are not willing to establish cooperation. It can be seen that online and offline are actually an inseparable community of interests.
In the past two years, we have also thought of many ways, such as separating online and offline product lines, but in the long run, this strategy will inevitably bring confusion in product positioning cognition, and we hope that online and offline consumers can establish a unified perception and influence on the Yangshengtang brand. So, we need to think about what is the difference between online and offline, where does offline revenue come from, and what changes have occurred in offline business?
In fact, when cosmetics first entered China, because the Internet had not yet emerged, many European and American brands regarded shopping malls as an important offline traffic field. At that time, the best shopping mall, the best location, and the best decoration could allow the brand to gain a considerable amount of customers. But nowadays, shopping malls have gradually changed from a traffic field to a stock field, and from a sales field to a life experience field. Now the reason consumers go to the mall has become: I want a place to live outside of work.
In this context, offline stores have naturally begun to change. For example, some international brands' offline stores have begun to shrink gradually, and the store area has also begun to change, and many stores have set up negotiation areas, and brands prefer customers to sit down and experience the products.
Therefore, in Yangshengtang's view, the biggest function of offline has become "experience", and offline experience functions have become more and more important. Perhaps at the beginning of its establishment, the brand did not have such a strong brand power, and BA's sales power was not as good as that of mature brands, so the most direct way for consumers to make a transaction was "experience", and offline was undoubtedly the first to assume the function of "experience" and customer maintenance.
In addition, when we are doing offline, we should consider both gross profit margin and gross profit. Gross profit margin can be obtained through discounts, but gross profit can never be obtained through discounts, and it is the brand and quality behind it that supports the gross profit. The stronger the brand, the lower the gross profit margin, but the higher the gross profit. When making a brand, Yangshengtang hopes to increase the gross profit of all stores while maintaining a stable profit output, so that the store can increase the final profit amount while consuming the existing stock.
At present, if the price control is done well, the high gross margin products with high repurchase rate will provide a significant boost to the growth of offline revenue. There may be times when the sales of a single product skyrocket, but in the end, it is the total amount and the number of repeat customers that determine whether it will help the store make a profit in the long run.
In addition, in order to provide consumers with a better sense of experience, the membership system is also very important. In today's era of information circulation, the membership system is to provide better welfare protection for brand consumers, connecting online and offline, so that consumers can not only use online tools, but also be able to visit the store multiple times, which is also where we are further improving.
As we all know, Yangshengtang started to enter the offline channel from a small CS store. At the beginning, we chose to focus on dealers as the CS channel, and in the past two years, we have begun to establish our own teams in the head stores. In the future, while maintaining cooperation with some dealers, we will also establish more service providers and open a real counter self-operated model. Of course, the counter is not a full stop for the health hall, but another starting point.
Thank you!
Organizer / Konan
