Often some dealers say that entering the KA store should be cautious, a variety of miscellaneous costs, entry fees, bar code fees, display fees, etc., "high costs, low profits, long account period", has become the mantra of many store dealers.
This is also the reason why many dealers are reluctant to do KA stores, typically thankless. But it is undeniable that in the past decade or so, the rise of the KA channel has also led to the rise of a number of dealers.
Even today, there are still many dealers, and Suzhou Leye is one of them.
Founded in 2012, in 8 years, from an entrepreneur to become an agent of well-known brands such as Guanshengyuan, Alps, and Great White Rabbit, the annual sales of nearly 400 million excellent businessmen.
Some time ago, New Distribution interviewed Ms. Zheng Juan, founder of Suzhou Leye Trade, and Mr. Zheng Yue, CEO. As a traditional trading company, how to stand firm in the fiercely competitive KA market and continue to grow, and extend more online opportunities here, I hope that their thinking and practice of business can bring you some thinking and inspiration.
The growth path of Suzhou Leye
In 2003, Zheng Juan entered the retail industry. He has worked for two companies, and in the first company, he has led the negotiation of the terminal team, the KA team, and the KA headquarters. Worked as a marketing director at the second company, responsible for the overall operations of the company.
It is these two experiences that make Zheng Juan have a strong understanding of retail, especially KA. In 2012, Zheng Juan, with several enthusiastic post-80s partners, officially began to start a business and established Suzhou Leye Trade, which mainly does KA channels in East China.
At the beginning of the business, the first brand of Leye agent was the ready-to-eat enoki mushroom - Jin Dazhou. At that time, Zheng Juan experienced a psychological gap, and in the past, there were big brand resources in large companies.
But starting your own business, doing a small category brand, no amount and no cost, it is very difficult to negotiate with the store, and many times you can only rely on past connections and accumulation to do business.
It is also in this way that Suzhou Leye has established a strong team cohesion. Zheng Juan told New Distribution that Leye has always had a tradition: every year 10 days before the Spring Festival, after the goods are shipped, all the company owners, including herself, all go to the front-line squatting point and sell goods with the shopping guide.
In 2014, Leye ushered in a turning point, when Guanshengyuan wanted to change dealers, and the teams of RT-Mart and Auchan recommended Suzhou Leye, and by chance, they acted as Guanshengyuan.
As the first first-line brand of Leye Trade, we strive to do the best in terms of terminal execution or promotional activities.
Since then, Leye has gradually entered the right track, successively representing well-known brands such as Great White Rabbit, Alps, and Fujijia, and the scale has become larger and larger.
While growing and growing bigger, Leye is also constantly adjusting in terms of organization. Every year, we make regional adjustments and team replacements. For example, this regional manager is responsible for Jiangsu this year, may be responsible for Anhui next year, and may be responsible for Zhejiang the following year.
Through adjustment, the regional manager can clearly know his own advantages and disadvantages, and at the same time, other regional managers can also find the advantages and disadvantages of the previous term when they take over, focus on the problem, make the area better, and the team can learn more things.
This is also why, in just 8 years, Suzhou Leye Trade has completed a leap from 0 to hundreds of millions. The cohesion and learning ability of the team enable Suzhou Leye to find a good development direction and method in a bad environment.
"Increasing sales and reducing fees" is the key to doing a good job in KA
Zheng Juan told New Dealership that the core of doing KA is management. The larger the KA system, such as RT-Mart and Auchan, the more transparent the rules. In this case, the requirements for dealers are very high, and the implementation and management of the team must be better than the manufacturers, and the manufacturers will be willing to give you the brand agency.
What makes it a good job? The key lies in two aspects: one is the increase in sales, and the other is the control of the fee ratio.
Sales increase, only if you are more direct than the manufacturer or find someone else to do, the sales volume is higher, and can develop steadily, the manufacturer will be willing to rest assured that the KA will be handed over to you; the control fee ratio is a test of the dealer's refined operation, the fee ratio is not well controlled, it is difficult to make money.
Taking RT-Mart as an example, there are two key points: the first person should be more effective. Whether it is a salesman or a promoter, it is necessary to be specific to the turnover and gross profit targets, fail to meet the standards and requirements, and make changes in time.
The second return rate is lower. Borrow the data chain of KA professional comparison, the same period, the chain comparison, the estimate. For example, how many goods to sell in the next month, how much safety inventory is, what are the number of turnover days, etc., all need to be accurately estimated.
If the store is really abnormal, the inventory turnover day is not high, timely cooperate with the internal resources of the store, and do the transfer between stores.
These actions require in-depth communication, many dealers who do KA do not do well in this link, the communication efficiency is too low, resulting in loss of the process.
Suzhou Leye actually strings these processes together to make the overall operation more efficient, and the annual return rate of the snack food category is only three thousandths.
As Zheng Juan said, KA's profit is the balance of the team's management and channel professionalism, rather than pitting a little fee on the family, taking a little fee at home, and using information asymmetry to make money. Long-term business must be based on value, earning the profits that should be earned.
Not all products are suitable for sale in stores
For dealers, not all products are suitable for listing in the store. Distributors of the KA channel are subject to some restrictions in the selection of products. It is easier for new brands to enter traditional small stores, because the shelves are very small, even if there is only one product, consumers can also see it.
But in the store, a SKU bar code fee may be hundreds of thousands, if a new brand wants to enter the store, there is no 6-10 SKU, do not touch, otherwise the most basic display surface is not, a shelf may be submerged on the shelf.
Therefore, in the selection of products, the first selection of powerful manufacturers; the second based on the group behind the channel, choose products suitable for consumer groups. At present, the consumers of the store have begun to age, so the product should not be too novel.
Third, all the promotion and operation modes are attached, and the core competitiveness of the product is the product itself, and the taste and quality should be good.
For example, Yuanqi Forest, sugar-free Coke why do you want to add sugar substitutes, in essence, it is still for the sake of good taste, only good taste can have a repurchase, why there is no fire in the reduced meal food, the reason is also here, the taste is not good.
The fourth predicts the repurchase rate. Before the product is on the shelves, it is best to try it on multiple channels, collect feedback, see consumer acceptance, and finally consider whether to enter the store for promotion.
This is the strategy of selecting products.
After the selection of products, marketing promotion is also a link that cannot be ignored in the operation of KA. Different KA systems, the promotion strategy is completely different. Take Hema and RT-Mart as examples: the core of RT-Mart is to promote purchases, and the core of Hema is to reach the experience.
At RT-Mart, promotion is to tell consumers the characteristics of the product. Do a good job of vivid display, the promoter will sell goods, master sales skills, chat with grandparents, and promote products.
In this type of store, the communication time between the promoter and the customer is limited, and the easiest way is to compare. For example, push a moisturizing paper, let the promoter prepare a pack of dry paper towels without a brand, compare with the moisturizing paper, and let consumers make their own choices.
But Hema is different, its core is reach, experience and customer stickiness, which can really make consumers feel at home and repurchase frequently.
Hema's shopping guide selection is required in terms of height, education, and weight, and it has to go through a week of training before taking up the post.
The training is divided into three parts: First, product knowledge. It is not the end of giving the product manual to the promoter, but also responsible for refining the shopping guide, the selling point of the product, and the difference between the competitor (do not demean the competitor).
For example, a piece of steak, how big to cut, the front and back of the fry for a few minutes, how many grams of pepper and how many grams of salt, are all unified standards, after training the promoter to fry on the spot, fried until the master chef is satisfied, it is qualified.
The second is to train the management mechanism of Hema. For example, when a shopping guide enters a store, what are the rules when doing a tasting promotion? What can't be moved? What are the high voltage lines? Wait a minute.
The third is to train marketing skills. This marketing technique is not to let the promoter sell all the time, but how to make the customer comfortable and how to make the customer satisfied. In the promotion of Hema, only 20 points out of 100 points are sales KPIs, and the remaining 80 points are assessed in the service process.
To share an interesting phenomenon with you, in some high-end residential Hema shops, some elderly people often go to our promoters to chat, often a chat is an hour, the promoters accompany the chat on the line.
The elderly look at what products to introduce, the first experience to take them to experience, as long as consumers are still interacting with you, can not be left alone.
Through such a series of ways, Suzhou Leye has gradually mastered the ability to co-create with manufacturers in the operation of KA products. Many brand chambers of commerce take the initiative to solicit Suzhou Leye's views on products and jointly create good products, rather than blindly letting dealers push.
Not only offline, online synchronous development
Talking about the direction of the company's development, Zheng Juan said that Suzhou Leye will go to a diversified service provider, do a good job offline at the same time, online should also develop synchronously.
From offline to online, it is not only a change in thinking, but also a professional talent who understands online operation, and the return of his younger brother Zheng Yue just solved this problem.
Before returning to China, Zheng Yue had rich online experience, and in 2015, he and Stanford partners founded the e-commerce platform Club Factory e-commerce platform, which once became the third largest e-commerce platform in India.
In 2018, he started his own business, obtained $2 million in angel investment, and established an e-commerce platform dealingoc, which achieved profitability in one year of establishment, but closed in 2020 due to sino-Indian conflicts.
Zheng Yue, who has rich online experience, returned to China and joined Suzhou Leye as CEO. Suzhou Leye also officially launched online at this time, and the offline KA, e-commerce, and new retail troika went hand in hand.
Zheng Yue told New Distribution that the core of online is refined operation, and if e-commerce wants sales, it must have a stable ranking, which requires familiarity with the platform's algorithm.
The core has three points: first, sales, the system thinks that you can sell well, will give you a good ranking, the core of this is the influence of the brand;
The second is the growth rate, to ensure that the growth rate is fast enough. For example, sell 100 today, sell 1000 tomorrow, and the growth rate is several times a day, and the system will also improve your comprehensive ranking.
The third is the category, the platform will put the category word weight to the highest, a product must do a good job of category keywords. For example, yogurt blocks, in Jingdong's classification is snacks, if you choose the wrong keywords, use yogurt as keywords, it is likely that consumers will not be able to search for your products.
This is completely different from the traditional offline, offline may rely on customer affection, or give some fees, but online is not OK, you must know the platform's algorithm, in order to do a good job, simply invest in advertising dealers can not be carried.
The first product made by Suzhou Leye online is Yili's new food machine, which took only three months to achieve a good result of 1 million monthly sales on the platform.
Zheng Yue went on to say that going online is only the first step, and in the future, it will do a good job of omni-channel coverage and become an operation service provider that empowers brands and empowers new products.
In the past, many dealers have been doing a barrier between the brand and the consumer, the dealer is only responsible for selling goods, the brand side does not know who buys, what the form of buying, knows nothing about their customers, only knows some channels.
The future dealer must not be a barrier, but a bridge, to help brand owners capture consumers, do consumer insights, so that brands can reach consumers through this bridge and understand consumers.