Choose wiser, consumption is not downgraded" has become one of the main characteristics of Chinese consumers today, and they are trying to find the most competitive channel to buy the brand they want.
Wen Wang Yadi Shi Dan.
id | bmr2004
Cover |Yonghui Supermarket's discount stores adopt a "shop-in-shop" model.
In 2023, "cost-effective" will become one of the keywords for young people's consumption, and "the most beautiful boy in the circle of friends" is no longer the lucky one who buys a limited model, but a little expert who buys good things with the least amount of money.
When young people no longer blindly pursue brands and trends, but pay attention to the cost-effectiveness and actual demand of goods, the consumption scene has also quietly changed. Many traditional supermarkets smelled the changes in people's consumption Xi and began to test the discount store model, trying to reverse the business problem of declining performance.
Following the release of the first batch of optimized and adjusted store progress in August, Yonghui Supermarket recently announced that it will add "** discount stores" in stores nationwide, and simultaneously add a discount area on the APP applet to provide discounted prices for food and supplies. As a major deployment of Yonghui Supermarket after turning losses into profits in the first three quarters of 2023, this move has become an important choice and means for its transformation and upgrading.
According to incomplete statistics, up to now, supermarkets such as Wumart, Freshippo, and Jiajiayue have all laid out relevant discount store models, which are earlier than Yonghui supermarkets. After two or three years of the discount store model, Yonghui Supermarket has finally taken this step, but this transformation also faces challenges in the management of the first chain and the transformation of the business model, which requires traditional supermarkets to move forward cautiously in continuous optimization.
Open the discount mode, what is the old supermarket?
Carrefour China's predicament is a wake-up call for domestic supermarkets, the hypermarket format is no longer suitable for today's consumer market, and only by transforming early and actively seeking new growth channels can we recover the decline.
In the first half of 2023, Yonghui Supermarket and Zhongbai Group have turned losses into profits, but Carrefour China, Lianhua Supermarket, and BBK are still in continuous losses.
The person in charge of Yonghui Supermarket told the reporter of "Business School": "Discount stores are the general trend of the retail industry in the current market environment, which can not only speed up the replacement efficiency of Yonghui products, break the difference between high and low prices in the marketing environment and the daily environment, but also further enrich the types of goods and bring more cost-effective choices to consumers." ”
Discount stores have become one of the measures for Yonghui Supermarket to adjust and optimize its stores, and it is also a new way of thinking to cater to the changes in current consumer demand. At present, China's discount retail format can be roughly divided into three categories, namely hard discount chains, temporary discount chains and brand sales. According to the commodity channel, the model of discount stores can usually be divided into "hard discounts" and "soft discounts", and hard discounts are mainly based on the construction of vertical chains, emphasizing source procurement and factory customizationSoft discounts are mainly based on expiring tail goods, which is a supplement to the retail format. Hard discount is a low-price and high-quality product made by relying on the ability of goods and chains, and the core of soft discount is that merchants make profits through the main discount. From the model itself, they are all mining the increment of the long-tail market.
According to the 2023 McKinsey China Consumer Report, in 2022, 16% of respondents reported spending of 5% or more year-on-year, halving from 2019Twenty-two percent of respondents reported reducing spending. The ups and downs of the market are driving consumers to maintain their quality of life through stricter trade-offsSome people even manage to spend less and buy more products.
Choose wiser, consumption is not downgraded" has become one of the main characteristics of Chinese consumers today, and they are trying to find the most competitive channel to buy the brand they want. They didn't compromise when choosing brands and products, they just weighed more carefully and looked more aggressively for discounts and goods.
Correspondingly, for supermarkets, discount stores have become a new track by expanding business formats and improving business models to cope with changes in the modern consumer market.
Discount change, everyone has to "cut a knife".
According to public information, in October 2021, Jiajiayue opened its first discount store in Shouguang Wanda Plaza, Weifang, Shandong Province, with the price of goods in the store 10% 15% lower than that of regular stores, and on June 20, 2023, it launched a new discount store format "Haohuixing Good Goods Discount Store". According to reports, the "Haohuixing Good Goods Discount Store" has both Jiajiayue's own brand products, as well as commodities purchased in large quantities based on more than 2,000 ** merchants across the country.
In the second half of 2002, Wumart opened a discount store in a shopping mall in Mentougou District, Beijing, which is located at the exit channel of Wumart store, covering an area of about 80 square meters, mainly selling groceries, grain, oil, rice and noodles and a few frozen products.
On October 13, 2023, Hema launched the biggest change since its establishment 8 years ago, began to implement a new procurement model, launched the "discount" reform, and took the lead in starting with Hema offline stores, and will also expand online in the future, and finally make all Hema products more competitive.
In fact, as early as October 2021, Hema opened its first fresh outlet store, selling products transferred from Hema stores and Freshippo's own brand products in independent stores. Hema Outlet is a hard discount store brand under Hema Outlets, which includes its own brand "Hema NB", fresh food, expiring products, etc., focusing on cost performance. The reporter learned from Hema that at present, Hema outlets are all in Shanghai and more than 50 have been opened. At present, there are 45 fresh outlets, distributed in 14 cities such as Shanghai, Beijing, Xi'an, and Qingdao.
Different from discount stores for the purpose of clearing inventory, Yonghui Supermarket, which entered the market late, took the three dimensions of goods, scenes, and services as the entry point to promote the refined operation of stores. As of early August, nearly 70% of the nearly 300 stores to be optimized in the first batch of Yonghui Supermarket have been completed. The customer traffic of some renovated stores increased by nearly 10% quarter-on-quarter in the second quarter, and the optimization model of "discount stores" is being promoted one after another.
The relevant person in charge of Yonghui Supermarket told reporters that in terms of the selection of discount goods, different from the traditional operating logic of discounted prices of expiring goods, Yonghui Supermarket focuses on improving the efficiency of goods, and evaluates the performance of goods through digital means such as its own first-class business system and YHDOS digital system. At the same time, combined with the product data under the digital sales dashboard, a part of the new products, online celebrity products and regular products will be selected from the discount product pool every day.
The person in charge stressed that there is no necessary connection between the discount store and the temporary store, and the main purpose of setting up the discount store is to provide consumers with cost-effective and high-quality goods. The reason for adopting the "shop-in-shop" model is mainly based on two reasons: one is to give customers a value-added shopping experience and facilitate one-stop shopping;The second is to select the best big brands, relying on the advantages of the first chain to achieve the ultimate cost performance of goods. It is reported that at present, the first discount store will be promoted in Yonghui supermarket stores across the country, and the scale of the discount store will vary according to the different store area, and the SKU (minimum stock keeping unit) will basically remain at 500 1000 single products.
It can be seen from thisDifferent from temporary discount stores such as Good Sale and Hi Special Purchase, the discount transformation of Yonghui Supermarket's shop-in-shop and Hema is more of a transformation of commodity value orientation, from first-class business-oriented to consumer demand-oriented.
It is understood that among the Hema outlets consumers, the highest proportion is middle-aged and young white-collar workers, accounting for more than half;followed by retirees, accounting for more than 30%. This side reflects that consumers are not only more and more pursuing "cost-effective", but also more and more "young", they need "cheap and good goods", not just "cheap goods", which also means that reshaping the ** chain has become the key to the sustainability of the discount model.
Go to the ka mode, ** chain needs to be refactored
In the mid-90s, with the increase of people's income and material abundance, small shops of the bazaar and individual business types could no longer meet the needs of the market, and chain KA stores came into being. KA is keyaccount, literally translated as "key customer", Chinese means "key customer", for the best enterprises, KA store is a direct sales terminal platform with great advantages in business area, customer flow and development potential. For example, Lianhua, Century Hualian, Yonghui Supermarket and other hypermarkets all emerged in the 90s.
Under the KA model, dominated by core brand merchants, the supermarket is more like a rental container, and the brand owner decides the type of goods in the daily container, and sells what goods are produced. Supermarkets will charge various fees, such as entry fees, shelf fees, display fees, etc., and thus operate.
Hema said that the de-KA turned to discount management, that is, no longer use this traditional way, omit the intermediate links such as entry fees and display fees, and completely use the vertical chain to operate, by reducing these intermediate links that do not produce much value to consumers, so as to save profit margins and achieve low prices.
This poses a new challenge to the supermarket's first-chain model, through its own brand or joint customization, the establishment of a vertical chain, has become a breakthrough point for retailers to achieve "discounting".
Taking Freshippo's baking industry as an example, Sugar Box Food (Kunshan) **hereinafter referred to as "Sugar Box Factory") is an Internet platform for the baking industry incubated by Freshippo, covering an area of about 6,000 square meters, located in Zhangpu Town, Kunshan City, in the center of the Yangtze River Delta Economic Circle, adjacent to Shanghai. In April 2023, the sugar box factory will be officially put into operation, reducing production costs through the upstream vertical chain layout, and trying to reduce the quality of baked goods.
Specifically, the sugar box factory only produces four large items, namely white toast, Hokkaido toast, mochi, and croissant, which are the big items of Hema Baking for a long time and throughout the year. According to reports, through the vertical chain model, the sugar box factory has realized full-link production, and the processes that originally needed to be completed in multiple factories have been completed in a centralized manner, saving upstream raw material procurement and transportation costs. For example, the direct transfer of flour from the Yihai Kerry factory to the sugar box factory eliminates the cost of flour transportation and packaging, which alone reduces the cost of bread production by 6% and reduces the use of upstream packaging materials.
On October 13, Hema signed an investment agreement with the Management Committee of Jiangsu Hai'an Trade and Logistics Park to build the first frozen pasta intelligent factory in Hai'an City, Jiangsu Province, and cooperate with Heshou Company to introduce advanced technology and establish a complete industrial chain from flour to frozen cooked noodles.
It is understood that on December 22, 2018, Yonghui Supermarket launched its own brand "Yonghui Preferred", which is mainly positioned for the majority of consumer families in China, and removes intermediate redundant links through the selection of source first-class merchants to achieve "source consumers". As of the first half of 2023, Yonghui Supermarket's own brand chain has introduced more than 60 source merchants with planting bases and innovative research and development to jointly promote the innovation and research and development of its own brand. Among them, 34 strategic cooperation companies have been formed, and 13 order planting and production line underwriting companies have been formed.
In the first half of 2023, Yonghui Supermarket's own brand sales reached 19500 million yuan, accounting for 464%, a year-on-year increase of 152%, and the proportion of online reached 225%。Yonghui Supermarket explores brand marketing innovation through various methods such as explosive product promotion, exhibition and sales, terminal image construction, cross-border linkage, and store visits. In the first half of 2023, the cumulative number of its brands** exceeded 86 million, in order to increase user awareness of its own brand.
Zhu Danpeng, an analyst of China's food industry, told reporters that there are similarities in the first chain, but due to different positioning, there are differences in the first business. In the future, the integrity of the construction of the entire chain needs to be strengthened, and the quality assurance system should be stabilized, food safety assurance, sales scenarios should be innovated, customer service system should be upgraded, and the stickiness of heavy consumer groups should be improved.
Can the "discount wave" continue?
As Zhu Danpeng said, the traditional supermarket profit model is composed of "three-in-one", with "front, middle and back" three profits, which are basically supported by the costs of dealers and manufacturers, and the experience of C-end consumers is weak. In the post-epidemic era, the macro economy has entered a downturn, and the discount store format has come into being. In foreign countries, the operation of discount stores is very mature, while in China it has only just begun.
According to the "2023-2028 China Discount Store Industry Competition Analysis and Development Prospects**Report" released by the China Research Institute of Puhua Industry Research Institute, discount stores will be the fastest-growing format in the next 10 years, with a compound growth rate of 56%, up from 2 in hypermarkets5% and 5% for convenience stores5%。
At the same time, discount stores are also favored by capital, Tianyancha shows that since 2021, many brands, including Prosperity Bazaar, Little Elephant Life, and Outlet, have successively received financing.
Opening discount stores has become a new action for domestic supermarket chains, and discount stores have gradually appeared in various business districts. Discount supermarkets are aimed at the most sensitive groups in a more direct way, which exist in first-tier cities, as well as in a wider range of regions such as second, third and fourth tiers, and are characterized by high quality-price ratio and high cost performance. In this case,Consumer stereotypes about discounts have been reshaped, and discounts are no longer relying solely on low-cost goods, but creating a low-cost management system to achieve the sustainability of low-cost goods.
Zhu Danpeng believes that there are restrictions on region, category, brand, specification, time period and other aspects in the discount area, while the discount store meets the consumption needs of consumers for cost-effective products. The operating model of discount stores has a positive impact on the traffic and overall revenue of the entire store, but behind the low price is low gross profit, and there are two core points: the first is the brand effect, and the second is the scale effect, without which it will not be able to survive.
According to data from the National Bureau of Statistics, in the first half of this year, China's total retail sales of consumer goods 227588 billion yuan, a year-on-year increase of 82%。Among them, the national online retail sales were 7,162.1 billion yuan, a year-on-year increase of 131%。Specific to the retail segment, supermarket retail sales decreased by 04%。Although the overall recovery of social consumption has stabilized, the supermarket industry tends to be flat, but online consumption leads the zero growth rate of social consumption.
It is imperative for physical supermarkets to increase store traffic by expanding new business formats, and they generally have certain scale advantages, and how to create brand differentiation advantages is a problem for enterprises behind low prices.
According to public information, in April 2023, Jiajiayue launched the snack chain brand "Yueji Snacks", positioning itself as a one-stop snack collection store with extreme cost performance, and has laid out 5 stores as of June 30;In May, Zhongbai Group launched a pilot "Xiaobai Snack Shop" discount store, which is still in the stage of testing the water and exploring, and will plan the development of the franchise model in a timely manner in the future.
It is worth mentioning that at the same time that supermarkets have laid out discount stores, the temporary stores that started with expiring food are facing development difficulties, and some consumers are disgusted by the launch of 99 yuan membership cards, and the lack of product types of good special sales has led to a decrease in consumers. In the final analysis, this kind of soft discount stores are very dependent on stable supply, and when there are more channels for tail goods processing, such as through live streaming or private domain processing, it will bring an impact to them.
This has also become one of the important reasons why expiring stores are "getting rid of" expiring food. The data shows that at the beginning of the establishment of the expiration store, the proportion of expiration food was close to 100%, but now the proportion of expiration food in most expiration stores has dropped to 5% to 30%. The dilemma of soft discounts is a warning for supermarkets such as Yonghui Supermarket, Jiajiayue and Hema that are increasingly aware that discounts are not a simple temporary and low price, but a more durable and innovative format.
Whether this "discount wave" can become a trend is not in consumers, but in the change of enterprises. For consumers, the potential demand for "buying good goods at a low price" has always been there, but at present, it is becoming more and more prominent, what enterprises need to do is to change the previous business philosophy, continue to provide consumers with discounted goods, and the test of the first chain and business ability is still very large.