For retail, the essence is the same: cost, efficiency, experience.
From the digitalization of the first chain, to the digitalization of operation management and marketing, and now to the deep water area - consumer digitalization, the digitalization of the retail industry has always revolved around reducing operating costs, improving operational efficiency and enhancing user experience.
As the starting point of retail business, consumers are constantly changing consumer needs and consumption scenarios, and continue to stimulate the innovation of new retail formats and models. As a result, consumer digitalization has become a very difficult but particularly important part of the digitalization of the retail industry.
Recently, Tencent Smart Retail organized a roundtable with the theme of "Consumer Digitalization", and I was fortunate to be invited as an expert in the retail e-commerce industry, together with Wang Hailong, CTO of Kid Wang, Song Xing, founder of Fenxi Consulting, and Yang Haichuan, a senior expert in Tencent's smart retail vertical industry solutions, to jointly develop and trend the digitalization of the retail industry, hoping to summarize the practical methods of enterprise consumer digitalization, and help enterprises better cope with the uncertain external environment and flexibly meet the rapid changes in consumer demand.
The beginning and end of the digital transformation of the retail industry
Are consumers the starting point and the end of digital transformation in retail? Facing this topic, as a practitioner and researcher who has experienced the digital development of the retail industry for more than 20 years, I am deeply touched.
The retail industry is directly facing consumers, and because of this, the digitalization of the retail industry hopes to do a good job in consumer digitalization from the beginning, but in view of factors such as technological development, business model, and market environment, the digitalization of the retail industry is not achieved overnight.
Before the popularization of Internet technology, it was difficult to realize the digitalization of consumers, so the head retailers with capital and talent strength started from the back-end digitalization to manage merchants and goods, warehousing and distribution more efficiently, reduce costs and continue to ensure competitiveness.
With the popularization of the Internet, the e-commerce platform has obtained digital consumers from the Internet to the platform for consumption at the beginning of its establishment, and then further optimized and enriched the goods, and continuously strengthened warehousing and distribution.
With the advancement of mobile technology and smart devices, retailers have also developed independent apps to cope with the impact of online, investing a lot of money and technology to once again enter a consumer war.
As the growth of user scale and sales scale has peaked, e-commerce platforms have begun to take the initiative to show favor to retailers, hoping to use their technical capabilities to help retailers improve their digital level and use their delivery capabilities to help retailers expand their home business.
But at this time, retailers are a little "tangled", whether to insist on making their own independent APP, or fully embrace the e-commerce platform, how to ensure the independence of user assets, and whether there are other options?
Nowadays, after years of learning, competition, and business integration with e-commerce platforms, the digital development of the retail industry has entered a "free period", and it is able to deeply combine its own independent APP with physical stores and operating categories for digitalization, and also carry out consumer digital operation through tools and methods such as small programs, enterprise WeChat, and ** communities, and the new format of the retail industry has begun to accelerate its attempts and expansion.
No matter what stage it is, consumers are the starting point and end point of the digital transformation of retail enterprises.
In this process, the value of consumer digitalization is gradually reflected.
In terms of improving consumer awareness and loyalty, retail enterprises can better understand consumer behavior, communicate with consumers online at close proximity and time, and get timely feedback to provide services that make consumers more loyal.
In terms of organizational management and decision-making, consumer digitalization can make the management decisions of retail enterprises no longer limited by experienced managers, and senior executives and store managers can make decisions based on data and consumers' real-time consumption needs, and the quantity and quality of decision-making have been greatly improved.
In terms of the optimization and upgrading of the first chain, after a better understanding of consumer behavior and consumer demand, retail enterprises can achieve thousands of stores and thousands of faces, stores in different regions provide different goods, formulate more accurate ** activities and discounts, and the certainty is significantly enhanced. And in inventory management, shelf management, warehousing and distribution management, etc., we can quickly adjust at any time according to the changes of consumers, so as to create a differentiated chain of "short chain + flexible + flexible" and competitive.
For employee training and growth, consumer digitalization can empower the headquarters and store staff of retail enterprises to quickly understand the data and preferences of each store and each consumer with the help of tools such as WeChat Work or APP and mini program.
Digital transformation is not entangled, and the transformation party of the child king is **
We have long recognized that digitalization must be the trend of the future, and we need to build our own digital capabilities. Wang Hailong, CTO of the Child King, said frankly that the digital transformation of the Child King began in the "tangled period", but it was not entangled.
On the one hand, for a retail company that is deeply engaged in single customers with 99% of consumers as members, the digital transformation of KidKing has been firmly centered on consumers from the beginning: online and offline omni-channel, the full scene of one-stop shopping to meet users, and the ability to meet user needs more intelligently.
On the other hand, the digital transformation of Kidwang belongs to the "No. 1 project" at the strategic level, and the senior management has a consistent understanding of the importance and difficulties of digitalization, and can firmly make long-term investment in stages.
Digital transformation technology comes first, and the technical team of KidKing in the early days avoided complex problems such as the division of interests and organizational collaboration with the offline part, and chose to build the system from the online cut-in, and independently explore and operate independently from 0 to 1. In order to strengthen the company's belief in digital transformation, the technical department took the initiative to undertake sales KPIs to ensure that the goal of 10,000 online orders per day was achieved within three months.
After achieving the sales target, the incremental value of digital transformation was effectively confirmed. The technology department then began to adjust the organizational structure online and offline, promote omni-channel integration, and hand over the responsibility of the company's independent business department.
This concept and rhythm have been running through the development of Kidwang's digital transformation, and many products and tools are incubated by the technical department from 0 to 1, and then form an independent plate for operation and development. At the roundtable, Wang Hailong also shared the practical experience of the digital transformation of the child king.
Digitally connect and drive consumers, employees, and goods
At present, KidKing has realized the digitalization of users, products and employees, and closely connected and driven each other.
At the level of user digitalization, KidKing has established 500+ basic user tags and 1000+ intelligent models, and set up a "user research" department to conduct research on consumer behavior and consumer psychology, and build a map of members' life needs. Parenting consultants can connect consumers through APP and WeCom to form a "thousands of people, thousands of faces" service mode, and provide goods and services that meet the needs of users more accurately, which greatly improves the trust and stickiness of consumers.
At the level of employee digitalization, KidKing standardizes the service content through the employee ** and other systems, and self-develops and establishes a parenting knowledge base - the integration of people and customers, precipitates the knowledge consulted by previous users, improves the professionalism and work efficiency of parenting consultants, and can understand the specific information of different consumers.
Through tools such as WeCom and WeChat Community, parenting consultants can independently allocate coupons, small gifts and other resources from the member intelligent marketing workbench - resource bank on the basis of fully understanding consumer information, and even actively explore business opportunities to drive consumers' shopping conversion and improve consumer satisfaction.
At the level of product digitalization, Wang Hailong gave a very daily but very "digital experience" example: consumers who buy milk powder in any store of Kid Wang, in addition to scanning the code to view the detailed description of the milk powder, they can also see the user reviews of users who have purchased the can of milk powder through any online and offline channels, and can check out and leave the store by scanning the barcode payment through their mobile phones.
It is precisely because the products and users, parenting consultants and users, online and offline are all connected, that there is a more comprehensive information display, which greatly improves the conversion rate of Kidwang's online and in-store stores.
Develop good tools and embrace new technologies
Wang Hailong believes that the digitalization of retail enterprises is independent in the core business operation part, and needs to develop their own systems and tools. As for the infrastructure part, it is possible to use third-party services and tools such as those provided by Tencent Smart Retail to produce higher efficiency, lower cost and faster output performance, and better promote the digitalization process of enterprises.
For example, in terms of digital connection and application, KidKing made a difference with the help of Tencent's infrastructure Tencent Cloud and related digital tools such as enterprise WeChat, small programs, etc., and used SCRM, CDP+MA and other tools to help parenting consultants do a good job in the application of corresponding labels and data for communities and users, so as to realize the deep connection and real-time interactive services between parenting consultants and consumers at low cost.
According to public data, as of the end of 2022, there are more than 10 million users of the children's king enterprise micro private domain service, with more than 50,000+ communities, and the amount of social change has increased by 15% year-on-year, and the transaction proportion of the entire online user has exceeded 6% so far.
In the face of the trend of new technologies such as AIGC, KidKing has also invested and explored AI in the past 23 years. On June 1, 2023, KidsGPT released KidsGPT, and after many iterations, the model has been upgraded from a simple human-machine Q&A to a human-machine combination model, allowing thousands of parenting consultants to serve more than 60 million consumers together with KidsGPT and expanding the service capabilities of parenting consultants.
Wang Hailong said, "After the realization of digitalization, Kid King can better practice the 'single customer economic model', which is a whole set of models of 'interaction produces emotion - emotion produces stickiness - stickiness brings high output value members - high output value members influence potential consumer members by word of mouth', to achieve this, the interconnection and drive between consumers, employees and commodities is very important."
Conclusion
To sum up, the digital transformation of Kid King is actually the essence of consumer digitalization: connection + drive. Through "connection + drive", retailers can understand consumers more and more, and integrate online and offline for more refined operations.
Regarding the support of "connection + drive", Yang Haichuan believes that the role of Tencent smart retail is more of a "sparring" for enterprises, a basic technology service provider, and a tool provider.
What Tencent Smart Retail is doing more now is to give retail companies greater freedom. Yang Haichuan said.
In order to achieve this goal, Tencent Smart Retail provides top-level business consulting services, including CRM, SCRM, CDP+MA and other tools to help enterprises sort out more dimensions of consumer behavior data and make these data more valuable, so that enterprises can better understand consumers, so as to provide goods and services that are more suitable for consumers, and improve consumer stickiness and conversion.
As I said at the roundtable, "Which retailers will survive in the future?" Retailers who know you can survive”