Under the normalization of the epidemic, retail chain enterprises generally bear the upward pressure of inventory costs, labor costs, and rental costs, so they pay more attention to maintaining healthy cash flow. The repeated epidemics and fierce competition make enterprises pay more attention to large-scale expansion. To improve the ability to resist pressure and improve self-efficiency, digitalization will become a new trend for physical retail enterprises under the normalization of the epidemic. It is a major challenge for traditional retail enterprises to realize digital transformation, seek healthy development of enterprises, and fulfill the social responsibility of retail enterprises as an important infrastructure for people's livelihood. Many retail enterprises are looking for answers.
As a pioneer in the digital transformation of brick-and-mortar retail enterprises, Wumart perfectly interpreted the "Wumart Speed" under the big test of the epidemic and handed over an impressive report card. In April and May of this year, Beijing was tested by a new round of epidemic. With the strong support of the government, Wumart was able to take advantage of the huge advantages of the digital supply chain and the docking of agricultural supermarkets, and quickly transported materials from all over the country to Beijing. The supply of vegetables increased by 3% compared with usual -5 times. It is the unified and smooth supply chain across the country and the multi-point DMAALL digital technical support that ensure that Wumart has the confidence to inject vitality into the Beijing market at critical times, achieving "Beijing speed, hard work to ensure supply, and the capital market, as firm as a rock."
Similarly, it is precisely because Wumart has digitized more than 80% of its users that it can directly provide consumers with online services when stores are temporarily closed due to the outbreak. Taking Yanjiao, Hebei Province as an example, Wumart’s online sales usually only accounted for 20% of the total sales volume. After the lockdown, due to the already established digital channels connected to consumers, online sales jumped by 5-6 times, exceeding It turned out to be omni-channel sales; during the Shanghai epidemic, Wumart Metro stepped forward and delivered 5 million guarantee packages online in 6,000 communities through the Metro APP.
Zhang Wenzhong, the founder of Wumart, emphasized that digitalization is the key to Wumart's online and offline integrated services to fight the epidemic and ensure supply. Digitalization is extremely important for the survival and operation of distribution companies. Why is it difficult for distribution companies to survive without comprehensive digitization? Let's start with the issues of customer flow growth, commodity supply chain management, and organizational cost reduction and efficiency improvement that deeply trouble retailer owners.
85%, 70%
According to the "Report on Chain Supermarket Operations (2020)" released by the China Chain Store and Franchise Association, the customer flow of chain supermarket stores in China has generally declined, with an average decrease of 4.9%. Huang Mingduan, executive director of Sun Art Retail, once publicly stated: "The loss of customer flow in offline stores of traditional hypermarkets is an irreversible process."
In contrast to Wumart, we found that as of 2022, Wumart has achieved hundreds of millions of users through all channels, and the proportion of APP orders in some stores has reached 85%. Growth against the market is not an accidental behavior. In 2015, Dr. Zhang Wenzhong, the founder of Wumart, proposed and explored distributed e-commerce, which laid the groundwork for today's various events.
In fact, long before the epidemic, physical retail has already felt the huge impact of Internet e-commerce, because the online consumption habits cultivated by users are irreversible, so we must work hard wherever the users are, Jack Ma and Jianlin Wang The ten-year bet on the proportion of online is approaching. At this time, winning or losing seems to be less important. After ten years of business verification, everyone has also found that the integration of online and offline is the end.
The integration of online and offline is not a simple online transaction. It is more valuable for enterprises to gain insight into user behavior and match precise marketing strategies. Naturally, the value cannot be maximized. With its own online mall, Wumart can conduct more in-depth research on users, and gain insight into shopping preferences and behavior paths in different regions and scenarios. At present, online members account for more than 70% of some Wumart stores, and members use code scanning to shop in the store. At the same time, with the technical support of the multi-point marketing center, it is possible to analyze user consumption behavior and formulate different precise marketing strategies based on model algorithms, such as price reduction PUSH push, big promotion reminders, arrival reminders and other forms to wake up sleeping users. Offline members carry out online conversion, and drive user consumption through coupon issuance, check-in, and product best-selling lists, and realize online and offline integrated marketing management.
Therefore, a key action of online and offline integration is the integration of user operations, building its own membership system and private domain traffic matrix, neither need to worry about its product data and user consumption information being "taken away", nor need to worry about being "taken away" by a third party Platform "kidnapping". Another key action of online and offline integration is the integrated management of commodity supply chains, which is also an important part of increasing revenue and reducing expenditure for physical retail enterprises.
60%, 21 days
In the operation of physical retail, the importance of "goods" is self-evident, and part of the success of Wumart comes from the adjustment and optimization of product efficiency, product structure and inventory management.
In the link of commodity circulation, relying on data, Wumart has strengthened the headquarter’s control over the product structure of stores, making it more suitable for the individual needs of users in the business circle. Improvement, fixed deposits based on sales, greatly reducing the number of turnover days, making the replenishment of stores and warehouses more scientific, and greatly improving product quality.
In terms of commodity efficiency, Wumart has changed the traditional way of relying on suppliers and experience to judge in the past. Through the analysis of online and offline historical sales data, the big data perspective of related business districts, and the data analysis and research of the surrounding business districts, etc. Actions to achieve accurate prediction of demand information, increase product selection efficiency by 60% by December 2021, sell suitable products to suitable people through big data, and truly change the traditional situation of relying on manual experience to order.
In terms of commodity structure, Wumart also faced the problem of homogeneous commodities. There are thousands of stores, and the commodity structure is mainly large and comprehensive. Most of the attention on commodity structure stays on training and requirements. However, with the changes in regional users’ consumption power and purchasing preferences, the large and comprehensive product structure has led to the inability to focus on the individual needs of users, resulting in a decrease in product satisfaction. For this reason, Wumart continues to sort out the product structure and streamline the number of products. Carry out multi-dimensional product selection analysis around each SKU, replace and add product categories on the shelf in a timely manner, and comprehensively consider the market data of the merchant's area to adjust the product structure in a timely manner to achieve system automation of manual strategies and system intelligence driven by algorithms Combining with modernization, while effectively reducing the store area, the product structure of the store has been optimized, and the expansion of the breadth and depth of categories has been completed. The success rate of new product introduction has increased by 30%, and the effective replacement rate has increased by 25%.
In terms of inventory management, large floor space and a large backlog of goods have always been the most troublesome problems for physical retailers. Faced with the same problems, Wumart bid farewell to the store team based on more scientific data cleaning and replenishment counting logic. Replenishment habits based on experience, relying on data analysis and the actual situation of the business district, including sales expectations, weather and festivals, etc., to output more reasonable product suggestions, and the headquarters will uniformly manage a series of processes for ordering, storing, and returning products. Taking Wumart Lenovo Bridge Store as an example, during the big promotion period, its inventory turnover days were also reduced from a peak of 35 days to 21 days, which greatly improved the efficiency of the supply chain.
1.1 times, 11.7%
We all know that the overall profit level of the physical retail industry is not high, so cost control is a great tool for physical retail companies to continue to develop healthily. , field” utilization efficiency of various resources.
Wumart Lenovo Bridge Store is located on Zhongguancun East Road, Haidian District, Beijing. The competition in the nearby business district is very fierce and the competition pressure is huge, which promotes Wumart Lenovo Bridge Store to actively innovate and seek renovation. Before the renovation, the Wumart Lenovo Bridge store had a monthly net loss of more than 1 million, ranking among the top three stores in the entire Wumart system. After the renovation, through the digital application of the supply chain, not only the labor cost and the warehouse area have been greatly reduced. , also achieved a 1.1-fold increase in profit margins.
First of all, in terms of store personnel management, the labor costs of supermarkets generally account for 30%-40% of the overall operating costs. Only by improving human efficiency can revenue be guaranteed. Through the application of digital systems, Wumart quantifies employees' behaviors and uses big data to analyze each position and each type of work. One post has multiple skills, and everyone is online, so as to ensure the healthy operation of stores and the efficient operation of products. Take store ordering as an example. There are more than 600 stores in Beijing Wumart. In the past, each store was equipped with 2-3 people for ordering. Now, the centralized ordering team at the headquarters orders orders in a unified manner. There are less than 30 people involved in the ordering process. Only ordering can be done every year. Save tens of millions of labor costs, which is not a small sum for most brick-and-mortar retailers.
Secondly, in terms of store operation and management, the difficulty of online and offline channel management for physical retailers lies in the inventory data of each channel, the difficulty of maintaining consistent product prices in real time, many factors affecting product management, long business chains, and a high degree of reliance on personal experience of employees, which varies widely. Qi, leading to poor decision-making quality and low efficiency. The digitalization of the supply chain makes the store inventory information completely transparent. No matter whether the goods are sold through online channels or offline stores, the inventory information will be updated synchronously, and the replenishment link of corresponding goods has also become efficient and accurate. As a replenishment warehouse for stores, it can also be used as a picking warehouse for online orders. Through the continuous optimization of business strategies and the application of digital tools, Beijing Wumart has reduced the proportion of store warehouse space from more than 32% to about 11.7%, increasing the warehouse space by about 20%.
User-centered, one-to-one service
Therefore, for physical retail enterprises, digitalization is the reengineering of their own operating models and organizational processes, and the value reshaping that runs through every link of the front, middle and back office. Ren Zhongwei combined his experience in the digital transformation of multi-point DMALL service retail enterprises over the past seven years, and summed up the "DUS capability model of retail enterprises in the digital age" (D digitalization, U user operation, S supply chain). In his opinion, future retail enterprises must obtain To continue to win, we must first return to the essence of the retail industry, that is, user-centered and one-to-one services. At the same time, we need to establish three major capabilities: user operation, supply chain (supply), and digitization (digitization), all of which are indispensable .
First, user operations. The essence of retailing is a one-to-one customer-centric service model, but limited manpower cannot provide one-to-one service to users due to the increase of stores and the expansion of scale; at the same time, physical retail is facing dual challenges from online and offline, The diversion of user traffic by e-commerce platforms has forced physical retail companies to integrate offline and online user operations. In addition, many retail companies are building private domain traffic pools to better understand user needs, what users like, and what they buy frequently. One precise service, rather than providing users with batch services.
Second, the supply chain. The essence of a distribution company is to sell products. Are the products in the stores a good and suitable product that can reach users in the shortest time? The digitization of the supply chain can solve the problems of end-to-end inventory and low efficiency, and can greatly reduce the transaction costs of brands and retailers, including communication, contracts, performance, etc. can be completed online, and the information of both parties is equal and standardized. Unify, improve efficiency and reduce costs, and can feed back the saved costs to users. Moreover, from production to delivery, the supply chain is reconstructed from a global perspective to do a good job of top-level design and end-to-end optimization, which can minimize transportation time, number of moves, inventory in each link, etc. Book.
Finally, go digital. Digitalization can better help retail companies realize supply chain and user operations. On the one hand, the maturity of new technologies, such as AI, big data, cloud computing, and artificial intelligence, has brought more opportunities for companies. Moreover, to achieve end-to-end comprehensive digitalization, good technology needs to be combined with business best practices and maintain the ability to continuously iterate. In addition, it is necessary to make intelligent decisions. For example, the retail giant Wal-Mart once sold baby diapers and beer together, but the sales of both diapers and beer increased, precisely because Wal-Mart made good use of big data technology. In addition to smart display, it can also help physical retailers improve product selection and other issues through digital means.
final words
"Humanity is going to be digitized in an all-round way. Digital China has become a national strategy. Digitalization is a long-term process. Today is only 1% to 2% of the historical process. We must firmly believe that digitalization is the future."
In fact, for Wumart, digitalization is a process of reshaping corporate value, including a series of adjustments to operating procedures, organizational structures, and management models. In this process, multi-point DMAALL provides it with strong technical support and ensures the system Relying on Wumart's actual combat experience, multi-point DMALL has also completed the rapid iteration and market verification of its products, truly helping retail enterprises to achieve data-driven management decisions and operation optimization. Dr. Zhang Wenzhong always hoped that through the practical experience of Wumart, he could bring more possibilities to the development of the industry and bring more inspirations to retail enterprises. I believe that with the joint efforts of everyone in the future, China's physical retail industry will also enter a new era. of the digital age.
