New digital operations and practices in the convenience store industry in 2021

In recent years, with the rapid development of my country's economy and changes in consumer demand, convenience stores have developed rapidly in the country. The number of top 100 chain convenience stores has reached nearly 132,000, and many excellent convenience stores have emerged. Local brand convenience store. But at the same time, there are common problems in the industry such as insufficient product strength, low degree of onlineization, low level of store management, and inefficient personnel. Domestic convenience stores urgently need to rapidly improve their digital capabilities.

The "2021 China Convenience Store Development Report" jointly released by KPMG and the China Chain Store and Franchise Association pointed out that with the support of policies, convenience stores will usher in five directions of transformation, namely: Upgrading the structure Chaining, attracting traffic with independent brands and personalization, creating a closed-loop digital operation, expanding the service radius of convenience stores, integrating supply chains and improving logistics management systems. At the same time, shopping convenience, experience scenario, category upgrade and digitalization will be the four core development trends of convenience store companies.

Let’s take a look at the digital innovation models of Lawson, FamilyMart, and Good Neighbor as representatives of convenience stores.

Lawson: Digitalization drives rapid growth

In recent years, Japanese convenience stores have gone against their previous cautious layout and started to " Running mode".

If you look at the pace, Lawson's is the largest. Today, with 3,256 stores, it has surpassed FamilyMart, becoming the foreign-owned convenience store with the largest number of stores in China. In 2021, Lawson will still maintain a growth rate of 30-40%, planning to open 1,100 new stores, and the total number of stores is expected to reach 4,300.

01 Digital tools to analyze customer needs

Lawson has expanded rapidly since entering China. In addition to the various franchise models, it also has its own set of system standards. Fan Guangdong, director of China Lawson System Department, mentioned the secret in a speech: "The first is the product strategy. We have our own product research and development team; the second is the membership system, which uses online data to carry out targeted analysis of customers. ;Last and most important: the output of business process standardization. Lawson has a set of standard management business standards that can be brought to all franchise systems. ”

Then Lawson. How did you develop this set of business process standardization? This comes from Rosen’s data analysis and summary of store customers over the years. In short, whatever customers want, the stores will provide it. If they like private brands, Lawson will produce them themselves.

Rosen found that more and more "small business district manufacturing and retail industries" are gradually forming, that is, from the procurement of raw materials, production of goods, store sales and Services, etc., are provided to consumers in one-stop service. When consumers are satisfied, they will naturally visit the store again. Over time, scattered customer flow will become a regular customer flow.

These data come from the powerful digital system behind Rosen, the collection of basic data and its efficient analysis capabilities. During the epidemic, many consumers were unable to go to stores. At the same time, Lawson began to establish a WeChat community. From drag-and-drop recommendations to consumers who independently scan the QR code to join the group, the survival rate exceeded 80%. During this process, the store will continue to publish new products, promotional activities, and interact with users in this group. In addition, there are solitaire activities, which can better grasp the product needs and prepare inventory.

02 Products and Operations

Lawson’s differentiated competitiveness in products lies in its fresh food and desserts, among which Fresh food sales accounted for more than 40%. Lawson will change 12 to 15 products every month, and 130 to 150 products a year, based on the popularity of the products and other factors.

The reason why new products can be released continuously and quickly lies in the fresh food factory behind Lawson. Lawson Fresh Food Factory's own products mainly include cakes, sandwiches, rice balls and other low-temperature fresh food products unique to convenience stores.

Lawson’s store operation capabilities are fully demonstrated in its understanding of young people. The consumer group Lawson wants to capture are young people aged 12-19. The shopping channels they are accustomed to using in this age group will accompany them throughout their lives.

To target the younger customer base, Lawson first made changes in the taste of its products. In addition to its signature desserts, including snow-skin mooncakes and other youthful flavors, other cakes, rice balls, Western pastries, and Korean food are also developed for the post-00s generation.

The same is true for its joint animation stores. Teddy theme store, HALLO KITTY theme store, LOVE LIVE! theme store, One Piece theme store, these IPs cooperated by Lawson are all familiar to teenagers. After 25 years in China, Rosen still shows the attitude of a young man. This is reflected in its insight into the preferences of young people and also comes from its flexible business philosophy.

03 Digitalization opens up new exploration of smart stores

Convenience stores have been upgraded from traditional stores to digital and smart stores! The transformation from single-store consumption to online and offline digital shopping is inseparable from the entire digital system.

Taking into account both technology and fashion, Zhongbai Lawson launched the first smart digital convenience store - Yongqing City Store, setting another benchmark store for the industry.

This convenience store has many technological innovations. Digital electronic equipment can be seen everywhere: electronic price tags, electronic screens, self-service checkout, etc., as well as newly launched Internet of Things control , air conditioning temperature control and freezer failure early warning systems.

The Internet of Things control system uniformly controls all circuit equipment such as sign lights and in-store atmosphere lights. Signboard lights and ambient lights will automatically turn on and adjust according to weather conditions to create a comfortable shopping environment for customers; at the same time, the circuit control system can also perform real-time analysis of the store's power consumption and fault reporting.

The air conditioning and temperature control system can not only meet the constant temperature adjustment of indoor temperature and humidity, but also timely cool down the outdoor unit of the air conditioner, thereby saving money and reducing consumption. The freezer failure early warning system can realize failure analysis and early warning of all freezers and freezers such as air curtain cabinets in the store. Once a fault occurs, the fault analysis data will be directly transmitted to the backend, greatly improving the timeliness of maintenance, ensuring normal operation of the store and safeguarding food safety.

The store also uses electronic price tags. The fresh food area uses electronic price tags. The price of fresh food can be adjusted at any time according to the needs of the store, changing the past paper price tags. reduce the complexity and further improve management efficiency.

The essence of retail is to serve customers and create the best consumer experience for users. Information technology can manage stores well and keep them warm.

At the 14th China Business Information Industry Conference, Lawson Deputy General Manager He Yunmin shared the key points of Lawson Sanjing Convenience Store: Refined management and precise marketing , product refinement. First of all, the practice of product refinement: from the product level, give consumers a reason to come to Lawson, give consumers a reason to come to Lawson again, and give consumers a reason to come to Lawson often. Reflect differentiated product power; master key Know-how and conduct full value chain management; KA-oriented supplier management with category management as the core.

The second is the practice of management refinement: 1. In 2019, Lawson implemented system transformation within the entire system: from Japanese-style selling price reduction method management to a closed-loop unit price of single products that is suitable for the changes in the Internet of Things era. 2. Strengthen management refinement in the temperature-dislocation competition strategy, achieve complementarity with the takeout platform in the time-dislocation competition strategy, and conduct cross-store pre-sales of refrigerated series.

Third, Lawson’s practice of precision marketing. Marketing precision does not limit itself. Through the value-added of Lawson platform, it operates a 15 million member system and cooperates with suppliers. , serve as a bridge between suppliers' new products and target consumers while providing suppliers with new product comparison and marketing information.

Data-driven empowering digital marketing, based on consumer demand and the implementation of new retail technology based on store POS business in convenience stores; Lawson’s closed-loop value, giving full play to offline Scenario value, cultivate reverse integration capabilities; deeply cultivate member data mining, O2O takeaway, O2O traffic drainage, E-PAY, SNS publicity, community promotion, etc.

FamilyMart: One center and four closed-loop digital strategies

By polishing the single store model, focusing on the penetration of the area Strategy, FamilyMart will first increase its market share in Jiangsu, Zhejiang and Shanghai, and then expand nationwide. In terms of store opening strategy, before opening stores in a region, we first build our own supply chain and logistics system, and then invite a large number of franchisees to open stores within the delivery range of the supply chain, so as to achieve the purpose of reducing costs and improving efficiency.

In order to cope with the increasingly fierce market competition, FamilyMart has also embarked on the road of digital transformation. It combines membership system and big data analysis to accurately locate post-90s customers and achieve rapid expansion.

So, how to do digital transformation? FamilyMart proposed “one center and four closed loops”.

01 A center

A center is a customer-centered value proposition. What can you do for customers? Why do customers come to you instead of others? Therefore, when analyzing needs, you must understand what do customers want?

Buying breakfast before going to work in the morning and then rushing upstairs is a temporary personal consumption. So, how to expand its scene? The opposite of an individual is the family, and the opposite of temporary needs is planning, so the whole family should launch a family consumption plan. FamilyMart currently has more than 60 million members, and members can use their points to get cheaper prices. Consumers can feel that the price of FamilyMart is very advantageous.

02 Four Closed Loops

FamilyMart first established an online mall. FamilyMart is not just an e-commerce store, FamilyMart is still an offline store. The first step is to do a good job offline and consolidate offline. And because FamilyMart has membership points, it is necessary to activate the points and provide them with more consumption scenarios, so an online mall was established.

The operation of the online mall uses two methods:

First, import from offline by scanning the QR code in the store Order. In the third year of FamilyMart's online mall, when the transaction volume reached 2 billion, it did not spend a dime on advertising, and all orders came from offline;

Second, through Pick up at the store to realize repurchase, and 50% of people will pick up at the store.

Some people say that I am a Family Member, but I don’t seem to have made any purchases online. That's right, because only 20 paid members can purchase it, and paying members need to pay a membership fee of 100 yuan per year. This is a membership model similar to COSCO. This membership model alone helps the whole family earn 1.2 billion a year without any cost. .

There is actually a lot of data behind paid membership. After FamilyMart collects a large amount of data in the background, it will continuously scan customer portraits.

For example, FamilyMart’s system scans data once a week. A certain customer comes 10 times a month. The data shows that he has not come for a week. When he hasn't come in two weeks, the system will send him a text message telling him that the family's lunch box is 25% off. Why a lunch box? Because the data shows that the last time he went to the store to buy a box lunch, if he goes to the store to buy a box lunch after receiving the text message, he will automatically receive a 25% discount. At the same time, the cashier will ask him if he will bring coffee today, because his tag in the system shows that he is a coffee expert. As long as based on the data, there is a 67 probability that he will buy this product, and the whole family will recommend it to him.

The ecological chain of FamilyMart is to allow catering and other different businesses to use FamilyMart’s points. In order to make the points work, let these businesses Customers become active and next get their customers coming back. Therefore, of FamilyMart’s 60 million members, 30 million are members who entered from outside after cooperating with various business formats.

Specifically, while focusing on information sharing with manufacturers and wholesalers, we achieve rationalization and efficiency of commodity circulation. , pursuing the maximization of customer added value through the development and production of marketable products.

According to Kensuke Hosomi, the new president of FamilyMart Japan, he stated to the public that "using digital technology, we are committed to reducing costs" and will accelerate the digitalization of stores as the highest priority project. . FamilyMart is supported by a complete set of digital systems, including ordinary membership system, paid membership system, digital product management system, FamilyMart butler system, etc. These digital tools also help FamilyMart analyze customer needs and store traffic types, leading to rapid expansion in addition to performance improvement.

Good Neighbor is a regional convenience store company with more than 300 stores in Beijing. It has been committed to using digital means to drive improvement of store operation capabilities. Regarding digital understanding, taking the recommendation of an e-commerce website as an example, it is stated that each user behavior and browsing habits will be digitally captured, analyzed and formed into strategies to recommend, reach and present in a way that consumers prefer. In fact, offline scenarios can also be defined digitally. In addition to traditional order data, user data, and even through IOT devices, user behavior data both inside and outside the venue, online and offline, can be effectively analyzed and turned into product display, marketing and other strategies. .

Good Neighbor: Running on the road of digital operation

In the digital operation of Good Neighbor, information and operations, Procurement, warehouse and other teams collaborated to digitize every link, and made corresponding adjustments to the personnel organization structure and related key operational data assessments based on the needs of the digital link.

Considering the actual operating capabilities and optimal cost structure of the retail industry, Good Neighbor believes that "intelligent decision-making and intelligent assistance" are the feasible implementation goals at the current stage. Complete "automation" is not required in the execution process. Completely economical. Especially in the case of small and medium-sized merchants, where talent is in short supply and the cost of high-end algorithm talent is high, it is even more difficult to completely digitize every process. It would be a more pragmatic approach to send part of the digital calculation results to the store for reference, combined with store operation experience. In fact, this is also corporate culture and has a lot to do with the development of Good Neighbors themselves.

In the digitalization process, the reasonable matching of people and goods (store-type scenarios) and the high degree of coordination between goods and places (good locations for high-quality goods) are the key to digital operation construction. the breaking point.

Regarding "people", Good Neighbor has recently been working closely with JD.com's retail cloud store digital team to conduct analysis, stratify users based on the user life cycle model, and work hard to Through user operation methods, guide users to make purchases in the store. Increase the depth of related purchases through the creation of scenes and the satisfaction of goods. At the same time, by matching user and product tags, the required products are placed in the corresponding store type to understand and meet user needs.

For "goods", Good Neighbor evaluates the entire network of a single SKU during the product selection process. During the ordering process, it uses past sales, inventory, loss reports and other data, as well as weather and holidays, etc. factors, provide store ordering data suggestions, and make reasonable order preparations based on the store manager's operational ideas. Through the hierarchical operation of commodities, the turnover efficiency, inventory depth, valuable product management, and category satisfaction of commodities are separately managed, and the life cycle of fresh commodities is reasonably planned, and losses are controlled through price change member notifications and other methods. Processed foods are linked to production plans with upstream factories.

Regarding the "field", the store digital team conducted in-depth cooperation in site selection and on-site management.

In terms of location selection, through the application of spatial big data and the behavioral characteristics of convenience store customers, the situation, population characteristics, and urban data of the area where the store is to be opened were digitally displayed and analyzed. For reference, give store developers a tool.

In terms of store management, reasonable planning is carried out for user movement lines and hot areas, and the floor efficiency of the cargo area, reasonable matching of shelves and products, and turnover efficiency are made Proper planning and evaluation. Continuously revise the execution efficiency and reasonably match good positions with key planned products.

In the daily management of stores, Good Neighbor has developed a "store management system" by itself to guide & supervise stores, implement standardized implementation and analyze operational data to form guidance Action (Digital Operations).

Through the store management system, it is integrated with the store's daily ordering, receipt, inventory, loss reporting and cashier work, especially the digital strategic guidance of some execution actions during the execution process. , further improving store execution efficiency and reducing the difficulty of store staff's thinking.

Good Neighbor believes that digital operation is not only a set of information systems, but also a set of digital operation methodologies, including: task-gt; execution-gt; statistics-gt ;Analysis-gt;Early warning-gt;Strategy-gt;"Automated" intelligent decision-making and intelligent assistance.

The management’s determination to change from original empiricism to data strategy in operational thinking requires not only changes in information systems, but also organizational structure, store processes and assessments. correspondence and support. The progress of the digital operation system will also move a set of static operation standardization towards dynamic standardization, stimulating the continuous improvement of the efficiency of enterprises in every small operation link.

Conclusion

After the epidemic, major supermarket brands are gradually turning to smaller stores around communities. At the same time, Internet giants such as Meituan, Alibaba, Pinduoduo, and Didi have successively joined community group buying and flocked to the community. As a convenience store serving the community, will its living space be further squeezed?

In this regard, professionals believe that the core demand of convenience stores still lies in the word convenience. The miniaturization of supermarkets and e-commerce community group buying have a certain impact on convenience stores, but it is not particularly large because the positioning of each business format is different and the functions are also different. Supermarket miniaturization and community group buying are different in terms of convenience value compared with convenience stores.

In the next 3-5 years, sustainable development driven by operational capability improvement will be an important development direction that convenience store companies will focus on in the future.

Among them, store operations are the core foundation to support future development. Enterprises need to improve the overall store operation level around store expansion, product iteration and digital capabilities.