This report gives some insight into the market and consumer changes under omni-channel integration.

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The title picture comes from: vision china

The title picture comes from: vision china

Titanium Media Note: Omni-channel integration is one of the most mentioned words in the retail industry in recent years. It was born in the context of the continuous increase in online customer acquisition costs and the continued decline in offline performance in recent years. From the emergence of O2O instant consumer super-business in 2013, online and offline integration began to sprout, and a wave of full-scale retail system self-upgrading and iteration began in 2016. Now, the online and offline omni-channel exploration of the retail industry has gone through several years. time.

In the years of omni-channel integration exploration, what industry insights did participants have and what effective paths were found? As a representative team in the omni-channel integration, Wal-Mart, JD, Jingdong arrived at home, and Tencent today jointly released the “China Retailer Super-Channel Integration Development Annual Report” (hereinafter referred to as “Report”), sharing the process of omni-channel integration. Some industry insights, and some summary and discussion of the current mainstream of several integrated development paths.

The "Report" analyzes the current trend of upgrading the profile of the consumer market and consumer behavior, and consumers enjoy the shopping experience of convenience, speed, quality and personalized customization. At the same time, with the rapid development of mobile Internet and the change of consumer concept, online and offline consumption boundaries are gradually blurred, shopping scenes are increasingly rich, and 79% of consumers shop online and offline, only 16% of consumers Only a single offline consumption. From the perspective of gender, men prefer online shopping, and the proportion of male consumers is as high as 44%, which is significantly higher than the proportion of 20% below the line.

In order to cater for the changes in consumer behavior, many online and offline integration modes have sprung up. The Report summarizes three typical integration modes: First, integration based on the improvement of supply chain efficiency is mainly reflected in boosting the retail chain through technical means; Second, based on the integration of the reconstruction of consumer experience, focusing on the optimization of consumer experience through digital innovation combined with retail operation of the Internet. Third, based on the fusion of real-time consumption scenarios, it mainly reflects the upgrade of offline stores to online ones, and meets consumers' real-time needs through real-time distribution.

The Titanium Media Festival selected some of the core content of the report, organized as follows:

Chinese retailer's super industry development background and current situation

There are four stages of commercial supertrade in China.

In the first stage, Walmart, Carrefour and other international retail giants poured into the Chinese market in the late 1990s, as well as China Resources million, supermarkets and other domestic supermarkets developed rapidly, foreign capital, domestic retail supermarkets occupied the dominant position in the market.

In the second stage, with the popularity of the Internet, the scale of e-commerce has exploded and online commerce has flourished. At the same time, convenience stores expand rapidly because of their timeliness and convenience.

In the third stage, with the changes in consumer demand, O2O instant consumers have become super-business and have developed rapidly.

In the fourth stage, online and offline self-upgrading and iteration from the whole retail system, the retailer super market formed an online business super-represented by Jingdong Supermarket, the omni-channel retailer represented by Wal-Mart, and Jingdong’s home. The representative O2O real-time consumer super-sports, the new retail species represented by 7FRESH, etc., coexist. Under the trend of parallel development of various business super modes, the trend of online and offline omni-channel integration has emerged.

According to the Euromonitor data, the Chinese supermarket industry is dominated by online retail and hypermarkets/standards. In 2017, online retail sales accounted for 23.8% of total retail sales, and hypermarket/standard super retail sales accounted for 22.3% of total retail sales. Online retail and large-scale commercial supermarkets are the main retail formats on the market.

With the popularization of mobile internet and the change of consumer preferences, consumption habits and consumption demands in the new era, online and offline integration has become a major trend. offline traditional merchants began to accept and embrace the internet, online retailers also actively cooperated with offline enterprises, offline merchants and online retailers have been cooperating more closely, and retailers' offline and offline integration has entered a new stage. The characteristics of the new online and offline retail formats are the integration of the three dimensions of digitalization, whole channel and more flexible supply chain, of which digitalization is the most core characteristic.

In terms of consumer characteristics, youthfulness, affluence, rationalization, and sinking of consumer potential are several key words.

Younger: 80, 90 gradually become the main consumer, preferring the all-channel mode of consumption

According to World Bank data, in 2017, the proportion of people aged 20 - 39 was the highest, with 29.7 % of women in the age group of 20 - 39 and 30.1 % of men. Compared with previous generations, the " post - 80s" and " post - 90s" have very different consumption habits. These people have the ability and will to improve their personal consumption level, and their standards for quality, experience and novelty are getting higher and higher. A single online or offline retail model cannot meet this group of consumers, and the online and offline integration model gradually meets their shopping needs.

Rationalization: the pressure of the first-tier cities increases, "urban white-collar" no longer willful consumption

In recent years, the per capita disposable income of urban residents in China has continued to increase, but the per capita consumption expenditure growth rate of urban residents in 2017 is lower than that of 2016. The main reason is that in recent years, the living costs of urban residents, especially those living in first-tier cities, are increasing day by day. At this stage, the first-tier city residents tend to rational consumption, more inclined to high price-performance products.

Consumption Potential Sinks: The Backward Attack of Low - level Cities and the Rising Consumption of " Small Town Youth"

Compared with the high cost of living of consumers in first-tier and second-tier cities, consumers in third-tier and lower cities face less debt pressure, while prices are relatively low, living and living costs are lower and purchasing power is raised faster. According to Jingdong Supermarket data, the sales growth rate of the third-tier and below cities was higher than that of the new first-tier and second-tier cities from July 2016 to June 2018. With the continuous increase of income, the third-tier and below cities have greater consumption potential.

The New Trend of Over - consumption by Chinese Retailers

The pursuit of High quality, consumers from "chopping hand" to "quality Family" stride forward

In recent years, domestic residents' consumption continues to expand and upgrade, consumer consumption has changed from the focus on quantity satisfaction to the pursuit of quality, high quality goods are more and more popular. According to the survey data, consumers pay most attention to the protection of authentic goods when purchasing online, and price becomes the secondary factor that affects consumption. The after-sales service and category richness of commodities and the timeliness of logistics are also the factors that users value in the consumption. According to JingDong's supermarket, JingDong's home and Wal-Mart data, people are increasingly looking for high-quality products when they buy food and drinks.

Rational consumption, "buy fine buy" is more important than "buy more expensive"

In addition to focusing on product quality and time, 73.8 percent of Chinese middle-income consumers pay more attention to the value of goods when they consume, according to the relevant report. With the change of consumer demand, the concept of "buy only the expensive, not the right" has been replaced by the concept of "buy fine and buy well," and the corresponding goods of quality are no longer linked to the most expensive. The pursuit of efficient selection of useful good things at the right price is the main consumer view of the day.

Pursuing enjoyment consumption, consumers pay attention to the dual enjoyment of material and spiritual

Enjoyment consumption refers to people's consumption in order to meet the needs of enjoyment, such as entertainment and cultural services, advanced food, and some spiritual and cultural goods and services. Since 2013, the proportion of education, culture, entertainment and daily necessities / services has been increasing in our country. The content of consumers' needs has shifted from the initial level of "food and clothing" to spiritual enjoyment. People pay more and more attention to consumer experience when purchasing consumer goods, enjoyment consumption becomes the focus of consumers.

Pursuing individualized consumption, keeping up with the trend, showing individuality is becoming more and more the label of the 80,90th generation

Residents' consumption has now entered a new stage of development, and consumers in the post - 80s and post - 90s have become the main force of consumption. Compared with consumers in other age groups, the post - 90s are most willing to try new products, and their choice of brands is more discrete and diversified. Small brands and customized products are quickly accepted by the market.

Pursuing convenience and quickness, one-stop service is more popular

At present, people's pace of life is speeding up, work pressure is high, and all aspects of food, clothing, housing and transportation are pursuing " convenience and quickness", which has given birth to many new formats of super retailing.

According to Erie, 67.6 percent of consumers choose the O2O platform to buy goods because of "door-to-door service, convenience and speed." In addition, with the intergenerational changes of the major consumers, consumers are more willing to improve their efficiency, buy the products they need at one time, and consumers increasingly pursue diversification and personalized goods. Provide "one-stop" service more to meet the needs of consumers.

The boundaries of online and offline consumers are gradually blurred, and 79% of consumers shop online and offline.

Nielsen's research data shows that 18-30 year olds prefer online shopping, 41% of 18-30 year olds choose online shopping, and 29% of 18-30 year olds choose single offline. Shopping, from the perspective of gender, men prefer online shopping, the proportion of male consumers is as high as 44%, significantly higher than the proportion of 20% offline.

As online and offline consumer channels become more integrated, more and more consumers choose to shop online and offline. A consumer research report from McKinsey shows that currently 5% of consumers choose pure Online purchases, 79% of consumers are online and offline to shop, while 16% of consumers only have a single offline consumption.

With the change of consumer demand and the development of the industry, consumers no longer simply use single online or offline consumption, but choose the most appropriate way according to their own needs. The consumption scene is diversified, the consumption choices are more diversified and convenient, and the user experience is getting better and better.

Integration of all channels has become the Development trend of retailers' Super-industry

Driving force of fusion on offline: complementary advantages and mutual promotion on offline

The rising cost of online customers and the continuous decline of offline performance promote online, offline retail enterprises pay more attention to the return of the essence of business, opening the road of innovation and integration. The advantages and disadvantages of line and offline are different, and there are obvious complementary relationships among guest group, scene and channel. Online channel is convenient, fast, but offline experience and trust advantage can not be replaced.

Online and offline have different attraction to consumers: online is convenient and fast, offline experience and services are more attractive to consumers

Consumers who prefer to shop online believe that “the goods are extremely rich”, “affordable”, “deliverable” and “can save time” are the key to their online shopping. Consumers who prefer to go shopping in physical stores believe that offline can be personally selected and quality is guaranteed. Online and offline integration allows retailers to better meet the diverse needs of consumers.

Consumers have diversified shopping needs: the industry is merging to meet the diverse needs of consumers

The shopping process of consumers can be divided into demand generation, searching for goods, selecting goods, placing orders, paying, taking delivery or receiving goods, using, feedback and other processes. With the influence of consumers' age, income, lifestyle and other changes, the whole process of consumer shopping has changed. Personalization, quality, convenience and quickness have become the core demands of consumers. In order to meet the diversified shopping needs of consumers, retailers have started to move towards all-channel retailing, which integrates online and offline, so that consumers can purchase the goods and services they need anytime, anywhere, freely, conveniently and quickly.

Shangchao retail industry enters a new era of omni-channel integration: consumer-centric, seamless cross-channel experience

In the context of the new era, youthfulness, personalization, quality, and fragmentation have become the mainstream consumption characteristics, and promoted the transformation and upgrading of retailers in the industry. From the perspective of the development of the channel, the retail industry has experienced a single channel and multiple channels, and has gradually moved towards a new phase of consumer-centric, online and offline integration. The supply chain, logistics, marketing and service methods have also followed. upgrade.

Industry changes need support from many technologies: technology development, retail infrastructure open to help retailers upgrade beyond the industry

Changes in consumer demand have driven retailers to integrate online and offline development in hyperindustries, while the development of technology and the improvement and opening of retail infrastructure have provided strong support for upgrading and changing industries. In recent years, new technologies such as cloud computing, artificial intelligence, big data, internet of things, ar / VR, block chain and so on have developed at a high speed and are gradually applied to all aspects of the retail industry. the improvement and opening of many retail infrastructure has laid a foundation for further integration online and offline.

Emerging technologies are applied to all aspects of retail sales, retailers super-retail full chain intelligent upgrade, improve efficiency, optimize experience

With the deepening of the integration of online and offline retail industry, consumer-centered has become the core concept of industry development, and there has been a lot of convergence and innovation in the market. And the rapid progress of related science and technology and the improvement of data system are the important driving force behind the industry transformation and upgrading. Computing power, algorithms, data and other core factors have experienced rapid development in the past few years. With the gradual promotion and deep application of retail science and technology in the whole chain of commercial super retail industry, the whole industry will realize intelligent upgrading. Efficiency and experience will be greatly improved.

Analysis of typical patterns of online and offline integration

Model 1: Integration Based on Supply Chain Efficiency Improvement

One of the important purposes of the integration of online and offline is to realize the organic convergence and integration of information flow, capital flow and logistics, which makes the process of production, circulation and service more efficient.

In order to better match "people, field, goods", to realize the supply effect of people in its field, goods in its position, people and goods matching, the comprehensive integration of supply chain is an important foundation, intelligent supply chain will not only be the traditional supply chain. It will rely on big data and information systems to integrate elements such as comprehensive perception of user needs, intelligent command and coordination, customer precision service, intelligent full-dimension collaboration, and focus on security, etc. Enabling systems to act in a coordinated manner under the leadership of information to maximize service energy and release service capabilities in an orderly manner will ultimately result in more accurate services and more transparent, flexible and agile supply chains. Make the various functions more synergistic.

Mode 2: Integration Based on Reconstruction of Consumer Experience

Based on the convergence of consumer experience refactoring, the core is to optimize the consumer-to-store experience through online and offline integration and the use of numerous retail technologies.

At present, there are two different approaches to the integration of reconstruction based on consumption experience: one is to realize digital innovation and upgrading of existing stores, which is relatively low in cost and can achieve rapid and large-scale replication and expansion; The second model is to use all kinds of retail technology and organic combination of various formats ( such as supermarket + catering ) to create a new species of business super. Both models have achieved the optimization of consumer experience and the improvement of store efficiency through online and offline integration.

Mode III: integration based on extended consumption scenarios

Based on the fusion of consumption scenario extension, the main performance is online upgrading of offline stores and meeting consumers' immediate needs through instant delivery. For consumers, instant consumption, with its advantage of short-distance instant distribution, fully meets the consumer's demand for convenience and immediacy of high-frequency consumer goods, provides consumers with a convenient and quick shopping experience for one hour delivery, and meets the higher requirements of consumers for timeliness of shopping.

The online platform upgrade solution of the enabling platform, together with the retailer's offline store network, strong procurement system and supply chain, together to form a complete, replicable, large-scale, cost-effective solution.

Trend outlook

Integration of all channels to meet the changing trend of consumption: from single "material" satisfaction to "Commodity experience" dual satisfaction

Consumer trends have changed in two ways.

First, consumer demand is changing. Today, consumers are not only concerned about the properties of goods such as function and durability, but also about the experiential needs of goods such as specialization, personalization and high quality. Secondly, consumption habits are changing, and consumers' consumption scenes are increasingly diversified and scattered. For consumers, physical stores are no longer the only shopping scene. More and more shopping terminals are appearing at present, such as computers, mobile phones, tablets, smart watches, virtual reality devices, etc., all of which have become shopping interfaces. Consumers are having countless screens, scenes and shopping entrances.

As shopping scenes become increasingly rich and fragmented, consumer habits expand to focus on product features and services, and omni-channel integration and consumer shopping experience will become the industry's breakthrough direction.

All-channel integration and empowerment of retail: online and offline two-way integration

The integration of online and offline retail channels enables offline retail enterprises to actively improve the digital level of their stores, connect online and offline commodities, customers, order information, and better match retail elements such as customers, commodities, venues, and so on, so as to improve operational efficiency; Online retailers upgrade intelligently through strong supply chain system, technology and perfect retail infrastructure, while O _ 2O and Internet integrated service platform optimize consumer shopping experience through technical means and service methods.

Overall, online and offline omni-channel integration has opened up online and offline resources, improving the operational efficiency of online and offline businesses, and more importantly, providing consumers with multi-channel and multi-modal shopping. The experience greatly enriched the service content in the retail supply and promoted the transformation of the consumer consumption structure from commodity consumption to enjoyment/service consumption.

Retailers overtook the front, middle, and background full links to begin merging and upgrading. At the same time to improve the consumer experience and achieve the efficiency of the whole industry, the integration of all channels will become the future trend of the whole retail industry.

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