Digital strategic transformation of traditional department store retail industry

With the impact of high costs, network shocks, consumption upgrades and other factors, in recent years, China’s department store retail industry has encountered an unprecedented winter.

Three years ago, some media described the development status and trend of the retail department store industry as follows: “Dance dance songs, the wind is always swayed, the rain blows away.” A pessimistic voice.

However, in the past two or three years, department store retailers have not been sitting still, they are trying to transform, innovate and innovate with their own methods and models, and try new ways under heavy resistance. The concepts of new retail and smart retail are also born in this context.

Nowadays, traditional department store retailers are mostly based on online and offline, rebuilding traditional business elements as the core, innovative business development and full-service integration as the goal, actively transforming, focusing on consumer demand, and striving for new changes, with the help of mobile New technologies and technologies such as payment, social networking, self-service cashier, virtual fitting, virtual shelf, face recognition, RFID, gesture recognition, AI, etc., vigorously develop quality retail, smart retail, unmanned retail, green retail, and greatly enhance the shopping experience. Effectively saving labor costs, the company’s competitiveness has been enhanced in all aspects.

It can be said that digital and intelligent retailing has made many contributions to the improvement of efficiency, cost reduction, customer experience optimization and revenue improvement for traditional department store retail business, helping retail department stores to complete transformation and upgrading.

Let us see some of the digital marketing strategies and smart retail cases of traditional department store retail.

Digitization and intelligence become the new label of traditional department stores and a new driving force for growth
Yintai Department Store

Yintai Department Store was established in 1998 and listed on the Hong Kong Stock Exchange in 2007. In 2014, Ali acquired the controlling stake in Intime Department Store through an equity acquisition and further privatized it in January 2017. Ali used Intime Department Store to explore the digital solution of the physical store, and finally completely opened up the online and offline business, online and offline. In the digital practice, Yintai Line adopts its own commercial counter management system, and adopts Ali’s “喵街” on the line to fully expand e-commerce and realize the online and offline integrated O2O mode.

At present, Yintai Department Store is fully committed to creating new retail products with the support of Ali. It is worth seeing.

In some entities, retailers are hesitant to build their own e-commerce platform, or cooperate with the big e-commerce platform, Yintai has already developed an omni-channel model, and has concentrated on the new retail business, and at the same time handed over the technology to Ali. In the past one or two years, one of the highlights is that a large number of Amoy brands have settled in, and Amoy brands have appeared in Yintai collection stores. The collection store and Tmall are automatically at the same price, and the goods, prices, warehousing, logistics, and settlement are fully integrated online and offline. Before and after Intime, more than 60 Amoy brands including Inman, Seven Gege, Deer and Flying Birds were introduced, attracting a large number of consumers who like the Amoy brand. In addition, Intime also cooperated with Ali in six aspects of corporate marketing, merchandising planning, daily operations, payment, refund system, logistics, and port.

The key point is that with the power of Ali, Yintai strengthens the reconstruction of people, goods and fields. For the new retail, Intime is currently focusing on building a pilot that truly reshapes people, goods and fields with Internet elements. At present, Intime’s membership system has been linked to Tmall Big Data and plans to open with Alipay. Recently, Yintai has initially completed the reconstruction of people, and the reconstruction of the most difficult goods and fields is underway.

Zhongbai Group

With the help of smart retail and new retail, Zhongbai Group reversed the unfavorable situation and the 2017 annual results broke out. According to the financial report, in 2017, Zhongbai Group achieved a revenue of 15.206 billion yuan, a year-on-year decrease of 1.04%, and a net profit of 67.646 million yuan, a year-on-year increase of 946.18%.

2017 is a year in which the transformation and adjustment work of Zhongbai Group has made an important breakthrough. In the case of a slight decline in revenue, profits have surged. An important reason is that in addition to the offline store expansion, Zhongbai Group began to conduct free purchase and O2O projects with multi-point living network technology in 2017. Collaborate to tap new online business increments. At present, 65 stores in the city’s warehouse supermarkets have been fully opened for free purchase, and 20 O2O businesses have been launched, with 150,000 registered members.

Multi-point Dmall and Zhongbai Group rely on model complementarity and resource sharing to achieve multiple dimensions such as commodity integration, logistics integration, warehousing integration, technology integration, membership integration, and marketing integration. At the same time, the use of offline store resources, commodity supply chain and warehouse, combined with multi-point Dmall online traffic, technical efficiency and big data operations, fully assist Zhongbai Group to achieve new retail digital transformation, to solve the traditional retailers in the checkout queue, product upgrades, The pain points of unified price, user loss and e-commerce impact have improved the overall operation efficiency of the store.

At present, the cooperation model of Zhongbai+Multipoint has achieved results. Many of the offline shopping pure self-help models “free purchase” and the online and offline integrated O2O model have been created from the original Wuhan area. The pilot of the store has expanded to the whole city of Wuhan and even its surrounding cities. With the further deepening of the cooperation between the two parties, in addition to more than one point in the Zhongbai warehouse, more convenience stores are also in the midst of new retail preparations.

It is worth mentioning that since the cooperation between Zhongbai Group and multi-point Dmall last year, the multi-point free purchase, O2O and other multi-point advantage businesses have achieved far more than expected in the operation of the Zhongbai line. Recently, the two sides jointly announced that the next phase of cooperation will be officially opened: since March 15 this year, the multi-point Dmall new service function “self-service purchase” has successively landed in the Zhongbai supermarket store, which will bring more convenient and quick shopping to consumers. Experience.

Multi-point self-purchasing and the previously highly acclaimed “free purchase” provide customers with a new experience of “shopping is not queued”, but the specific use of the two is different: multi-point free purchase with mobile phone as the main operating platform, After scanning and arranging the goods through the multi-point APP, the “payment voucher code” can be swiped on the entity verification machine to remove the goods; the multi-point self-purchase is to bring the goods to the physical self-service cash register. Code, self-operated cash register shopping cart to complete the addition, open the multi-point APP “sweep” function, scan the payment code on the screen and pay, you can complete the purchase, the whole process takes only a few minutes. It not only provides different consumers with the freedom to design shopping lines, but also quickly completes the shopping process. It also helps the store to reduce operating costs and promote the improvement of turnover rate and efficiency.

On January 8 this year, Zhongbai Group also launched the first unmanned supermarket, and smart retailing reached a new level. The name of Zhongbai’s self-service vending supermarket is called “Good State e-purchase”, which was jointly established by Zhongbai Group and Hubei Bangmart Technology Co., Ltd. The first store is located in East Lake Greenway, Wuhan. The first unmanned supermarket in Zhongbai has the following characteristics: 1. Diversified physical display of various products, touch screen selection; 2. Sweep settlement, all mobile phones are fixed; 3. Labor cost is saved, discount 20% 30% .

In the short period of six months, Zhongbai Group has quickly completed the digital upgrade and the effect is good. It should be regarded as one of the leading enterprises in the industry. The cooperation with multi-point Dmall is also the benchmark for the “new retail” of traditional retail transformation. The cooperation model is worthy of all over the world. Offline retailers learn and learn from.

Rainbow Mall

Tianhong Shopping Center was established in 1984. It started the chain development in the country with the combination of “department store + supermarket +X”. In 1995, it started to use POS computerized management system. It is one of the earliest physical retail enterprises in China. In 2015, we established our own digital R&D team, which has initially formed a three-dimensional e-commerce model of “Tianhong Micro-Products + Online Rainbow + Tianhong WeChat”, “Solid Store + PC End + Mobile”, which realizes the integration from online stores to online and offline. Omnichannel. Among them, the rainbow scarf is the product of the comprehensive deep integration of the rainbow and the online, and is positioned in the localized consumer service platform, with many functions such as shopping, Tianhong home, overseas purchase, and life service; Tianhong WeChat service number has millions of fans. The volume has the functions of draining the rainbow scarf APP, membership service, and fine-grained management of members; Tianhong micro-product is a product based on the mobile social B2B2C model. At present, the focus is on digitalization of the “Red Scarf” APP, which promotes the mode of shopping for customers at home.

In April 2018, Tianhong signed a strategic cooperation agreement with Tencent to jointly establish a smart retail research laboratory to conduct research and development of more application-level products in the fields of intelligent identification, AI, big data, consumer finance, etc., to realize new retail from digital to intelligent. Transformation.

The current hot news about Rainbow is the opening of its new retail category, “Global Inclusion”. It is worth noting that the “Global In Select” cashier link uses RFID radio frequency identification technology. The system can quickly identify the type, quantity, amount, and discount of the product without the need for labor. This is the first time that RFID radio frequency technology is combined with the retail format. It is also the first integrated RFID self-service cash register in China, which solves the traditional retail checkout queuing problem and quickly completes the shopping process.

RFID technology is also used in Tianhong’s unmanned convenience stores. On August 8 last year, Tianhong’s first unmanned convenience store opened in Shenzhen Nanshan, covering an area of ​​12 square meters. It uses RFID radio frequency identification, intelligent monitoring, cloud customer service, online payment and other technical means. The convenience store operates in the exclusive form of members and connects to the Rainbow Scarf App to enhance the intelligent shopping experience.

Yonghui Supermarket

In the digital transformation of department store retail enterprises, Yonghui Supermarket is a successful model.

Join hands with Tencent, technology to enable retail. Nowadays, Yonghui needs data and technology support from the store, online and offline users, and supply chain. Yonghui and Tencent Cloud create a Yonghui cloud computing to help Yonghui create smart retail based on data technology. Improve efficiency and reduce costs.

Yonghui uses Tencent Cloud’s mature network and strong infrastructure to build a multi-site, multi-center unified control and Yonghui cloud platform, providing a wide range of cloud computing services such as sales of big data and artificial intelligence, and the stability of services. High reliability, let Yonghui cloud land quickly and save a lot of time.

Technology empowerment store. Yonghui Store combines Tencent Cloud’s computing power and artificial intelligence algorithms to make breakthroughs in different areas of cooperation such as smart site selection, smart selection, sales measurement, business circle insight, store user portrait, face payment, etc. And effective results.

Nowadays, Yonghui Super Species, which is popular in China, provides a selection of quality products that are directly imported from the world. After purchase, consumers can cook and eat at the store, or enjoy the 30-minute delivery service through the app and small program platform. This new format of “mixed experience of online and offline integration of fresh food and retail + retail” opens up a new viable model for physical retailing and online integration.

In addition, Yonghui Yunchuang, with its global supply chain and smart technology, launched the new retail format of the new convenience store, Yonghui Life, providing quality services such as 30-minute delivery through offline stores and online apps to satisfy users’ freshness and convenience. The omni-channel demand, to achieve a new consumer experience online and offline, has been the shadow of an unmanned supermarket.

At present, Tencent Cloud Smart Retail has further cooperated with Yonghui’s series of brand stores such as Yonghui Life and Super Species to provide face recognition technology in floor-to-door stores, which can fully understand the rich user portraits and real-time transaction conversion rate of the store, and realize the panoramic view. Consuming consumer insights, combined with Yonghui’s self-developed store self-checkout system, through face recognition payment, the mobile phone can easily complete the whole process of shopping, greatly enhancing the store shopping experience.

In summary, these traditional department store retails have the following characteristics and phenomena in digital construction and new retail exploration:

First, the omnichannel digital model has become the mainstream of the industry. In order to fully explore the retail format upgrade, most department stores have built an all-channel digital model of “entity + online + mobile”.

Second, the new retail business is frequent. The new concept and the new model have given birth to a new retail scene of thousands of stores, and various “retail +” new formats have emerged one after another. Compared with the traditional format, the new format pays more attention to the customer experience. Young fashion and high-end luxury department store projects are greatly affected by shopping centers. The number of newly opened stores has continued to decrease year-on-year. Large traditional department stores have generally transformed into shopping centers, super-species, outlets, etc., and traditional department stores have invested heavily.

Third, various new technologies continue to drive smart retail to master more accurate consumer data and achieve precise marketing. Information technologies such as mobile payment, Internet of Things, face recognition, and AI promote the transformation and upgrading of the traditional department store retail industry from procurement, production, supply, and sales.

Fourth, the deep integration of retail capital, to create an integrated online and offline integration. On the one hand, large-scale Internet companies infiltrate large-scale offline, online and offline integration from capital integration to business integration; on the other hand, physical retail value is highlighted, high-quality offline retail brands are fully recognized by the capital market, The next company is also accelerating integration and building a nationwide retail platform.

Embracing the transformation and breaking the same, opening up the digital marketing system of the whole store
Although there are many forms of business innovation, there are still many traditional department store retailings that are stuck in a simple business portfolio or business segmentation or focus, and deep innovation and lack of exploration. The problem of omni-channel construction is similar. Although the O2O model has been implemented in form, an online payment platform has been established, but there is no substantial progress. Although online transactions are started but experience-based services are neglected, consumer participation is low, and the online marketing platform is completed. Lack of professional operation team, insufficient mining of consumer big data information, can not obtain effective business information.

How to use the Internet’s thinking and new technology to further transform traditional department store retail, and raise new retail and smart retail to a whole new level?

The first is to achieve a comprehensive digitalization of customers, commodities, and marketing. In the new customer-centric marketing era, it is necessary to first realize the digitization of customers, that is, to achieve customer registration, establish a customer account system, and connect online to target customers, affecting target customers.

The second is to realize the onlineization of all goods in the store. Make it easy for your target consumers to search for the store’s products online, and realize real-time push of the store’s products and target customers. To realize the digitalization of marketing, in the era of mobile Internet, enterprises must move traditional offline marketing methods and measures to the Internet.

The third is the interconnection of various data. With data as a means of collaboration, it is the first to open up data collection and sharing, and realize multi-dimensional and multi-dimensional data real-time, unified and analyzable. At present, the data collection and analysis of the whole industry chain is mainly covered from the procurement end, the logistics end, the consumption end and the service end. The supply chain, warehousing and data of e-commerce and physical stores should be opened up to form an integrated management. Traditional department store retail enterprises mainly use OA, CRM, ERP and other information systems to collect and integrate internal data of the enterprise to achieve interconnection and interoperability.

The fourth is to use a variety of new technologies to promote accurate marketing. Some of the leading retailers have begun to apply these digital technologies to increase operational efficiency and reduce costs while enhancing the consumer’s entire journey experience. For example, deploying artificial intelligence technology in physical stores, combined with technologies such as camera (face recognition), smart shelves, and mobile payment, enables stores to image consumers’ gender-age appearance, product preferences, mood changes, and consumption records to capture consumer behavior. , tap consumer motivation, increase conversion rate, and flexibly change product direction and business strategy.

The fifth is to do a good job in the terminal operation and achieve a good experience. Break through the traditional sales scene and interaction mode, design a scene-based, layered terminal system, including the comprehensive upgrade of the offline experience scene, and the good integration of online and offline channels to meet the comprehensive needs of customers for timeliness and experience. For example, video walls and digital screens can be used to display product information in an all-round way, and provide images and videos that customers can interact with products to promote the creation of potential purchases. In addition, virtual and augmented reality can be integrated into offline traditional retail. (such as virtual fitting) can provide a series of opportunities for further user participation, a more personalized user experience, and adapt to environmental changes, thus injecting digital advantages into the in-store experience.