2019-08-05 13:54

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Social E-Commerce: A New Business Revolution in Retail Business

 

[Beijing Direct News Network, August 5] (Direct Sales Reporting Network)The emergence of social e-commerce in recent two years is a new thing in the deepening process of supply-side structural reform. Essentially, it shows a new commercial revolution taking place in China's retail industry. Studying the commercial revolutionary nature of social e-commerce is of great significance to promote the deepening of China's economic reform and the development of socialist market economy.

I. The Course of Retail Revolution

Retail is a business activity in which commodity operators or producers sell commodities to individual consumers or consumers of social groups. The characteristics are that the quantity of each commodity transaction is relatively small and the number of transactions is frequent; the commodities sold are consumption materials, which are used for living consumption by individuals or social groups after purchase; after the transaction, the commodities leave the circulation field and enter the consumption field.

Since the mid-19th century, several revolutions have taken place in the world's retail industry, namely, Department stores, supermarkets, chain stores and no-store sales.

The first revolution in retailing: Department stores.

In 1852, in Paris, France, there was a young man named Aristide Busiko who was born in a Hat-Making family, but he felt that there were new business opportunities in that era. He wanted to provide shoppers with more diversified choices in the new business model. So he started a hundred called Bon March re. Stores inadvertently opened the first revolution in retailing. The word "Bon Marchlei" means "cheap market" in French. Bomarche department store has changed the traditional "workshop" retail mode, the most prominent innovation is: fixed prices, small profits and more sales. In the late eighties of last century, there was a "commercial building fever" in all parts of China. Many counties and cities appeared "department stores" and "people's shopping malls". At one time, there were many cars and buses, which became a common memory of the prosperity of the market in the early period of reform and opening up.

Retail Revolution II: Chain Stores.

Shortly after the emergence of department stores, Americans invented a business model that can quickly replicate retail stores, namely "chain stores". In 1859, in New York, two small partners from Maine, George Gilman and George Huntington Hartford, founded the Atlantic and Pacific Tea Company (A&P). A&P is well-known in the United States and the world as the pioneer of modern chain stores. The emergence of chain stores has changed the form of commercial organizations, that is, from single stores to combination stores, through the establishment of a large-scale sales system, to achieve economies of scale.

The third revolution in retailing: supermarkets.

Supermarket, now commonly known as "supermarket", is an American invention. In August 1930, Michael Coulomb in New York opened the world's first supermarket, the Kim Coulomb Joint Store. The emergence of supermarkets is known as the "retail revolution". At that time, the United States was an automobile society. The large refrigerators at home provided the conditions for one-time food purchase. The way of self-service shopping brought convenience to customers. The promotion strategy of "small profits and more sales" induced customers to buy large quantities of food from the economic benefits. In the process of supermarket development, there are many retail formats, such as comprehensive supermarket, convenience store, community supermarket, discount store and so on. In the mid-1980s, supermarket was introduced into China. In 1991, Lianhua Supermarket was founded by Shanghai Internal and External Integrative Business Association, which marked a new period of development of retail industry in China.

The Fourth Revolution of Retail Industry: No Shop Sales.

The so-called "no shop sale" refers to the way of selling goods directly to customers without going through stores or automatically purchasing goods by customers. Direct selling is a form of non-store selling. In 1871, the United States Montmary Department Store began to operate mail-order sales, after which large department stores began to carry out this business. The essence of communication sales is to use postal communications to complete the sales process of commodity advertisement, order, distribution and collection. Because of the development of science and technology, there are three forms of communication sales on the basis of postal communications: telephone sales, television sales and electronic sales. Electronic sales later developed into today's online sales. In 1929, the United States divided the non-store sales into communication sales, vending machine sales and visiting sales. Direct selling belongs to the category of visiting sales. Non-store sales have a great impact on the retail industry, which can greatly reduce the intermediate links, save the cost of sales, change the way of shopping and payment. Today, it has gained the upper hand in the competition with the store sales.

2. Social e-commerce is the product of deepening reform

Social e-commerce is a new term composed of "social" and "e-commerce". Social e-commerce refers to a new e-commerce mode, which takes consumers as the center and triggers emotional resonance as the motive force, realizes synchronous circulation and transformation of content and commodities by optimizing content creation, content dissemination and sales transformation mechanism, thus improving marketing efficiency. That is to say, social e-commerce is based on interpersonal network, using the Internet social tools, engaged in sales of goods or services, is one of the important manifestations of new e-commerce.

Since the Eighteenth National Congress of the Party, the Party and the government have attached great importance to the structural reform of the supply side. The emergence of social e-commerce is essentially the product of deepening structural reform on the supply side. The Party Central Committee regards the people's yearning for and pursuit of a better life as the focus and foothold of deepening reform and opening-up. The new model of social e-commerce can precisely deliver the products consumers need to millions of households and achieve the basic goal of structural reform on the supply side. At present, although the emergence of social e-commerce is only two or three years, its vitality is very strong, which fully illustrates the important positive significance of social e-commerce in the development of socialist market economy.

From the current situation of development, there are mainly the following forms of social e-commerce to meet the needs of supply-side structural reform:

—— Shopping-oriented social E-commerce

Guided social e-commerce is developed from the traditional Taobao or Jingdong e-commerce platforms, which rely on the rebate and coupons offered by the platform merchants, with the help of social software to promote drainage and powder absorption. It can be understood as social tools and scenarios enabled retail, which is a new retail model that uses personal social networks to trade goods and provide services through social tools or scenarios. This kind of mode generally integrates multiple categories and brands of supply chain, develops online distribution malls, recruits a large number of individual shopkeepers, and distributes one by one.

Retail decentralization is a typical feature of guided social e-commerce. The traditional channel management system has been upgraded by the Internet technology, which makes the channel operation more flexible and portable, and can realize the volume of retail channels quickly. It is manifested by the huge volume of channels, closed consumption scenarios, high customer stickiness, channel self-flow, low commodity circulation cost and low channel access threshold. It is not a centralized retail platform business, but a decentralized retail channel business. It uses offline physical stores as channel carriers, while social retailing uses individual natural persons as channel carriers, and upgrades the channel operation system by using cross-network technology, which improves the efficiency of channel operation. It is a very advanced business model.

Cluster micro-store is a typical social e-commerce, it is a personal retail service platform, can provide shop owners with cosmetics, mothers and babies, health food and other sources of goods. Gathering depends on large traffic, large number of users, large orders to gain voice, to ensure high performance-price ratio of goods, a large number of shopkeepers through social relations to spread commodity information, increase the exposure flow of goods. The terminal consumers see that the commodity information is ordered by the gathering authorities to complete the distribution and after-sale. After the order is completed, the shopkeeper receives royalties from the cluster.

—— Content-based social E-commerce

Content-based social e-commerce uses opinion Leaders'word of mouth to make business driven by content. Audiences gather together to form a community based on common interests and hobbies. It attracts a large number of users to visit through publishing high-quality content by themselves or others, accumulates fans, increases customer trust and stickiness, thus produces purchases, and becomes a community. Faithful consumers of a brand or platform.

There are two typical characteristics of content-based social e-commerce: one is marketing targeting. User groups of content-based social e-commerce have obvious common labels, which can be clustered together because of common interests or pain points of demand. Usually, they have similar values, and can carry out targeted marketing. Output of content for common pain points and life scenarios can easily stimulate people's interactive dissemination, transformation and repurchase. The force is also strong. Second, the operating threshold is high. Content-based social e-commerce has a high demand for content operation, which requires continuous and high-level content output capability. At this time, it needs to build its own professional content team, and do a good job in personal positioning, business strategy and marketing promotion.

Xiao Hongshu and jitter are typical representatives of content-based social e-commerce. Xiao Hong Shu, a powerful grass planter, mainly shares pictures and texts. The overall length of the book is longer. Hot evaluations will analyze product components, technological content, experience, usage scenarios, etc. These high-quality user original content can make consumers understand products more intuitively and have stronger overall conviction, which is more effective than general advertising. Video tremolo brings goods through video content, mainly through the use of product function display to cause shocking effect, triggering a lot of tremolo friends attention and follow the trend, a time will quickly blow up a product craze, in Taobao and other shopping websites at the same time will also be online a lot of "tremolo the same style".

—— Platform-based social E-commerce

At present, the popular platform-based social e-commerce game method is a group-forming mode. Its main feature is that users bargain in groups, use social forces to sink users, and through low-threshold promotional activities to cater to users'greed, show off, excitement and other psychological help products to lock in users to sell some universal, cost-effective products. Achieve sales fission targets.

The typical feature of platform-based social e-commerce is to activate large numbers of people at low cost. The biggest advantage of the group-forming model is to buy high-quality products at relatively low prices, while the cost advantage is a very sensitive topic in the relatively remote cities below the 3rd and 4th lines. The remote cities below the 3rd and 4th lines are the areas with relatively concentrated population in China. This model can be bargained through the form of Wechat group-building. Activate this group. However, the supply chain of platform-based social e-commerce is very demanding. Without abundant funds and professional talents, it is very difficult to do so.

The typical representative of the platform-based social e-commerce model is to fight for more. The success of Pingduo lies in the formation of low-cost user fission based on the mass flow of Weixin, grasping the real pain point of low-cost demand of users in three or four lines, and then finding "explosive" products to complete the closed-loop sales. Pingduo is a third-party social e-commerce platform focusing on C2B conglomeration. With the combination of "conglomeration + low price + social interaction", Pingduo purchases high-quality goods at lower prices by launching a conglomeration with relatives and friends. Up to now, Pingduo has become one of the largest e-commerce platforms on the road of "group purchase". Although it has been controversial, it has also expanded a user self-growth model of "customer-acquisition-retention-cash-self-dissemination".

3. The Commercial Revolutionary Nature of Social E-Commerce

The connotation of business revolution is actually the change of business form. Under the situation of deepening reform and opening-up, the change of China's business form is accompanied by the continuous change of supply-side reform and demand-side management. Therefore, in this sense, social e-commerce is undoubtedly a commercial revolution.

The commercial revolutionary nature of social e-commerce is mainly manifested in:

—— Digital transformation

Today is the information age, and the digitalization of information has been paid more and more attention by researchers. The English translation of "digit" into Chinese means "number". American computer scientist Negroponte shocked the whole world by publishing his monograph "Digital Survival" in 1995, and was listed as "one of the most important futurists of our time". Social e-commerce is actually a successful practice of digital transformation of retail form.

Whether it is PC Internet or mobile Internet or the Internet of Things, it is actually the carrier of digitization, thus turning the real world into a digital-based network world. In fact, social e-commerce is the digitalization of business circulation. To transport logistics, we should digitalize payment, logistics and customer service. All elements of social e-commerce have been digitalized. At the same time, digital supply spreads upstream. Intelligent factories and digital factories are based on Internet technology and big data technology. Through the connection between the upstream and the middle reaches, the upstream also produces a more interconnected interactive intelligent effect. In addition, downstream digitization, that is, human digitization, has also appeared in social e-commerce. There are basically two apps on everyone's mobile phone: Wechat and Jitter. In the process of social e-commerce, in fact, these two APPs are digitizing the vast number of consumers.

We find that many consumers'purchases come from recommendation, from community recommendation and from social recommendation. The process of social e-commerce is to gather users together, collect their needs, and then recommend consumption rationally according to their needs. Entering the era of mobile Internet has entered the era of mobile social networking, and consumers have an additional role of information disseminator. In fact, everyone has an omnipotent circle of friends, in the circle of friends to bask in their own lives, forming a new type of traffic media. Use this media to attract traffic and turn it into a real deal. In fact, the idea of gathering is to turn consumers into communicators of goods at the same time.

—— Social Operations

Social e-commerce is a new business model that combines social services with e-commerce services. Traditional e-commerce mainly guides users to shop online through information retrieval to complete e-commerce consumption, but social e-commerce promotes the development of e-commerce business through social relations as a chain.

Social operation actually regards social relationship as the sales channel of social e-commerce, and plays a very important role in promoting sales growth. We can see that e-commerce services based on social platforms actively provide consumers with adequate options, such as consumers can decide whether they are willing to accept product information push; at the same time, they actively provide consumers with a series of keywords to screen products. We also find that many social e-commerce platforms are armed with advanced technologies such as artificial intelligence, big data, cloud computing, so as to grasp consumers'demands more accurately and provide them with more accurate commodity information services.

How to solve the problem of "let users join in promotion and form resonance effect" is the key to social operation. For social e-commerce, commodity sales based on social platform is only the first step, and the second step is to let consumers take the initiative to use various social tools to spread, forming the effect of word-of-mouth transmission. On the one hand, the platform should establish close interaction with consumers, not only to get consumers'feedback on goods, but also to provide more opportunities for consumers to participate. For example, through docking manufacturers, let them participate in the design and production of goods, functional improvement and other levels, so as to form a close social relationship between the platform and consumers. On the other hand, the platform should give some incentives to the consumers who take the initiative to participate in the communication, and warn to eliminate any form of communication aiming at the development of offline, so as to ensure the healthy and stable development of the social e-commerce industry.

—— Personalized Service

Personalized service is based on the user's settings. It collects, collates and classifies resources according to various channels, and provides and recommends relevant information to consumers to meet their needs. We find that the social e-commerce industry has begun to make full use of various resource advantages, optimize the industrial chain, and actively carry out all-round services to meet the personalized needs of users.

On May 28, 2019, Liang Zhaoxian, the world's largest microwave oven manufacturer and chairman and President of Granz Group, a well-known Chinese household appliances brand, visited Pingduo Headquarters to formally establish a long-term comprehensive strategic cooperative relationship. Personalized service will be a very important part of the cooperation between Quitou and Granz. Wu Yi, Director of Marketing Department of Glanz Living Electrical Appliances, said: Glanz will produce the best products and give the greatest support to multi-platforms. Both sides will jointly launch customized products to meet the differentiated needs of consumers in different regions.

As the pioneer of the social e-commerce model, Pingduo is considered not only to bring affordable goods to consumers, but also to create an interesting and interactive shopping experience. Third-party data show that Pingduo has maintained a significant lead in terms of users'average daily use time, number of openings, user retention and other important indicators, showing a strong user stickiness. This pioneering business philosophy not only leads the transformation of the e-commerce industry, but also gives a lot of inspiration to the brand side. Alice, Chief Information Officer of Glanz, said: Team research results show that many multi-users share "bargaining", "bargaining" and "planting trees" not only for the benefit, but also for the interaction and fun between friends, which is particularly evident in young users. Combining the product characteristics and user characteristics, the two teams put forward a series of open proposals. Alice pointed out that for young people who have just entered society, both sides can work together to develop the safest but cheapest kitchen and electrical products to create a good hour for young people to share breakfast. "Buying more is not only the cheapest, but also the safest." At the same time, Alice suggested that in large-scale, high-sticky innovative applications such as "multiple orchards", interesting game interactions such as "tree-knot microwave ovens" could be upgraded to create more surprises for platform users.

(Author: Ouyang article is an expert of the Direct Marketing Expert Committee of the Chinese Marketing Society and a scholar of the theory of direct marketing economy in China. He has published many academic works, such as "China Direct Marketing Economics", "China Direct Marketing under the Rule of Law", "Global Financial Crisis and China Direct Marketing Development Opportunities", "Franchise Theory and Practice". )