Setting Up Profit Mode Of Convenience Store

Butz Alan, a famous western scholar, has shown that there is a positive slope change between market share and profit rate, which is highly related to the scale of operation in many industries. That is to say, the most important way to obtain high market share is the large-scale operation of enterprises.

This has almost become the consensus of the development of convenience stores in domestic enterprises.

Since the beginning of the first real convenience store in 1995, the convenience store has gradually become a prairie fire in Southern China, central China and East China in just 7 years.

Among them, the convenience store development in Shanghai is the most mature.

According to the latest statistics, by the end of 2002, there were 3500 convenience stores in Shanghai for 24 hours.

At present, some big convenience store giants are still accelerating, such as Lianhua express, more than 800 stores, more than 700 stores, and more than 600 stores in twenty-first Century, and they want to open 500 stores in 2003, and more than 500 stores of "good virtue", and push them at the speed of one household each day.

However, relative market share does not bring profits to enterprises.

It is reported that in Shanghai more than 10 convenience stores, at present, almost no one can really achieve profitability.

At the beginning of the investment, many convenience stores entered the profit period after three years of business, and now, even without making profits, it has become a problem even to maintain their livelihood.

They have been very puzzled.

Japan's 7 - 11 average gross profit of food is as high as 47%, and the average gross profit of Taiwan 7 - 11 has reached 30%. The convenience store that is really bigger and stronger will increase its gross profit rate, at least more than 25%.

The gross profit margin of convenience stores in China is generally low, averaging around 20%. In the past two years, due to the increase in the number of competitors and the ineffective internal friction, gross profit margin even showed a downward trend under the rapid growth of the market.

There is no doubt that the embarrassment of convenience stores has caused a considerable number of online competitors to be in jail.

Over the past two years, many industry experts have pointed out that convenience stores will be the fastest and most promising retail format after supermarkets.

But in fact, the development of convenience stores is not smooth in China due to the constraints of policies and the congenital conditions of the market.

There are two groups of target customers in convenience stores.

One type of pursuit of entertainment, enjoyment and habit of "nightlife" is mainly for young people aged 12 to 25, singletons, young students and night workers. One is that they are accustomed to fast shopping or shopping in urgent need of fast-paced life.

According to the location of convenience store location, convenience stores have different choices of target customers.

For example, in living quarters, schools, Internet cafes and business districts, market composition is often dominated by the first group, while in gas stations and railway stations, convenience stores often choose second ethnic groups as service targets, and enterprises should choose suitable target customers or ethnic groups according to the existing and potential market conditions.

If you choose, you will give up.

Convenience stores should try their best to avoid target customers who exceed their capabilities in the early days of market development.

For example, in Beijing, if the white-collar workers in high-grade office buildings and business districts are targeted customers, they will face the situation of high rental cost and insufficient purchasing power, which will make convenience stores face difficulties.

At the same time, as convenience stores are a free form of traditional supermarkets, the target customers will overlap in demand. The relative weakness of convenience stores in price competition requires that convenience stores should avoid the direct impact of competition and avoid delamination in the different needs of the same target customers, so as to form differentiated competitive advantages.

Of course, if a region is too harsh to restrict the competitive advantage of convenience stores, the most sensible choice for enterprises is to give up, no matter how attractive the target market is.

Because of its entry, it can only compete with local traditional supermarkets and tobacco stores at the same level of competition. The so-called "strong dragons are no more than a local snake", and it is inevitable that they will eventually fail, and this is the strategic mistake of many convenience stores in China.

It is the significance of convenience store to provide customers with difficulties and create new value.

The convenience store value should be guided by the selected target customers, and the system should identify the "special needs" and "general needs" of the target customers, so as to form a fine set of goods and services.

Convenience stores often choose fast food, pre cooked food and some daily necessities for satisfying the general needs of the target customers. The common characteristics of these goods are good quality, high freshness, moderate specifications, and high brand awareness, but these are not enough.

The characteristics of convenience store products are reflected by these two commodities.

One is the fine extension of products.

For example, some over-the-counter drugs, gifts and so on; one is the flagship product of regional target customers' needs, such as the convenience store of Japanese 7 to 11 convenience stores in Japan, which has a daily sales volume of about 20% of the liquor shop convenience stores, and, like the "convenient service area" convenience store developed in the United States, operates gasoline, diesel, lubricating oil, and so on, and also sells some cigarettes, razors and pajamas sleeping bags used by motorists.

But convenience stores in China seem to be more interested in "general needs". No wonder they call it a replica of small and medium-sized supermarkets.

As a matter of fact, the convenience store format integrates core competitiveness into convenience mainly because of the services it provides.

This refined service configuration has become the most notable feature of convenience stores from other formats.

The convenience store service is a set of post office, bank, office service, print shop, ticketing and other service functions.

As with commodity allocation, it should be targeted at the specific needs of the target customers to carry out the hierarchical allocation of "general needs" and "special needs".

Compared with other competitive formats, the competitive advantage of convenience stores is represented by "convenience".

This convenience is concentrated on: the convenience of 1. distance: the radiant radius of convenience stores is generally not more than 500 meters, and customers can reach 5 to 7 minutes on foot.

The convenience of 2. time: the business hours of large supermarkets are usually 8:00 to 23:00, but the convenience store is "Anytime" type 24 hours open, 7 days a week, and can be satisfied in any time needed by the customers, sometimes even making a phone call.

The convenience of 3. products: convenience store business area is generally 50 to 200 square meters, in a limited space to meet the various needs of the target customers, the allocation of goods should be wide, narrow and shallow combination, that is, varieties, 2000 to 3000 in general, but less optional, single product may have only one or two best sellers, and the same commodity stock less, in order to strive for greater display space.

The convenience of 4.: the layout of the merchandise is aimed at considering the convenience of the target customers, such as the elderly and the children, and the shop layout is clear at a glance.

The convenience of 5. paction: because of the use of electronic cash registers in supermarkets, employees are skilled in operation, and there will be no queuing up phenomenon, which will shorten the shopping time of customers and the average customer stay time is about 5 minutes.

This competitive advantage of differentiation can make convenience stores have enough confidence to survive in competition with other formats.

However, the survival of convenience stores is not only the pressure of competition, but also from the threat of competitors.

For example, the three Pai Lou road in the Yu Garden area of Shanghai is only 100 meters long, but it is surrounded by 4 convenience stores. They are: good Debali, Lianhua express, Jie Qiang and twenty-first Century convenience. Such a crowded degree is only a partial portrait of excessive competition in Shanghai convenience stores.

Generally speaking, in a childishness of an industry, a weak enterprise should focus on a certain point in the market, create a safe haven, form a market segment, grow with the growth of this small local market, and a strong enterprise can expand rapidly to form a cost leading edge.

But with the convenience store competition in China, large and small enterprises have chosen the same way: scale expansion and quantity win.

In the limited space of market capacity, the fierce competition of competitive enterprises directly leads to the deterioration of competition environment.

As the most flexible branch of retail format, convenience stores have the obvious advantages of the most widely distributed network resources, making it a strategic pmission hub for various business entities outside the world.

The mutual advantage between the inside and outside resources of convenience stores makes the competitive advantage of their goods and services no longer compete with other competitive formats. At the same time, the difference in the degree of grafting with external resources also forms a structural separation of competitors.

The development of Beijing convenience store market is very bumpy. An important bottleneck is logistics distribution.

Logistics and distribution in Beijing tend to focus on large scale delivery such as big supermarkets, big supermarkets, etc., and can not adapt to the small scale delivery of convenience stores.

Such rigid structural constraints can not be solved for a long time. Therefore, the development of domestic convenience stores should be more applied to the third party logistics to meet the convenience store convenience products and services quality and satisfaction.

At present, the logistics resources of postal system are mostly used in China, and the convenience store is also called post chain convenience store.

In China, as a traditional logistics enterprise, postal service has established a relatively perfect physical pmission network covering the whole country. The integration of its network is unmatched by any industry in the country. With the advantage of the distribution and distribution of the postal system, the convenience store headquarters can perfectly realize the timely delivery of goods on the same day.

Of course, the third party logistics is just a borrowing tool.

If the company is strong enough to build its own supply chain, such as Japan 7 to 11, its store location often adopts Domino's centralized shop mode. Due to the small spacing between shops and 20 distribution centers, the average pportation radius of each distribution vehicle is greatly reduced, while saving logistics costs, it also enables goods to be delivered in a timely and timely manner.