Online Shopping Craze &Nbsp; How To Pform Traditional Department Stores?

2010 China

The traditional department stores such as Beijing Wangfujing, Shanghai Bailian and Guangzhou department store, which first tried online business, now do not seem to be successful in their online businesses.

Xidan shopping mall launched IGO5 love shopping website in 2001. By February 2010, the IGO5 website has achieved profits and sales volume is more than one million yuan, but it is still less than Xidan's 1 billion 200 million yuan annual revenue volume.

So far, no department stores in China have explored a more successful model.

The future of the traditional department stores is uncertain.

However, in the rich department store industry, there are still a few subdivision providers who have handed out satisfactory answers. Although they are still relatively young, their growth rate and unique attention are attracting attention.

Development bottleneck of department stores

With the rapid development of retail industry in China, the full opening of the Chinese market to foreign trade retail enterprises and the emergence of all kinds of supermarkets have brought great impact to the Chinese department stores that once belonged to the "overlord" of the retail industry, and the bottleneck system encountered in the evolution of the format has further developed.

It is mainly manifested in the following aspects:

The first is the quantity of the products.

The number of products in large stores and large supermarkets, especially the daily consumer products, is far more than the number of products in department stores, which severely impacts their final sales.

Special stores play the role of killer category, such as the emergence of Suning Appliance and Gome, so that the sales of electrical appliances in department stores have no advantage, and the business scope of department stores has been challenged and restricted.

The two is price.

The price of products in department stores is high, and the vast majority of consumers prefer to go to stores and supermarkets to buy cheap and good products.

Three, supermarkets and supermarkets have set up fresh food counters, which have better met the needs of consumers' daily lives, diverted tourists, and the department stores have been hit hard by different location.

The four is location and number of shops.

The location of department stores is mainly located in the commercial central district, far away from the place where the consumers live, and the number of shops is also very limited. For example, Wangfujing department stores, Tianhe department stores, and Chinese department stores are all single stores, while supermarkets and convenience stores are built near residential areas, which helps the office workers to go shopping nearby when they come home from work, and narrow the sales distance between the terminal stores such as consumers and supermarkets, convenience stores, etc., so that the department stores are out of favor with the vast numbers of consumers.

Breakthrough through operation mode pformation

The dilemma of department stores is mainly the serious diversion of customers and the rapid reduction of business scope.

An analysis of its plight shows that the retail strategy of department stores is not clear. The department stores do not establish clear business strategies according to the changing retail market, nor provide service outputs suitable for consumers' needs, so they can not win stable customer groups.

If the business mode of department stores has changed, it is difficult to keep away from the predicament if we continue to follow the business model of traditional department stores. Transformation and adjustment are imperative.

Relocation of market segments

For a department store that has opened or has a certain history, positioning is still the first priority.

The reasons lie in two aspects: first, the emergence of new formats such as supermarkets, warehouses, electrical professional shops and home centers, so that department stores lose their competitive advantages in food, household appliances, furniture and daily necessities; two, the excessive development of department stores in large and medium cities, and the same operation structure and marketing means lead to vicious competition.

The core of positioning is to set up a unique image and status in the minds of the target customers. Each department store implements differentiated operation to expand the survival and development space of the whole department store instead of breaking the existing market cake.

In the division of market, department stores try to differentiate themselves from other retail formats and carry out market segmentation.

The positioning of the customer group and the business value of pmission should also be differentiated.

After the relocation of the department stores, the adjustment and safeguard measures, namely, adjusting the commodity structure, reflecting the characteristic management, focusing on service upgrading and cultivating customer loyalty, have reached the real effect of repositioning, so that department stores can get rid of difficulties as soon as possible.

According to Potter five force competition model and the degree of competition, how should department stores fight against the substitutes and existing competitors? The existing substitutes can according to the STP rule, the department stores locate in the top consumer goods, take the fashion, boutique, individual needs as the core of value, and at the same time assist other laws of innovation operation, such as building brand advantage, and making the advantage merchandise with "name, special and new" as the leading factor, highlighting the service advantages, environmental advantages and cultural advantages.

For other competitors, other department stores should learn to develop in a wrong way, avoid direct competition between department stores and department stores, and make their own characteristics among department stores.

Survey of electronic commerce in department stores

For department stores, online sales can not only reduce costs and increase sales, but also increase storage and logistics costs due to increased sales. This is due to the fact that online sales are characterized by delay in delivery.

For suppliers, the cost of opening stores in department stores is lower than that in physical stores. The entry fees, rents and divisions of online stores will also decrease. Even if the prices of online goods are reduced at the same time, the profits of suppliers will be at least flat, otherwise the department stores will have no significance in opening online stores.

Taobao can freely support tens of thousands of individual online stores. It can be concluded that the cost of entering the online store should be far lower than that of the entity stores. That is to say, suppliers can get more unit profits through online sales, and can sell more products with price advantage.

In addition, it is also a test opportunity for many suppliers who want to open online sales channels temporarily without ability or risk to take risks.

As a matter of fact, suppliers who have short production time, such as garment manufacturers, accumulate experience through online sales, can improve their production efficiency and reduce the backlog of finished products.

Therefore, online sales to suppliers is also worth trying.

For consumers, it is possible to buy products that are more abundant, have more choices and comparative opportunities at lower prices, and operate simply, online payment security and quality of goods are guaranteed. How can consumers refuse? Perhaps the prices of department stores are higher than those of individual shops, but in the trade-off between price and quality assurance, traditional consumer groups will surely choose more quality department stores.

According to the survey of e-commerce outsourcing agencies, 53% of enterprises choose "replenish the existing store sales business and sell products within a limited range", and think that "enterprises that are equally important as sales channels and shops" account for about 43% of the total, and e-commerce is located in department stores with auxiliary functions. 53% of enterprises believe that the main purpose of developing e-commerce is to increase the flow of shops, while 47% of the department stores regard it as "an alternative or supplementary means to shop."

45.8% of the department stores believe that "enterprises lack the overall strategy of e-commerce", and 29.2% of department stores say that "top managers do not attach enough importance to e-commerce". 41.7% of department stores believe that "the strategy of this company simply imitated other companies and did not really grasp the status quo of e-commerce".

From the above data, we can see that at present, many department stores in China do not have a clear e-commerce strategy. E-commerce is different from traditional department stores. It needs a clear strategy and adjusts the organizational structure according to the needs of strategic implementation.

According to the survey of department stores, there are many problems in the development of e-commerce business in department stores. Among them, "insufficient contact with customers" is the most prominent.

Many department stores put forward the fact that the current situation of traffic volume stagnation and the difficulty of enlarging membership scale is the problem of attracting passenger flow. However, it has revealed that the department stores and customers are not adequately connected.

At present, many department stores maintain contact with their members through e-mail, SMS, etc., but the effect is not satisfactory.

In addition, in the construction of information system and logistics system, the difference between enterprises is also an important factor affecting the overall development of e-commerce in department stores.

In view of the problems in the development of e-commerce in department stores, it is necessary to strengthen the integration between online and offline stores and provide customers with various shopping channels.

The e-commerce business in department stores needs to find ways to increase customer shopping and reduce shopping inconvenience, but it is not easy to do this.

According to the current trend, online shopping has little impact on traditional business, and is a complement to traditional business models.

However, there are still some problems in online shopping. For example, it is not possible to collect taxes on sellers online.

South Korea's National Office of taxation is investigating the seller's sales information in a large online store and taxing the seller over a certain limit.

However, if the tax system is implemented, it will inevitably change the original appearance of the online store and make some people withdraw from the network pactions.

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General planning for general merchandise industry to enter E-commerce

E-commerce is not only a network paction, but also a comprehensive business activity carried out by the Internet, such as market research, finance, production, customer service, material distribution and so on. These activities involve both inside and outside the enterprise, and are directly related to the enterprise strategy.

If enterprises want to adapt to the changing market demand in the era of network economy, we should set up e-commerce development plan at the strategic level, formulate and integrate the development strategy of enterprises with the help of the Internet and e-commerce.

E-commerce for department stores must start with e-commerce strategic planning, e-business process reengineering, e-business mode choice, and business process strategies that match e-commerce, such as product strategy, market strategy, organization strategy, supply chain strategy, marketing strategy, logistics strategy, financial strategy and human resources strategy.

In order to cooperate with the e-business strategy, there must be a strong executive team and management tools to develop an e-business organization structure, which includes all the post functions of the entire e-commerce.

From the market research, sales, customer service, website promotion and operation, product development, website construction, warehousing, packaging, logistics, delivery, financial monitoring all aspects.

The organizational structure is based on the business process to complete the entire logistics system from research and development, design, procurement, warehousing, sales and packaging delivery.

Website construction, promotion, product planning, merchandise upload and other information flow.

Finance, procurement, sales and other departments to complete the integration of the entire capital flow.

Such a scale organization needs to interact and coordinate operations with other departments through MIS.

At the level of tactical execution, we need to have an in-depth understanding of the information and product information of the enterprise. Professional work is made by professional people, such as product title and product information introduction. It must be attractive and easy to be caught by search engines.

The team has professional personnel to manage website members, and must answer the questions of visitors in time. There must be a complete membership management system. The team knows how to manage and attract members and retain members, because the members of the website are the wealth and resources of e-commerce websites, and also the potential consumers of the target customers.

The team understands the target customers, has the specialized personnel to the website technology and the function unceasing improvement, enhances the user experience.

There are special people who promote websites and know how to publicize products and information on potential websites.

E-commerce in department stores has the functions of attack, defense, extension and sticky.

One is to take advantage of some commodities to attack some competitors, to deter other formats; the two is to maintain stability for the current business form, customers and market share; the three is to rely on business circle radiation and e-commerce to open up more customers; four is to adopt information management tools in the form of membership cards, discount cards and points, enhance interaction with users, enhance customer relationship management and increase customer stickiness.

The future of electronic commerce in department stores

The substantial products provided by the huge supply chain in physical department stores can ensure that online shopping consumers have more adequate choice of goods and purchase opportunities, thus forming a higher consumption volume.

Moreover, the entity department store has a large number of professionals who are familiar with consumer psychology and behavior habits, and these talents are the lack of B2C e-commerce enterprises at present.

Discounts, promotions, points, gifts, rebates and other means in the department store are attracting consumers to form repeated, frequent and mass purchases. By providing diversified membership services and preferences, they have accumulated many years of experience in increasing user stickiness and have achieved good results.

It can be imagined that once this mode is pplanted to the B2C online shopping market, it will have a huge impact on the entire online shopping market.

Although online trading in physical department stores has the above advantages, we must pay attention to dislocation management if we want to succeed.

Therefore, the online shopping mall can not copy the shops to the Internet as simple as it used to be. It should distinguish the location and select the young and fashionable goods to focus on the sale.

Traditional department stores have a reputation advantage, so long as they agree with suppliers and solve the channel problems, it is feasible to open online stores.

If used well, online shopping will become a useful supplement to physical sales.

The gradual pformation of traditional department stores into online stores can make the offline system and capability that has been running for many years become a powerful online resource.

At the same time, the traditional department stores open shop gradually, and gradually find their own development path.

It should be noted that although the e-commerce mode of physical department stores is not mature enough, it has the advantages that can not be ignored.

China Electronic Commerce Research Center found that, among the four factors of the lowest online shopping satisfaction, the quality of goods ranked first, and after-sales service is the most unsatisfactory part of online shopping users. Most netizens do not agree with the overall and meticulous identification of after-sale services.

Physical department stores are irreplaceable in terms of product quality, service quality, integrity and so on, and have accumulated a relatively high reputation in the vast number of consumers.

This makes consumers satisfied with the commodity quality and after-sales service satisfaction of the online shopping mall opened by these department stores.

To sum up, department stores must recognize the causes of their difficulties and make a good job of re positioning after pformation according to their own advantages and disadvantages, combining and analyzing their special environment.

Starting from segmenting the market, we should take advantage of the operation of department stores, identify the target customers, establish clear business strategies, improve the service output level of department stores to meet the needs of modern consumers, narrow differences and improve business efficiency; adjust the commodity structure, reflect the characteristics of business, focus on Service upgrading, and cultivate customer loyalty, which is a safeguard measure for the department store after repositioning.

Department stores must establish differentiated competitive strategies to win customers, benefit and development with clear positioning.

E-commerce is a tool and marketing tool, and also a consumption trend. It should be valued and can rise to some business strategy in some industries. However, this strategy can only be effectively implemented only if the core values of enterprises are clearly defined.