Metro Vs Watsons: Retail Innovator

Among the international retail giants in camping in China, Metro is a "mainstream alternative". The value of the alternative is that it changes the same retail mode and starts the wholesale business of "B2B" in the form of supermarkets. In the traditional jungle of the retail industry, Watsons is also an awakening rebel. It has stepped into the field of personal care and has made money in women.

One is doing "big", and the other is "wholesale and retail". One is aiming at "small" and the other is personal care.

What is amazing is that they are freaks in the retail industry, but with the help of their unique business thinking, they become the innovators and leaders of the industry.

Change face, start innovative form Vs create concept

In 1964, thanks to a trip to the United States, Otto baisheim pirated the "Terfloth&Snoek" wholesale store in the United States, and built a refreshing shopping mall in Dusseldorf, Germany: Metro's "Cash&Carry" shopping mall.

Initial

Retail industry has always been an industry that is full of fire and competition. Effective procurement, low cost logistics and strong terminal are the three magic weapons for the retail industry to win.

Traditional retail is only in the stage of making consumers buy, focusing only on goods.

Metro changed its form and sold it wholesale, while Watsons changed its business objectives.

In 1981, Li Jiacheng's Hutchison Whampoa bought Watsons wholly-owned. At that time, its label was "Watsons pharmacy". Guangzhou started in 1828 and moved to Hongkong in 1841. After centuries of accumulation, it has laid a solid foundation for business in Hongkong, mainland China and Philippines, and has more than 100 retail outlets and pharmacies.

The acquisition of Watsons made a big change to Watsons. With the centenary details of the drugstore, it repositioned the product category, subdivided the retail market, launched personal care, skin care and beauty products. The first chain of retail operations based on the concept of "personal care" was refreshing and full of novelty.

Next,

In fact, the innovation and maturity of every commercial form means a huge gap in market and development opportunities.

Metro discovered the blank of B2B, and found opportunities in a highly entrepreneurial German market environment. Watsons made a unique approach to self mining, extending from drug retail to personal care, and seized the inherent demand for quality of life under the commodity economy.

They all break into a blank market that has never been explored, but blank market does not mean waiting for a few dollars. It is the key to success and failure to formulate their business models accurately and soberly.

Commented: from the history of the development of retail formats, Metro and Watsons are all new things that the old retail format has to deal with the changing retail market. However, we have different starting points and different environments. We know that self selected supermarkets were developed in the United States in the 50s of last century and extended to the whole world. Metro is the result of the combination of traditional commodity markets (wholesale markets) and self selected supermarkets. This is the result of an active choice, so today we can see a large number of international supermarket chains, such as WAL-MART and Carrefour, but there is only one Metro.

And the change of Watsons needs to be passive. The traditional retail pharmacies are faced with the right to sell the prescription drugs in hospitals. The range of marketable products is greatly reduced. Many pharmacies can only sell some Chinese herbal products and cosmetics. However, Watsons has made a more detailed positioning of the customer groups, and the commodity category is more abundant. Therefore, we can see a lot of, not well-known sales pharmacies of cosmetics, herbs and foodstuffs in Hongkong and other places, but Watsons has only one.

Mode positioning, spot purchase, self purchase, Vs group buying

Metro's peculiarities lie in "ready to buy and carry".

The so-called "spot purchase and self pportation" refers to the professional customers who choose their own goods in the warehouse, paying in cash and taking away the merchandise.

Specifically, it is "one system and two theories".

One system is the "Cash&Carry" system. The straightforward plation is "paying cash and pulling the goods by itself". It has two links and different meanings. First, the purchase link: the goods are delivered to the supplier by the supplier. After that, Metro pays in cash, and the settlement time is generally between 1 and 2 months. Two, the sales link: the goods are placed in the supermarket shelves on large packages and are freely selected by customers.

The goods are paid in cash, and the goods are pported by the customers themselves.

As a result, the advantages of the "C&C" system came out: entering and selling low prices, cash settlement, moving in and out quickly, self provided pport tools, reducing circulation costs and shortening the circulation time.

The two theory is limited customer theory and limited profit theory.

Shopping malls determine their specific target market consumer groups from a large number of consumers. They directly serve enterprises and institutions, small and medium retailers, hotels, restaurants, troops, factories, schools and other corporate bodies. They are "limited customer theory". Metro only maintains a reasonable and low profit level, which ensures that commodity sales prices remain at a low level and enables them to get reasonable sales profits through this link, which is a "limited profit theory".

And Watsons's tailor-made model for them is "group buying mode": continuous low quality + unique product mix (daily necessities, beauty and health products, special products) + weekly new product + elegant shopping environment.

In fact, from a strict sense, Metro's spot purchase and self purchase is group buying mode, enterprise customers, wholesale business, low price strategy, if not defined by the Internet carrier, Metro is the largest B2B enterprise at present.

The difference is that Watsons's "group buying mode" is more like the group buying website that is hot at the moment, because it does not sell wholesale, but wins by differentiation and precision.

The products of Watsons personal care shop are all inclusive, from more than 20 countries, including cosmetics, drugs, personal care products, fashion accessories, candy and gifts, and so on 25000 kinds.

The value of such a product portfolio is fully integrated into the differentiated brand extension.

In order to keep the price low, Watsons not only increased the frequency of the nuclear price, simplified the rules of double return, but also introduced a low price strategy to encourage consumption and 1200 kinds of best sellers to cut prices by 20% permanently, so as to better implement the low price strategy.

In addition, Watsons launches more than 200 new products on average every week, so as to introduce new products, eliminate obsolete old products, and ensure the novelty and attractiveness of shops.

The meticulous humanized shopping environment makes customers feel comfortable and relaxed. For example, it sets the height of the shelf to 1.4 meters (convenient for female customers), and arranges store layout and product layout according to different locations.

The "group buying mode" not only embodies Watsons's unique market sense of smell and innovation, but also strengthens consumer's awareness and loyalty.

In fact, low price, high quality, product depth and breadth, and environmental comfort have almost become the driving force for consumers to choose Watsons shopping.

The premise of Metro's "one system and two theories" is professional customers. This element clearly distinguishes it from WAL-MART, Carrefour and other supermarkets that are directly facing the final consumer. Metro's cash on sale and pportation is only allocated to those registered professional customers. They must provide the necessary documents to prove their business background, so as to get free membership cards.

Of course, Watsons is also basically a limited customer, but it is limited by product category, rather than human division.

But there is no doubt that limited customers can reduce costs on the one hand, and on the other hand, higher requirements for the ability to anchor customers.

Comments: in the industry view, the root cause of Metro and Watsons positioning patterns actually come from their respective businesses.

Business rules focus on service Vs experience supremacy

Unlike general hypermarkets, supermarkets, department stores and so on, Watsons is based on the bustling business district, the shops are exquisite and comfortable, and the romantic combination of colors is seen as tailor-made for fashionable women. Metro is full of rough and simple style in the industrialization period, and its connections are always in the urban fringe of big cities. The shops are both supermarkets and warehouses, and the parking area and business area are almost equal, and the vast majority of goods are bundled or sold in boxes.

Because of the particularity of customers, different types of professional customers can buy different packages of goods in Metro.

For example, the hotel and general food retailers have different requirements for the packaging of goods. There is no difference in the general supermarket products, but Metro can make it more detailed and personalized.

These unique practices make Metro no need to grab customers with ordinary hypermarkets.

However, it is different from the wholesalers in general: Metro's warehousing distribution can provide "one-stop" shopping service, eliminating the pain of customers rushing back and forth between wholesalers of various professions.

Metro also has a unique German personality.

For example, the "pparent" checklist is arranged in detail in terms of the name, unit price, quantity, amount, date and customer name of the purchased commodity.

The degree of detail, even the number of rolls per packet of toilet paper, is clear.

To this end, Chengdu Metro opened two months ago, and even encountered the crazy return of the incoming traders and consumers, amounting to up to one million yuan.

However, Metro has been insisting.

In addition, Metro usually operates at 3 a.m. for special customers such as hotels, restaurants, etc. the food area is marked with different colors and different products. Refrigerated food containers are directly linked to refrigerated warehouses to ensure refrigeration temperature.

A series of professional measures reflect the spirit of dedication for all professional customers.

Similar to Metro's focus on professional customers, Watsons's success also depends on anchoring customers.

Walking into Watsons, customers can fully feel the relaxed environment and warm atmosphere. The pink, red and blue combination of shops gives people a nice feeling of warmth, romance and mood, and less people's selling and chattering recommendations.

Just external experience, has made the customer feel full respect and freedom.

It comes down to specific methods. First, Watsons provides customers with a comprehensive solution.

Customers can get a psychological and physical support from the product portfolio provided by Watsons. Second, Watsons emphasizes on price combinations for customers, offering low-cost and high-quality dual brands to consumers; and third, meeting customer needs.

Watsons's main target market in mainland China is targeted at 18~35 year old fashion women. Watsons believes that female consumers of this age group are the most challenging.

They like to use the best products, seek novelty experience, pursue fashion, and are willing to show themselves in front of friends.

In Watsons shops, you often see Watsons stores filled with fashionable, well spoken, novelty young women who have turned it into their habitat and fashion bridgehead.

Private brand building is also a killer for both customers.

As a competitive strategy of retail enterprises, private brand can not only get circulation profit, but also raise brand premium and win customer loyalty.

According to the survey, more than 40% of the commodities in European and American markets are private brands of retailers, and private brands protect the core competitiveness of enterprises.

And Watsons's own brand characteristics have always been popular. As of 2010, its own brand accounted for 25%, reaching more than 1004, including personal care, cosmetics, and even candy, beverages and so on. Its own brand development strategy has become a learning sample for latecomers.

In 2003, Watsons began to launch its own brand MJ (the abbreviation for juice "Mr.Juicy") in sugarcane juice in the market. In 2004, the new product, MJ sour plum juice, was again listed on the market. In view of the unique wet and hot climate characteristics in Guangdong, the market of South of the Five Ridges Qing Qing Yin beverage market was fully built, causing a warm response.

At present, all kinds of "cool tea" on the market are no copycats.

In contrast, Metro's customer base determines the market potential of its own brand.

At present, Metro provides 6 kinds of 2000 brands of its own brand to customers in China, including two major areas, such as food and beverage, office and so on. Its sales share accounts for about 9% of the total sales volume.

In the next 3 years, Metro plans to increase sales of its own brand from 9% to 20%, and increase from 2000 to 3000.

With the continuous strengthening and adjustment of its own brand, Metro aims to establish a more sound customer policy and closer to its core target group.

Metro and Watsons have anchored customers through their unique experience and service, thus becoming the king of retail industry, but the way of expansion is quite different.

Comment: the services of the two enterprises have a great relationship with the positioning of their customers. Customers who go to Metro shop hope to buy cheap goods, remote location and rough sales environment, suggesting that the cost of goods here is low, while Watsons's location and decoration style can give customers a different buying experience.

Speaking of its own brand, Metro and Watsons have done quite well. Metro's own brands are all common commodities everywhere. In order to save the cost of goods and reduce unnecessary publicity expenses, Metro will choose some common products that sell steadily, and adopt customized methods to push them to the market at low prices, so as to achieve the goal of occupying the market.

The key to Watsons's own brand is self-developed new products, and borrowing these new and unique products that other retail markets can't see, Watsons firmly locked its loyal customers.

Expansion path, Vs capital stick

Compared with WAL-MART and Carrefour's two international giants, or even Watsons, Metro's expansion speed is obviously slower.

As of January 2011, Metro had 44 branches in 35 cities in China, far less than 160 of WAL-MART and 145 of Carrefour, compared with Watsons's more than 700 stores.

In 2006, Metro announced that it will expand at the rate of 6 to 10 stores a year, and 4 years later, Metro has just opened 13 stores.

However, conservative is not the tradition of Metro. In the first twenty years of its development, Metro has opened more than 200 supermarkets in Germany alone.

With its deep accumulation, in 1990, Metro entered Turkey and Morocco, and then began to arrange all the countries in Eastern Europe in 1995. Then it steadily moved to Russia and China, Japan and other Asian countries.

Up to now, Metro has covered 28 countries in the world, with more than 500 shops.

Though not surprising, it contributed a lot to Metro Group. In 2009, Metro Group contributed more than 46% of its 66 billion 500 million euro sales.

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In fact, any big company has its own surplus and insufficient strength. In the name of metro, there are actually some difficulties.

At least criticisms are that Metro has never stepped into the US market for half a while, and the members of the company are eating away from Metro's base camp. Sam is also a company.

Metro did not dare to advance, and the new market with developing countries had something else. It was the strength of the supermarkets in the United States and the abundance and abundance of market food and other non food products. They did not dominate the market after entering the country, but rather waited for the stones to crack.

More importantly, Metro is busy concentrating its energy, material and human resources, and constantly entering the vast market of developing countries, crossing the Atlantic, central and South America, across the Mediterranean Sea, India ocean - Africa and Australia.

At this time, under the command of Li Jiacheng, Watsons became extremely fierce and sharp.

In 2000, Watsons went west to Europe and bought the Savers chain store in the United Kingdom. In 2002, it went east to buy the Holland Kruidvat group. In 2004, it continued to the East and successfully acquired the Latvia Drogas company. This marks Watsons's entry into the Baltic Sea market and won the first battle. In 2005, Watsons also invested a huge sum of nearly 5 billion 500 million Hong Kong dollars to acquire the controlling power of Marionnaud, the largest perfume retailer in France. Watsons's key development strategy in Europe entered the stage of effective implementation.

In the same year, Watsons bought SpektrGroup, a health care and beauty products chain headquartered in St Petersburg.

The acquisition extended Watsons's global business to Russia, further consolidating its position as the world's largest retailer of personal care and beauty business.

In contrast, Metro is rather low-key and cautious.

Of course, this has a lot to do with the characteristics of Metro.

The business area of each Metro shop is generally 15000~20000 square meters, which can accommodate more than 50 Watsons shops. And because the radiative radius of its business circle is usually 50 km, it can not naturally compare with Watsons of Xiao Ling Ling.

But Metro's calmness and low profile also come from its sober understanding. A high-level person once laughed lightly: "we are more steady than speed, and we pay more attention to effective penetration than relative popularity. Compared with others, the flow of people here is not crowded, but the turnover of single invoices is much higher than that of other stores, and each store can enter a profit state only after running one or two years."

Watsons clearly does not agree with Metro's expansion strategy, and the world's biggest is not necessarily satisfied with its acquisition ambitions.

Capital cavalry continues to sweep across Europe.

In 2006, Watsons made the 65% stake in DC, the only national chain of health care and beauty products in Ukraine.

In Europe, because of the economic development and the gathering of the middle class, the size of such consumers coincides with Watsons's consumer positioning.

Such a large-scale merger and acquisition operation has not only increased Watsons's business outlets several times, but also expanded its business scale.

In Asia, Watsons acquired a well-known retail drug retailer in Philippines in 2003. In 2005, it bought Malaysia ApexPharmacySdnBhd chain drugstore and expanded its business in Southeast Asia.

The bar of capital has enabled Watsons to complete its overall layout in Asia and Europe for the next few years. It has firmly held the position of the global personal care retailer. It has 20 retail brands and more than 8900 retail stores in 34 markets and more than 1800 cities in Asia and Europe.

No wonder investment bankers suggest that Watsons's best way to maximize value is to split it from Huang.

Comment: the difference between the expansion of the two retail giants is due to the differences in the location of the format and the characteristics of the business circle. We know that Metro's location depends first on the main line of communication between the urban and rural joints of the first and second tier cities (usually the expressway or the speed around the city). There are not many locations that meet these two conditions in China. Metro's strategy for location selection is more likely to be opened than new ones, so Metro's expansion speed is much slower.

And Watsons is much smaller because of the area of a single shop, only a few hundred square meters, as long as there is a certain number of consumers in line with the requirements of Watsons store, such a place in large cities, Watsons's opening choice is much larger, a city opens dozens of business network points is not a problem, so from the surface, the expansion speed of the Watsons is much faster, and it is easy to buy some of the same type of competitors, into the global personal nursing retail head.

The trend is unbearable and lonely Vs continues to wind up

In 2010, the most competitive year in China's retail market, Metro was not able to resist loneliness.

In November 2, 2010, Metro introduced a new store model in Shanghai for the first time: "restaurant and restaurant"; in November 17th, the first Chinese store of Metro's Wan de Cheng electric appliance was located in Huaihailu Road, Shanghai.

Beyond conventional practice, the goal is clear - to accelerate the pace of expansion in China.

At this point, Watsons is obviously more familiar with the characteristics and rules of the Chinese market.

Compared with the traditional Metro shopping mall, the dining area is small, mainly for hotel, restaurant, canteen and other catering professional customer service, can provide a one-stop solution for the central city catering operators.

Watsons subdivides personal care from traditional retail, and through this brand new store mode, Metro further subdivides restaurant retail into a professional store close to the needs of restaurant operators.

One reason is that the scale of China's catering industry is growing at an annual rate of around 1 trillion yuan. The huge market represents great opportunities. The other is that the "food and beverage" ship is a small turnaround. It can be used as a metro store and an adult, and it can be copied more quickly and easily.

It is generally different from the new and the industry in the "food and beverage link". When the appliance of Wan de Cheng entered the beginning, it seemed destined for the frustrations of its process and the tragic ending.

The best buy in America is still the best warning for outsiders.

Under the premise of Suning, Gome and other domestic appliance chain giants firmly grasp the market dominance, best buy has made a fast start, but it has been in China for nearly 5 years, but now it has less than 10 stores in Shanghai.

When the first calf is not afraid of tigers, when Metro has not yet entered, Metro CEO codgers announced with satisfaction: "we will open 100 Wan dcheng electrical stores in China before 2015."

Wan de Cheng is the largest consumer electronics chain in Europe.

This entry is the world's largest electronic commerce and industry Foxconn, which may be the source of the bottom of the city, but it will not become a reason for the industry to sing more.

Under the premise of Gome Suning, which has spread throughout the country's second tier or even three or four line cities, the target of 100 stores in China will undoubtedly be numerous.

Metro made a sudden effort and Watsons never stopped.

Editor in chief: NF039 (source: business commentators: Dai Yonghua)

In 2010, the number of Watsons's stores in the mainland suddenly increased from 400 stores in 2005 to more than 750 stores, and it was ambitious to launch the "thousand store plan" in 2011.

Its path is, on the one hand, binding partners with strong partners, such as Japan's Yong Wang, commercial real estate giant Dalian Wanda and COFCO, which can make Watsons's expansion more than half the effort. While enjoying advanced and advanced power, it can also save energy for location selection. On the other hand, it will speed up the penetration of the two or three line market and grab and occupy the market before the rival Wanning, Guerlain beauty and SF.

At the same time, Watsons began to test the new form of water marketing, joint Renren opened the "Renren beautiful journey", and launched its own mobile platform software, the appeal is simple and straightforward, standing in the forefront of the industry.

Watsons, who had been riding a dust storm, suddenly found that the tiger was waiting behind him, and suddenly felt a sense of crisis.

In fact, Watsons's high speed expansion is very rare in modern retail channels, and it is at the two poles with Metro's rigorous and steady German style.

It is undeniable that Watsons's stable performance has contributed to its expansion.

But tracing back to the source, Watsons is still seeking the scale benefit of chain operation to the greatest extent.

Retail business contributed nearly half of the turnover in the five major businesses of Huang and real estate and hotels, energy, ports, telecommunications and retail. In 2009, the retail business receipts amounted to HK $116 billion 100 million, which has exceeded that of Bailian, Huarun and other local retail groups. After a small gap, they surpassed Suning and Gome. In 2010, however, their 3G business continued to suffer losses, and energy and port profits declined.

At this point, the role of Watsons and Metro has something in common.

Looking back, Metro and Watsons are plunged into the retail market, looking for only opportunities for development. They never expected that a little rebellion and innovation would have opened up such a wonderful chapter.

To sum up the common ground, but one sentence: find gaps in mature markets.

This is their path map of the "Joan Ma card line", while Metro and Watsons have never deviated.

Comment: due to the different formats, the development trend of Metro and Watsons is completely different. Metro's large volume and unique location requirements have led to a huge restriction on the number of stores in Metro stores and supermarkets. In order to achieve the purpose of expansion, Metro can only choose new formats, such as catering outlets for franchised food and beverage products, and "Wan de Cheng", which specializes in household appliances.

Watsons's small shops make Watsons's shops like grass and can take root and stand firmly in any corner of a big city, especially Watsons has adopted bundling mode with strong commercial real estate, which has reduced many difficulties of location selection of Watsons business circle.

Channel Innovation: turn around and turn around

The road of innovation and business between Metro and Watsons is undoubtedly a practical revelation of business to many enterprises who are puzzled by the channel.

First, we can't find the answers to the questions, so let's change the question.

The market is not short of some self created game rules and deviant managers. Watsons is positioned in the field of personal care retail, Metro focuses on the B2B enterprise bulk buying field.

Under the modern channel system, the power line is flat, minimizing the channel loss, facing the market audience is the reform direction that every enterprise is eager to try. Therefore, facing the vertical extrusion of the upstream and the horizontal competition of the homogenized competitors, the traditional channel operators are becoming increasingly embarrassed in the market where the slogan of "channel is king" is still popular.

If we say that the channel managers who are under the pressure of survival have strong management team, introduce the concept of modern operation, and are more fortunate to unite a group of industrious and hard-working front-line staff, still struggling for the basic survival, then it is time to consider whether their own business or business mode should be stopped urgently.

Metro and Watsons jump to appear order and operation rules, and turn around in the traditional retail field of over competition. They are turning around by positioning innovation, inject brand power, and expand resources integration ability, becoming the only king in their respective subdivision areas.

Second, private brand guarantees Mai Qu's core competence.

Metro Watsons, the two innovative retail giants, after having stable passenger flow and brand reputation, integrates upstream supply chain resources and continuously launches its own brand products in its own storefront, thus realizing the pformation from simple channel providers to channel brand businesses.

Compared with brand enterprises, the operation advantage of this channel brand business is obvious: private stores, which save the channel development process of consumption charges; face the market directly, seamlessly connect with consumers, do not have any channel to give profits, and the product proceeds into the bag; but with the mature Qu Daopin brand, the private brand will naturally have higher brand premium capability.

To enter, attack, retreat, and defend, in the channel business, upgrading to enough to promote the realm of its own brand is indeed a good thing.

Of course, the expansion of Watsons and Metro has the participation factors such as capital support and enterprise strength. These success factors are often difficult to replicate for many small and medium enterprises in the channel field, but what is more important and can be used for reference is the keen market sense of smell, the marketing ability of market segmentation, and the decision-making power of bold and resolute atmosphere.

In view of themselves, many channels of Commerce have found that what they lack in front of the market is really smart and bloody.

Third, we need to be cautious in positioning innovation and reshaping models.

The innovation of channel business does not mean that any enterprise should rush forward.

The blind innovation of jujube and jujube playing three poles will only lead to chaos, and the business positioning of changing businesses is a major business operation.

For the start-up operators, location innovation should scan their own resources, search for the blue ocean market in the existing market, analyze the consumption group and consumption characteristics, evaluate the market development space, and cautiously check the operation effect of the mode. Once the conclusion is feasible, the battle can be launched.

For those who want to pform and reshape their position, they do not have the advantage of new strength, small boat and good turn. They should be cautious and prudent in steering halfway and adjusting their course.

It is worth studying and learning by physical channels. It is a business innovation mode in the field of online e-commerce.

The online retail sector is emerging in the face of explosive innovation, and online innovation is probably a way to innovate.

It is foreseeable that in the future, the king who can occupy the retail market must be an integrated cross border channel enterprise integrating online and offline.

No matter how mature the market is, opportunities for innovation will always exist. In another way, turning around and coming face to face may be a vast expanse of blue ocean.