What Is The Loss Of Traditional Retailing In The New Retail Sharing Mode?

IKEA has been operating in China's online mall for more than a year, independent.

The platform and conservative market strategy, though 250 thousand of the new registered users, are significantly lower than the expectations of the outside world, and for most people, IKEA is still a company with only store businesses.

From the data of IKEA's fiscal year 2017, IKEA's sales in China exceeded 13 billion 200 million yuan, an increase of 14% over the same period last year, although it still maintained a 2 digit growth rate, but it fell by 4.9% compared with the 2016 fiscal year.

In contrast,

The concept of shared economy has landed in the domestic retail industry for about a year. Meanwhile, NetEase strictly selected products and so on, while grabbing the market share of MUJI, a large number of entrepreneurs began to target online sales of high-end home.

When a group of barbarians invaded, the nightmare of IKEA seemed to have just begun.

Is IKEA's fault just missing the electricity supplier?

Not long ago, the media reported that Wuhan opened second IKEA shopping centers, and once again responded to IKEA's plans to add 2 to 3 stores a year in China.

However, it is not directly proportional to the speed of new stores. The growth of IKEA in the Chinese market has lost a strong trend, but weakness is multidimensional.

In the 2017 fiscal year, IKEA's global growth slowed to 7.1%, far below the expected growth rate of 10%. The rapid growth of the Chinese market is precisely the target of IKEA's heavy dependence.

A group of beautiful data is that the number of visitors in China's shopping malls in the last fiscal year exceeded 90 million, an increase of 11% over the same period last year. The official website visited more than 75 million people, an increase of 24% over the same period last year. The total number of members of the IKEA exceeded 18 million, an increase of 12% over the same period last year.

The increase is down by 9%, 10% and 9% compared with the previous fiscal year, which does not seem to be a good trend.

Most likely to be associated with IKEA may be poor performance in the electricity supplier, IKEA e-commerce website (Shanghai) online orders reached 5 times below the line (Shanghai area), but the electricity supplier.

At present, it accounts for only 3% of the total sales of three stores in Shanghai.

Although IKEA's e-commerce platform in China is still in the state of trial operation, the main purpose of the electricity supplier is not to rush sales performance, but to learn new channel experience.

However, IKEA will not be too relaxed from the strength of online competitors.

During the double 11 period last year, there were more than 30 sales of household brands in the Tmall platform, and sales of Lin's wood and Pingo international brands exceeded 400 million.

According to Tmall's tonality, this year's double 11 period is bound to invest more resources, and will further squeeze IKEA's market space.

Coincidentally, according to IBISWorld data, the US furniture market with a market size of US $70 billion now has 15% of its sales coming from online.

This attracted Amazon, Wayfair and Target to launch the furniture online shopping service in this market and become IKEA's new rival.

At the same time, it also means that the number of consumers and consumption capacity that IKEA can not reach due to the lack of online channels is hard to gauge. There are rumors that IKEA will cooperate with a domestic third party platform in the field of electricity supplier. Will this be the result of unchecked results? It may also be somewhat helpless.

On the one hand, unlike IKEA, which began to accelerate its expansion in 2010, the replication of IKEA shopping center in a second tier city is bound to have greater pressure due to the saturation of business and soaring land prices.

On the upper level of the Internet, the impact of NetEase's strict selection on MUJI is obvious. Online furniture sales also appear in some online home sharing direct purchase platforms, and it is also trying to break the traditional retail price advantage through factory direct selling mode.

On the other hand, under the baptism of Internet culture, the value of traditional brands is weakening. The new business model begins to question the so-called brand premium, while some emerging brands prove the rational consumption of users.

The rapid growth of brands including good shops and Jiang Xiaobai has already reflected the fact that consumers are starting to pay for quality, or that they are more willing to choose brands that conform to their own attributes and form identity.

According to IKEA's official statement, we plan to build 3 distribution centers, 5 customer distribution centers and 5 small parcel distribution centers in China before 2020, and distribute them in five regions of southeast, northwest and central China in order to speed up logistics.

In addition, IBS Department has been set up to help IKEA perform data analysis, official website optimization, CRM system maintenance, online and offline interaction and so on.

However, these are still limited to "planning" and "preparation", and time is gradually killing IKEA's inherent advantages.

The lost glory of traditional retailing in the era of shared economy

If you ask IKEA what its advantages are, I believe that most people's answers will be situational experiences.

Designers decorate and create a sample room, simulate the use environment of the products, stimulate consumers' eyeball and stimulate consumers' desire by optimizing the resources, selecting art and so on to create the best state.

Some people put IKEA's experiential marketing as a guide, bringing the experience of life into the shopping mall, and relying on the richness of the brand to bring one-stop service to consumers.

Admittedly, compared with the electricity supplier, traditional retailing has always relied on the "experience" to defend its own advantages. IKEA is the leader of the company, and a group of loyal consumers are willing to pay for such an experience, even if they have lost their cost performance compared with the electricity supplier.

However, under the new retail and shared economy mode, the last retaining wall is being dismantled.

Ali, Amazon and so on have begun to layout the unmanned supermarket, one of the core ideas is the offline experience, online purchase, remote distribution, in order to make up for the short board experience in the experience.

The appearance of an unmanned supermarket has already painted a cake, and the offline advantage of the daily necessities and the consumer goods market will no longer exist. Will the next furniture and other large items be?

This is probably the reason for IKEA's luck. The logistics of large commodities has always been a difficult problem. Because of the particularity of commodities, some details of the experience can hardly be replaced by electricity providers, such as the comfort level of sofa, the aesthetic feeling brought by the matching of goods and so on.

After the idea of shared economy was deeply rooted in the hearts of the people, this situation began to usher in a turning point.

Judging from the big environment, Airbnb and other short term rental platforms already have the basis of home sharing. Users are also in contact with different household products in the process of accommodation.

In fact, there is a similar business model in China, and more thorough.

For example, "I am at home" has launched a life home service. When users buy products above designated price on the platform, they can apply for a life home, provide offline experience for new customers who have the same purchase needs, understand the use of products in real life, and get some benefits after completing the order by new customers.

Optimistically, the essence of shared economy is to make use of fragmented time and idle resources to produce greater value, which is also applicable in furniture industry.

New customers can communicate face-to-face with users and have a more intuitive understanding of the products.

In addition, the "online business platform + offline sharing experience" mode makes the price of furniture market more pparent, do IKEA rely on experience to tell stories, and then improve the way to play premium?

Of course, it also faces new challenges, such as user security, privacy protection, qualification review, logistics services, promotion and so on.

These platforms are still evolving, which is a bad news for IKEA. The former can activate more idle resources to enable users to experience products and services in the neighborhood. IKEA can hardly open stores to most people's doors.

Whether in terms of service efficiency, business prospects or consumption habits, IKEA, who eats old books, has become a subversion in the slow pace of development mechanism.

Will personalization be the last straw for IKEA?

IKEA's new marketing keyword is the living room, which indicates that IKEA will focus its attention on the living room in the 2018 fiscal year, and strive to meet the needs of users at different levels.

The living room is no longer just a place for visitors and rest, but also can carry more functions such as work, games, parties, solitude and so on.

This is not just a change in marketing, but also a self denial and repositioning of IKEA. The IKEA between models has been unable to meet the needs of Chinese consumers. One is material promotion and the pursuit of more products; the two is spiritual upgrading, which forms more personalized needs.

Obviously, IKEA saw this trend and tried to cater for it, including the introduction of limited design series, improving the price of some personalized products, and even after the experience, the PUP (ordering Center) mode of logistics distribution.

Unfortunately, IKEA is still a sample of standardization in many people's minds, and the implementation of personalized service is still facing a very small threshold.

Moreover, IKEA has made some detours. For example, according to the sales and visits in 2017, the monthly sales of PUP in Beijing are only 1/10 of the average monthly sales of IKEA stores, while the number of visitors on weekdays and weekends is only 1/4 and half of that of the mall.

The PUP model failed to meet expectations and may even be abandoned.

IKEA's hesitation and trial and error are just the opportunities for competitors. Jingdong, Tmall's warehousing and logistics already have the ability to pport large pieces of goods, and many entrepreneurs begin to experience the sharing outside, using factory direct sales, online and offline linkage and other ways to improve shopping efficiency, while providing better products and services.

These are not available to IKEA, or the blank areas that the traditional retail giants have not yet realized.

There is no denying that the home industry is ushering in the new retail era. New business models and old business thinking, new spoiler and old tycoons are competing with one another. Even multinational corporations like IKEA should make changes.

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