At present, the construction of “private traffic” has become a new traffic channel that enterprises and brands pay more attention to. Indeed, such a flow channel with “independent property rights” and continuous low-cost or even free access and repetition is an important choice for enterprises and brands who care about the input-output ratio.
However, after several years of development, the private domain is no longer a simple “flow channel” role. It is observed that its role has become an indispensable business ability of enterprises. Why is private domain operation valued?
As mentioned earlier, because the brand has “property rights” to the private domain, it can reduce the dependence on uncontrollable external resources and traffic, optimize the interaction ability with users, and realize the continuous iterative evolution of user experience and products and services. Finally, it will realize the brand’s own user assets and the ability to reach users based on the private domain, and strengthen the anti vulnerability of enterprises.
This conclusion is not easy to come by. Based on the data insight and practice accumulation of youzan’s private domain ecology, youzan new retail, in conjunction with the Chinese version of Harvard Business Review, summarized, analyzed and released the 2021 private domain operation insight report, which refined a model, two values, four trends and seven observations of private domain operation.
The report points out that the private domain is essentially a set of anti vulnerability laws to systematically improve the operating power. That is, the ability of enterprises to still benefit in an “uncertain” environment. Based on the richness of the report, the author interprets the four trends of private domain operation published in the report. These trends highlight the new value points of the private domain, which may give some new inspiration to brands that are still unclear whether to make up their determination to be a private domain and are using the private domain as a traffic channel
trend 1: the private domain has become an indispensable user reach and operation position
There is no doubt that this is the basis of private domain operation.
According to BCG statistics, the penetration rate of private domain contacts in China is as high as 96%, of which 74% of users have experienced planting grass in the private domain, and consumers spend nearly 1.5 hours on private domain contacts every day. Meanwhile, youzan data shows that Gmv brought by youzan merchants through core private domain operation contacts has shown a rapid growth trend in recent three years, with an average annual compound growth rate of 37.56%.
Meanwhile, private consumers have higher repurchase frequency. BCG survey data show that 79% of consumers have made purchases in the private domain in the past year, of which 45% said they would increase the purchase frequency. In the first three quarters of 2021, the average repurchase frequency of members using merchants of youzanwei mall was as high as 7 times, and the average repurchase proportion was as high as 45%.
Based on the characteristics of private domain, nature is closer and more direct to consumers, which is convenient for enterprises, brands and consumers to establish long-term trust relationship and gain first-hand data insight.
Moreover, China’s social networks have covered almost every user, which can help brands better reach consumers, which is the best soil for the rapid development of private domain. So that enterprises and brands can have enough channels, means, and more different forms of content to connect consumers.
Based on such factors, more and more businesses begin to try and gradually increase the strength of private domain operation while doing traditional public domain operation
trend 2: LTV (long-term user value) has been better demonstrated
Under the operation of private domain, consumers buy more frequently, which actually reflects the change of private domain as brand “property right”.
Bai Ya, founder and CEO of youzan, once put forward the explanation of private domain property rights. Only when users are precipitated into the private domain of the merchant, the property rights belong to the merchant, and all the income from working on private domain property rights belongs to the merchant.
Therefore, under the private economy, the relationship between businesses and consumers is no longer a one-off deal. More users’ long-term repeated repurchase is of greater and longer-term value to businesses.
The report points out that as the cost of acquiring new products continues to rise, enterprises begin to change from product thinking to user thinking, from focusing on Gmv to focusing on LTV (life time value, i.e. user long-term value). LTV’s improvement measures include extending user life cycle, increasing customer unit price and re purchase rate, and finally improving enterprise value. Among them, the operation of members is the key to improve LTV.
LTV can be seen more clearly from the specific data. In the first three quarters of 2021, the number of members and sales contributed by members of Zan merchants increased significantly compared with the previous two years. The number of members exceeded 30 million, the purchase record of store members exceeded 90 million, and the turnover was 14.1 billion yuan, further increasing the proportion of Gmv in the market of Zan merchants to 25%. The average arrpu value of members (annual contribution amount of members) has increased year-on-year for three consecutive years since 2019, up to nearly 520 yuan.
In the private economy, we should pay more attention to the repurchase rate and value of a single customer. The repurchase rate multiplied by the value of a single customer is the value of the whole single customer.
“Single customer value” pays more attention to the “depth” of operation to promote more customers to repurchase more times. Generally, more effective operation means include community operation, brand D2c operation, member operation and how to better transfer to private domain. Its root lies in the repeated construction of “trust connection” between merchants and customers. After reaching a certain trust connection, the categories of goods that businesses can sell are naturally expanding. They can sell more key categories in line with the brand positioning, and then continuously improve the single customer value, and improve the customer repurchase frequency to form a positive cycle
trend 3: retailers\’ Wuxi Online Offline Communication Information Technology Co.Ltd(300959) field is rapidly realizing integration
When the private economy develops more and more deeply, the integration of Wuxi Online Offline Communication Information Technology Co.Ltd(300959) continues to accelerate, and the boundary becomes more and more blurred.
It is worth noting that the integration of Wuxi Online Offline Communication Information Technology Co.Ltd(300959) is not to seize online and offline resources. Instead, build a three-dimensional brand management field around consumers, build multi-contact omni-channel operation, and truly bring users Wuxi Online Offline Communication Information Technology Co.Ltd(300959) consistent high-quality experience.
In particular, local retailers are more prominent in Wuxi Online Offline Communication Information Technology Co.Ltd(300959) integration. Because the local business heavily depends on the customer service of shopping guide and the performance ability of stores, there are business hours and logistics space restrictions in the traditional offline field. After Wuxi Online Offline Communication Information Technology Co.Ltd(300959) is opened, not only the user system is common, and consumers can enjoy unified user rights and interests, but also offline stores can undertake to store and home performance business, while cloud stores can undertake departure business and touch ability. The two complement each other, which not only increases the sales space, but also brings business hours and physical space increment to the stores. At the same time, solving the problems of shelf extension and category differences in stores and implementing thousands of stores and thousands of faces can not only improve the sales growth of more categories, reduce the store inventory pressure, turnover, temporary and inventory delay risks, but also improve the capital turnover rate.
According to the data of youzan, in the first three quarters of 2021, the turnover of Gmv of youzan retailers was nearly 10 billion yuan, accounting for more than 16% of the market. In the scenario of leading to the store, there are nearly tens of millions of electronic card and coupon orders, nearly 20 million self delivery orders to the store, and more than 12 million local distribution orders, which means that online brings rich passenger flow to offline scenarios
trend 4: private domain becomes a test field for new brand / product incubation
According to incomplete statistics from the praise side, in 2021, more than 150 new products of digital 3C and home appliance brands were launched simultaneously at the praise Xiaocheng end, such as iphone13 series, Dajiang mavic3, TCL smart screen, etc. the Gmv brought by new products accounted for more than 30% of the overall performance.
Compared with the same period in 2020, the average growth rate of cutting-edge brands in youzan’s Gmv reached 197.5%. From July 2020 to June 2021, the average number of repurchase by members of new consumer brands with praise was 12.9, the repurchase rate was 38%, and the sales of repurchase customers accounted for 74.2%.
Thus, the private domain is also becoming a testing ground for new brands and new products.
Because new products and brands often encounter many difficulties when they are launched, such as the lack of early trust foundation, which is easy to make consumers and investors doubt and difficult to open up the situation and carry out business; The market feedback live data is extremely scarce, which can not provide timely and effective reference support for later operation; Brand marketing innovation is divorced from market planning. In the initial stage, due to the failure to collect a large number of effective precipitation data, it is difficult to integrate with the new product promotion strategy, and there is no effective feedback from the market and consumers in the short term, which makes it difficult to give full play to the effectiveness of the marketing model, etc
Private domain operation is closer to consumers, so consumers can participate in the co creation of new products and grow together with the brand.
In the private domain, it is also easier for businesses to obtain consumer feedback. In the private domain pool, businesses can invite core users to participate in the experience and collect feedback, and iteratively optimize products accordingly, and then launch them on the market; It can also adjust the marketing strategy in time, making it easier to open the situation and carry out business.
The private domain of the brand can be built into a brand exclusive DTC self operation position, which comprehensively combines brand publicity, mall transactions and user marketing interaction.
The future belongs to businesses that can manage users well, especially private domain users. Whether it is a new brand or a traditional brand, whether it is online or offline businesses, grasping the trend of private domain operation has become one of the required courses in the new era.
