Industry perspective
In the past, the discussion on Channel online focused on devices (PC / mobile), communication technology (4G / 5G), marketing methods (SOCIAL fission / live broadcasting with goods), etc. in addition, we believe that the discussion on Channel online now deserves attention to the following changes:
① product change: from “goods” differentiation to “experience / rights” differentiation
② change of brand empowerment: from “precision marketing” to “brand co creation”
③ change of channel role: from “inventory clearance” to “new product explosion”
④ category change: the optional and durable categories continue to penetrate, and the category focusing on experience will enter the market
Enlightenment to the brand:
Online channel advantages: precision marketing; The success rate of new products increased from 10% to 60%, and the incubation cycle was shortened;
Side effects of relying on online channels: ① the sales expense rate is 1.25 ~ 2 times higher than the industry level. The cost of e-commerce traffic increased, and the brand’s advertising investment increased, but the improvement of ROI was limited. ② In terms of personnel salary, the median of digital posts is about 37% higher than that of retail posts. And digital talents are in short supply. ③ Inventory pressure increased. Q4 sales are concentrated, and Q3 inventory accounts for 2% – 3% higher than the industry level. It increases the pressure of goods preparation and promotes the flow distribution. The uncertainty has a greater impact on the brand.
As the basic natural flow, offline channels deserve attention: the rental cost has gradually decreased. Compared with the end of 2018, the average shop rent in 2021h2 first tier cities has decreased by 17% and that in second tier cities by about 5%. While mature brands are making efforts online, they do not change the basic role of offline operation, and consolidate offline competitiveness by deepening cooperation with offline channels, Wuxi Online Offline Communication Information Technology Co.Ltd(300959) same price strategy, optimizing offline store location, layout and experience, and encouraging offline dealers.
Enlightenment to the platform:
Experience upgrading helps categories continue to penetrate: optional and durable categories continue to penetrate, luxury goods, furniture, home decoration and other experiential categories accelerate online layout, and actively communicate with young consumers.
Digital empowerment creates new products: from marketing empowerment to product design empowerment, create new CRM products with brands. New products that meet the needs of users will attract higher quality traffic and make a positive contribution to Gmv and advertising consumption. The average unit price of new products is 1.3 times of the market.
Enlightenment to channel role:
For the incremental market, the online channel is positioned in flexible asset light operation, widely reaching users, marketing to create popular funds and cultivate users’ mind. The key indicators are category penetration, user growth, Gmv, marketing expenses and ROI
For the stock market, the positioning of online channels is fine digital operation, driving the linkage of all channels. The key indicators are channel customer acquisition cost, repurchase rate, user long-term value LTV, etc.
Risk tips
The terminal demand is weak, and the consumption recovery is less than expected; Macroeconomic depression; Industry competition intensifies; Uncertainty of industrial policies; Risk of deviation between statistical results and actual situation, etc
