E-commerce: Online and offline conflict resolution

April 22, 2010 the Ministry of Industry and Information technology released data show that the first quarter of this year, China's Internet users add 20 million people, the total number of netizens to 404 million people. Statistics show that at present, the Internet has become an indispensable tool for people to live, work and learn, and is having a profound impact on all aspects of social life. The Internet industry continues to develop. It is estimated that 1-March e-commerce, network advertising, online games, search engines and other markets grew by more than 20% year-on-year, the internet industry has become the main growth area.

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From the point of view of network users, with the expansion of the scale of netizens, and with the increasing sophistication of netizens, the value of Internet for netizens is changing from "entertainment platform" to "business platform".

From the enterprise's point of view, the entrepreneur's understanding of the nature of the network is increasingly rational and scientific. From the perspective of brand communication, the network is only a channel of information dissemination, but this channel integrates all the traditional media forms and aggregates a large number of young consumer groups.

From the product marketing point of view, the network is a marketing and communication integration channel, in the network media to spread and sales of the distance between further narrowing, that is, to achieve brand communication and product sales integration.

It is based on the network media to brand marketing communications and sales integration, E-commerce more and more enterprises pay attention to, on the one hand, enterprises through E-commerce mode on-line, so that the effect of network marketing more intuitive and effective; On the other hand, the distance between the brand and consumers can be effectively shortened, The communication between the brand and the audience is more direct, especially with the young consumer group.

The reason why e-commerce is becoming more and more valued by the brand is that the development of the network sales has the incomparable advantage of the traditional brand operation mode.

First of all, the network media integrated the brand marketing communication and product sales, so that the brand marketing communication activities more direct, more effective. Therefore, the effect of network marketing is not the brand exposure, audience participation and other difficult to quantify indicators, but the real sales conversion rate.

Secondly, the network sales compressed the traditional marketing of the intermediate links, so that the distance between consumers and brands shortened. This one on the one hand to enhance the rapid response ability of the enterprise, effectively adjust the product strategy according to the market sales situation, on the other hand effectively compressed the intermediate link, thereby reducing the cost of traditional channel construction, effectively reduce the product sales price.

Moreover, the network sells to the consumer bigger product choice noodles. In a traditional offline store, if the 600 sku, then is a very large shop, such a large store inventory, logistics, venue rental, personnel and so is a large amount of expenditure, but in the network stores, consumers can easily achieve 1000 sku, so that consumers to expand the choice of face, So as to effectively meet the personalized needs of consumers.

Finally, the network sales to the brand's sales coverage further expanded. Where there is a network there is our sales terminal. In the traditional agent to join the system, the county-level market for agents is a very embarrassing market, if open stores, it is likely that the situation is beyond the income, if not open, and is likely to occupy the initiative of competitors. But online sales have solved the problem, and network sales have broken the limits of geography and the number of terminals.

Therefore, as a new sales channel, the network is increasingly showing its huge market competitive potential and advantages. For most traditional brands, the main consumer groups have been online, if the effective system of enterprises or offline mode, then there must be a direct deviation between the sales channel of the enterprise and the target consumer groups, so whether the network as an important product sales of new channels to develop, Will determine the future market position and living space of the enterprise.

Online and offline: Symbiosis or mutual destruction?

For the wave of e-commerce, whether small and medium enterprises, or domestic and foreign large enterprises, can not be lightly. In fact, many companies have been active in trying to score a piece of cake in the online shopping market. Gome launches online mall. and Gome as more and more attention to e-commerce channels of enterprises there are many. The average daily net profit of 200 million of China Mobile in 2008 is vigorously promoting its own electronic channels, hoping to be able to quickly their own business through the network or even mobile network sales.

However, at present, the enterprise is faced with an awkward problem is: The network has a unique marketing charm and huge market potential, if not the development of online channels, is likely to be left behind by competitors; but the traditional online channel competition is already very intense, The development of online channels will also impact their own painstakingly built under the line channel system, the traditional offline channel but their current settlement of this!

In the late 90, Compaq, the world's PC powerhouse, launched its official E-commerce site in 1998 to sell computers directly in an attempt to snipe at the second-place threat of Dell's direct sales model. Although Compaq was cautious, the channel operators are still angry. The channel trader does not think Compaq is competing with rivals, but that it is Compaq's desire to bypass the channel and take its place.

Specifically, the conflict between online channel and offline channel is mainly embodied in two aspects: the competition of consumers and the impact of price.

1, consumer competition

Online channel to the competition of the offline channel is first of all consumers, which is also the source of conflict. Due to the rapid and convenient network communication, as well as the price advantage of simplifying the intermediate links, making online channels as a new channel model in attracting consumers at the same time, the natural cause of the squeeze on the traditional channels, so that offline channels can not be hostile to the online channel and strongly resist it?

2. Price impact

Because of the characteristics and advantages of network marketing communication, the goods sold online are not cost of logistics and storage, and they do not need to bear the expensive marketing cost, which leads to the price of the same products being sold on the line cheaper than that of the offline retail stores. Data from Taobao shows that compared with the traditional logistics, the shop owner can save 60% of the transportation cost and 30% of the transportation time, the marketing cost is lower than the traditional offline store 55%, the channel cost can be reduced by 47%. Considering the above cost factors, the same goods on line and offline channels exist 20% to 30% The difference is perfectly normal. 20% of the difference is enough to let the line under the channel industry chain generated a huge turbulence, the traditional line under the channels of the real estate store system and hard to flee the goods management, online channels under the impact of the helpless, it is very terrible, but also offline channel the most intense reaction of the crux of the problem.

Whether it is consumer contention or price shocks, these are ultimately conflicts of interest. Therefore, the Chinese enterprises involved in E-commerce, the current urgent need to resolve the main contradiction is also how to balance the online channel and the existing cable channel of interest conflicts.

Harmonious coexistence of online and offline: Sustainable development of e-commerce

How are the interests of online channels and offline channels balanced? In fact, this is a problem of resource integration and utilization. E-commerce is not only a front-end interface concept, the backend has a lot of resources to integrate. For example: Supply chain, product manufacturing process, logistics, data marketing, information technology platform and so on.

In fact, in today's competitive ecological environment, enterprises all marketing thinking model should face the consumer market, distribution channels are not determined by the enterprise, but consumers decide when, where, how to buy the goods they need. Convenience strategy is the key point of network platform competitiveness. Therefore, when deciding whether to build online channels, we need to transform from "channel strategy" to "consumer shopping convenience", and then take "consumer shopping convenience" as a basis for decision-making. There is no absolute conflict under the line, the key is how to "consumer convenience shopping" as the basis for effective integration. Only the establishment of online on-line interactive retail channels based on E-commerce mode is really meaningful.

And to really do this requires enterprises to put online and offline channel construction to the strategic height of positioning. Only strategic positioning is clear and clear to fully utilize and integrate all available resources.

Li Ning, which has been involved in E-commerce and has gained a lot of performance, operates entirely in an independent manner and is directly led by the company's COO (COO). Obviously, e-commerce was incorporated into the company's strategic deployment by Li Ning. Accordingly, Li-Ning company for its own online sales and offline channel positioning is very accurate.

On the strategic orientation of the construction of line and line channels, enterprises must make clear the position of the online channel in the whole channel system of the enterprise and what role they play. At present, the business of wading E-commerce is mainly the online channel positioning as a supplement to the offline channel, but the future development trend is absolutely online and offline integration. Whether complementary or complementary, it is necessary to have a clear strategic positioning. Only after the positioning relationship between the line and the offline channel is determined, can the enterprise adopt appropriate strategy.

1, the main line: online and offline channel to achieve product differentiation

At present, in dealing with the relationship between online and offline channels, many of the main ideas of the enterprise mainly offline channels, the online channels as a supplement to offline channels. The conflict between online and offline channels is ultimately the conflict of interests of channel merchants. If the line only sell a specific category of products, and offline channels have a difference, not to cause the channel to panic over the water. At the same time, the offline channel has been effectively made up, to expand the company's sales share.

Compaq in the planning and implementation of the online strategy, the existing channels of the interests of the business really take into account, it is worth learning from. Compaq to balance the interests of the line under the channel, not online and under the line to fight up, took a "smart" approach: specifically for the online development of a set of products, is the later Prosignia series of computers, specialized for small and medium-sized business computers. Although the result of Compaq's eventual merger with Hewlett-Packard was, to some extent, not a huge competitive advantage in the form of electronic commerce, the experience of Compaq on line and offline is very useful.

Li-Ning company for its own online sales and offline channel positioning to achieve a difference. For example, the line of the Li-Ning flagship store specializing in the sale of new products, some shops sell inventory goods; Li Ning official E-commerce platform e-lining.com mainly sell limited edition products, including star signature can be stored goods. It can be said that Li-Ning company's online and offline differentiation of the road, for more to enter E-commerce in China to provide a reference coordinate.

Specifically, in order to achieve differentiation, enterprises can take a variety of ways:

(1) Online is the processing of offline channel inventory platform

This is the offline sales of inventory to the line to sweep goods, reduce the brand's inventory pressure. This is also the choice of many traditional enterprises, online can not only sell suitable for the network of low-priced goods, and offline channels of stores and other images and prices are not conflict. Once famous American High-tech electronic products retailer Sharper Image in the development of online channels, only on the line to sell inventory surplus products and anti-season products, sales effect is also very good.

(2) line is the line of the classic product of the engraving platform

When the classic models of the previous years online has been broken down, the classic style of tracking, only online sales, offline channels do not cause conflict, but will help to improve the total sales share of the enterprise.

(3) Online provision of special products

This refers to the network sales development of product models, these styles do not shop under the line channels, terminals can not be bought, only in the online exclusive sales, such a differentiated settings, naturally from the root cause to avoid the conflict of interest between channels.

2, Complementary: online and offline integration

The future must be a combination of online and offline channels. This is an inevitable trend of development. Because of the diversification of consumer demand, it is impossible to have only one model to meet all the needs. Especially when enterprises are willing to seriously consider consumer convenience shopping experience, offline and online integration should play a complementary role.

Seven wolves began to shop on Taobao three years ago to try new channels of network sales, set up a "new channel" department at the end of 2008. Zhoushaoxiong, chairman of the Seven Wolves, inspected the U.S. retail market, pay special attention to the development of e-commerce of the Seven Wolves; its assistant Hu has also said that seven wolves have invested tens of millions of in doing ERP, "Planning for 3-5 years, to achieve from a traditional enterprise into traditional marketing and e-commerce coexistence and integration of new economic entities."

At the same time, it is worth noting that many online Web sites have also started to consider offline expansion, after all, about 80% of the offline people have not online shopping, how to cover the 80% has not been online shopping, some forward-looking E-commerce site began to explore, Taobao launched the so-called "big Taobao" new strategy, Start testing the water line under the sales, 2688 sites are also under the development of online purchasing points.

In the future, a traditional enterprise alone line or under the line is not good, online channels to expand to the line, the line to expand to the line. Now almost all traditional offline companies want to develop online channels, this is a big trend. How to integrate online sales with hundreds of physical stores, to form a complete, strong net, is not an unrelated two skin, is the enterprise must face the problem sooner or later.

Then the line and offline channel fusion concrete how to operate? There are several ways to refer to this.

(1) Unified pricing, flexible promotion

Now, on many well-known online shopping platform, almost all products are cheaper than the market terminals on the price. Cheap range is add, many even She half. This is one of the main incentives to attract online shoppers. However, the online price is low, because there is no specification, operating costs are relatively low, once the specification, the cost must go up. The costs of online and offline channels tend to converge.

With the increase in per capita GDP, the consumption concept of online shopping will be completely changed, convenient, efficient, wide selection of the core concept will be consumers on the agenda, and gradually replace the trajectory of the "low price equals net shopping" these consumption concepts.

Therefore, not only to have the concept of channels, but also to see the people behind the channel-consumers! When we move from "channel strategy" to "consumer shopping convenience", focusing on "consumer shopping convenience", we will find that online and offline channels for consumers are very different. The heavy consumers who buy online are actually biased towards the target group with no time for money.

Therefore, we can set up a unified, strict price system, product line on the next price. But online and offline promotional strategies can be more flexible, such as online mail, gifts related accessories. This also does not exist the channel conflict problem, but to the consumer's coverage actually is broader, the on-line platform and the entity shop each has the characteristic, mutually complements, harmoniously coexists.

(2) Seamless docking, Harmony win

Online channels and offline channels to form a common interest, consumers can see the goods online, online ordering, and then pay money to take goods, enjoy the corresponding services, consumers can be more assured that more convenient. This model can be referenced by the United States clothing company established in 1901 Nordstrom.nordstrom currently has 175 stores in the United States, also through the catalogue and the Internet to sell products. 2008, Nordstrom Company effectively integrated the E-commerce platform inventory system and physical store inventory system. The company's online and offline channels have a unified inventory system based on the launch of the "internet shopping Shop Pick-up" (Buy online/pick-up in store) services. In this way, the formation of the line under the integration advantages, to bring more convenience to customers, and give full play to the comprehensive competitiveness of multi-channel operations. The company earned 680 million dollars in E-commerce revenues in 2008, up 8.4% from the previous year. In the difficult times of the U.S. economy, can achieve such results, "online shopping shop pick-up" service can be said to be a work, to a certain extent also illustrates the effectiveness of this mode of integration.

(3) Personalized service, multiple value-added

For consumers, shopping on the internet and shopping in the physical store on the level of spending is the same, the difference is the meaning of which way of shopping can bring more convenience and quality service.

With the Internet from the information display as the center of the 1.0 to interactive as the center of the 2.0 and to "anywhere with" as the center of the 3.0 evolution, to provide consumers with personalized, customized full range of exclusive services, has become a trend. As the Internet business-oriented applications, a full range of personalized services is the next step in the development of E-commerce one of the important directions. For example, to provide a series of features door-to-door service, free door-to-door service, online product personalized customized services, mobile phone users exclusive preferential services, product after-sale maintenance and so on. By providing consumers with more intimate, personalized services to seek enterprise sales online and offline effective integration, and explore a more diversified value-added areas.

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