Some thoughts on the price war of electric dealers

This is the No. 05 phase of the preparation of Eric, Eric Jianguo teacher, Dongyang and I as guests. The child teacher is methodical, has the depth, I have dwarfed, the oral expression is really weak burst.
The theme of this issue is the "Electricity quotient 11" Jap "brewing a new round of price war."
The original text reads as follows:

11 Promotional Reviews

1. Why the electric dealer in the Golden Week collective Jap
11 Golden Week households to outdoor leisure and entertainment mainly, especially the users with the ability to consume;
The overall internet traffic plummeted 30%;
8.15 price war fraud, the negative impact is too large, especially jingdong, and it is the protagonist;
Prepare double promotion, at the same time sniper double 11, and, after each big promotion, there is a consumer recession, double, double 11 very unfavorable;
Operation Support, 11 period staff holiday, customer service, order processing and other positions are short of, and highway traffic on the negative impact of logistics is very large;

2. What is the impact of offline promotions on online platforms
For the impact, we must subdivide, for example:
may impact online platforms but different categories, such as offline clothing stores, generally is immediately try to wear to buy, not very will parity, and home appliances and other 3 C products, will generally look after the goods to the online parity, and then consider where to buy; however, because users buy several sets of clothing under the line, will inhibit the consumption of similar goods desire, indirect impact on the online sales
May pull online sales because of promotional activities to bring users to the offline, expand brand Awareness
has not affected many traditional high-end clothing brand, line the next price, or line online under the category complementary
Or does not affect the user loyalty to a certain brand, such as watches, offline selection, online buy, the brand overall sales volume has no impact.

3.11 Golden Week which is more attractive than double and double 11
From the category point of view, such as building materials home, heavy physical experience of large commodities, 11 golden Week has obvious advantages, and for high-end clothing, 11 Golden Week also has advantages, because offline shopping malls, such as Wangfujing, the Pacific can try to wear, such goods to buy the wrong risks and immediately want to get the impulse, significantly higher than the price sensitivity;
From a pure online purchase, double 11 more attractive, because the cat is mainly brand manufacturers/vendors Direct price promotions, and there are 60,000 brands; now Jingdong and other giants are already in the beginning to send coupons, ready to intercept the cat, the equivalent of this year double a two days of cat promotions.
From 2011 sales results, the day cat that day sales 3.4 billion, but the average daily sales less than 300 million and double sales must be very far.

Analyze the possibility of future price wars

1. Indomitable August price war, who finally hurt?
Not hurt who, because the end result is that this is not a price war, but in the name of the price war marketing, and mainly focused on micro-blog.
We think, Daiju Dongweibo No. 8.14 on suning easy to buy a price war, Suning Day response, the next day, and a large promotional activities, at least half a month to prepare, such as selection, stock, adjust prices, as well as the peak sales emergency preparedness. I suspect that the two families are in advance.
If said to hurt who, is to hurt their brand image. The next time you call Wolf, it is estimated that the number of people will be much less.

2. Price war can break the current market situation
Can, if the price war plus crazy marketing promotion, but they are difficult to continue, if there is more capital, it is another matter.
Now the electric business giant, almost all is homogeneous competition, user most can perceive, or price difference.
Relative to the product brand, the user is in fact no loyalty to the channel brand, because the transfer cost is too low.
But the price war is not just price reduction so simple, just like the order conversion rate, depends on your category, user group characteristics, site experience, such as the combination of multiple factors results.
Look at China's home appliances industry, the formation of the current market pattern, mainly attributable to the price war. That year, the microwave oven more than 3,000, now only 200, do not engage in price war, it is not expected to be the world, but this price war, mainly based on manufacturing cost advantages.
If the electric dealer's purchasing and operating cost is low enough, it is very healthy to make a large-scale sale.

3. What should the industry shuffle in the future
Let's talk about the ambitions of Jingdong.
In fact, the final goal of Jingdong is not to do retail, but to do the platform and Channel, do the whole supply chain integration, earning into the merchant's money; it is not to buy home appliances, books, department stores, but to do "commodity" circulation. Retailing is a means of entry.
The ambition of Suning is also platform and channel, and Natural has the advantage of supply chain, day cat More is a marketing channel, supply chain is weak, suddenly exerting force is difficult.
This is not difficult to understand the price war, Beijing east to fight Su Ning.

Besides, I understand the future of the electric business War
The first stage is the price war, the price war will form a basic market structure, at this time, the top 3-5 electric power companies occupy 80% market share, price war began to subside, the electricity business from the war years into peacetime.
The second stage is the operational cost and operational efficiency battle. For example, the same 4000-yuan LED TV, a margin of 100, a 800, who can support to survive, it can be imagined.

For the seller of goods, the final competition must be cost, because it belongs to the circulation industry, the value of circulation is the goods from the brand to consumers the entire supply chain the lowest cost transfer.

Of course, the premise is: strategic can not go. For example, if the BoE does not introduce books in time, speed up the open platform construction, and determine the logistics strategy in advance, it will be very difficult now.
I'm not talking about brand differentiation. For example, can we feel the brand difference between Carrefour, Wal-Mart, Hualian and other supermarkets?
I also did not speak of service differentiation, such as website experience, after-sales service, logistics and distribution, these will eventually be similar.
It is difficult to form the weight of the shuffle.

4. What other companies have the strength
Continue to rely on the price of survival to see who has the money to see who can be merged into the money, will be able to survive by price, because it is a blood transfusion process.
Can continue the price war, see Hematopoiesis level, this is the operation cost and operation efficiency competition.
Specifically what enterprises, I really do not know, I do not care much.

5. Possible changes in form and operation of future price wars
The price war, or competition, has three levels:
One is the competition between the power companies
The second is the competition between the brand dealer or distributor in the platform
Third, the traditional brand dealer's service
For the electric business giants, estimates and other market patterns formed, it subsided, the big hit price war is self-inflicted, input-output ratio is too low. However, the small war, such as holidays, hot events promotions.
For the distributor within the platform, may be even more tragic, because every day there are new entrants and exits, selling the same goods, for the platform brand, may be because the product itself to avoid competition because of the differences, as the same quality products, offline how the fight online may also be like that.
For traditional brands, based on their own business of the electricity business services, because of alienation may not happen price war. For example, Ikea family members, in the Ikea net orders, and then to the physical store warehouse delivery.

On the reduction of the form of promotion, nothing more than full reduction, full gifts, discounts, coupons, etc., in the traditional retail industry for hundreds of years, the estimated changes are not small.

However, the implementation level of the electric business, there may be changes, such as order-type production of C2B, pre-sale, because it is on-demand production, so greatly reduce the inventory cost and unsalable risk, can be low price competition. Of course, this will also affect the price war form.

6. What is the psychological shift of consumers to price promotions
Slow sales promotion Because I feel like I'm selling every day.
The enthusiasm for price reduction is not high because the things you want to buy are likely not to reduce the price of goods, or price range does not give force;
Rejection of price promotions because of the downgrade promotion, bought a lot of useless things, but also occupy space
A lot of the current price reduction is a cover, such as the full 20 percent, in fact, 20 percent of things are unpopular, still very few, from the long term this will hurt the merchant itself.

Several recent events in the electric business industry

1. The year-end target analysis of several large electric dealers (cat, suning easy to buy, Gome, Beijing-east, Tencent)
Day Cat: Cat Supermarket estimated the end of next year or the first half will be exerting force, and a shop dozen, borrow a store brand;
Suning easy to purchase: IT system construction estimate is the focus, which has made it very passive;
Jingdong: In addition to the sniper days of the cat's double 11, it is estimated that the annual sales, to investors a beautiful report, and consider how to make a loss; others, I do not pay much attention to.

As for their sales targets, I really don't care.
Pay attention to the electric business giant, for small and medium electric business and traditional enterprises, is how to let them for me, such as the whole channel shop.

2.2012 the end of the market share and Industry pattern forecast
Compared with Q1, the Q2 market share has changed very little, less than 2%, although it is growing scores than the same period last year; The estimated change will not be too big in the next few months, determined by the overall market demand and consumer buying habits.

However, the General Electric business, the second half of the performance overall better than the first half, about 10%-20%.

3. Electric Business "breakout" several suggestions
If the breakthrough, the current most effective way, or price war and marketing promotion, but this based on reducing costs and improve efficiency, user experience of the meticulous operation.
I said 4 points:
Establish or improve sales forecasts and replenishment models to reduce stock and unsalable rates and increase inventory turnover.
Establish market trend forecasts based on large data, consumer demand mining, and personalized recommendations based on user behavior.
From the perspective of the entire supply chain to consider the process of improvement, from procurement to the next single to reach consumers in the hands of the lowest cost, the highest efficiency, rather than focus on a certain link.
The refinement of marketing promotion, in-depth user needs and marketing channels to match, more prominent brand professional image, not just visibility.

Some of the suggestions above are mainly aimed at the electric business giants, and for the small and medium power companies, it is estimated that they have not yet arrived at this stage.

I put Jingdong, Su Ning This first revamping business, are classified as the seller of goods, that is, focus on sales, this is a very low-level form.

Nokia, for example, defines a phone as a phone call, but Jobs has redefined the phone: Handheld entertainment communication tools, creating a new era.

For example, now the mid-Autumn Festival to send mooncakes, send crabs have become a Futures model: gift coupons; Such businesses can deploy a set of independent B2c:shopex, through the shop delivery, or even recycling coupons, on the sale of coupons on the delivery site.

For example, you are a local convenience store chain, then you can use your brand, supply chain advantages and store promotion resources, to provide the physical store of the complementary category and unmet needs.

The future of the electric business, should return to its own advantages and values, used in the appropriate link and scene.

For more discussion, please enter my microblog: http://weibo.com/zwchen