The death of Gilt ParknShop: The revelation of food electric merchants ' digging graves

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"Guide" in the domestic, fresh and food electric business has been a hot business areas, almost all of the electric business giants and the traditional industry giants will enter the field of fresh food, the wind optimization of the life of the network are in different areas to do a good job, but the real success is still far away from abroad FreshDirect (Fresh Direct) Peapodrelayfoodsocado (Okedo) AmazonFresh, such as fresh giants are doing well, but does not mean that the field will be very easy, regardless of domestic and foreign have many classic failure cases, earlier dark horse elder brother another article "gene or thinking?" The death of a "fresh electric dealer" has analyzed the domestic case, but today introduced is abroad a classic high-end food electricity quotient failure case-gilt ParknShop

The following is selected from the wealth of Chinese network

May 2011, the Electric Business website Gilt groupe launched its newest sale website--food website Gilt ParknShop. Just weeks earlier, Gilt Groupe had just raised 138 million of billions of dollars of investment from investors, including Goldman Sachs, which gave the company a valuation of about $1 billion trillion.

Gilt Groupe to fame is the real-time flash-purchase model of large discounts and limited inventory, which brings New York-style sample sales to the world. Unlike it, Gilt ParknShop claimed to be established to become a "luxury brand" selling high-end food at high-end prices. However, this model did not work, this May 24, Gilt ParknShop quietly closed.

But as a group of already-established, growing and promising food-technology start-ups have shown, the failure of Gilt ParknShop does not justify the inability of local food economies to share a slice of the e-commerce industry with annual sales of as much as $225 billion trillion. However, Gilt ParknShop's Waterloo does suggest that selling food online is completely different from selling designer handbags, and understanding these differences is essential.

Gilt tast Failure

The demise of the Gilt ParknShop and the failure of e-commerce sites such as the early online grocery retail start-up Webvan and the online food market and the Pay service website Foodzie have many reasons.

Failure: Product planning lacks the basic characteristics of personalized food--at least the food electric business movement understands the characteristics of foods that are directly inconsistent with their start-up models.

No farm, city, region or country will have the same local food system, so the relevant standards cannot be estimated in a simple-or even less simple-algorithm. Lifestyle Zen is a law firm that serves innovative entrepreneurs, including food-technology start-ups. Patrice Parkins, the boss of the law firm, sees it as a common misconception that a skilled talent is expected to enter the food industry. "It is thought that as long as you have a capable programmer and creative talent and find the right team, you can move an idea from the conceptual stage to the implementation phase almost soon." However, she further said that many times, "people do not have sufficient market research, can not really ensure that the products they provide must have market demand." ”

Failure II: Gilttast face low conversion rate and low repurchase rate dilemma

Although its web site is quite impressive--an average of 100,000 independent visitors a month--its comments do not pull sales. Gourmets may be willing to eagerly read articles about new salt or the most delicious prosciutto, but that does not mean she will buy the product. Unlike groceries, handmade foods are often considered a niche market. They can be a great gift and an occasional delicacy, but most people-even gourmets-don't buy high-grade truffle oil too often. Customers who are interested in buying these products usually buy from a place where they can see, smell and taste the products, such as at the farmers ' market, in Whole Foods (Whole Foods), or in their own physical stores.

Failure third: The product margin is too low

Given the low profit margins, any food-oriented business will face the inherent challenge of putting out a healthy balance sheet. That is why Gilt Groupe announced in September 2012 that it would reduce the number of products offered by Gilt parknshop.

Failure IV: Distribution, the common dilemma of all such electric dealers

Companies trying to sell food also face a special problem: distribution. This is the hardest part of creating a viable business model, according to Danieres Goulde, founder of Food+tech Connect, a market research firm. "A lot of people just planted it. ”

In addition to the usual distribution requirements-warehouses, trucks, and labor-food is perishable. "It increases the complexity and constraints of company distribution, especially as they expand their operations," she said. As business starts to grow and demand grows, you become a distribution company, an order fulfillment company, so if you can't keep up with the pace of demand growth, you can't survive.

Eggs, the online farmers ' Market in San Francisco, has come to the same conclusion. The company was run by the tech veteran Rob Spiro, co-founder of the social-aardvark, aardvark in 2010 for sale to Google (Google) and Arron Savante (co-founder of the Software design company Carbon hep). They first tried many ways to conquer the "last mile" of distribution, to provide local food to customers, and finally set up their own logistics infrastructure system to deliver groceries to customers in the San Francisco Bay Area. By working with manufacturers to design their own online sales platform, the eggs team can cater to the needs of different food producers. And this, Gilt ParknShop did not do.

Gilt ParknShop's warning to Chinese fresh and food enterprises

Warning of the life of the Fresh Electric quotient model:

1 in the field of fresh electricity in China currently has business-to-business, B2C,O2O three kinds of visible models.

Business-to-business General satisfaction is the group procurement or hotel food and finance procurement, at present there are some engaged in the supply chain and cold chain management enterprises are doing, but the existing problem is the slow cycle of the problem.

The mainstream mode of the domestic fresh electricity trader is also the problem of Gilt tast, which still does not revolve around the core logistics distribution and the category dilemma that the electricity trader says.

O2O is trying a small regional solution, but there is no large-scale popularization of the case in China, only in some cities in China, such as Beijing and Shanghai, between some of the water test, do the same city O2O fresh distribution, the purpose is to bypass logistics, At present, it is still suitable for traditional to have a certain number of offline stores to test water.

Choose which mode should be from the allocation of their own resources, not limited to what the model can be successful, foreign countries such as the Amazon as a comprehensive platform for the success of the case, the domestic or in the trial stage of burning money, did not prove that any model is feasible or not feasible.

Warning Two: The planning problem of the food material system.

This is not just a question of gait tast, the problem of doing fresh electricity in China will be more prominent, because:

1 China's food is too different, look at a tip of China, you will know that every region of China will have different food culture, may be the Guangdong popular seafood, in some areas of the mainland is not popular. This is a higher demand for the choice of ingredients, because it means that you cannot standardize the choice of ingredients, China's different areas of the difference in the characteristics of the food is more obvious than abroad. You need to expand your category indefinitely.

2 Food planning You also need to consider the issue of gross margin: due to high domestic traffic costs and logistics distribution costs, low margin of the category is not profitable, so either higher end route to do high-end food, or to do personalized food. Do ordinary daily just need in the supermarket can buy the category failure of the higher risk, not only the profit is lower, it is important to purchase this material user habits have been online, it is difficult to transform. Of course, relying on the cat such a platform for processed cooked food is a choice.

3 There is still a core problem in food planning that cannot be standardized, the reason why the electric business arises is because the current products of the electrical business have strict standards, such as what is the configuration of the computer; but for a fresh electric dealer, you have a piece of pork distribution you have to guarantee the proportion of fat, how much proportion of lean meat, Maybe the product we bought yesterday is different from today.

Warning Three: Food safety issues.

is a relatively prominent issue at this stage in China, China's food safety is not a fresh electricity business can be solved, so, under the overall environment, the general view that the solution to the food safety needs of the layout of the whole industry chain can control food from the source, otherwise you will always be able to avoid the risk of food safety, But in China can from the field to do not a few of the table, so, for food safety general Solution said rely on procurement control quality, but the effect of how much is not to say.

Warning Four: Cold chain and logistics distribution problem, this is guit tast distress problem

First of all, cold chain problem: A few days ago with a fish company in Dalian Chat, he gave the understanding of China's cold chain is still very backward, but also need to study hard like abroad. and fresh to cold chain requirements not only we see the freshness of the problem, throw a few examples for reference: Bananas can not enter the cold storage, Apple to enter the cold storage, fish are prone to die, need to add ice, and every fixed time need to be filled with oxygen; seafood needs seawater, water spinach to the horizontal ... Obviously not reliable, and this each kind of question needs to have the special person to take care of, therefore, not to mention to the cold chain more advanced stage, but does not have the cold chain, the fresh distribution also loses the significance.

Logistics problems: 1 is how to distribute the problem, the same is the timeliness of the problem, if the distribution range is too large, not only the high cost of logistics, and user demand has been lost timeliness, fresh food can not be guaranteed. 2 who collect the problem, the General Express can be pushed where, but for the freshness of the requirements of raw fresh can not squeeze can not wait. Therefore, some people think that in such a large area of China, only suitable for localized fresh platform, the national distribution is difficult to ensure user experience.

Warning Five: Who is the user of the problem?

In the Chinese user group, eliminate high-end users, the real demand for fresh electricity business is the most intense supermarket force "aunt", but, aunt will not online shopping. This leads to cooking people do not buy, buy people do not cook, how to promote marketing is the key.

Guit tast give China fresh inspiration far more than that, if you can think of the above five problems, China's fresh electricity business is still a blue ocean in theory.