Why the traditional household enterprises should develop the electric business

(This article is published in the "East China Furniture" May 2013 issue)

This is a seemingly simple but very simple question: why do home enterprises to do electricity business?

If say 2012 years double 11 before many enterprises have different views on this issue, Taobao day Cat double A net shopping carnival 19.1 billion sales should be completely unified the concept of people: home Enterprises must do electrical business!

Ma Yun in 2012 years double Shilai to say this:. "I personally firmly believe that the day cat shopping carnival will be a signal of China's economic restructuring, that is, the new economy, the latest marketing model of the traditional marketing model of the war, so that all manufacturers traders know that the situation has changed today." For the traditional industry, the war may have begun! ”

This is the electric business to the traditional economy of the gauntlet!

1. The electrical business to the home Enterprise's challenge

It should be said that the vast majority of household enterprises have seen the challenges of the electrical quotient, which may be the traditional home enterprises to do the direct motives of the electric business. This is perhaps the best reason why many home businesses are determined to be electric dealers.

Let's take a closer look at the direct challenge of the development of electric business to traditional home enterprises:

1) Rapid growth. Home Enterprises feel the most direct threat is the speed of the growth of the electricity business, this is the traditional enterprises can not imagine. For example, Beijing East. The original home appliance retail industry has been basically suning Gome share the world. Unexpectedly suddenly kill out of a Jing East, immediately put Su Mei dozen to abandon helmet lost armour, rout. Suning quickly desperate to develop electricity quotient, easy to buy tightly bite Beijing East, at least stabilize the ground. Reviewing the history of Su Ning Gome suffered from the impact of the Beijing-east, the traditional enterprises will be surprised out in a cold sweat: electric business is like a scourge!

2 large scale. Along with the astonishing development speed, the electricity merchant's scale already surpasses the traditional enterprise's imagination scope. Taobao began to set up in 2003, 10 years of Kungfu has become the sales of trillions of enterprises! What is the concept that a traditional enterprise should reach trillion? Suning struggle for more than 20 years, opened more than 1700 chain stores, has become the boss of home appliances retail, sales are not yet hundreds of billions. What makes the traditional enterprises uneasy is that only the Beijing-East development for several years, the current operation is still in the loss, according to the latest financing of the valuation has reached 10 billion U.S. dollars, and Suning's current market capitalisation of only 40 billion yuan!

3) Development trend. Of course, the most surprising thing to the traditional enterprises is the trend of the development of the electric business. Development speed and scale can be superficial temporary, but the trend is long-term and directional. The trend of the development of electric business has become an indisputable fact since the double of the carnival: The future economy will be a power-free economy. Traditional enterprises have only two choices: the development of electricity business or extinction.

In front of the direct challenge of the electric dealer, the home enterprise seems to have no leeway to retreat, the electricity dealer should be the thing that is against the clock. But the reality and our home industry has opened a modest joke: the electric business of the storm has been delayed to the home industry is a substantial crisis. The reason, I will be in the future article detailed analysis.

Home industry may become the only remaining electric business development of the blue ocean. I summed up the development of household industry electric business is: Online down, offline on the go. This kind of stalemate may give some home enterprises more opportunities to think.

2. Home Electric Business Marketing chain

Our next analysis of the electric business marketing chain may give home enterprises a greater sense of crisis and increase the sense of urgency to do the electrical business.

The development of electric business, on the surface, is because of the speed and scale of its development and the actual net-purchase diversion to the domestic enterprise's offline channel poses a threat. However, if we study in depth, we will find that the electrical business in the home goods in front of the shopping guide has a very important advantage, so that the strategy of the traditional home enterprises constitute a great threat.

We analyze this threat from consumer behaviour at home. Household consumption has two main characteristics: The amount of input is large but commodity knowledge scarcity, which means that consumers need to do a lot of information search and consultation before deciding to buy goods. But the traditional home channel in the marketing but cannot provide such marketing function.

From the point of view of household consumers, the marketing function of traditional channels is incomplete. The vast majority of household consumers in the decision to buy home goods before, need to get the relevant household goods knowledge, but the traditional home channels do not provide this information, so that household consumers can only consult relatives and friends about home improvement projects and related knowledge of commodities. I call this information for Home Shopping guide information. The research shows that the home shopping information has a great influence on the decision of household consumer to buy home goods.

The advent of the Internet, especially the interactive function of Web2.0, makes the Internet an effective information platform for household consumers to search for advice. In fact, the development of home electrical business, such as the O2O model known as the network group buying, to some extent, is the result of this search consulting behavior.

The above picture is we draw the home electric dealer marketing chain map, it contains the purchase, the distribution installs the service, the customer service three functions is the traditional home channel to be able to provide, but other various information function is the Internet electricity dealer's exclusive advantage. Therefore, from the strategic point of view, the traditional home enterprises in the home Commodity Shopping Guide information provided by the absolute disadvantage. And this home commodity shopping guide information, it is the future of domestic consumer traffic entrance.

Users online shopping, is because the Internet has home merchandise sales, but more importantly, because the Internet provides a wealth of home goods information, to provide the same as other users with the same needs to communicate with each other space. In a word, the Internet for home consumers to provide them with the necessary home shopping guide information.

The internet is expanding the connotation and extension of the marketing system of household industry. The change of the extension is simply manifested in the change of sales channel and mode, and the change of intension refers to the fundamental change of the marketing mode. Network Marketing will be home marketing from the traditional sales and after-sales service to the provision of pre-sale shopping information, so as to become a closed-loop marketing chain, this is home electric network marketing in the marketing model of the fundamental changes.

Therefore, the impact of home electric dealers on traditional channels, not only in sales. In fact, the biggest crisis of the traditional household business is the electric dealer's upstream control of the home precise passenger flow by providing the Home shopping guide information.

Imagine one day when home consumers in the purchase of household goods are first to search the Internet to find the necessary home goods shopping guide information. At that time, the flow of the traditional household enterprises were all blocked, what still do business?

This is the most important reason for household enterprises to be electrically-commercial. Therefore, the household enterprises must be electronic business, and should be around the above mentioned in the home enterprise marketing chain content of the gradual electronic business.

3. Electric quotient gene and differential development

Crises are often accompanied by opportunities. The development of electric business brings a huge potential crisis to the traditional home enterprise, and also brings the new development opportunity to the enterprise.

Differentiated operation has always been a big problem in domestic industry. People often say that the home industry is a big market, small enterprises, weak brands. Weak brand is the homogeneity of serious, no differential management, so the enterprise is difficult to develop, so the majority of small enterprises.

It is difficult to differentiate the difference in the space dimension. However, the development of electric business to provide enterprises with a reform of the differentiated operating space-electronic business.

We are concerned about the development of the electric business, the first concern is the space for market development, that is, traditional enterprises through the development of electronic business to improve sales. However, the development of the electric business should be worth the attention of the traditional household enterprises, and it is the difference operation that can be realized by the electronic business, because the difference operation may bring more space for the enterprise sustainable development.

We usually understand the development of the electric business is to build a website, open a shop online and do some network publicity or something. But the electrical quotient I'm talking about here may be much more than that. More accurately, the electronic business is the electric quotient of the gene implanted into the development of traditional home enterprises, is to let enterprises plug in the wings of the electric quotient.

The implantation of the electric quotient gene is the opportunity for the traditional household enterprises to realize the differentiated operation when they face the challenge of the electric trader. I often joke that to believe that "the first egg must not be chicken" principle, in fact, this is a very serious truth, describing the process of differentiation formation. Enterprise pursuit of alienation, often hope to get someone else without the first egg. But the first egg is not chicken, the egg is the result of the gradual evolution of the gene.

The evolution of eggs and the realization of differentiation, the two principles are the same, is the genetic process of gradual change. Back to the idea of electronic business, we are familiar with the Web site, online shops or network publicity, these enterprises can be outsourced to complete. Even if the establishment of an independent electric company to achieve the expected revenue and profits, it may not be much help to the business of the electronic business, because the traditional parts of the enterprise is still traditional.

The gradual change of the electric quotient gene of the enterprise is bit by bit. For example, home goods should have a deep cultural heritage. Can be a corporate brand culture, small can be a small story of a commodity. Originally traditional home channels can not effectively spread these cultures, now the Internet provides a platform for information display and dissemination, how do we home enterprises grasp this opportunity in the brand culture and home merchandise culture publicity and communication with consumers to make their own characteristics?

Another example, the enterprise traditional channels of the shopping guide, how to allow each customer to enter the channel shops through micro-credit microblogging QQ to the enterprise's products to learn more and interact with the enterprise? Enterprise Micro-Credit microblogging QQ just a device or can really play the brand communication and customer service function?

For example, two-dimensional code may be the best line of communication online tools. Whether the enterprise fully utilizes this tool to put the line through, so that consumers have the opportunity to feel more corporate brand culture, more detailed understanding of enterprise product characteristics, more convenient shopping?

Each of the above content may be insignificant, but if the enterprise is a step-by-step in the day-to-day operation of the electrical quotient of the gene in a bit by bit and make it rooted growth, the enterprise's differentiated management will be in the development of the day. Consumers will also feel the difference.

Perhaps at this time the first egg is not the goal of the enterprise pursuit.

Of course, the diversification of the business can be realized far more than the above described several aspects, the household enterprises should be based on their own characteristics and expertise, to find suitable for their own business development of the road of electronic business. In fact, this is the differentiation of business. Suitable, is the best, is the real difference.

Electronic Business is a method, but it is a new thinking idea. In another article, I talked about how far away from the traditional home business of the electronic business: How far you are in the electrical business, how far away from the electrical business.