Difficulties of furniture e-commerce: how to solve the problem of home online

 

For home e-commerce, logistics has always been a big problem. At the end of last year, Alibaba's investment has been improving day by day, which seems to have brought some changes to the industry, which has given hope to home e-commerce. Before this, we have also seen that companies such as Melaleuca and Kumanju are using their own staged success in the home market to confirm: from the current point of view, "online shopping, offline third-party distribution installation services" The O2O model may become a standard model for the development of home e-commerce, and online e-commerce platforms will also follow this already opened path.

 

 

Counting the e-commerce platforms that are still good in scale, it seems that only Taobao Tmall and JD.com have home (home improvement) channels. Even Suning.com, which has been working hard, has not officially launched a home channel. It can be seen that the home category is more like a wolf in the eyes of these e-commerce platforms like wolves, and they dare not start easily.

 

E-commerce difficulties: online, "not coming"

 

"Down" is a big problem for the home channel of the e-commerce platform. Although Taobao Tmall took the lead in establishing a home improvement channel, and there are also many home furnishing brands in the "Double Eleven" shopping spree that are over 100 million or among the top brands, the development of home furnishing categories is always not smooth.

 

At that time, the Ai Hive project that tried to land seems to have become tasteless. The Beijing Ai Hive offline experience store that cannot be done again and again is currently difficult to find in the Tmall. It is difficult to find a population that drains offline. Copy in other cities. In 2013, the "Double Eleven" home improvement O2O plan was again boycotted by offline traditional shopping malls.

 

The online platform's efforts to seek offline physical experience seem to have an inseparable knot: due to the different operating cost structure of online and offline, it is difficult for online e-commerce platforms to find the "external" response of traditional offline channels.

 

Taking furniture commodities as an example, the online sales price may be 1.3-1.5 times the ex-factory price of goods, while the price of traditional home furnishing products is generally more than 4 times the ex-factory price, of which the online sales price may only be enough to pay for the mall rent. Under the conditions of this different cost structure, it is difficult for the dealers of offline malls to cooperate with online sales of household goods: if they are sold at online prices, offline dealers cannot afford the high rent of the venue; if they use offline At the price of the sale, the customer may have long escaped.

 

Since the path of "down" experience is not feasible, then the path of no experience is required. Ali's stake in Haier Rishun Logistics may be one of the important strategic considerations to solve the problem of how household goods come down.

 

At least for now, the O2O model of "online shopping, offline third-party distribution and installation services" may become a standard model for the development of home e-commerce, and online e-commerce platforms will also follow this already opened path . However, the "last mile" service of household goods requires special business skills. Haier Rishun Household Logistics relied on the logistics and online store resources of Haier's original home appliance services, and built a support for online sales of household appliances almost overnight. Offline home goods distribution installation service system.

 

Whether JD.com, which is just building a home improvement channel, can rely on the existing logistics system to create a home logistics service supporting online sales of home products in the short term, is the key to JD.com's successful development of its home improvement channel. On the one hand, building a home logistics service system that is compatible with the home goods sales line has many difficulties after all, requiring a lot of investment and growth cycle; on the other hand, the market capacity of 2 trillion can never be handed over to competitors. Therefore, JD.com's actions in this regard will have no small impact on the competition and development of online home furnishing sales.

 

This O2O model will also become a differentiated marketing model for the development of traditional purely online e-commerce home furnishing categories.

 

Today, the history window for building a new independent home e-commerce platform has basically been closed, so it is unlikely. But vertical e-commerce platforms for household items, such as children's furniture and upholstered furniture, seem to be possible. A good example is the e-commerce platform of Kumanju Children's Home. Because of the exclusive authorization of Disney, the platform has room for survival and development.

 

As a children's furniture brand with exclusive authorization from Disney , Kumanju experienced the process of developing from offline traditional operation to online development. Kumanju was founded in 2008. In 2009, the number of offline stores reached more than 300, with sales income of more than 40 million, and received 60 million A round of venture capital. However, Kumanju, which has gained venture capital, has changed its business direction and focused on online development. During this period, it closed more than 200 offline stores, a move that is still controversial. However, Kuman's efforts on the development line have won a B round of RMB 100 million in venture capital.

 

It is worth pointing out that Kumanju is not a purely online e-commerce platform, but an O2O e-commerce model with offline experience outlets. We just listed the vertical home e-commerce platform as a pure e-commerce platform. Whether other vertical e-commerce platforms such as software furniture can survive, basically depends on whether the platform has an effective segmentation strategy to withstand the invasion of large e-commerce platforms in the future. The effective separation strategy mentioned here, of course, also includes the establishment of offline physical experience store system.

 

Viewing the future of integrated distribution from Melaleuca

 

The Melaleuca Furniture Mall, which was killed from the Tao brand, developed from an online and offline integrated distribution system, so it went smoothly and developed rapidly. In 2012, the sales were about 600 million to 800 million, and in 2013 it was nearly 2 billion. It has entered the top ten of Chinese furniture brands and has become a dark horse in the Chinese furniture industry.

 

Merlot started to open experience stores offline in 2011, trying to integrate online and offline marketing models. The number of Merlot offline experience stores reached 137 in 2012, and this number almost doubled in 2013. The Melaleuca experience store is generally opened away from the city center, so the rent is relatively cheaper, and the area is only about 500 square meters. However, there are two figures that can explain the success of the Merlot integration model: One is the users of Merlot experience stores, 90% of which come from online. An important function of the shopping guide of the Melaleuca experience store is to communicate with netizens who visit the Melaleuca mall online and guide netizens to purchase furniture in the experience store; secondly, the experience store can make money. Because of the unique online and offline integrated marketing model, the Ping effect (monthly sales per square meter) of the Merlot experience store can reach 15,000, while the average ping effect of the furniture mall channel is only more than 2,000.

 

Perhaps we should understand the online and offline integrated marketing system of Merlot from the perspective of consumers. Where do consumers learn about Melaleuca? Mostly from online marketing, and then into Melaleuca's online mall. However, why did consumers decide to buy Melaleuca furniture in the end? Basically, they went to Melaleuca's offline experience store and felt reliable, satisfied, and very cost-effective after seeing the real thing. Do consumers divide online and offline during the purchase of Melaleuca furniture? It should be indistinguishable and indistinguishable. When a consumer orders a Melaleuca furniture at a Melaleuca mall with a PC terminal at a Melaleuca offline experience store, is he online or offline at Melaleuca? Online and offline. Because consumers do not distinguish between online and offline, the company's marketing system must also be fully integrated online and offline, in order to provide consumers with a better consumer experience.

 

In 2014, Melaleuca's offline experience system has a new layout, starting to open small shopping malls of 5,000 to 10,000 square meters, and accepting other first-line furniture brands. This is Melaleuca's transition from a commodity brand to a channel brand, and should be our focus.

 

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