Transformation and Balance: From Traditional Agents to Home Operators

Where is the way out for traditional home appliance agents in the new era? Transformation is the answer given by most businesses. Transformation is the result of consensus, but the process determines the success or failure of the result. Mr. Wang, who has worked in the agency industry for more than 20 years, told us about his mental journey of transformation in recent years. For Mr. Wang, who came from the traditional wholesale trade, after 20 years of precipitation, he has formed a complete company operation mechanism, a stable team, and abundant funds and resources. However, he is still facing transformation after three years of involvement in whole house customization.

# Background #

From the initial small kitchen appliances to a series of kitchen appliances, the scale of Wang Corporation in the peak period of operation exceeded 654.38 billion, which is a very typical large enterprise in the home appliance industry.

Like the corporatization of Dashang, Wang Company began to transform as early as a few years ago, gradually reducing the scale of traditional wholesale trade and making efforts in the direction of more terminal operation ability. In fact, from the initial wholesalers to operators, from simple trading companies to several independent companies today, the scale of several hundred people has also brought greater demand for development momentum.

On the one hand, changes in the market prompted Mr. Wang to make a decision to transform again; On the other hand, the company's internal team development demands are obvious, and the increase in labor costs in the past two years also needs to find profit points again. At the same time, more importantly, the acceleration of channel flattening makes Mr. Wang feel that the development space is tight and compressed.

Although Mr. Wang has gradually separated his development focus from distribution channels in recent two years, the whole channel distribution still accounts for a certain proportion of sales. When manufacturers put forward the transformation to new retail and began to promote channels directly and flatly, on the one hand, Mr. Wang actively responded to the brand strategy, on the other hand, he was also looking for the next breakthrough point from the actual situation of his company.

On the one hand, although Mr. Wang has his own independent e-commerce company, he can't compare with the e-commerce department of the manufacturer in terms of capital, ability, platform and market reaction speed, so the e-commerce business is obviously compressed. On the other hand, brand-name stores are directly operated by manufacturers, including the docking of some lower-level dealers, which are also taken over by manufacturers. The standardized output and management level of manufacturers is much higher than that of agent trading companies. "For more than ten years, we have deep feelings for this brand. We not only benefit from the brand, but more importantly, brand awareness has been deeply rooted in the genes of everyone in the company. But at the same time, we need to look at the changes of the market and the development of the times soberly, and find our own position and development direction in the tide of development. Development is not only the company's appeal, but also the survival and development appeal of hundreds of people in the company. " From development to responsibility, it may be the difference and focus of thinking after realizing scale.

Mr. Wang began to inspect the market several years ago. Based on the strength of the home appliance industry and the company itself, the whole house customization has entered his field of vision. Is it integrated and can it become the next outlet for the company's development?

break even; balanced budget

Cost input and conversion rate

Three years ago, Mr. Wang reached a cooperation with a well-known whole house custom brand and began to explore the development of large-sized houses.

Mr. Wang did market research and selected the company with the best profit and annual sales scale of over 100 million from several companies, specializing in the whole house customization project. The idea at that time was to prepare for the early market investment, because the company had the highest profit and sufficient funds for the early market investment. "Even if net investment is needed, the investment budget has been made with the strength of the company at that time."

Despite the market investment plan, from the current situation, Mr. Wang frankly underestimated the business risk, because in the whole transformation process, he did not get the expected "minimum risk", but the input and output were extremely unbalanced.

The first is the high cost of store rental.

According to the requirements of the manufacturer, Mr. Wang opened two brand stores in the high-end shopping malls with the most concentrated local passenger flow, and the annual rent of each store reached 6.5438+0 million yuan. At first, Mr. Wang was hesitant about such a high fee. In view of the brand image and the need to acquire high-end customers, Mr. Wang insists on taking the store rent as part of the promotion. However, the actual situation has not reached the ideal expectation, and the biggest imbalance lies in the imbalance of passenger flow, customer unit price and high rent.

Secondly, the cost of store personnel is high.

For the whole house customization, there is a most special and important role, that is, the designer. According to the scale of Mr. Wang's shop, there are basically about ten designers. The basic salary of designers themselves is several times higher than that of ordinary store staff, and the monthly salary and welfare of designers is not a small expenditure. The imbalance is still the mismatch between the number of customers and the value of the customer list and the high personnel cost.

In addition, the cost of obtaining customers in stores is high.

In fact, no matter whether it is high rent or high salary, there is no corresponding income support, which leads to an imbalance between profit and loss.

To this end, Mr. Wang also tried many ways to get customers outside the natural passenger flow, but all of them were high cost.

For example, entering Vanke and cooperating with real estate will cost 65,438+10,000 yuan at a time, not including our own labor and materials. "Of course, there are tens of thousands of admission fees, but based on our own high-definition brand positioning, it is futile to enter the ordinary community without target customers and purchasing power." Under the paradox that there is no customer base at low cost and the customer base at high cost is uncertain, the activities are still unbalanced.

Another imbalance is the brand's high-cost customer acquisition information.

The whole house custom brand has its own home portal website, which will push interested local customers to agents. A customer's information fee is 500 yuan, and Mr. Wang also bought it, but in fact, the effectiveness and conversion rate of customer information is not high.

The superposition of various single high costs led to the store's three-year profit and loss beyond the scope predicted by Mr. Wang. The cost of each store is two or three million per year, and there is not enough customers and customer lists to support it. Is it really the business's own operational ability?

The most important thing is the imbalance of channels.

When Mr. Wang just took over, the whole house brand including Mr. Wang had three agents in the local market. Because the market was large enough, Mr. Wang did not have much objection to this agency model at that time, which was very different from the traditional generation model of home appliance brands. In three years, only in the local market, the brand has developed five agents, and this multi-generation model in one place is likely to expand.

Because there is no channel and product division, many generations in a place have obviously caused "internal friction" in the local market, and the most direct thing is the price competition in the market. Setting a high brand price, especially low-price competition, is actually very harmful to local agents, which means that all five businesses have the dilemma of "killing 500 enemies and losing 1000".

Obviously, multi-generation in one place is the main reason for the double decline of passenger flow and customer unit price. Mr. Wang said that in fact, the brand has many excellent areas, but the merchants in these areas have very obvious "single-minded" characteristics. For example, the largest brand agent is the local agent, and there is only one local brand agent, which has great control over the market, channels and customers, especially the pricing power.

At the same time, Mr. Wang is also conducting self-reflection. Actually, everyone has a gross profit of nearly 40 points. Generally speaking, this profit margin can support diversified investment, but it still can't make the actual income and expenditure reach an ideal balance.

In addition to these external uncontrollable factors, Mr. Wang admits that the whole house customization is still very different from the home appliance industry in terms of mode. The feature of whole house customization is one-stop. At the beginning, I hoped to move the existing home appliance sales position forward and integrate home appliances with home. But the fact is, at present, these are still two customer groups, and it is impossible to integrate customer groups only by relying on home and home appliances. It is necessary to carry out one-stop penetration of home improvement, home appliances and home, so that it is possible to do a good job in the whole house market.

The whole house customization looks beautiful, but the twists and turns and difficulties are determined by many factors, including details, especially as an upstream manufacturer, it needs to have enough determination to cultivate the market. Mr. Wang admits that if there is only one brand agent in his regional market, he is confident to do a good job in the market with the company's personnel and financial strength. In the process of communication with the brand, the sales department, investment promotion department and portal of the brand belong to independent operation departments, and each department also has its own tasks. There is no chess game and unified strategy between departments, which leads to unsatisfactory communication efficiency and results between agents and them. Internal friction in factories is also one of the reasons for market dispersion.

Mr. Wang intends to try to close the store this year, stop loss first, keep a store and allow himself to try and make mistakes. He used to make home appliances because he chose the right brand. Today, it is very important for both agents and operators to choose the right brand. And this kind of choosing the right brand is a comprehensive combing of brands, products, channels, prices, interests and so on. If there was luck in the past, now businesses need to be rational, have the strength of trial and error, and have the courage to correct mistakes and stop losses. Next, Mr. Wang's road to transformation continues, and the direction comes from the company's accumulation for many years.

The road of the future

Operators and service providers at the same time

10 years ago, Mr. Wang set up the service team as a company and started the service business. Previously, Mr. Wang contracted the service to a third party. However, with the increase of customer base, the third party could not support the company's needs, so Mr. Wang split the service business and became independent.

At that time, the basic sales of the whole company could basically support the independent operation of services. Today, the installation cost of the factory and the sales of auxiliary materials constitute the income source of service companies, and service companies have become an important way to solve the user service experience and employment problems. More importantly, because the service is directly operated, the service quality is controllable, the customer experience is very high, and it also adds great value to sales.

At present, the service company has a service team of more than 100 people, which is very mature in service quality control. In addition to meeting his own domestic needs, Mr. Wang is still considering further expanding the extension of the service team.

"No matter how the market changes and how online develops, someone has to undertake the landing work. Compared with factory direct sales, we have obvious advantages in regional market services, sufficient resources and manpower, and the market response is fast enough. In terms of service input cost, it is even lower than the manufacturer's own cost. " Teacher Wang Minrui saw how to enlarge his advantages. In addition to meeting the internal circulation of services, there will be opportunities to undertake more services from manufacturers as a third party in the future.

15 years ago, through the wholesale business and extensive distribution channels, Mr. Wang dug the first bucket of gold through the role of wholesaler.

Ten years ago, starting from customer experience, service companies made profits independently, and initially determined the role of service providers.

Four years ago, Mr. Wang led the company to transform into an operator. On the basis of the original channel expansion, the new retail transformation of e-commerce, Tik Tok store and Aauto faster store has been carried out, and it has moved towards the role of an operator.

Three years ago, Mr. Wang tried to customize the whole house and put his best team and best resources into cross-border integration and transformation. Although he has encountered setbacks at present, he is still a transformation of identity and role, that is, a home operator.

From Mr. Wang's role-playing and transformation for many years, we can see that the traditional traders and agents in China are gradually fading out of the historical stage. They once played an important role in China's home appliance industry, and became a link that can't be ignored in the industrial chain. Today, they will continue to participate in the market competition in another capacity. In other words, the role of the agent has become an integrated operator integrating operation and service, and will continue to explore its own sustainable development path in a brand-new market and era.

Mr. Wang's transformation is unbalanced. His bold self-analysis and interpretation can be used for reference by peers. At the same time, Mr. Wang also called on upstream suppliers to give more targeted guidance and support to the transformed large enterprises from a global perspective, and to build a win-win industrial chain from a longer-term perspective. For Mr. Wang, his role, identity and bearing function are changing, and the imbalance and even setbacks in the process of transformation have not hindered his overall progress. This is the tenacity of home appliance merchants.