Best Buy'S Thoughts: Where Is The Defeat?

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Chen Xiao said: "now Gome adopts the selling mode, and the store has become a place where no risk is charged, and the supplier has to enter.

"Only consumers are not clear now, once the truth is understood by consumers, then Gome's business model will be unsustainable. Gome's 3C and IT digital products have absolutely no advantage over the computer city, and once the GOME stores are opened to two or three tier cities, if they insist on such a mode, they will die."

In order to verify some of Chen Xiao's comments, I ran to the Gome supermarket near my residence and compared the price of goods with the bee lotus and Jingdong mall.

I miss miss best more when I am surrounded by middle-aged women salesmen who are surrounded by customers.

I remember that by the end of February this year, when best buy announced the closure of all 9 stores in China, the almost identical comment on the media was that "the price of best buy is too high", and the "buyout" mode of commodity management is not suitable for China's national conditions.

But now, in the field of home appliance chain operation, for many years, Chen Xiaoque, who has hosted Yongle and Gome's two major appliance stores, admitted that Gome's business model "will be difficult to continue" and "will be eliminated".

This is strange! Collecting the rented store mode of operation, buying out the commodity management mode of commodity independent operation, which one is more suitable for the national conditions, which is the development direction of home appliance stores?

Best buy's first crime:

Did not let consumers feel "cheap".

The biggest reason for best buy in the Chinese market is that its price is high.

However, at least in the last one or two years, Gome's commodity prices are not cheap, and the low price advantage that it originally built up is disappearing.

As Chen Xiao said, with the increase in the number of invalid stores, the price of Gome is increasing.

Why, then, is there a reason why most of us are still at low prices? There are three reasons:

First, the low price in Gome's history and the brand impression caused by a large number of advertisements advertised by "low price" as the core demand, once the brand image of consumers is formed, it is difficult to change easily.

"Old books" can be eaten for a long time.

Second, in the holidays and new store opening period, Gome is still continuously promoting the low price promotion activities. The biggest trick is that it is good at choosing the image products carefully, and takes the victim pricing method to create the overall low price image.

Second, customize personalized and differentiated products to brand manufacturers.

Such so-called "personalized" and "differentiated" commodities occupy the growing share of sales in Gome.

The advantage of this approach is that consumers can not compare prices, and stores can safely publicize the "lowest price in the city" and "one price one loss ten".

That is to say, the secret of Gome is to make consumers feel "cheap".

Consumers are not statisticians. It is hard for each commodity to be three yuan, and can only rely on impressions and feelings.

In the eyes of consumers, best buy is a high price.

This is true, but this impression is magnified and solidified.

That is to say, the products of best buy are not all higher than national beauty, and not so much higher.

Who makes you buy best buy, disdain to play cheap cards, and spend less time doing some image products? Chinese consumers are good at this.

Best buy's second sins:

Consumers don't pay for shopping experience.

Best buy's business philosophy is "customer centered", providing customers with free shopping environment and fair guidance service.

For this reason, it no longer uses the salesmen sent by the manufacturer, but pays its own fixed salary and employment guide.

Compared with Gome promoters, best buy's Guide buyers are younger and of higher quality. In order to provide them with better services, best buy should give them more training and better wages and benefits.

Compared to Gome, best seller's store layout is more relaxed, decorating is relatively sophisticated, and provides a variety of samples and equipment for consumers to try.

In order to facilitate consumers to purchase, it does not display goods according to the category.

These practices, of course, will make consumers' shopping experience more comfortable, but they all need to spend money. "We spend three to four times more money than others on team building and store mode construction". Ultimately, these spending money will inevitably push up the price of goods.

This has made a big mistake for Chinese consumers, rather than being surrounded and harassed by promoters. Rather, it is better to repeatedly compare several commodities, rather to run more or more times back and forth, or to raise the price a little.

Chinese consumers have plenty of time to shop.

For many young people, a good experience is also needed.

However, after they could experience best buy, they turned to other nearby stores and bought the same thing at relatively low prices.

Chinese consumers do not consider themselves obliged to take care of the businesses that provide them with experience services, as many people do in the physical bookstores to read books and to order online.

Again, the number of home appliance stores in China is so large that they are concentrated in the central area.

Best buy is well known for its careful market research in marketing. It was said that it took 10 years for a decision to be made, but after a long time, it did not mean that it could not play a bad game.

Your service doesn't care, or even if you care about it, you can't get the money. Such a foolish thing is not the logic of business.

Best buy's third sins:

Too generous for suppliers

How does Gome earn money? On the one hand, it will rent stores to different manufacturers and collect entry fees (as well as various decoration fees, shop fees, publicity fees, etc.), on the other hand, draw a certain proportion from the sales volume of goods as profits.

In essence, Gome is buying and selling commercial real estate, but it is less risky and more powerful than pure commercial real estate. The venue is rented and can be in arrears with manufacturers' sales returns.

The money it earns is not sold by itself.

In this mode, why are suppliers willing to supply them to be slaughtered? In a word, the sales volume is large and the total sales volume is large.

This is why Wong Kwong Yu died in prison and opposed Chen Xiao's proposal to increase the profit of a single store, and determined to expand the speed and scale of opening stores because he knew it was the lifeblood of Gome.

And how can best buy earn money? Buy cash at lower prices, dominate the pricing power, and recruit promoters to provide consumers with unbiased shopping guides and earn the price difference.

It can be said that this kind of commodity management mode is a real retail business.

But in this mode, the rental and decoration costs of best buy stores can not be passed on to suppliers, and the wages of promoters are not too small.

Is the supplier satisfied with this mode?

Because the number of stores in best buy is too small, and the overall sales volume is too small.

Why did best buy in China for 6 years, and only opened 9 stores, mainly due to the high cost of opening and operating.

Not only that, best buy dilute brand display, but also let home appliance manufacturers are not used to it, feel that there is no place to make their own decisions, there is no strength to make.

They also worry that best buy's unbiased shopping guide cut off its control of the terminal, resulting in a decline in sales of its own products.

In short, as producers, they also want to wrap up their retailers because they are uncomfortable.

I have worked hard to offend consumers and suppliers. Can best buy be unbeaten?

Business rule and the future of home appliance stores

It's not that best buy's business model is bad, but it doesn't think clearly about its positioning and development ideas.

If you are targeting high-end people and fashion people, then, according to the past mode (of course, product differentiation is essential), two or two cities in Shanghai will be enough.

Then, leave the fire, waiting for the rise of Chinese consumers' purchasing power and rationalization of consumption habits, and then cut from the high-end to the middle and low end.

In fact, it still makes money in flagship stores in Xujiahui, Shanghai.

If it is targeted at the mass consumer, then it will have to substantially reduce the input of experience services. If you want to invite your sister-in-law, you should ask your sister-in-law to do little tricks like the toss, the audition, and so on. In short, the operation cost and the retail price will be greatly reduced, so as to ensure that it is competitive with Gome.

Don't take the news that China is a big consumer of luxury goods.

For most ordinary consumers, the purchasing power of disposable household appliances is quite low, and they are quite sensitive to price.

As long as you can save a few dollars or tens of dollars, you can run your broken leg.

What should be done in the home appliance chain store? What kind of mode should be adopted? Chen Xiao thinks that it should be a commodity management mode, but several attempts have been unsuccessful.

In either case, "the responsibility of the channel is to find a cost effective product for consumers" (Chen Xiaoyu), you can try to crush suppliers, but ultimately bring benefits to consumers.

Otherwise, business rules will eventually emerge. No matter how much you have been exposed to, you will not be able to escape the fate of the birds.