What Can We Deal with 2019? Build the Flow Pool by Stores Themselves!

Yang Ting

Guangzhou Bo-Tree International Trading Co.Ltd

In 2018, cosmetics stores no longer complained about the difficulty in doing business. Instead, it has been found that a fewer number of stores stuck to their business.

Adopting the supermarket model for CS has just completed the function of commodity transfer.Therefore, the value of this channel has already been cannibalized by e-commerce. But the value of CS is not only reflected in commodity transfer but information transfer and service experience. If we look at the well-performed CS right now, they are either stores selling special goods or stores offering special service for shoppers to experience.

The majority of CS, especially Top 100 Chain Stores are on a wrong way just like Watsons — “high flow + high performance-price-ratio” due to the unsustainable “high flow”. The demographic advantage will gradually disappear; and the information channel is more and more fragmented. So, the model of high flow will become outmoded.

What do the stores do now? Create about flow by themselves! This means building their own flow pools which resembles fish farming. Namely, they need to keep customers firmly in our own fishponds.

Many shopkeepers have similar measures like year-end appreciation banquet and interaction activity with old clients instead of transaction. But it is far from enough. What they need to fight for is not the good feeling of the clients, but to establish their own flow pool.

Reshaping the flow attraction of the commodity system

As the CS flow declines, the value of commodity is sharply decreasing. On the one hand, commodities are highly homogeneous; on the other hand, excessive promotion leads to the decline of commodity value. So,reshaping the value of commodity is a high priority.

At present, most of the CS stores including Watsons are shifting sales tend from domestic products to imported goods. But most of them are focusing on luxurious brands introducing and still need to engage in price war with online stores frequently, yet failing to attract customers to go inside the store.

Figure 1. FORM05 Types of agent brands

The first point for building the attraction of commodity system is “new”, which is providing brands and products unseen by customers instead of luxurious brands. Customers will choose online channel to buy luxurious brands. The second point is“fast”, which means offering new experience chances for customers in a sustainable way. At the same time,the strict assessment standard of re-purchasing rate needs to be set to weed out the poorly sold products quickly. It actually raises a claim for the shopkeeper.

Offering attractive contents to customers

In order to sustain the attraction of the store, the shopkeepers should not only let customers think of them when they need to go shopping. They should provide more things beyond products. Simplly copying the product advertisement words is not attracting customers but driving them away.

Many shopkeepers say that they have no knowledge about composing contents for propagating their products. Actually it is not complicated. They just need to show the professional aspect of themselves and let customers believe that they don't need to worry about for selecting products with them. They can conduct tests for products from professional perspective and share with their clients with colloquial languages. For certain, they can share with customers other useful information to establish the professional image of the shopkeepers.

Viewed from the trend in recent years, as customers'professionalism increases, the trend of “SK-II” mode does not work any more. The product ingredients and effect have become the focal point in the eyes of customers. Olay has spent several years to get through difficulty and finally achieved growth by applying the ingredient of nicotinamide. So under this background,the shopkeepers can take opportunities to build their own Internet celebrity IP to attract the focus from customers rather than selling the stereotype copywriting offered by manufactures.

integrating store into customers'lifestyles

The core in scrambling for flow is contending for the customers' attention, namely, time.The rooted reason why brick-and-mortar stores are overwhelmed by e-commerce channels is that people's lifestyle has shifted to the Internet, and most of their attention has shifted to the online stores. So adding service experience projects to increase attention from buyers is one of the effective means to build flow pool.

The author of this paper tends to build the brickand-mortar store into a life-style store which can be integrated into customers' life, so as to gain the absolute advantage in fighting for their attention acquisiton. For example, people asked why foreign cosmetic stores offer coffee bar service. Is it for the purpose of showing off or adding sales value? It is apparently wrong. Drinking coffee is a popular lifestyle accepted by westerners. By providing such service,cosmetic stores could build their stable flow pool.

Started from 2009, shopkeepers began to feel the gradual decline in flow, while it still has not reached the freezing point till today and this decline will continue. Just like offline stores, many Taobao stores no longer rely on public flow. Instead, they pay full attention to take care of the flow pool of their own.Under the drastically changing background now, we should also change our mindsets in doing business.Truly, we need to always focus on the core in this regard. Apart from that, the author would like to share the following points: Firstly, is retail equal to commodity management? No, it is the customer maintenance through commodity management.With stable flow pool, the front-end store and commodity is a small fraction. Secondly, we used to say that doing brick-and-mortar store should adopt the Internet thinking. It seems that we should pay attention to the lifestyle in the Internet. With the approaching of the 5G era, our lifestyles are going to change dramatically. It is on our own to decide whether it is a challenge which may cool down our business or an opportunity to achieve actual growth in difficulty.

The year of 2019 is just the beginning.