Internet Business Thinking

Chapter 30 Early Entry, Early Profit - Internet Awareness in Traditional Industries (6)
"The biggest transformation of the Internet to traditional industries is not to establish an e-commerce store, but to use the spirit of the Internet to transform the organizational structure and processes of the entire enterprise." Liu Shichao believes that e-commerce has two main aspects of organizational restructuring: macro and micro .From a macro point of view, the operating system of e-commerce is obviously different from the traditional system, and has extremely high independence requirements.

Why do so many companies pull out the e-commerce department to set up a company?Liu Shichao pointed out: "That's because the entire e-commerce operating system, including the human resources system, financial system, IT system, warehousing, and supply chain, conflicts with tradition. For example, I wanted to promote a subordinate not long ago, and he was promoted from manager It took one year to become a department manager. But if an employee of Gloria’s offline department wants to be promoted to a department manager, it may take six or seven years. In the same company, this person has been in the e-commerce department for one and a half years as a department manager The manager, the other person will have to survive for six or seven years, and no one will be able to balance it.” The expansion of e-commerce is these three to four years, and it takes at least seven or eight years for traditional companies to build an industry talent.However, the rapid development of e-commerce does not allow such a long time to train people.A common view in the industry is that 4 months in e-commerce is equivalent to 1 year in traditional industries.

For Gloria, although the e-commerce department did not set up a special branch, it still uses the structure of the business department to ensure the independence of the e-commerce department. The e-commerce department has independent personnel, finance, design and even business intelligence. The department is actually a complete company.

From a microscopic point of view, the e-commerce brought about by the Internet will make the management of enterprises in the future appear in a state of loss of control. "Future management will change from the original control-based management idea to trust-based authorization." Liu Shichao said, "The Internet era has fundamentally changed the efficiency of decision-making. If you still want to control everything, the time cost of information transmission will be reduced. Let you do nothing."

In traditional enterprise management, it is usually the high-level decision-making of the company, and the low-level execution.However, Liu Shichao believes that e-commerce relying on the Internet has greatly improved the efficiency of information transmission, leading to the need to reverse this structure in the e-commerce level of enterprise management.Because the situation may have changed by the time the information is transmitted, it is necessary to allow the front-line people to make decisions, while the senior management has changed from the original decision-making function to the current support and provision of resources. "Now my subordinates often tell me what support and resources they need, and let me help them solve them. The first part of every weekly meeting is to tell them my itinerary for the next half month or a month. Let them make demands on me. For example, next week I will be sent to Hangzhou by my subordinates to talk to some friends from Tmall.”

而随着组织结构的改变，歌莉娅的人效也显著提高。刘世超透露：“歌莉娅电子商务业务前年89个人卖了6000万，2012年120个人卖了1.7亿，2013年差不多达到3.5亿。我干了1年，人效从1年78万提升到141万，2013年将会从141万提升到250万。这就是组织再造的价值。”

(Section 2) O[-]O layout of traditional department stores armed to the teeth
Intime is able to actively embrace e-commerce as a traditional department store. It has mainly made three efforts: first, to break through internal resistance and achieve a top-down unified thinking in terms of system construction and innovation; second, to break the thinking mode and promote online and offline Business is moving toward integration; the third is to keep up with the times and determine to be a big data-driven consumer solution provider.

Among the top ten e-commerce companies in the United States, except for the leader Amazon, the rest are bridgeheads for traditional companies to reach the Internet. They are the products of traditional companies and Internet genes. The core theme embodied in this is: integration.Intime Commercial (Group) Co., Ltd. has used the omni-channel strategy of embracing the Internet to confirm its choice of combining physical department stores and e-commerce for transformation: in the first half of 2013, the total sales of 31 Yintai stores were 74.29 billion yuan, a year-on-year increase of 16.9 billion yuan. %; through cooperation with Tmall, on the day of Double Eleven in 2013 alone, the sales of Intime Department Store’s Tmall boutique flagship store reached 3704 million yuan, six times that of Intime’s online sales in 2012.

Physical department stores embrace e-commerce

Since the 20s, Intime has been in constant self-innovation, from traditional marketing to vigorous youth marketing, to the "electric shock" of Yintai.com, and to taking the lead in launching a comprehensive strategic cooperation with Tmall. These are continuous innovations Act of.

With the increasing demand of customers, e-commerce provides more and more choices and channels, while the traditional department store industry still stays in the concept of venue leasing.As a "second landlord", the department store neither knows what products are available on the goods side, nor can it identify customers' identities and preferences.Intime realizes that it is imminent to change the business model of department stores. Intime Online was launched in 2010. After several adjustments and revisions, it finally positioned itself as a fashion B2C. In 2012, Intime.com’s sales revenue was close to 6 million yuan, a year-on-year increase of 281%, accounting for 4% of the entire Intime Department Store Group, which is equivalent to the sales of a medium-sized store. Although the scale is still small, it is developing very rapidly.

The continuous development of Yintai.com is an important manifestation of Yintai's Internet thinking, and has accumulated e-commerce experience and capabilities for Yintai. "The ultimate goal of retailers is pan-channel, that is, to focus on customer needs, try to apply new technologies to various channels, and fully infiltrate retail brands into customers' living habits. Intime's future direction is driven by big data. consumer solutions provider." Intime CEO Chen Xiaodong said.

Traditional department stores carefully layout O2O
Intime has made a series of efforts to embrace the Internet.

First of all, put customers first: first, learn from the idea of ​​"decentralization" on the Internet, not simply be oriented by sales goals, but hope to cultivate a sense of customer identity; second, instead of blindly encouraging customers to buy a lot of things, employees are required to guide customers to use Buy suitable products in a suitable way; third, determine the product category of Intime based on the principle of "customer first"; fourth, held the first Yintai Commercial Skills Competition in 2013, divided into cashiers, customer service personnel, and shopping guides The four major positions of security guards and security guards are contested. Each skill assessment point reflects the details of employees providing services to customers. The ultimate purpose of skill assessment is to demonstrate the service level and promote employees to strengthen the service concept of "customer first".

Secondly, the omni-channel strategy: create a "24-hour Intime", fully integrate offline stores, Intime.com, Tmall Intime flagship stores and mobile terminals, and open up online and offline products, marketing, services, experiences, and members, so that Intime can seamlessly Everywhere, all the time, around all the consumption links, make a seamless and smooth system to meet customer needs.Intime has also set up touch screens in physical stores to facilitate customers' offline experience and online purchases, and also provides online order inquiries, pick-up and delivery services, etc.

Thirdly, Internet thinking: its essence is openness, transparency, sharing, and responsibility, which is reflected in entertainment and socialization in shopping malls.Online shopping is convenient and fast, but it lacks experience and loses entertainment and social attributes. Intime's offline activities pursue "how to play as fun as possible".Over the years, Intime Department Store has accumulated more than 200 million VIP members. In October 2012, it launched a VVIP club for high-end membership services; in May 10, it launched the social network "Intime Girlfriend Circle". More points and activity discounts, share the joy of shopping.On June 2013, 5, Yintai held a mid-year celebration event. Through the live broadcast of Zhejiang TV Station, the sales of Yintai's 3 stores in the whole province increased by 2013% year-on-year, and a total sales revenue of 6 million yuan was achieved in two days.

Finally, driven by big data: digitize store products, gradually capture user data, including store user data and VIP user data, and open up offline physical stores and online VIP accounts. At the end of 2013, Intime completed the installation of free WIFI in all physical stores. When a customer who has registered an account enters the physical store and connects to WIFI with his mobile phone, all the past interaction records and preferences of the customer with Intime will be displayed in the background.By analyzing the electronic receipts, walking routes, and staying areas of customers in physical stores, we can identify customers' shopping preferences, analyze shopping behavior, shopping frequency, and some habits of category matching, and can increase or decrease wireless POS terminals at any time according to passenger flow. Wireless PC terminals improve customer shopping experience.Intime.com can even accumulate data on different users’ preference for brands and discounts, relying on the relevant data of mature stores, and then based on the analysis of users in the cities where the newly opened stores are located, it can derive guiding opinions on grouping goods and attracting investment for new stores.

In the field of new business, in May 2013, Yintai Group, Alibaba and other enterprises jointly invested and established "Cainiao Network", and Yintai Group held 5% of the shares, becoming the second largest shareholder of "Cainiao Network" after Alibaba. Create a platform for mutual benefit through logistics data network interconnection; "Youbao Online", which was initiated and invested by Yintai, has become the largest Internet vending machine company in the country.

Break the thinking pattern with an innovative attitude
Chen Xiaodong, CEO of Yintai Company, said that the biggest impact of e-commerce on traditional enterprises is reflected in the way of thinking.The thinking mode of some traditional enterprises still stays in the linear structure, and many interest patterns have been solidified and difficult to break.The change of promotion means and marketing methods caused by e-commerce is not the core, but the most fundamental core is that e-commerce has Internet thinking—openness, transparency, and sharing—and uses this thinking to break the existing and rigid pattern of interests , A direct and efficient communication channel has been established between suppliers and customers.Essentially, the competition between e-commerce and traditional retailers is a competition of mindsets.

Take changing the sales promotion mode of shopping malls as an example.Under the joint venture model, various promotional activities without restraint cannot meet customer needs.There is an Yintai store that plans 273 days of promotion activities in one year, and asked him why it takes 273 days?The answer is, because 2013 days were done in 263, and it must be increased in 2014, so it is 273 days.In fact, this is an inertial thinking, because changes will affect interests.In the face of vested interests, if there is no strong self-motivation and a strong sense of crisis, it is impossible to change the enterprise.

Intime has done a lot of work and efforts in internal system construction and innovation to protect innovation, stimulate innovation, and form an innovative culture and atmosphere.For example, Yintai established an "innovative job security team" with CEO Chen Xiaodong as the team leader.In addition, there is a fault-tolerant mechanism for business innovation within the group. It can be said that this mechanism is the core of ensuring corporate innovation.Mistakes should be made, and success is an accident. Only when the top management has this kind of thinking, mind and inclusive attitude, can employees dare to innovate boldly.Otherwise, it will be difficult to succeed in innovation, and gradually, the enterprise will form a rigid system that is self-styled and respected only by the superior.

(End of this chapter)