Recently, a student asked me to talk about the blue ocean strategy . I thought about it, where can there be a blue ocean in e-commerce? Let’s simply discuss the “ Red Ocean Strategy ”. Many investors make money in the bull market and spit it out in the bear market. In fact, e-commerce is similar. There is a joke saying: "The money I made by luck in the past few years has been lost by abilities in the past few years." So, how can e-commerce continue to make profits in the red ocean after it has wade through the blue ocean?
1. Cost-leading acquisition scale
Cost Leadership is one of the Porter competition trilogies. For companies that control upstream supply chains, high cost performance is always the killer to disrupt the market. However, cost leadership is not about losing money to gain publicity, but based on the company's ability to control the supply chain and costs. Those playing methods that often "free shipping for 9.9 yuan" and "strategic losses" do not belong to the cost-leading strategy.
The cost leadership strategy mainly includes three conditions: first, it has a certain scale effect; second, it has transformed the industrial chain structure to improve efficiency and reduce costs; third, the company's location has the advantages of an industrial cluster.
For example: Among our students, a brand is the number one brand of solid wood furniture online, with an annual sales of 2 billion yuan. The main materials used are white oak imported from the United States. They are genuine pure solid wood furniture with authentic materials, so the amount of imported wood is also the first in category. In terms of supply chain transformation, the brand plans to directly import logs from the United States and process and produce them domestically, which can reduce supply chain costs by more than 15%. This is a typical cost-leading strategy, because the supply chain is transformed effectively reduces costs. In fact, the brand does not win by low prices, but by the comprehensive strength of brand, material and quality; and the optimization and saving of cost structure will undoubtedly further enhance its profitability and competitiveness.
Let me give you another example: Our Student A is a casual clothing brand, targeting young men born in the 1990s. The main price range of summer products is between 50 and 100 yuan. The company is in Xintang, Guangdong. It takes advantage of the advantages of the industrial cluster to purchase fabrics by itself, so that the factory can process the cost, and control the cost in place. On the basis of maintaining price competitiveness, the average gross profit margin is more than 50%. In addition, there is a student B who also does casual men's clothing with the same positioning. The company is in Suzhou, Jiangsu, and mainly purchases finished products from factories, with an average gross profit margin of less than 40%. By comparison, it can be considered that Student A has a cost advantage.
Many times, e-commerce equates cost leadership with low-priced hits; and mistakenly believes that as long as the scale is larger, it can have economies of scale and cost leading. In fact, if the scale cannot exceed the category's leading brands, then there is no advantage in competing for costs. And most stores cannot reach the top position through "strategic losses". Therefore, it seems like a must-see for small shops to compete for prices, but in fact it is not a good way out.
2. Positioning differences precipitate users
Differentiation of brand positioning is the basis for dividing the market cake and obtaining premiums. Its essence is to accurately distinguish the target population, meet the preferences and needs of the target population , and establish popularity, reputation and loyalty.
Well-known e-commerce brands that have survived to this day have basically taken this path, such as Afu essential oil, bio-biological thermos cup, banana underwear, copper maker, Yu Nifang, Libo, Yinman, big pink rag doll, fairy's pocket, Jiangnan Buyi, Rwanda fish, etc.
This type of brand with differentiated segmented positioning, which is what we usually call small and beautiful brands, accounts for about 24% of the market share. It not only achieved great success in the past, but also continued to usher in the spring of development in the future.
A small and beautiful brand, the opportunity lies in the crowd, not the keywords. For example, Jiangnan Buyi's naturalistic style has a stable subdivided target customer group, with member purchases accounting for 68.5%; for example, Rwanda Fish, the proportion of old customers over 5 years old is 40%... Obviously, old customers are exclusive group packages for small and beautiful brands. This group package cannot be taken away by other brands, and there is no need to worry about other leading brands intercepting users, and there is no need to worry about the real-time horse racing mechanism, because the precise group will make the indicators such as click-through rate, conversion rate, collection, purchase addition, and repurchase rate are excellent.
3. Increase quality and price to obtain premium
We analyzed the champions of price wars in various major e-commerce categories in the past 10 years and found that they have always been "the flag of the king on the city wall", and the throne of the champion is rarely sat for a long time. If a dark horse is temporarily leading, there will definitely be another dark horse to replace it. However, those brands that choose higher prices and have a certain premium often have the last laugh.
For example: Among our student companies, a brand is a leading brand in the outdoor lighting category. The brand has followed up and tried it in the competition for low-priced hot products of 9.9 yuan, but it sold tens of thousands of orders at once. The supply chain was under great pressure and brought a few hundred bad reviews, which was not worth the loss. Therefore, we resolutely gave up the garbage price and garbage products, followed the mid-to-high-end quality price route , and developed series of products based on different scenarios and uses of the user group. Although the sales volume has decreased, sales and profits have increased, and the company's operating indicators have become healthier.
There are two sources for higher premiums: the first is brand value; the second is the increase in quality and price. If the brand is not well-known, then using higher quality, price and service to gain more praise and reputation, you can still gain more premium space, and also provide conditions for creating better products and services, forming a virtuous cycle.
4. Farmer's Law Obtain Share
The only effective way to prevent weeds from growing in the fields is to plant crops, which is the law of farmers.
For example, Handu Yishe divides different market groups through a group of more than 70 brands; Procter & Gamble has segmented product functions and has created more than 300 brands, covering markets in more than 160 countries. These are classic uses of the law of farmers.
Due to the principle of distracting platform traffic in the past, most e-commerce companies have also opened a lot of stores and brands, and some clothing companies often open more than 50 stores. However, the Farmer’s Law does not win by the number of stores, but effectively occupy the segment. What is effective occupation? If a store’s sales cannot enter the top 10% of the sub-category, then there is only sales significance but no market position. In other words, opening more stores, casting more nets, and not focusing will not establish a competitive advantage.
There are many cases where effective occupation of sub-categorized categories. For example, among our student companies, a brand belongs to the number one brand in the wall clock subcategory. In addition, the company has two brands entering the top 10, distinguishing between design style, product materials and price bands, occupying the mid-range, mid-to-high and high-end markets respectively to meet consumer needs at different levels. Thus, the largest share is occupied in this category.
5. Category wolf pack captures the head
The category wolf pack strategy refers to creating advantageous product groups under the same category through supply chain advantages, and occupying the top positions of each adjacent sub-category under the category through advantageous product groups.
For example, we have a student who focuses on traditional nourishing categories, creates the advantages of the supply chain, and controls upstream resources. For more than 10 sub-categories/small categories with market capacity of over 100 million yuan, each store uses the strategy of breaking through each store, creating 2 to 3 hot products, firmly holding the first position of each small category. This strategy, resource sharing, leading costs and high competitive barriers, makes it difficult for other competitors to have a chance to break through.
The core of the category wolf pack strategy is product and supply chain advantages . There are still many opportunities in the long-tail range of sub-categories or large categories. For example, in the sub-categories such as home storage, leather cleaning and care, large-size women's clothing, wallpaper and murals, and simulated flowers, we all have students who have gained the leading position through category wolf packs.
The difference between the farmer's law and the wolf pack category is that the former may form differentiation from various dimensions, while the latter mainly strengthens the category advantages; the former's goal is to occupy a greater share, while the latter's goal is to occupy the first position.
6. Build advantages in the laws of floating ships
The floating ship rule, as the name suggests, is that the water rises and the ship rises. No matter how high the water (market) is, we are always a little higher than our opponents. For example, the 1,000 grams of large bath towels from Kangerxin Hotel were once a hot-selling product on the entire network, because the competitors in the market only have 500-600 grams of bath towels. Because Kangerxin uses sufficient materials, good material, stronger water absorption, and soft skin, this product has higher competitiveness.
The floating boat method is a commonly used competitive strategy, but the following key points need to be paid attention to.
First, the functions or quality that exceed the opponent must be useful, it is a real requirement, not a fake requirement, or a useless person. For example, a domestic mobile phone mainly features waterproof function, but who would take your mobile phone to swim or take a bath? After all, the probability of falling into the toilet is very low! For example, a certain mobile phone claims to be able to smash walnuts. The question is who bought a mobile phone to smash walnuts?
Second, if one function is higher than the opponent, other practical performance cannot be sacrificed. For example, a certain brand once launched a card-style razor, focusing on the concept of lightness and thinner than all competitors. However, this electric shaver can only deal with beards below 2 mm, and there is nothing to do if it exceeds 2 mm; and the battery life is short and it requires frequent charging. This is the sacrifice of the original main function for a certain selling point.
Third, the floating boat method cannot be excessive. Just make the main selling point surpass the opponent. If you surpass too many, or add too many additional functions, it will greatly increase the cost and lead to a decline in competitiveness. For example, a cordless hair dryer not only uses infrared radiant heat technology in addition to making a fuss about battery capacity, but also uses infrared radiant heat technology. The result is that the price is more than 2,500 yuan, which reduces market competitiveness.
7. IP culture shapes internet celebrities
If we cannot open up the gap with our competitors from the perspectives of functions, materials, craftsmanship, cost, category, etc., then the creation of brand IP culture in the mobile social era provides us with new ideas. Focusing on brand IP culture interpretation, on the one hand, add points to brand value; on the other hand, it also expands the company's value chain and business scope.
For example, Desha takes "every girl is a princess" as the core brand concept, focuses on the clothing segment of girls aged 3-12. Over the years, it has continuously invested a lot of money to create a princess cultural IP, designed Princess Desha cartoon image, produced 120 episodes of the cartoon "Disha Doll", expanded the O2O experience hall, created a "princess town", etc.
For example, Three Squirrels has the mission of "making the world's masters happy" and focuses on the IP culture of the Three Squirrels, extending from nut snacks to the cultural industry, including graphic animation, 3D animation, animation, picture books, dolls and offline food stores. Brand IP has enabled Three Squirrels to establish a comprehensive leadership position from material consumption to spiritual needs.
For example, Internet celebrity milk teas - Heytea, Cha Yan Yuese, etc., are all third-generation milk teas. The third generation of milk tea takes IP culture as its core, keeps up with the fashion and cultural trends, and is different from the first generation of brewed milk tea and the second generation of fresh milk tea in various dimensions such as store image, appearance packaging, cultural concepts, and product innovation.
8. The benchmarking law innovation and transcendence
The benchmarking method is a common strategy in market competition, and it is also a watershed between first-class players and ninth-class players.
Nine-rate players , staring at benchmark brands and popular products, imitating styles, plagiarizing pages, copying pictures and texts, using black technology to increase sales, and using lower prices to grab business. In the end, they will harm others and not benefit themselves, disrupt the market, and drive out good coins. A red ocean, and everyone has no money to make money.
First-class players also focus on benchmark brands, not imitating or plagiarizing, but as a basis for analyzing market demand and customer preferences, they stand on the shoulders of giants and surpass giants through technological innovation, functional innovation, quality improvement or supply chain transformation.
In addition, there are super players who start from brand positioning, stand on the opposite side of benchmark brands, and redefine the industry's selling points and needs. For example, Pepsi Cola was just released, and it proposed the positioning of a "new generation of young people" in view of Coca-Cola's "classic and traditional" positioning, and immediately gained the support of a large number of young people who did not know the truth, thus occupying a place in the world. When the rising star Qixi saw that there was no chance of tradition or trend, she simply cut off the fire and positioned it as "non-Cola" and also divided the country.
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