Household goods, like housing, are rigid demands. When people have a place to live, they will furnish their nest with furniture. Therefore, although different times or different stages of consumer taste and requirements for household goods are not the same, but household goods will always keep a large market.
In the past, traditional home furnishing was very popular. However, nowadays, due to the rise of new retail channels such as real estate decoration, complete decoration, e-commerce and SHOPPING MALL, the total consumption of traditional home building materials decreases, consumption growth shrinks, and multi-channel marketing costs increase. The traditional home furnishing industry is not what it used to be.
The rise of multi-channel forces, the traditional home industry pain intensifies
With the rise of a variety of new retail channels, the traditional home industry pain intensifies. For traditional homes to grow, they need to pinpoint the problems that are holding them back. In fact, there are many factors holding back the growth of the traditional home business. Compared with Internet home furnishing brands, the traditional home furnishing industry is often faced with more difficult industry pain points.
First of all, the traditional home store customer flow decline, and even some stores are more shopping guide than customers. This directly leads to the store sales slump. According to relevant public information, the sales volume of home furnishing stores in 2014 was about 1206.21 billion yuan, down 3.36% year on year; The sales volume in 2015 was 1084.91 billion yuan, down 9.98% year on year; In 2017, the sales volume of building materials home furnishing stores above the national scale was 917.37 billion yuan, down 22.6% year-on-year.
From this point of view, the traditional home store customer flow decline has been an indisputable fact. The whole traditional home furnishing industry is in the dilemma of declining customer flow. On the one hand, the traditional home furnishing industry is used to passive transactions, brands are waiting for customers in the store, there is no active heart to attract guests. On the other hand, there is a huge increase in consumer business in the stores now, and many customers may just wait for the opening time of the movie to come into the store, but often they just look and never see anything.
Secondly, due to the rational return of the property market economy and the introduction of a series of real estate policies, the overall household consumption demand of residents has declined. After the 19th National Congress of the CPC, adhering to the spirit of “house is for living, not for speculation”, the country has issued relevant purchase restriction policies, or purchase limit number or increase the down payment interest rate. Limit buy policy frequency, housing industry encounters cold, with its relevant household also ushered in winter.
Finally, with the rise of home furnishing e-commerce platform, hardcover room and brand furniture enterprises, the traditional home furnishing industry is faced with multi-channel diversion. In addition to traditional stores, Internet home furnishing also provides consumers with more consumption scenarios. A large number of customers who belong to traditional household stores are intercepted by the Internet at the front end. In addition, Internet home furnishing does not have the cost of traditional home furnishing in store rent, store shopping guide and other aspects, which can give consumers a higher bargaining space. Naturally, consumers are more willing to choose to buy household items on the Internet home furnishing platform.
To sum up, the joint action of multiple factors, the traditional home industry customer flow sharply reduced, sales decline. So, some people guess that since most of the flow of the traditional home furnishing industry is blocked by the Internet home furnishing O2O Internet home furnishing platform is about to rise to the top? In my opinion, not necessarily.
Take Meilele as an example: home furnishing platform problems are also many, the development is not smooth
Why do home furnishing O2O Internet home furnishing platform at the beginning is not necessarily successful? We take Meilele as an example to see how deep the water behind the Internet home furnishing platform is.
Founded in 2008, Meilele is a large-scale comprehensive O2O model shopping platform for home furnishing. Its platform brings together brand furniture, building materials and home furnishings in nearly 260 physical stores across the country, boasting the same style and price online and offline. It is said that the whole house of Meilele can be purchased at one station. Customers can choose styles online and then experience them in the store. After placing an order, the platform will arrange logistics, delivery, installation and other aspects in one step. It seems that Meilele this home shopping platform is almost perfect. In fact, there are a lot of problems behind Meilele.
First, there are so many distribution channels for household products today. Just participating in the Internet home improvement market, there are three kinds of home improvement websites: platform, self-support and portal. At the present stage, platform websites doing home building materials include JINGdong, Tmall, Tuba Rabbit, Qijia and Meilele, among which Jingdong and Tmall belong to comprehensive e-commerce platform, Tuba Rabbit belongs to overall home decoration platform, while Qijia and Meilele belong to more vertical O2O e-commerce platform of home building materials.
In addition, there are love space, live and other self-owned home decoration websites; Sina home, netease home and other furniture portal sites. These are relatively more famous, in doing home building materials large and small website platform is simply more like cow hair. Meilele such home O2O is just one of the types, it is difficult to absorb all the flow of home furnishing industry.
Second, Meilele has unique advantages, but also has its contradictions. Meilele originally focused on the online channel of “Meilele Furniture Network”, and later began to develop the offline “Meilele Experience Pavilion”, which together constitute the “dual platform O2O” business model. Such a business model is like a double-edged sword.
Furniture belongs to durable goods. After consumers buy a whole set of furniture, they will use it for many years. The material, design, technology and style of furniture are also difficult to be displayed through simple pictures on the Internet. The experience pavilion added by Meilele bears this function. Secondly, the experience pavilion can provide better after-sales service. So customers can first online platform to watch, and then to experience the pavilion to experience. This is the advantage of the dual-platform O2O business model.
Also because furniture is durable, customers are less likely to become long-term customers. In other words, a customer who buys a set of furniture is unlikely to buy it again for 10, 20 or even 30 years. So Meilele online to spend more money to buy traffic. Meilele needs a huge amount of capital for its self-built experience stores, which has been occupied for too long. Moreover, the extensive expansion period of the industry has passed, and the expansion mode of self-built stores is severely restricted. Both online and offline platforms need blood and money.
Moreover, compared with the peer Meilele store is too small, can accommodate a few brands. It is understood that the volume of a Red star Macalline furniture museum is 6-100,000 square meters, while the largest Meilele experience museum is only 5,000 square meters, with a total of 14 brands stationed in the country. Double platform mode, Meilele from the original light mode into a heavy mode.
Third, Meilele’s management is not very stable. It is said that Since 2012, when Mei Lele began to contact capital, the company has never been out of the whirlpool of personnel disputes. From March to August 2015, Li Yonggang and Huang Hui, Founder of Meilele, Yuan Boyin, executive of Meilele, and Pan Shouzheng, brand director left successively. Although in the news reports at the time, all the people involved cited personal development as the reason for their departure, it is hard not to think that the two events are inextricably linked after the arrival of the capital.
Less than two years after the wave of departures in 2015, Gao Yang, former CEO of Mei Lele, also left the company in early 2017. Mei Lele’s new CEO is Shen Yi. However, according to insiders, Mei Lele’s new CEO, Shen Yi, has also left Mei Lele, and the change of CEO has pushed the game theory of capital side into the spotlight.
We have to admit that the entry of capital did alleviate mei Lele’s embarrassment, but the impact of capital thinking and entity thinking made Mei Lele wander between fantasy and reality. In the mind of Meilele employees, Huang Hui is the pioneer of Meilele who “rides a motorcycle, takes cash and establishes supply chain”. However, after capital entered, this former founder was also marginalized. Less entrepreneurial feelings, later Meilele is more like a concept and tool for making money or financing. Under such circumstances, Meilele is in urgent need of a strong new person at the helm, or a strong professional capital.
Under the attack of many difficult problems, the United States lele household when how?
As mentioned above, Meilele development is not successful for many reasons. Externally, there are too many sales channels for household goods. Internally, Melle’s two-platform model has left it burdened and its management in turmoil. So, want to continue to mix in the traditional household industry, beauty lele should be how?
First of all, Meilele should make it clear that because of the durable property of home furnishing, it is not realistic to cultivate customer stickiness. If the platform wants to have a stable and continuous flow, it must make its products have a strong brand advantage. Therefore, vertical platforms such as Meilele should carry out vertical expansion, expand categories, improve one-stop home shopping experience, improve the mall stickiness. To put it bluntly, if customers want to buy furniture, the first one will think of Meilele, so meilele’s mall stickiness is already very high.
Second, meilele is essentially just a home furnishing platform, and its customer – and service-centered core should remain unchanged. Therefore, no matter how capital thinking interferes, enterprises should keep the initial mind of user thinking and take customer service as the center. In this way, more consumers are willing to buy furniture on the platform.
Finally, the platform leader should also assess the situation and cultivate a stable platform team. Meilele will no longer be regarded as a tool to make money, but a team work together. In this way, the team can cooperate more sincerely, forming the maximum synergy, and acting on the development of the platform.
In general, although Meilele faces many problems, it has obvious advantages as a vertical platform for home furnishing. However, home furnishing channels too much but external cause, is the common problem faced by the industry; The uniqueness and contradiction of dual platform can also be alleviated in the future platform management. These are not intrinsically big problems. Meilele faces the biggest problem, is in the capital control of the management turmoil. This is not only a problem of Meilele, but a common problem of all home furnishing platforms controlled by capital. It is a game between companies with initial entrepreneurial intention and capital.
Public ID: Liukuangtmt, content cooperation plus wechat account: Sanche2017, this article was first published on The website of Venture Capital