Through digitization and customer experience, BESTORE forces a reform in the whole process, improves the operation efficiency of industry, brings about the transformation from “flow management” to “customer management”, satisfies the needs of individual customer efficiently and accurately and achieves the integration of employee value realization and customer value creation. On January 8, 2018, BESTORE interpreted its understanding about new retail at 2018 New Retail Sharing Meeting themed with “Digital Driving Makes Snacks More Delicious”.
The reform of retail industry was kicked off in 2017, the “First Year of New Retail”.
In this year, BESTORE matched the information of 37 million VIPs to the system of more than 2,000 “smart stores”, realizing the accurate analysis on the customer group based on single-store and single-customer mode and exploring their demands for consumption through big data platform. Besides, BESTORE also ranked at the top during “Double 11 Shopping Festival” and “Double 12 Shopping Festival” in 2017, and “resonated” with more than 30 online platforms to form the core driving force of new retail by means of omni-channel digitization.
As Rome was not built in a day, the reason that BESTORE is able to stand in the new retail outlet and sets up a benchmark is its continuous self-reform for 11 years. And BESTORE has answered two key questions with exploratory and practical results. How can snack enterprises make good products in the era of new retail? How much underlying determination and accumulation are required to be a benchmark for new retail?
Consumer research creates the Kingdom of Snacks
The China National Food Industry Association estimates that Chinese people will have created a market of RMB 2 trillion yuan through the consumption of snacks by 2020. This is a blue sea born under the new trend of consumption upgrading. Consumers are no longer satisfied with childhood candies and fried goods, but desire for richer, tastier and healthier snacks.
In the era new retail, good products are always the core competitiveness for taking a share from this blue sea. “According to consumer tracking research, BESTORE realizes that the “good taste” is the most critical factor of purchasing in the snack market, and ingredients, production process, optimal edible period, nutritional composition and healthy formula are key elements to ensure good taste. Consumers will eventually choose you when you insist on making the best products only.” Yang Hongchun, the founder of BESTORE said.
In August 2006, BESTORE started from a small store opposite Wuhan Plaza and created a product supply chain from scratch. The original idea of the founding team is simple: bringing the most delicious snacks in the world to customers’ home.
At that time, this small store only sold more than 60 kinds of snacks, but the effort was not simple. The founding team had investigated in the prosperous business circle of Wuhan Plaza for two months, trying to master people’s favorite varieties and flavors; on the other hand, they traveled to hundreds of factories across the country to select products and explore the methods to make delicious snacks.
People often say that new retail redefines consumers, goods and shops, of which people become the center. The store is opened where people are concentrated; and retailers supply whatever people need and prefer. As a matter of fact, the “people-oriented” concept was deeply embedded in the corporate gene as early as the beginning of BESTORE.
Until today, BESTORE, with more than 200 employees engaging in R&D and quality control, has developed 1,500 kinds of snacks. These snacks are all produced based on the accurate membership portraits obtained through consumer research and big data analysis. Then, the consuming group and consumption scenarios are subdivided to predict different consumption needs, research and develop the technological requirements of product formula, formulate the physical & chemical and sensory indexes and standards for each commodity, and deliver to a factory engaging in strict selection, evaluation and certification for customized production.
In order to capture the variable consumption trends, BESTORE carries out a research on the big data of consumption measured in weeks. Through this research, it captures more than 2 million customer reviews on average every month and gains insight into consumers’ behaviors and preferences through feedback data. On the one hand, the latest series of afternoon tea and snacks for pregnant women are born by analyzing the latest customer preferences and developing new products; on the other hand, the taste for products that have been launched can be adjusted according to the feedback of consumers.
Now, health is increasingly becoming a high frequency word among consumers. In order to make snacks tasty and healthy, BESTORE set up an inspection center (physical and chemical laboratory) in 2010, and became the first enterprise to pass the CNAS certification in the snacks industry of China. In 2015, BESTORE took the lead in founding BESTORE Health and Nutrition Research Institute jointly with Hubei Nutrition Society. In 2016, BESTORE established China Research Institute for Marine Snacks together with Ocean University of China and Zoneco, aiming to develop the high-protein and low-fat seafood into delicious snacks. Instant Scallop and Instant Prawns made a breakthrough in hundreds of millions of sales in that year.
In 2016, BESTORE fully launched the customer voice system, obtaining big data and key words from mass customer reviews and tracing problems from customers’ perspective. “From March to September last year, we mined more than ten million customer evaluation data through this system and obtained many opportunities, such as product improvement, internal operation and sales growth. We have changed the taste of 10 SKUs and adjusted the packaging specification for 15 SKUs, with each creating the sales increments of more than RMB ten million yuan.” Zhao Gang, the senior vice president of BESTORE introduced.
Internal and external digital transformation
Now, new retail has become an indispensable topic in this industry. Nevertheless, the essence of implementing new retail is to connect online and offline stores in the way of digitization and achieve a complete tracking study on the trajectory of consumer behaviors, so the inner needs of consumers can be understood accurately and the consumers, goods and shops can be reconstructed by focusing on consumer demand. And ultimately, the enterprise operation efficiency will be enhanced with “customer experience as the center”.
Qian Hao, a well-known Internet analyst, believes that BESTORE has presently occupied the leading position by examining the competitive pattern of snack market based on the definition of new retail and is the only brand that has achieved the collaboration in multiple online and offline channels.
There must be a powerful information system to support multi-channel collaboration, in order to manage the inventory management efficiently, dispatch the intelligent logistics and open up the membership system.
As an offline start-up, BESTORE has the information layout almost synchronized with its development. In 2008 when there were only 100 stores established within two years after its establishment, the founder took out all the profits of RMB 10 million yuan at once to launch the store information management system. With this system, BESTORE realized the unified management of goods, prices and orders in all stores and achieved the growth in the number of stores from 100 to 1,000 in the next four years.
In 2009, BESTORE had 300 stores, and at the same time, it encountered the biggest problem in FMCG industry, i.e. replenishment. It had been obviously laborious to count the business data only with a pen and a form, and consequently, BESTORE launched the warehouse information management system, based on which it could respond to replenishment orders from stores within four hours and screen out rush orders for priority delivery.
Now, the automatic replenishment system of BESTORE can carry out complete matching through the big data system. By clicking the mouse in the store management system, the inventory information of more than 2,000 stores nationwide can be presented like a battle map. When the salesclerk enters the store and turns on the computer every morning, the automatic replenishment system will send replenishment orders and remind the salesclerk to restock products that are out of stock or almost out of stock.
After realizing the automatic replenishment of system, BESTORE can deal with the sales peak calmly. In the first offline activity of Alipay, Alibaba in 2014, BESTORE ranked the first, with its trading volume also raking the first compared with that of all other brands.
In 2012, the Tmall Flagship Shop of BESTORE was launched. And its orders in a day are usually as many as that reached by an offline store in a month. Many companies will encounter this problem in the practice of new retail, that is, the online inventory is empty, but the goods are actually stored in the offline warehouse. The scattered information can only be integrated with a strong brain.
This “super brain” is the big data background system established by BESTORE in cooperation with IBM and SAP in September 2015. Through IBM, the front, middle and back ends of BESTORE can be connected. With this system, BESTORE has integrated more than 10 systems, over 30 online and offline platforms, and also the transaction information and customer data of full channel. And in this way, all the channels are integrated into an organic whole for information exchange from the previous state of fragmentation.
Relying on this system, BESTORE launched the store O2O business that year and broke through the monthly sales of RMB 30 million yuan a year later.
At present, the information system of BESTORE has covered the fields of commodities, marketing, channels, customers and supply chains. In 2016, IBM, which has served many well-known enterprises, appraised BESTORE as the best case of global omni-channel retail with internal services.
And the smooth operation of this digital system in BESTORE benefits from the practice of “internal strength”.
BESTORE has started to train all managers’ Internet-based thinking since 2013. The founder leads the team to visit and inspect dozens of the best enterprises in various fields every year, such as Alibaba, Jingdong, Huawei, Haier, MI, Haidilao, HSTYLE and Kidswant, for the interaction and exchange among senior management teams. In order to adapt to the short, flat and fast thinking characteristics of the Internet, BESTORE simplified the organizational structure into three layers and tried to implement the team operation internally in 2016 so as to cancel the management level, establish the direct link between headquarters and minimum business units and build the agile and capable internal response mechanism.
“Data Maniac” precise endorsement
At the end of 2012, the number of BESTORE stores approximately reached 1,000.
In this year, the sales volume of China’s smart phone market jumped to the first place in the world. In addition to books, daily necessities and clothing, consumers even buy household appliances online. And because of the outbreak of “Double 11 Shopping Festival”, BESTORE who is devoted to the research and development of snacks and offline stores saw the changes in consumption habits of the new generation and started the online layout.
In the same year, Tmall Store earned RMB 12 million yuan in bulk snacks. The founder of BESTORE decided to take e-commerce as a major strategic layout and invested heavily. As he required, all resources should be given priority to the support in e-commerce, and consequently, the online sales increased to RMB 1.2 billion yuan in the following three years.
The development & operation of e-commerce platform does not merely mean the increasing of a sales channel. It is like an electric wave tester, testing and recording online consumers’ reactions and preferences. Mining requirements from customers and converting them into value are the key points to new retail.
Nowadays, BESTORE e-commerce is like a “Data Maniac”.
In the snacks industry, it’s the general method to decode consumers’ tastes, preferences and buying habits according to the difference in region, age and gender. But for BESTORE, this is only “Level 1”.
In addition to the underlying RMF transaction attribute, BESTORE e-commerce extends the database to customers’ collection, purchasing, browsing and other behaviors. And these behaviors mean more potential purchasing powers. For example, when a customer adds a product to Favorite, but not order it for a long time, the customer may have hesitation in price. And at this point, the coupon offered by the system may promote the customer to make up the mind. This is “Level 2”.
What if customers don’t like coupons? Let us advance to “Level 3”. The various social platforms of BESTORE will record customers’ interactions and reviews, based on which BESTORE can further analyze their favorite interactive mode, promotion mode and purchase intention, etc. by grabbing keywords so as to obtain the accurate portraits of VIPs and achieve the maximum conversion rate.
At “Double 11 Shopping Festival” in 2017, the accurate marketing response rate of BESTORE increased by 40% year on year, which exceeded the industry average to a large extent. And under the trend of decelerated growth in this industry, the omni-channel sales rose to 35%.
Consumer’s favorite smart store
At “Double 11 Shopping Festival” and “Double 12 Shopping Festival” in 2017, more than 2,000 stores of BESTORE were shortlisted for “TOP 1” in the carnival battlefield of new retail.
If it is said that online channels can meet the advantage of convenience, the offline stores will supplement the functions of pre-warehouse, experience and community management etc. In the digital tide, offline store is not only an organic component, but also an emotional carrier. Whether the store can bring the ultimate experience is the key to the success of new retail.
Although it is making a strong run online, BESTORE has never eased the offline layout. In 2014, all offline stores of BESTORE launched the online payment of Alipay and started the digitization process of stores. It also became one of the first batch of members of Global Cashless Alliance last April.
According to the ingenuity of “One Store, One Product”, BESTORE launched the fifth-generation stores based on the fourth-generation ones in last year, i.e. the layout of BESTORE Life Pavilion, including handmade sofa chairs made of Italian leather, European bread elaborately baked with imported ingredients, and coffee machine of the worldwide limited edition. It pursues the ultimate intentions everywhere, so can you simply regard it as a snack store?
The construction of smart stores is the most important strategic step taken by BESTORE for new retail in 2017. It cooperated with Alibaba to link 2,100 stores from June to the eve of Double 11 Shopping Festival, realizing the connection of membership data, payment, financial accounting and big data marketing system.
For BESTORE in physical retail, the greatest significance of smart store not only lies in the growth in sales volume, but also in the integration of the data about 37 million VIPs of full channel. Offline stores can support trading by mobile phone Taobao or QR code, which enables consumers to experience a more convenient shopping offline. Presenting Taobao passport for the scanning through store POS, the payment and membership identification, score accumulation and rights write-off will be completed at once. At the same time, since the membership system of the brand has been connected, consumers can centrally manage the membership cards of all brands under their names in Taobao passport and achieve the deposits and withdrawals of online and offline scores. By connecting with stores and shopping guides, consumers can also get better after-purchase care.
As disclosed in the Report for Authoritative Release Trend During Tmall Double 11 Shopping Festival 2017 issued by Alibaba, BESTORE won the first place in “Consumer’s Favorite Smart Stores Brand List”; and at “Double 12 Shopping Festival” in 2017, the sales volume of offline stores reached RMB 80 million yuan and the full channel broke through RMB 160 million yuan. BESTORE ranked the first in the snack category by virtue of its trading volume data published by Koubei.
In 2018, BESTORE will further carry out smart store project to make more targeted marketing strategies based on big data collected from the customers. In order to lay a solid foundation in various aspects including brand strategy, observation of consumers’ activities, research & development of products, optimization of supply chain and the opening of stores, BESTORE will establish strategic cooperation with Alibaba’s numerous departments such as data bank and strategy center to jointly work on relevant projects by taking advantage of big data.
With the high ability in data analysis and perfect omni-channel system, BESTORE is comprehensively open to the cooperation in the data application. As a result, BESTORE’s vision of the new retail market is becoming ever clearer. At the same time, BESTORE has applied varied designs to different stores for new retail. The fifth generation of stores have been trying new designing styles specific to different commercial districts and scenarios of consumption. For example, the self-service snack counter is specifically designed for those who work in office buildings. These pilot stores have been put into operation for more than three months, and it will be possible to see the consumption demand of snacks in an office scenario through examining the consumption data generated from these stores; intelligent customer service system has been launched and operated successfully in 2017, and it is expected that this system can handle the workload of 150 front line customer service staff per month in 2018.