Platform and self-operated: The dual models of instant retail promote each other and win-win

Reporter Wang Xiaoxuan

Instant retail, a new format model, has developed rapidly in China in recent years, especially during the epidemic, which has solved the various needs
of many consumers at home.
In the recently released "2022 China Instant Retail Development Report" (hereinafter referred to as the "Report"), the China Chain Store and Franchise Association compared and analyzed
the platform and self-operated models of instant retail.
The platform model does not directly own goods, usually relying on the Internet platform to form an effective link between online consumer demand and offline merchant goods, and the platform provides offline instant delivery capacity services; The self-operated model directly owns stores and commodities, and has independent distribution capacity, mostly in the vertical retail industry, with strong
control over goods and supply chains.

Each has its own characteristics and emphasis

For the classification of just-in-time retail business models, the industry generally distinguishes its models into two types based on whether they directly own goods: platform model and self-operated model
.
The platform model does not directly own goods, usually relying on the Internet platform to form an effective link between online consumer demand and offline merchant goods, and the platform provides offline instant delivery capacity services; The self-operated model directly owns stores and goods, and has independent distribution capacity, mostly in the vertical retail industry, with strong control over goods and supply
chains.

Platform model instant retail e-commerce belongs to a typical asset-light operation model, the biggest feature is that it does not operate its own goods, only provides services, and users purchase services
.
The platform does not directly own goods, does not have its own offline stores or front-end warehouses, does not personally operate, but through the establishment of an online transaction matching platform, attract offline supermarkets and other physical stores to settle in
.
The online platform provides traffic entrance and distribution logistics support, the goods are completely owned by the offline merchant stores settled on the platform, the offline store is responsible for picking and packing, the platform matches the delivery staff to pick up the goods in the store and then deliver them to consumers, the fulfillment process is: online order - merchant order - merchant picking and packing - platform takeaway brother to pick up the goods - deliver to consumers - complete the fulfillment
.
At present, there are three typical platform model enterprises in China's instant retail market: Meituan flash sale, Jingdong Dajia and Ali Ele.
me
.

The comparative analysis of the two modes of instant retail in the "Report" shows that the platform model belongs to asset-light operation, which does not directly own goods, and platform e-commerce only operates online traffic and logistics distribution capacity, without heavy investment in laying offline physical outlets, nor does it need to purchase and operate commodities, which is convenient for rapid market
expansion.
The platform cooperates with offline stores to link consumers with offline stores, and provides consumers with multi-category and diversified home delivery services in the same city, and the fulfillment method is to deliver goods from the warehouse or store of offline merchants, and the merchants will pick them by themselves and the delivery staff will directly deliver the goods of offline merchants to the consumer's location
.
Compared with the self-operated model, the platform model has a richer
category.
The merchants settled in the instant retail platform cover supermarkets, convenience stores, fresh fruit stores, flower and green plant stores, dessert and cake shops, bookstores, pharmacies and other types of stores, covering grain and oil side foods, leisure foods, fresh fruits and vegetables, mobile phone digital, medicine and health, personal care and beauty, flowers, cakes, clothing, home furnishing, small home appliances and other massive commodities, the platform can integrate various products to meet consumers' multi-category instant consumption needs
.

The platform model generally relies on the traffic entrance of the Internet platform to link a large number of existing users to offline stores, and its model advantage is that it can integrate offline store resources and nearly all categories of goods to meet the relatively long-tail instant consumption needs of consumers, and at the same time can bring new traffic entrances to many offline retailers and brand owners, helping offline merchants reach surrounding consumers more efficiently, so its model has a wide range of application and has the characteristics of
"no touch".
The platform model generates revenue through platform service fees, and ultimately achieves profitability
through the network effect and scale effect formed by platform prosperity.
Compared with the platform model, the self-operated model is a typical asset-heavy operation, whether it is the fresh vertical e-commerce or offline supermarkets mentioned above, the goods it sells are basically merchant-operated products, merchants need to purchase goods, and invest funds to establish a large number of front-end warehouses or stores around the community or business district and manage commodity inventory
.
This kind of capital investment poses great challenges
to the profitability and business expansion ability of enterprises.
From the current overall situation of the industry, most of the vertical fresh food e-commerce companies in the self-operated model are in a loss-making state
.
In distribution and picking, it is generally done by the company's own team, and the goods are delivered from the front warehouse or store closest to the consumer, and these costs are also a big burden
for the enterprise.

The self-operated model is suitable for retail enterprises with sufficient digital investment and Internet genes, because products are usually purchased directly from brands or suppliers or produced by themselves, responsible for the whole chain management of products and in-depth control of goods, but in order to balance the number of online SKUs and performance efficiency, the category richness is not good
.
The self-operated model obtains income through the difference between the purchase and sale of goods, and improves the efficiency of commodity circulation through its own operation, and ultimately achieves profitability
.

Open platform: The traffic operation and fulfillment of consumers continue to deepen, and the service innovation and empowerment of retailers and brands continue to deepen.

Traffic operation: From "traffic aggregation" to "establishing a cooperative and open platform to provide instant retail services for fragmented scene traffic"
.
In terms of traffic operation, in the future, the instant retail open platform will evolve into a cooperative and open platform, not only aggregating traffic in its own channels, but also providing instant retail service support
for fragmented retail scene traffic.

Fulfillment: From "shaping the intra-city delivery experience in minutes" to "introducing intelligent technology to break through the limitations of space in fulfillment and continuously define faster fulfillment times"
.
In the current mode of instant retail, consumers can choose 3-5 kilometers around stores to place orders, and match the corresponding delivery staff, which can complete the order fulfillment in
a short time.
In the future, the instant retail open platform will introduce intelligent technology, such as drones (vehicles), etc.
, to break through the original spatial concept defined by instant retail and achieve fast long-distance fulfillment, and due to the blessing of intelligent technology, the fulfillment time will be continuously shortened and redefined
.

Facilitate online and offline integration

The "Report" shows that instant retail is a business that relies on offline physical retail, which can be used as a supplement to offline physical retail, help it expand its sales channels, and help offline physical retail achieve online and offline integration
.

Expand store coverage radius and obtain new traffic Through the online store business district and efficient instant delivery network provided by the instant retail platform, the business district of the store will be expanded from the current 1 km to 3-5 km, and the coverage of store users has been greatly improved
compared with the original.

For traditional supermarkets, the traffic of offline supermarkets is unstable and there are many influencing factors, while instant retail platforms have stable and massive user resources, which will bring new increments
to offline physical retail.
In addition, a large number of online and offline promotion activities on the platform help retail partners obtain traffic, and with the traffic entrance and in-depth and close cooperation mode with upstream manufacturers, it can help physical retail obtain increments
in the traffic operation link.

Improve store operation capabilities With the help of the platform's technology and big data capabilities, relying on the store fulfillment system, intelligent product selection system, out-of-stock management system, etc.
, to help merchants improve the fulfillment efficiency, commodity selection and management efficiency
of online orders.
In terms of distribution, for traditional retailers, building their own delivery fleet is too costly and inefficient
.
The instant retail platform has a mature, efficient and large instant delivery team that operates
24 hours a day.

In terms of picking, the platform works with supermarkets to improve the efficiency
of store picking.
For example, the picking app launched by the instant retail platform and the installation of full-time pickers and other measures to optimize the links of the distribution chain have greatly increased the total number of orders that stores can handle in the same time
.
In terms of inventory optimization, the platform can provide real-time data support, so that stores can timely know the sales data of current and recent hot products, and give suggestions for product stocking
.
Based on big data, it provides stores with sales of various categories in the city and recent best-selling products, and guides stores to adjust inventory, which not only reduces the difficulty of merchants in doing business, but also improves the participation of merchants, and at the same time reduces the difficulty
of consumers' purchases.
In terms of product selection optimization, the open platform docking, opening up online and offline data flow, realizing the comprehensive opening of basic commodity information, commodity prices, spot inventory and other data, and timely updating inventory status and data, improving statistical data support, and avoiding stock-outs
.

Improve user insight and operational capabilities Access to a large number of high-quality user groups on the platform can achieve online and offline omni-channel multi-dimensional user accurate identification and marketing management capabilities through data intercommunication and CRM system, and greatly increase the purchase frequency of users
.

For offline physical retail, online platforms can help them acquire users, and help stores carry out event promotion and operation while promoting stores
.
Most importantly, the platform can help physical retailers understand and operate these users through a large amount of data, which can not only help traditional retailers do good user management and targeted operations, but also develop more accurate user marketing strategies
for physical retailers.
The platform continues to accumulate data, and the more detailed the user's consumption label, the easier it is for merchants to accurately reach users, attract potential customers, and enhance the stickiness of
existing users when marketing.

China Food News(November 18, 2022, Version 07)

(Responsible editor: Zhu Meiqiao)