NEWS

China's home furnishing industry emerged in the mid to late 1990s. The commercialization of housing and the promotion of real estate have brought about the rapid growth and huge market scale of the long and complex market of home furnishings. According to Frost & Sllivan data, the retail sales of China's home decoration and furniture retail market reached 5.4 trillion yuan in 2019, and it is expected that China's home decoration and furniture industry sales will exceed 6 trillion yuan in 2021.

However, despite the large market size, there are also many problems in the home furnishing industry itself. First of all, this industry has the characteristics of "large industry, small business", low entry barriers and fierce industry competition, forming the characteristics of "small, scattered, multiple, and chaotic", leading companies have a low market share and too many local brands . Second, with the changes in real estate policies, this industry quickly entered the stock market.

Almost all large-scale home furnishing stores such as Jiaranzhijia started in the era when the market broke out. From a small building materials market at that time, the house has gradually developed to a volume with 450 stores, 12 million square meters, covering more than 600 million people, and annual sales of more than 100 billion. However, despite the large volume, with the changes in market demand and the impact of e-commerce channels, traditional home furnishing stores, in addition to the problems of the industry itself, are also facing new problems such as market saturation, store empty rentals, and decline in traffic. Gradually fell into the contradictions and anxiety of the online and offline interest game.

After years of resistance to e-commerce and online, traditional home furnishing stores realized that online and offline integration is inevitable. Digitization is just a path to the same goal in the industry. In the digital age, all links of the home furnishing industry chain are also gradually undergoing digital transformation, and are gradually deepening from the front end to the back end.

Transformation is imperative. But how to transfer will inevitably have to go through some painful choices and explorations. Driven by the times, Jia Ranzhi has embarked on a road of digital transformation.

1. "Anxiety" and opportunities in traditional home furnishing stores

Home furnishing is an unpopular industry, and people in the industry know this well. Consumers may go to the supermarket once a week and once a month to the mall, but it may take many years or even more than ten years to go to the home furnishing store. The unpopular industry attributes have led to very low capital attention in the industry. “Daily and monthly live traffic is very small. This is our biggest problem.” said Wang Ning, CEO of the New Retail Group of Jia Ranzhi.

In addition to low traffic, long industrial chains and low efficiency are also the core pain points of the industry. The home furnishing industry has a particularly long chain, from design to construction to decoration, including the purchase of furniture, building materials, and even the late-stage logistics customized installation of home appliances, household goods, and home accessories. The long chain leads to low efficiency. Users usually need several Months.

The emergence of e-commerce has made these pain points infinitely magnified. In addition to FMCG e-commerce platforms, Internet home improvement platforms such as Tubatu and Aispace also appeared in the home furnishing industry around 2012~2013, attracting a lot of investment. From the perspective of these asset-light online platforms, offline home furnishing stores wear two heavy shoes, one representing the rent and the other representing the personnel cost, so they can’t “fly” at all.

This made the management team of Jia Ranjia fall into a kind of anxiety. The online and offline left-handed fighting and the game between brands and distributors have also made the management have a feeling of resistance to e-commerce. The creation of a self-operated online platform will have an impact on offline stores everywhere, while the brand selling goods across the country will reduce local distributors to porters and assemblers.

"What we are most worried about is that the original advantages will become your burden. If your cognition is blurred, you will fall very quickly. The head company must be crisis-conscious." Wang Ning said. Has the previous offline advantage become a burden for Jia Ranzhi? In this regard, he believes that it is not the case.

"Ordinary people shopping or consuming, there are generally four nodes, ** customer acquisition, the second is experience, the third is settlement, and the fourth is delivery. The experience and delivery of the home furnishing industry are strong on experience and interaction, but they become our natural Advantage." Wang Ning said. Sticking to the offline has become the basis of the transformation of Jianjiajia, which is also destined to embark on a transformation path different from that of the Internet platform.

2. The road of digital transformation from marketing to ecology

Statistics show that among the various channels of home retail, chain home stores accounted for 25%, non-chain home stores accounted for 35%, online channels accounted for 10%, and other channels accounted for 30%. The fact that Jia Ran chooses to stick to the offline, has the foundation of the industry, and the current situation that the entire chain of the home furnishing industry is less than 5% online, also gives the Jia Ran enough time to learn how to deal with online.

With the foundation and time, the key is how to do it. In response to the problems of flow and efficiency, Random House has adopted various attempts such as platform cooperation, platform construction, and cross-border acquisitions.

In terms of efficiency, Didi’s taxi-hailing model has had a great impact on Yuranzhijia. How can designers provide users with on-demand services like driving a taxi? To this end, Jiaranzhijia has built 6 platforms, including design cloud platform, furniture material procurement platform, merchandise sales platform, construction management platform, logistics distribution platform and home service platform to realize the whole chain connection. In order to provide users with a better design experience, the home design software Homestyle under Autodesk has also been heavily purchased to provide powerful tool support for home design.

However, the improvement in efficiency is only the use of taxis. Because of the late access to the Internet, the taxis built by the house with a lot of money have fallen into the embarrassment of no passengers. In the field of consumer Internet, traffic is the problem of **. Therefore, marketing entry and online drainage have become the core issues after the platform is built.

The cooperation with Alibaba has become inevitable. In 2018, Zhiranzhijia broke the prejudice against "Double 11" and no longer blocked it. Instead, it started in-depth cooperation with Ali. The introduction of traffic quickly enabled an online detonation to be realized. In the first double 11, it sold 5.496 billion yuan, and by 2020, the sales of its 407 stores have reached 23.8 billion yuan, a year-on-year increase of 30%.

On Double 11, the Home of unexpectedly found the "traffic password" for the consumer Internet, and also began to try to jump out of the Ali department and establish global traffic. Currently, it has established content with Douyin, Toutiao, Kuaishou, Xiaohongshu, and even Station B. Cooperation with traffic.

The success of online marketing has given Ranzhijia more energy to do digital research and development in business and industrial ecology, use digitization to improve management and organization efficiency, build a data center, and build an industrial service platform.

Wang Ning believes that the home furnishing industry must be localized, and the home furnishing industry can be said to be a "heart-stuck industry". The cost of online to offline is much higher than offline to online. Therefore, Jia Ranzhi set out to build a marketing system centered on the same city site, using live broadcast as the starting point and centering around local distributors to convert users into fans and super members. In addition, Juranzhijia also launched the Dongwo APP and Data Center, which deposits users and data on its own platform, and brings together partners such as stores, distributors, and logistics partners on the platform.

Through digitization, Jianzhijia will integrate the business of building materials supermarkets, logistics, decoration companies, smart homes, etc., and coordinate ecological parties such as designers, construction teams, dealer brand factories, and logistics service providers to create an open industrial Internet platform. , Open and empower all kinds of partners.

"Digital transformation is not for a better tomorrow, but for the needs of today's survival." Wang Ning said, "In fact, we are not saying that digital transformation has been successful, but we can only say that we have come all the way. But now we have a sense of confidence, I saw the increase."

3. Methodology of digital transformation of traditional enterprises

There are actually two types of companies in the future, one is digital, and the other is undergoing transformation. Wang Ning said that transformation is more difficult than mere digitization, because it is very difficult for a relatively successful company to change smoothly from a state. But transformation is inevitable, because new entrants, changes in consumer behavior, cross-border looters, and new species that create new demands have brought unprecedented challenges.

What should be done with digital transformation? Each industry has its own characteristics, thousands of lines and thousands of faces, and it is necessary to make the one-meter wide subdivided areas 100 meters deep. Through his own practice, Wang Ning has also summed up the transformation road of Jiaranzhijia into 5 maxims:

①Digital transformation is an enterprise's No. 1 project, and the determination and execution of No. 1 are the prerequisites for successful transformation;

②Digital transformation is a system engineering, which needs to start from top-level design, combined with business operation practices, and finally achieve data-driven;

③ Organizational guarantee is the key to digital transformation. The core organization that drives digital transformation should be refined from the business team, centered on the digital department, and get priority allocation of talents and resources;

④ The digital transformation of traditional enterprises must first be light and heavy. In the early stage of transformation, you can make full use of the more mature SaaS tools on the market to run the business first, and then conduct customized development after digital drills;

⑤In the process of digital transformation, you cannot abandon the main offline business. Digital transformation is to empower traditional offline businesses, not to abandon the main offline business.

on June 18,the lndustrial Culture Development Center of the Ministry of lndustry and lnformation Technology and Anji County Dakang Holding Grou.Co.,Ltd.reached a cooperation...