Home market transformation and upgrading

The market is trapped – the real estate policy introduced in turn in 2011 has made many home furnishing companies feel more difficult in their operations. The home store, which is the lifeblood of its channel, is also in a puzzle. The property market has been hit hard, and the downstream home furnishing industry is also not optimistic. Since the beginning of this year, reporters have found that passenger traffic has been greatly reduced compared with previous years. Even in the peak season, there are no hot scenes in the past. Many home stores are responsible for this. People also admit that this year's market is cold, the store can be basically the same as last year on the basis of vigorous promotion, and the market has become an indisputable fact. In the wait-and-see atmosphere of the property market, consumer demand has plummeted, and the market's weakness has made the home circulation industry face a crisis and a huge test.

Difficulties in the pattern - in the field of home circulation, the business model largely determines its success or failure. From 2000 to 2005, the industry generally believed that the modern supermarket chain model will replace the original booth market model. However, in recent years, the market for decorative building materials booths has expanded the total size of the market on a large scale. In sharp contrast, the format of the building materials supermarket has shrunk significantly. The reason is that, besides the low-priced products in the booth market are more suitable for the current situation of the Chinese household consumption market, taxation has always been a pain point for building materials supermarkets, and its total public tax expenditure is about 6% of total sales revenue and 40% of gross profit; The booth market only bears less than 0.5% of the sales revenue, and the impact of the tax on its gross profit is negligible.

Crack: the difficulty of transformation and upgrading of home stores

However, in a deserted market environment, the stall market is not "sit back and relax." The hypermarkets that have always played the role of “two landlords” often lack interaction with consumers. The scenes of various product manufacturers and agents have occurred from time to time. Therefore, in the actual sales and implementation process, problems occur in services and products. It is inevitable. In addition, the phenomenon of homogenization of booths is also very serious, lacking core advantages.

Difficulties in the channel - With the nationwide staking of home stores, the number and size of stores have expanded rapidly. At present, it is an indisputable fact that home stores are spread throughout the first-tier cities. Especially in the central city, the stores have become saturated, so the competition is fierce. As the stores open more and more, the density is getting higher and higher, and the consumer demand is sharply reduced, so the profits are naturally diluted, how to avoid close combat between the stores, and where to start to occupy the market becomes a new problem.

At the same time, the strong rise of e-commerce this year and the activities such as group purchases and collections have also largely diverted the traffic of traditional channels. Even some dealers said that in the current market environment, the traditional storefront sales accounted for only 10%, while the network sales can account for 60%-70% of the total monthly turnover, e-commerce is already Erosion of store interest. Compared with the traditional channels, the group purchase and collection have gathered a lot of popularity and won more customers with their price advantage. Faced with online channel “grab food” market share, home stores are caught in the channel dilemma.

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