Offline Sales Are Sluggish—Where Are the Opportunities in Vaping?

Offline downturn, where are the opportunities for e-cigarettes?

Core summary:

1. The impact of the epidemic on the consumer industry will create a win-win soil for e-cigarette brands and store dealers.

2. The improvement of health awareness and the spillover effects of offline business formats will jointly promote the retaliatory rebound of the e-cigarette industry.

3. In the second half of the battle in the e-cigarette industry, multiple dimensions such as product experience and expansion efficiency jointly formed the winner and winner.

For retail practitioners, this is undoubtedly the coldest and longest Spring Festival holiday.

A sudden epidemic and a call to lie at home and contribute to the country made what should have been a good start for the retail industry into the darkest moment.

In order to appease dealers and relax through the winter, various e-cigarette brands have also announced support policies.

However, as the epidemic prevention and control situation improves, construction of construction and social order is gradually restored across the country, and new propositions have emerged:

1. What impact will the epidemic have on the e-cigarette industry?

Looking back at the SARS epidemic in 2003, Taobao, Jingdong, Ctrip, and Haidilao all seized the structural changes in the social business system and withstood the impact during the special period and subsequent retaliatory growth and ushered in a turning point.

We say the word crisis because on the other side of crisis, there is often a shuffle: brands with mediocre products and weak anti-risk capabilities are eliminated at an accelerated pace, and brands with stronger strength and better efficiency can not only stabilize their positions, but also seize the opportunity to build a bigger market.

If the scuffle in the first half of 2019 allowed the outside world to see the business opportunities of e-cigarettes, the power outage in the second half of the year allowed practitioners to see the need for supply chain and channel building capabilities. So, what about the moment when the industry seems to be shrouded in a shadow?

In the final analysis, whether e-cigarettes have a future and which brand has more potential in the future have always been questions that linger on the minds of practitioners with a wait-and-see attitude.

I very much agree with Fat Luo who got inspiration from Zeng Guofan when talking about what a person means to do things: he did not stay out of the way and pointed out the country. Instead, bow in, put yourself in, and turn yourself into a key variable in solving problems. And this moment is actually the best time to join e-cigarettes.

2. Add additional policy incentives to revitalize existing stocks

Before talking about e-cigarettes, let's first look at a case. It can be regarded as the best case of Lin Qingyan in which in the physical retail industry that has suffered the fierce impact of the epidemic, seizing opportunities based on past capacity reserves and achieving soaring performance.

As a local beauty brand, Lin Qingxuan is different from the previous fire's Perfect Diary and Huaxizi. It used to rely heavily on offline stores.

The epidemic broke out and all stores were closed. Founder Sun Laichun admitted that he was worried that the company would not last two months. But what the founders didn't expect was that the company withstood the pressure.

As of February 21, total online and offline performance reached 145% year-on-year.
 
How did Lin Qingxuan recover blood in a short period of time?

It is because it began to promote digital transformation in 2018, building infrastructure such as business mid-station, ERP, and CRM, and firmly grasping users in its own hands. Therefore, although Lin Qingxuan did not attach great importance to online before, relying on the ability to reach users across all channels he had accumulated in the past, he could realize the migration to online in a short period of time.

So back to business, the e-cigarette industry is no exception. On the premise that the Black Swan incident is inevitable, helping dealers build a member operating system and empowering them with the ability to revitalize their stocks is undoubtedly the winner and winner under market changes.

In the past, stores in the past were site-oriented, and used this as the core to gather traffic and provide services and products. This set of logic completely failed after offline passenger flow was cut off. Nowadays, brands have begun to pay attention to the construction of omni-channel access capabilities.

Taking Xuejia as an example, among its latest five support policies and tens of millions of yuan subsidies for partners, there are two major items: sales assistance and technical empowerment, which are directly aimed at helping dealers improve omni-channel access capabilities.

Sales assistance: Launch a series of promotional activities and subsidize relevant gifts. Consumers who register as members of the Xuejia franchise store can enjoy 3 coupons for cigarette bombs and 1 coupon for free, and an additional gift of 220 yuan worth of classic cigarette rods (small white box experience pack).

Technology empowerment: Use advanced technical means to dynamically update store business information. In particular, through the membership system, stores can be diverted and distributed; establishing a professional membership system can automatically recall customers and enhance user stickiness.# p#pagination title #e#

It took Lin Qingxuan two years to establish the traffic pool, but the customer network of most e-cigarette stores is not big enough, so the first step is to use promotional policies to form attraction. By increasing the membership value, it can accelerate the traffic pool in the cold winter of the epidemic. Construction.

Attracting users in is only the first step, and only through operational means can stickiness be formed.

This aspect does rely on the personal capabilities of the store dealers, but the prerequisite is that the brand builds relevant entrances, processes, systems, systems and other infrastructure for it.

For example, He Wei, who expanded his five Xuejia e-cigarette franchise stores to 10 last winter, said bluntly that I started from sales and knew the importance of service when talking about how to retain old customers.

He revealed the secret in detail: if there is a problem with the cigarette rod, the cigarette rod can be replaced for free. By retaining those who use the cigarette rod, the repurchase rate of cigarette bombs has been improved; the unopened cigarette bombs are replaced unconditionally, and even after new flavors come out, He Wei will also take the initiative to invite customers in the customer group to exchange them with old unopened flavors.

Not only that, with the help of Xuejia's system, He Wei can also accurately control the inventory and flexibly pack it: when there is a large number of cigarettes and bombs in stock, he will launch an activity to buy 3 boxes of cigarettes and bombs and send 1 shot. Because it is more affordable than buying the 298 set directly, you can sell 3-4 times the 298 set in one day.

Simply put, with the support of the headquarters, e-cigarette stores have stronger ability to resist risks, and dealers 'worries have been greatly reduced.

3. Strengthen brand awareness and activate increments

The example of Lin Qingxuan's survival above is indeed because on the one hand, he has polished its omni-channel reach capabilities in advance, and on the other hand, what is more essential is that his brand has been truly recognized by consumers in the past few years and has a solid pursuit of existence.

This is the essence of the retaliatory backlash that everyone expects: real demand is suppressed.

There is no doubt that a retaliatory backlash will definitely come for e-cigarettes.

On the one hand, the epidemic has changed consumption awareness; the spread of COVID-19 droplets, directly reflected in pneumonia, and its harmful characteristics to people with stronger immunity, will improve the public's health habits for a long time to come, especially It is the focus of the lungs.

On the other hand, the spillover effect brought by the resumption of business; for example, sales of Hangzhou Tower, which resumed business on February 20, exceeded 11 million yuan in five hours, exceeding the full day data for the same period last year.

A large number of customers lined up on site, which naturally overflowed to other business formats. This scene will appear one after another across the country in the future.

Many people only see the release at the demand level on the surface, but what needs to be clear is that this is also a revolution at the supply level: because a large number of businesses that cannot withstand it have fallen, supply and demand have been inverted.

According to incomplete statistics from Prism, more than 100 commercial real estate properties have announced rent reductions and exemptions, involving more than 2000 projects. The rent-free or halving periods range from 5 days to 67 days.

For e-cigarettes, a large number of high-quality spots are entering the market at extremely low costs.
 
This window period will create a win-win soil for e-cigarette brands and store dealers.

Yang Haoyong, CEO of Guazi Used Car, who won the war on used car e-commerce, mentioned a boiling water theory that has far-reaching influence in the Internet industry: comparing users 'perception of brand to water. If the water does not boil to 100 degrees, it burns to 95 degrees. It is a waste. When burning to 95 degrees, as long as the fire is withdrawn, the heat will be lost; but if burning to above 100 degrees and maintaining a low heat after the water is boiled, the water can be kept boiling.

In other words, running fast is actually the safer one. Because after running out of the leading position, you can obtain better upstream and downstream resources such as points and supply chains.

With this perspective, we can see very clearly when we look at Xuejia's incentives to open stores.

Incentives to open stores: Open stores outside Hubei Province: If you open flagship stores and standard stores, you will receive product support worth 15000 yuan/store; if you open mini and small stores, you will receive product support worth 6000 yuan/store.

Opening stores in Hubei Province: If you open flagship stores and standard stores, you will receive product support worth 45000 yuan/store; if you open mini and small stores, you will receive product support worth 22500 yuan/store.

At the same time, Xuejia will provide site selection services, crowd flow estimation models, and hands-on help customers improve business health and improve store profitability.

It is reported that unlike friends who donate goods support at retail prices, Xuejia uses the purchase price as the support standard for new stores, which is almost twice the investment of friends.# p#pagination title #e#

According to this policy interpretation, Xuejia's partners assume that they open stores within the first quarter and can receive up to 90,000 yuan worth of goods support (retail price). It is not difficult to see Xuejia's determination from sales training.

Sales training: Established Xuejia Business School and opened online courses for partners in various channels (including franchisees/agents/partners, etc.) to train shop location skills, business skills, and offline partner distribution. Through the introduction of the monthly "Category Experts Newcomer Camp" series of courses, standard talents and operational standard output with Xuejia characteristics are formed.

The business school's mentor team is composed of managers with more than 15 years of rich practical experience on various sales fronts. Simply put, store opening incentives and sales training are front-end and back-end. The purpose is to support new franchisees in the short term, lay a larger retail network, and achieve a win-win situation through network effects.

This is the reason why we said win-win situation above. The essence of blitz lies in holding high and fighting high. If dealers want to hand over their reserves to the brand with confidence, they must have sophisticated equipment, advanced tactics, sufficient financial strength and mature training.

Take Xuejia as an example. There are a large number of mature dealers like He Wei who can continue to accumulate and share successful experiences.

For example, after arranging three pilot projects: dining floor, shopping mall floor and entrance, it was finally concluded that the shopping mall floor was more suitable for e-cigarettes in terms of traffic and accuracy. He also figured out the purchase ratio of 1:3 for stick bullets and the purchase rules: the latter is a consumable, and generally various flavors will be relatively average for the first time. After one month of testing, they can be purchased based on popularity. For example, mint and cola are purchased at a 100:1 basis; the former is based on positioning and targeted channels are laid out. For example, the Smart Series, which is very cost-effective, sold about 50 units in half a month after entering the supermarket. Not only is the experience sharing brought about by the effect of scale, but more complete and mature services will enable more and more newly affiliated dealers to gradually become the next He Wei.

Whether it is the implementation of the protection of minors or the training support for the popularization of e-cigarettes, He Wei feels very reassured. He mentioned such a detail: Xuejia had such a clause in its contracts to franchisees and dealers, which made him feel that it was a very strong commitment and backing: due to changes in laws and regulations or national policy reasons, e-cigarettes were prohibited from offline sales, Xuejia was obliged to take back the dealer's inventory of Xuejia e-cigarette products.

In a nutshell, Xuejia's route is to further increase the scale of the offline sales network by establishing mutual trust with dealers, revealing the brand power of the company with stronger terminals, and subtly occupying the minds of consumers.

4. Expand product advantages and create an ecosystem

The epidemic is present, but the market needs to see the future more. An undeniable fact is that after this disaster, e-cigarette brands have entered the second half of the battle: small brands with insufficient strength in cleaning the battlefield have gradually withdrawn from the battlefield, and competition among leading giants has begun to enter ecological level competition. Decide the winner through multiple dimensions such as product experience and expansion efficiency.

The outside world always regards e-cigarette companies as stupid people and rich money, but in the end, even if they burn money, there is a difference between them. Lucky burned to the Nasdaq and its market value climbed to tens of billions of dollars;ofo burned itself to the abyss of eternal redemption.
 
As He Wei revealed, Xuejia was chosen because it has the fastest growth rate, whether it is product iteration or store laying, which has a stronger impact on the market.

As brand awareness has increased, more and more commercial buildings have invited him to open stores. Among them, it is not difficult to get a glimpse of the idea of putting efficiency first through Xuejia's universal partnership plan: through customized tools, users can easily share Xuejia products on their own Social networks. Using QR codes, authorized dealers can target customers and transform retail customers into small B users, assisting in sales and dissemination and profit sharing. Then through the sharing of small B users, the bottom-level distributors are continuously divided, allowing the bottom-level base to continue to expand.

The company provides platform support, calculates revenue, locks in customers, flexibly purchases, delivers goods with one click, and absorbs dealers 'existing inventory. Develop a promotion ambassador, and dealers can receive promotion subsidies, which will be included in the payment after settlement.

This means that dealers no longer just work for the brand, but form a community of interests with the brand through this win-win ecosystem for dealers and users to share the dividends brought by rapid development.# p#pagination title #e#

For brands, this can achieve higher efficiency and lower-cost expansion; for dealers, in addition to natural passenger flow, a multi-level and wide-coverage sales network has also been developed, improving the ability to resist the epidemic and other black swans.
 
From a macro perspective, Snowboard's group army is not only larger in scale, but also goes deep into the market like capillaries. Brand awareness, supply chain advantages, diluted costs of warehousing and logistics, etc. brought by scale effects will ultimately feed back to dealers.

In other words, for e-cigarette brands that adopt ecological methods such as Xuejia, the comparative advantages gained by their dealers will continue to accumulate like rolling snow.

5. Finally

By dividing the five major support policies and tens of millions of yuan in subsidies launched by Xuejia one by one, and observing them in the context of the industry, it is not difficult to see that the e-cigarette industry is standing at a very delicate point. As for the opportunities, it will be left to you to carefully study them.