Traditional Department Stores Test Hydropower Providers To Make Ends Meet: Encounter Three Major Predicament

Compared with Jingdong, Dangdang and other electricity providers annual average growth rate of more than 100%, the traditional department store enterprises to test the water e-commerce is difficult.

According to incomplete statistics, in the Southern China area, large and medium-sized department stores have opened e-commerce business, these enterprises run for a long time in a few years, short for nearly a year, but so far, their performance has not been as good as expected.

"Department stores are investing tens of millions of dollars in e-commerce, but until now, we are still afraid to make profits."

As one of the pioneers of e-commerce in a department store in Southern China, Lin Lin (a pseudonym) introduces that although department stores have mature experience in physical store operation, they lack professional talents in the electricity supplier field and match goods suitable for network sales.

Although the final statistics of the annual report have not yet been released, Lin Lin knows that the company's online business is still in a state of deficit last year.

Lin Lin said frankly that this report card was long expected, and the electricity supplier Department has been established for 2 years, and the company has never asked the Department to give a clear answer.

This performance is not a case in the industry.

According to a research report of GF, the online rainbow in 2010 is expected to reach tens of millions of yuan in 2011.

Ceng Yafang, assistant director of e-commerce Department of the company, also confirmed that last year's company online.

A survey report showed that the scale of e-commerce pactions in China in 2011 reached 7 trillion yuan, up 46.4% over the same period last year.

Among them, the scale of online shopping pactions exceeded 770 billion yuan, an increase of 67.8% over the same period.

"The share of online shopping market is mostly occupied by several big business tycoons."

Lin Lin admitted that department stores were far less profitable than these electric business predators.

In the future, the cake in e-commerce market will also be expanded rapidly.

Guangzhou's "opinions on accelerating E-commerce in the field of Commerce and circulation" revealed that Guangzhou will make full efforts to build "Internet trading capital" in the next 5 years, and strive to apply e-commerce widely in the circulation sector in 2012. The professional market with annual pactions of more than 1 billion yuan will be fully applied to e-commerce. By 2015, Guangzhou will strive to achieve more than 70% penetration of online shopping.

The head of Guangdong chain operation association said that in addition to the impact of the electricity supplier, today's department stores are also faced with factors such as rent increase, overall consumption decline, and excessive competition in the industry. Therefore, despite the poor performance in the field of e-commerce, e-commerce business is still the first choice for department stores to find new profit growth points.

"In the future, more enterprises will enter the field of electric business."

Ceng Yafang said that in 2012, Tianhong will make clear plans in terms of personnel training in the electricity business field and profit mode of online shopping malls, and the specific deployment will be announced in the 2011 Annual Report.

In addition, the innovation of marketing mode will also be the focal point of department stores.

Guangzhou friendship said that at present, apart from the younger and fashionable fashion of online merchandise business, the company is still making efforts to strengthen diversified payment methods.

In addition, the company has introduced a 3D panoramic field simulation network technology to make up for the inadequacy of online shopping.

In addition to online shopping, the company will also use the online platform to provide customers with online value-added services and resource sharing services.

The 100 hundred purchase network also has a joint interaction with the national physical stores. It regularly organizes and promotes the online and offline cooperation promotion methods, and the innovation of the marketing and service mode of the regional stores convenient and self service.

Three major predicament

Scarce talents

In fact, compared with the electricity giants, department stores expand the business of e-commerce, and have the advantages of ready sourcing channels, stable customer base, mature after-sales service system, and physical stores with certain brand influence.

But why is the competitiveness of department stores in the field of electricity suppliers inferior to that of e-commerce enterprises?

Lin Lin believes that the lack of talent is one of the important reasons.

"Department store operation is not very professional, but professional talent is hard to find."

Lin Lin said that e-commerce is actually a burning industry, investing tens of millions of yuan, but its profit model is totally different from physical stores, especially in terms of commodity selection, logistics distribution, network marketing and so on, which are suitable for network sales. However, the current department stores expand their electricity business mostly from employees in physical stores, and lack of professionalism.

Compared with Hangzhou, Beijing and other cities, the concentration and scale of the electricity supplier industry in the big cities of the Pearl River Delta are not big enough, and the attraction to the talents is not strong.

Lin Lin has tried to dig corners from the cities where the electricity business environment is mature, but these people feel that their career prospects are not ideal and their wishes are not strong.

So far, the staff of the company's electronic business department mainly consist of physical shop staff and newly graduated college students.

The shortage of talent also raised the salary level of employees in the industry.

Lin Lin disclosed that at present, wages in some key positions in Southern China are more than twice as high as those in other ordinary industries. The salaries of ordinary posts are also about 50% higher than those of other similar industries.

The salary level of employees in the electricity industry is basically a price per year.

Logistics distribution system relying on physical stores

In addition to talents, the ability of logistics distribution of SMEs is also an important bottleneck for testing department stores to enter the electricity supplier.

At present, most electronic stores in department stores rely entirely on physical stores' inventory and logistics distribution, and there is no independent logistics distribution network and system.

"This leads to a certain difference between online inventory and physical store real-time docking."

The head of Guangdong chain operation association revealed that this would lead to asymmetric inventory, which would affect the subsequent loss of distribution and the loss of business integrity caused by the invalid goods and orders.

In addition, the traditional characteristics of the regional industry in the department store have not yet been broken, and the network sale involves all parts of the country. Therefore, the way of distribution depending on the physical store will affect the distribution of the goods.

Because of the logistics and distribution links, the scope of Tianhong online shopping mall is still limited in Shenzhen.

Guangzhou friendship also admitted that how to make distribution services and diversified payment methods seamlessly, has not yet found a very effective way.

Non differentiated commodity category

The department stores, which have very mature operational experience in the category, line matching and brand introduction of physical stores, seem to be at a loss as to what kind of products they choose online.

At present, the operation modes of online shopping centers of major department stores are mostly operated jointly by themselves, consignment and suppliers.

Under the support of this mode, there are enterprises trying to move all the goods in the physical store online, and there is not much difference in the prices of categories and commodities under the online and offline businesses.

Besides, enterprises choose commodity layout through commodity selection. For example, according to the sales experience of the entity store, the company sells the best selling products in offline sales to online sales.

"But in fact, network sales must be mismanaged with the entity's merchandise business."

The above associations say that the online shopping mall has a younger customer base. They are more sensitive to fashion and price, and the traditional network providers mostly compete through price war, so that consumers have already formed online consumer prices far lower than the physical store's consumption habits.

That is to say, online merchandise must be completely misplaced with the physical store, which is more attractive to customers.

But from the current performance, due to lack of experience, many department stores have no clear positioning and mode for which products are more suitable for online consumers and pricing mechanisms, while how to expand the market while ensuring the profits of enterprises, and how to avoid the embarrassment of the two channels under the online and offline channels.

Lin Lin said her company is still exploring.