As one of the representatives of the new retail convenience store, Today has established a fresh, young and healthy brand image with the ability to refine operations and build a flexible supply chain across regions, attracting highly viscous core consumer groups, 80% of which are from cities. The new force is the main force. From the first domestic convenience store with international capital layout, to the self-built international standard fresh food factory, to the R&D new retail cloud platform, the value of B+ round financing in the middle of 2018 is over 3 billion – what is the secret of the development of this national brand? ? The "Chain" magazine of the China Chain Store & Franchise Association conducted an in-depth interview with the head of today's strategy to decipher the winning rules behind its valuation.
Open way: cooperation with platform users to win
"Chain": Can you explain some of the 2019 core strategy "open co-creation"?
Today: Today has always regarded the "small and beautiful startup alliance platform" as the corporate vision. This year's "open collaboration" is the strategic direction proposed under our brand vision. On the one hand, Today is constantly polishing the franchise mode of the store: from the opening of the franchise, it has attracted thousands of elite entrepreneurs from the city to join, and some franchisees have already held 3-5 stores, in a sense, become a small enterprise, and more Excellent franchisees become the management of the company under a reasonable training and selection mechanism. In this year, we are focusing on the product matrix that is designed to match the needs of different entrepreneurs and is committed to joining the long-term development of talents. On the other hand, “Open Co-Creation” is committed to working closely with social institutions and enterprises in need to create exclusive new retail operation solutions for different industries.
"Chain": Today as a platform, from what aspects will the entrepreneurs of internal and external cooperation be empowered?
Today: One of the most important values of Today is empowering users, not just customers, but also platform entrepreneurs, suppliers, partners, and Today employees. Although it seems a bit "virtual", in essence, we emphasize the altruistic spirit, that is, to stand on the other side's position and consider how to solve their pain points. For entrepreneurs, Today has low-interest loan support for under-funded entrepreneurs; for landlords we also have investment solutions that are higher than simple house leasing; for other industry needs, such as schools, Internet cafes, etc. Demand, we will customize the solution to solve its core pain points to carry out close and win-win cooperation, which can be said to be "energy", or deep cooperation and win-win.
"Chain": How does Today choose cross-border cooperation, is multi-format cooperation a trend of convenience store development?
Today: At present, we can see the composite stores of Today+Internet Cafe, Today+ Gym, Today+Orchard, etc. At the same time, we are cooperating with schools, exhibition centers, government centers and other institutions to provide consumers in specific environments and special areas. Customized convenience service. These cooperations have a broad market space, but this also puts a greater test on the brand's operational capabilities. We also have some brand cross-border stores that are being selected for landing this year. This is not necessarily the trend of convenience store development, but Today's consumers are relatively younger, and the brand recognition in the camp city is also good, so there are more similar cooperation opportunities. Our original intention is to meet the needs of users. Driven by demand, the way of cooperation is not limited.
The Method of Fresh Food: Occupy the New Generation of the City
Chain": Today invests heavily in the construction of the fresh food supply chain. What is the consideration? What role does fresh food play in the convenience store model?
Today: Convenience stores are more popular than traditional couples, with high traffic and high frequency of consumption. The key factor is fresh food. At the same time, 80% of Today's customers are 18-35-year-old urban freshmen who pursue freshness, vitality and health. Therefore, Today has always attached importance to the ability of product research and development, especially the ability to eat fresh food. In order to develop differentiated and competitive fresh food, Today proactively builds its own fresh food factory and logistics system, continuously launching seasonal fresh food products, and creating localized fresh food products. We said "Today for six meals a day" is breakfast, lunch, dinner, afternoon tea, staying up late, snacks, you can come to Today to find the right product. In this way, the user's stickiness will rise, and fresh food sales will drive the sale of the remaining categories.
"Chain": At present, in the convenience store industry, what are the difficulties and pain points that are common to fresh food?
Today: The tastes of young customers are changing rapidly. The hot-selling categories this month may not be popular next month. At the same time, the food and beverage games in the market are constantly emerging, and the trend of take-out is improving year by year. In shallow terms, this may be a challenge to the convenience store's fresh food sales, but looking at the higher level, the market demand is growing. Therefore, fresh food not only requires quality, but also caters to and even guides the taste buds of customers, creating their own explosive models, and at the same time building a supply chain system that can meet the needs, ensuring that consumers are safe, secure and convenient in the convenience store. Delicious food. This test is the comprehensive ability of the convenience store's market research and analysis, fresh food research and development and supply chain.
"Chain": How does Today build competitiveness in fresh food and how to form differentiated competition?
Today: There are currently 3000+ SKUs in the sale of goods in Today. At the first product exhibition in Tokyo last September, all 49 major categories of goods were on display at the scene, including a large number of fresh foods. This is a concentrated display of the taste and food of Today. At the same time, we spent a few years, creating a series of star products such as cream, sausage, hot dry noodles. But returning to the essence of retail, consumers' preferences are changing even faster, and the constant is that they want products with higher cost performance. It's not just about cheap, it's better quality and lower prices. So on the surface of the competitiveness, digging a layer back to the above mentioned fresh food research and development and supply chain capabilities.
Operational skills: store gross margin leading industry
"Chain": According to data released by the 2018 China Convenience Store Conference, the profitability of domestic convenience stores has improved, but the overall profitability of high-margin (≥30%) companies is only 16%. What is the operating capacity and profitability of Today stores?
Today: We are committed to establishing a “big middle school + small front desk” organization with agility and stability, enabling the platform to refine operations across regions and continuously empowering users in all aspects of the platform to improve overall operational efficiency and flexibility. Changes in market demand.
In the fourth quarter of 2018, Today launched the “Partnership, People and Stores One” project, which motivated all employees to participate in the operation, expanded the fresh food category, optimized the price strategy, and adjusted the promotion structure. A series of measures made the overall gross profit margin of the store increase rapidly. Since 2019, the average gross profit margin has exceeded 32%, and some stores have exceeded 40%, and continue to rise.
"Chain": How does Today operate the entire supply chain system, and what upgrades will be made in the future?
Today: At present, Today has initially established a flexible supply chain system to meet and guide consumer demand in a timely manner. In addition to its own supply chain, there are more than 800 domestic and foreign partners. In order to improve quality and efficiency, we have built 9 multi-level logistics centers across the country, and all the systems are connected to the middle platform, so that each store manager can master the inventory in real time, and analyze the smart orders and replenishment according to big data. Sales changes. In the future, we will still focus on building the rapid response capability of different cities and different supply chains to market changes.
Platform: Digitalization brings thousands of stores
"Chain": How do you view the transformation of convenience stores in terms of digitalization? What is the core of the convenience store digitalization?
Today: The traditional retail model, when customers go to the store to buy and pay, although a large number of transactions are generated, the customer feedback and consumption data obtained by the company are very limited, let alone the customer portrait. The convenience store is just a home store on the surface, but it is an iceberg underneath, with a long industrial chain, and its operational efficiency requires huge data support.
From the annual order of Today, the proportion of mobile payment is nearly 90%, and the difference between the product structure and customer demand of each store is obvious. Overall, younger consumers are more discerning and more personalized, and no longer replicate the same experience as they used to. If there is no digitization, this valuable data is not available, and the business model will stop.
"Chain": How is the digital transformation process of Today, and what plans are there in the future?
Today: In 2018, Today set up a technical team of hundreds of people to study the business model of Today's entire platform, from big data location, warehousing and logistics, to sales forecasting, category optimization, etc., to explore the intelligence of the entire chain. By September, Today's self-developed new retail cloud platform was launched in national stores, marking the first stage of digital transformation.
This year, we are focusing on small programs, apps, etc., bringing offline traffic to the online market, greatly increasing the proportion of online sales, and generating more valuable data, so that each store can accurately serve the target customers. In the face of the industry, Today hopes to act as an “infrastructure” and “operating system” to help upgrade the convenience store format.
In the longer term, Today will provide partners with technical output, including product development capabilities, big data capabilities, logistics capabilities, etc., making Today an open collaborative platform for “+Everything”.
The potential of capital: scale efficiency and talent assistance
"Chain": In June last year, Today's convenience store completed 300 million B+ round of financing, with a valuation of over 3 billion yuan. Why do capital favor Today?
Today: Every investment institution has conducted a detailed survey of Today. In terms of capital, Today's outstanding performance lies in deep supply chain and product development, as well as the unique enabling organization and franchise platform operation mode.
Investors believe that Today has seized the market vacancies of domestic chain stores in Central China, and has become a leader in domestic chain convenience stores through strong control and expansion of alliances and regional intensive cultivation. In the areas of supply chain optimization, differentiated product development, information system application, store management, etc., Today continues to establish the convenience store industry standards, enhance the style of the retail industry, lead the change of the store organization system, and give local young people a dream. platform.
There is a saying in the old saying that “there are many helpers”, and the help of capital fully shows that the direction of today’s exploration is correct.
"Chain": How do you view the impact of capital on the development of the convenience store industry?
Today: Convenience stores need to build a strong middle and back office. In addition to the input and output of a single store, economies of scale are very important, and the requirements for talents and partners are also high. Investors often have deep insights into the industry, so financing not only brings financial support, but also broadens the vision of the management team and helps strategic decisions to reach better. For Today, we have received capital support. On the one hand, we are constantly polishing the single store, upgrading the product structure, improving the efficiency of the supply chain, and empowering the store. On the other hand, we are attracting talents and creating Internet thinking and offline retailing capabilities. Composite team. On the basis of deepening China and South China, Today will continue to enhance the national influence and attract more forces to participate in the construction of national brands.