Flexibility and digitalization are the advantages of local convenience stores.

Author | Produced by Zhao Xiaomi | 36Kr-Future Consumption

"Shanxi Convenience Store" has become a hot word on the Internet recently because of its density comparable to that of Japan and ahead of the development of the industry.

At present, the most widely covered convenience store brand in Shanxi is Jin Hu Convenience.

the number of convenience stores under Jin Hu exceeds 1,111, and the total number of stores in various formats exceeds 1,511. These stores are not only very dense in Taiyuan, but also sink into other 7 cities and more than 31 county markets in Shanxi Province.

Shanxi province itself is not a province with high GDP, and the cities, counties and towns expanded by Jin Hu are not as strong as those in Guangzhou, Shenzhen and Hangzhou. It can be said that convenience in Jin Hu has sunk to a nationwide market that is demanding of convenience stores, and the depth of sinking is similar to that of Meiyijia (all in county-level areas).

Like Meiyijia, Jin Hu Convenience Store does not follow the standard "Japanese Convenience Store", and household consumer goods account for a relatively large proportion of the community stores. However, different from Meiyijia, Jin Hu is convenient to enter the market early in hot meals, baking and other categories, and has completely reformed its localization and differentiation.

Local regional convenience store brands generally encounter a problem: when making fresh food with high gross profit margin, if you find an independent supplier to do it, the research and development of new products is not flexible enough, and it is difficult to get competitive prices; If you build your own fresh food factory, there will be few convenience stores and it will be difficult to support the operation of the factory.

Jin Hu Convenience provides a solution to the above problems with a set of format "combination boxing". In addition to a single convenience store, Jin Hu Convenience Group also has franchise stores such as early fast food and baking.

These high-end fast food restaurants and bakeries in Mao Lijiao can not only support convenience stores in the supply chain, but also reduce the rental cost and attract more customers by combining store types.

opening up these multi-format stores with digital tools has played a "living water effect" of the user pool. For example, after spending in Jin Hu convenience, consumers can receive discount coupons for baking in Alipay, and vice versa, thus realizing two-way diversion.

At present, Jin Hu Convenience has more than 2 million members in Alipay applet, and most of Taiyuan are members of Jin Hu. During the "Cool Red Packet Festival" of Alipay, the cancellation rate of coupons issued by Jin Hu Convenience Store ranked first in Shanxi Convenience Store.

Jin Hu's convenience, offline and online innovations are worth learning from local convenience stores.

Multi-format combination to reduce costs and increase income

Apart from more than 1,151 convenience stores, Jin Hu Convenience Group has more than 1,511 baking shops, as well as fast food restaurants and other types of stores.

the original intention of developing these formats originated from Jinhu's thinking about grafting Chinese fast food on convenience stores. In 2116, Jin Hu Convenience acquired the fast food brand "Early Fast Food" owned by Meitehao, and the research and development capabilities of early central kitchen and fresh food were also bought.

At that time in 2116, Shanxi people could buy daily hot food such as steamed stuffed bun, hot porridge, tea eggs, sausage, etc. in the convenience of Jin Hu. These products were researched by the central kitchen in the early morning, such as black pepper sausage, which had already belonged to online celebrity cuisine at that time.

Not only are these hot food ready to go, but also some convenience stores in Jin Hu directly integrate convenience stores with early fast food, and customers can even have breakfast in them.

its specific form is that one store has two doors, which not only highlights the attributes of convenience stores, but also highlights the attributes of fast food, attracting two groups of customers to enter the store. The second format can reduce the cost by subletting.

for example, if you rent the facade house and then take the shop on the second floor above, sometimes the rent can be reduced to less than half of the original price. In addition, in convenience stores and fast food restaurants in Jin Hu, the store manager and the clerk can all be the same person, which further reduces the personnel cost.

compared with convenience stores, the gross profit margin of fast food is higher. After about one year of operation, the overall gross profit margin of this combined store can reach more than 31%, which is close to 7-ELEVEn. Coupled with the reduction in rent and labor costs, it is conceivable that the net interest rate of convenience stores+fast food stores is considerable.

this kind of convenience store has become a dining scene, which is not limited to buying scenes, and it is becoming more and more common. In addition to convenience bees, 7ELEVEn, Ledoujia and Tangjiu stores in first-and second-tier cities, the dining area is relatively large.

consumers in second-and third-tier cities have a slower pace of life and have more time to sit down and eat slowly. In Jin Hu stores, in addition to regular food such as steamed stuffed bun, porridge and covered rice, there are also daily food such as fried dough sticks, old tofu and hand-grabbed cakes.

but at this time, the bigger problem facing convenience stores is that the competitors in catering have become the small restaurant next door.

In this regard, Jin Hu has facilitated the further standardization and branding of regional delicacies. At present, Jin Hu Convenience is still researching and developing Shanxi specialty noodle food.

standardize the production process of this noodle, so that residents everywhere can eat authentic and delicious special pasta. For example, in addition to eating Daoxiao Noodles, Shanxi people also have a kind of "Picked Noodles" which is very popular, but there is actually no chain store in Shanxi that makes this kind of noodles. At present, Jin Hu Convenience standardizes the production process of "Picked Noodles" so that residents everywhere can eat authentic and delicious "Picked Noodles".

so is the logic of Jin Hu as a bakery. In 2111, Jin Hu founded the brand "Jindu Baking" (formerly Jindu E). On the one hand, this degree of baking can increase the competitiveness of desserts such as bread and cakes in Jin Hu convenience stores; On the other hand, the two brands jointly rent stores, and the bargaining power of rent is significantly enhanced.

But the number of convenience stores in Jin Hu at that time was not enough to support the daily operation of a fresh food factory. Therefore, Jin Hu established an independent baking brand to share the supply with convenience stores.

Through this set of "combination boxing", Jin Hu can reduce the cost as much as possible in the sinking market and improve the profit rate, so that franchisees can make profits.

Differentiated competition

At present, community stores account for more than 61% of all convenience stores in Jin Hu. On the one hand, there are not many business districts in Taiyuan, the main market in Jin Hu; On the other hand, Xu Meng, assistant to the chairman of Jin Hu Convenience Store, thinks that there will be more community stores among local convenience store brands in the future.

With the intensification of competition in first-and second-tier cities, the sinking of convenience stores has become a trend. Even Japanese convenience stores headed by Rosen have sunk into "fourth-tier cities".

Xu Meng believes that business district stores and office stores are exactly what Japanese convenience stores are good at. Even if local convenience stores occupy a favorable position in advance, Japanese convenience stores will sink into the city, and almost the same location will definitely lead to a decline in the sales of local convenience store brands.

instead of confrontation, it is better to play differentiated competition. Jin Hu's location of convenience store opening is quite different from that of Japanese convenience stores. If Japanese convenience stores enter the market, not only will the location not conflict, but they will also drive the whole convenience store market, which will benefit local convenience stores.

in addition, community stores and third-and fourth-tier city markets are more friendly to franchisees' money investment. According to the Jin Hu convenience joining page, the initial start-up capital of joining a convenience store in Jin Hu needs 211,111-251,111 yuan, which is really relatively low compared with other convenience store brands that cost more than 611,111 yuan.

Jin Hu's convenient joining is relatively flexible except for its high requirements for site selection. For example, the size of the store, "ideally it is 61-81 flat, but there are also dozens of flat shops and large shops over 111 flat." Xu Meng said.

Jin Hu convenience SKU exceeds 3,111, of which 91% of the product categories and display methods are guided by the headquarters, and the remaining 11% can be freely selected by the store manager from the commodity warehouse of the headquarters. In this way, on the one hand, we can use the big data and analysis capabilities of the headquarters to guide stores to ensure basic revenue, on the other hand, we can create more personalized stores through the store manager's understanding of local consumers.

according to the size, shape and business circle of stores, Jin Hu has different operating templates. There are dozens of templates, and different templates match different decoration schemes and commodity structures.

At present, there are only 9 convenience stores in Jin Hu, and the rest are franchisees. Xu Meng revealed that the profit cycle of franchise stores is generally 1.5-3 years.

after the penetration of Taiyuan market is basically completed, Jin Hu has sunk to Taiyuan, Shanxi Province, including seven cities including Yangquan, Jinzhong, Changzhi, Linfen and Xinzhou, and there are about 31-51 stores in more than 31 county markets.

Xu Meng told 36Kr-Future Consumption that the short-term goal of Jin Hu in the future is to fully penetrate the whole province of Shanxi, and then to open stores in Yuncheng and other cities.

Digital "living water"

As a representative of an old convenience store, Jin Hu has a rapid digitalization process. Coincidentally, the two main pain points of digitalization are very representative in the whole retail industry.

first of all, it is the problem of improving the efficiency of multi-formats. As there are many formats and brands in Jin Hu, the data of various businesses and regions need to be effectively integrated.

this problem is a common problem faced by many brands. For example, in some Japanese convenience stores, due to different registered companies in different regions, online points and coupons cannot be used universally; For example, some local convenience stores build different brands for different markets, and they also need member integration.

Jin Hu Convenience has cooperated with Alipay service provider * * * through Alibaba Cloud to develop "three platforms", namely data platform, business platform and member platform.

specifically, the data center can unify and standardize the data of independent business systems within the company, and combine the big data of various business systems to form valuable data assets. Settle users and members of different independent businesses into the same pool and integrate them.

The middle office of the business is mainly to improve the efficiency of Jin Hu employees. Employees can use nails to make intuitive statistics on store business, and obtain professional business analysis guidance such as accurate marketing analysis of members, product correlation analysis, store performance analysis, promotion effect analysis and inventory turnover analysis through Alibaba Cloud's big data mining algorithm. Xu Meng said that everyone can save two to three hours a day through the business center.

for members in Taiwan, after combining the data and analysis of the above two, members can be pushed with one-click promotion activities.

In this way, Jin Hu can get consumers in all formats through Alipay applet and other tools. For example, Jin Hu sometimes conducts activities to buy goods at the convenience of Jin Hu and get discount coupons for baking this year.

the second pain point that has been solved is the problem of brand aging. Even if the popularity is as high as Jin Hu, it needs to attract people to shop after 11, or even after 11. In recent years, Jin Hu has also been increasing the proportion of food and imported goods in online celebrity.

The most direct way is to directly push online celebrity food and imported goods that young people like through the tools such as Alipay applet, so as to attract store consumption. Another way is to attract younger customers who are baking this year into convenience stores by issuing coupons.

The data provided by Jin Hu shows that digitalization has helped Jin Hu to accumulate more young users. In the past, the main user portrait was over 35 years old, but now the most is 25 -35 years old.

The format of "combination boxing" and digital management keep Jin Hu convenience alive. Flexibility and digitalization are the advantages of local convenience store brands compared with Japanese convenience stores, and they are also the general trend of the industry.