If a top product manager can improve the average boarding rate of the business details page from 15% to 16.5% by reorganizing the information structure of the business details page, combing the promotion/shopping guide labels, salvaging high-quality comments, adding video materials and adjusting the position and shape of the boarding button, it will have great commercial value.
-Because the overall conversion rate is the product of all links, it will directly increase the final sales of 10% at the same cost. Isn't it amazing?
However, we can also see that there is a huge limit here, that is,15%-it basically determines the upper limit of product conversion value; And this limitation, or basis, is largely determined by the model.
Mode is a more grand concept than product, which basically means what to do and what not to do in business, who to locate accurately, how to do it, how to form a memory point, how to link all links, and how to realize it concretely.
Here are some concrete examples:
Everyone is familiar with it: the leader of the former is JD.COM, and the representative of the latter is Ali's Taobao Tmall.
There are fundamental differences between these two modes:
JD.COM promotes income through the cost of goods plus gross profit (making money by selling goods).
Ali promotes revenue growth by promoting business transactions and charging service fees (charging service fees, advertising fees, marketing tools or commissions to facilitate transactions).
This determines that for JD.COM, let consumers buy more self-operated goods as soon as possible and have a good shopping experience as the core appeal (making consumers' money); On the other hand, through marketing tools and professional services, Ali allows sellers to gain a competitive advantage in traffic and achieve their own sales goals on the massive merchants and commodities on Taobao platform, thus making profits (earning sellers' money).
The former is naturally closer to consumers, while the latter is naturally closer to sellers.
This is the difference in business essence and practice brought by the model.
Of course, JD.COM and Ali also gradually extended to another mode in the middle and late period. JD.COM founded POP Mall, and Ali started to be a super self-operated Tmall, forming a mixed model.
Naturally, JD.COM pays more and more attention to merchants, and Ali pays more and more attention to shopping experience-but their genes are continuous, which also leads to great differences in product concepts and practices.
The fundamental difference between the two models (high direct income, low net profit and low direct income, high net profit) also determines why JD.COM ranks far higher than Ali in the world's top 500 companies, but Ali's company market value is far higher than JD.COM's.
Traditional e-commerce centers on goods and brands, aggregates goods, and consumers come to the platform to find goods (although it can be thousands of people), which is essentially to build a commodity pyramid.
Social e-commerce naturally centers on the circle, gathering people, pulling people and selling goods step by step, and transitioning marketing from B-end to C-end. In essence, it is to build a relationship chain and sell it on it.
This is a huge change in mode, or a brand-new mode.
From the perspective of cost structure, the sales cost of traditional e-commerce mainly occurs in the construction of marketing and sales channels, while the cost of social e-commerce has largely shifted to the social cost of building a relationship chain.
For example: using social red envelopes, group fights, and online celebrities. , combined with huge investment, continue to aggregate users to the platform; The growth logic has changed from managing commodity categories to managing relationship chains; The evaluation index of enterprise value changes from commodity category, operation ability and sales scale to the breadth, depth and firmness of relationship chain; The decision logic of purchase has changed from the description of goods, the endorsement of platforms and brands to the trust between people in the relationship chain.
We can see that the difference between these two modes determines the fundamental difference between traditional e-commerce and social e-commerce in the direction of enterprise value judgment and investment construction, and their internal business logic and growth driving means are also fundamentally different.
Tencent's great success lies in that although it doesn't have the gene to sell goods, it doesn't sell anything, because it firmly aggregates people, so it can sell anything through it, and it is easy to sell anything.
However, we should pay attention-it is through it to sell goods, not through it to sell goods in person, which is determined by genes (this is also a painful lesson I learned when I was in charge of tourism and food business in Ctrip: genes don't match, so I can only get twice the result with half the effort).
Of course, virtual goods based on ostentatious attributes, such as various diamonds of QQ, are the best "goods" that Tencent, which aggregates "people", can sell, because the value of goods is naturally in the social category.
Compared with the mode mentioned above, the warehousing mode may be unfamiliar to many people. However, everyone must be very familiar with JD.COM and Tmall based on regional warehouses, Amazon based on parallel warehouses, and fresh e-commerce companies such as Daily Fresh and Box Horse based on front warehouses.
1) The so-called unified warehouse is a big warehouse, which stores all the goods and delivers them in a unified way. Corresponding to this is the sub-warehouse. For example, in JD.COM, China has eight warehouses: Beijing/Shanghai/Guangzhou/Shenyang/Wuhan /Xi/ Chengdu/Dezhou, covering the corresponding provinces and regions respectively. Orders are delivered from sub-warehouses according to the target address area, and can be transferred across warehouses when the warehouses are out of stock.
2) The difference between parallel warehouses and sub-warehouses is that the sub-warehouses are divided by regions, and each warehouse is basically all categories; Parallel warehouses are divided into warehouses by category and distributed nationwide. From which warehouse is the goods required for the order sent? Sometimes it is necessary to split the order and deliver it from multiple warehouses. The advantages are perfect category management, low out-of-stock rate and no trans-regional allocation cost. The disadvantage is that the system is complex, the technical requirements are high, and the logistics docking coordination is difficult. It is necessary to realize highly automated order processing, which is currently only adopted by Amazon in China.
3) Pre-warehouse, there are several subdivision modes below. Generally speaking, it is to put a small amount of goods around users (often with high frequency and emergency attributes). For example, you can rent a cheap basement room (front warehouse) near a covered community every day, put a freezer and shelves, and choose hundreds of popular fresh products (there are also a few high-frequency department stores for daily necessities). Consumers open the app, first locate the address (or mobile phone GPS), and then display the goods in the front warehouse corresponding to the address. After placing the order, the delivery staff will start from the front warehouse next door and deliver it quickly. The advantage is fast, but the disadvantage is less goods and high cost.
The difference in business model brought by these storage modes is somewhat similar to that of Wal-Mart vs 7-Eleven, which greatly affects the business model running on it, so the product layer also needs completely different design. For example, the front-end products of the front warehouse are highly designed based on LBS and high-frequency categories, which are suitable for home and cooking scenes, and fully consider the shopping guide in the mode of less and better and out of stock, and fully promote the inventory turnover rate and sales rate.
Operators should focus on the categories with emergency attributes and rapid delivery needs, and choose the head goods according to the characteristics of surrounding communities to reduce the long-tail goods and losses.
Like a box horse, it can also adopt fruit cutting and take-away mode in fresh retail to minimize the loss caused by the death of aquatic products and local fruit rot.
The warehouse mode is usually a large e-commerce company with a large number of goods, and the front-end products are highly based on the personalized design of goods and categories; Let consumers quickly find the one that suits them among the massive commodities, create differentiated scene columns, lay shopping guide paths for different user groups such as promotion orientation and quality orientation, fully highlight the conversion rate, lay a good product mix with low gross profit, high repurchase and high gross profit, and promote profitability through category combination.
In the current environment of consumption upgrading, everyone should be more and more familiar with cross-border e-commerce, and its mainstream model is roughly as follows:
1) Many merchants hang goods on the e-commerce platform first, and then purchase goods after they have orders (or predict advanced goods according to sales volume), and mail them to buyers from overseas. Personally, it is called purchasing mode, and enterprises are called overseas direct mail mode.
With the growth of the scale of e-commerce platform, sellers gather multiple orders to use the same package for overseas delivery, and then split the delivery after arriving in China, which is a direct mail mode.
In this mode, the freight cost decreases, but the logistics time is long, and the possibility of commodity damage increases.
2) The bonded mode is that merchants purchase the best-selling goods in advance through big data analysis and put them in China's bonded area, and consumers directly deliver them from the bonded area after placing an order.
On the one hand, it saves the logistics and labor costs of merchants, and the logistics speed is almost the same as that of domestic orders.
On the other hand, goods entering the warehouse through bonded mode can be cleared by personal belongings, which enjoys advantages in taxation and inspection and quarantine.
3) The commodity mirror model, which I named Amazon's overseas purchasing model, may be unique in China at present, and its essence is a kind of overseas direct mail.
Amazon is the number one e-commerce company in the world and has a strong self-operated platform in all countries, which is the natural advantage of Amazon's cross-border.
Through technology, a large number of overseas self-operated products from Amazon platforms in the United States, Japan, Germany, Britain and other countries (named Meiya, Japan, Deya, Yingya) are synchronized to China Amazon overseas purchasing platform, so that China consumers can place orders directly on China website, and then the system synchronizes the orders to the corresponding "X Asia" in the background, forming a shadow order, which is essentially fulfilled directly by Amazon in that country. This is a mirror model.
Comparing the latter two modes, bonded warehouse mode is the core mode of Netease koala, which I call "heavy mode"-because merchants need to be responsible for the logistics system at home and abroad, manage product selection and inventory, which has huge cost input, while online products need to be purchased one by one, and the quantity is relatively limited, and they also have to bear the inventory risk caused by product selection deviation.
Amazon's product image can be called "light mode" accordingly. It is not responsible for inventory, only for sales. After synchronizing products according to the rules, it is not difficult to reach a massive scale.
However, limited by the synchronous market and legal rules, the local market of goods has limited overall fit and lacks pricing power, which leads to the lack of control over promotion, thus facing challenges in the environment of "no promotion and no e-commerce" for China people.
Under the characteristics of these two modes, we can see that there will be great differences in product design in the early and middle stages, and there will also be all-round differences in commodity system, price system, promotion system and shopping guide system.
These are some examples of models. Only when the product manager deeply understands the model, advantages and disadvantages and limitations of his platform can he conceive the product more deeply and accurately and achieve commercial results.
Finally, let's talk about how the product manager thinks about the model.
For example, some recent articles are talking about pre-warehouse, which is actually very traditional. It seems to analyze the data in the column and give a conclusion, but it doesn't touch the essence at all.
For example, an article mentioned that "U shopkeeper competed with Ding Dong to buy food, and lost in terms of less goods, slow delivery and poor experience", and then listed some data, so it was concluded that the U shopkeeper project failed.
It seems that the arguments are sufficient and the articles are professional; However, if you think about it deeply, it simply can't stand scrutiny: doesn't U shopkeeper know that there are more goods and it's better to deliver them faster?
When product managers and students majoring in operation read this article, the correct reaction is to think about the details of the model: in order to deliver quickly, they need dense front warehouses and enough distribution manpower.
Then, how to solve the user base, sales rate, inventory turnover rate, floor efficiency and other problems caused by the shrinking coverage radius of a single warehouse? Under the service standard of one hour, how to solve the problem of insufficient delivery capacity during peak hours (the core category of the pre-warehouse model is usually fresh, and the peak consumption is usually around two meals) or the problem of surplus delivery manpower during low hours? With the abundance of commodities, the number of long-tail commodities has increased greatly. How to solve the loss of long-tailed goods with relatively slow sales and the cost of warehouses?
If we think about these problems clearly, we can really see the advantages of Ding Dong in buying vegetables, or come to the conclusion that it has no model advantage and only relies on stronger capital investment for the time being to win.
Therefore, only by deeply understanding the details of the model can we have a profound interpretation of each company's practices and its own advantages and disadvantages, so as to foster strengths and avoid weaknesses, make more accurate products or do a good job based on the key of the model.