In-depth | In the Second Half of the Snack Food Competition, How Can the 'Online + Offline' Model Break Through?

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Enterprise growth accompanies three stages: from rapid growth driven by market dividends, to transformational growth driven by management and leadership, and finally to product and model growth driven by innovation. The snack food competition has undoubtedly entered the third stage. In 2018, snack food brands took more frequent actions than ever before. Bestore fully upgraded its brand image; Be & Cheery upgraded its packaging; Three Squirrels grandly launched 11 new products before Double 11. As internet traffic dividends level off and online and offline merge, we can see brands facing changes in the consumption environment. For snack foods, the second half of the competition is just beginning. 『 01 』 In the first half, centered on internet dividends, Three Squirrels must be mentioned In 2012, Three Squirrels entered the snack food field as a revolutionary and disruptor. Although Bestore, Be & Cheery, Xinnongge, and others had already laid out e-commerce before this, none affected Three Squirrels' development trend as the "No.1 internet user experience brand" in the snack food category. At that time, although most brands saw the internet development trend, they were still in the exploratory stage on how to operate. From its birth, Three Squirrels clearly understood that the advantage of internet brands lies in efficiency conversion and a brand-new user experience. Efficiency conversion brings the convenience of product information flow and the price advantage of streamlined sales links; user experience is the window for brands to directly face consumers opened by internet e-commerce. Three Squirrels proposed the concept of "forest food" and operated with full IP, with obvious differentiation in competitive advantages. Customer service, with a cute little squirrel image and a call of "Master," instantly narrowed the distance with consumers. Peripheral innovations such as Mouse Box, box opener, nut cracker, and sealer gave consumers full surprises, opening a brand-new experience for internet brands. As early as 2012, they carried out graffiti contests, Squirrel One Piece, and other fancy plays that are not outdated even now. A series of tactical measures around the strategy quickly made consumers accept Three Squirrels, while also causing considerable shock to snack food brands developing at the same time. But in the past 5 years of rapid internet development, consumers' stimulation threshold has become higher and higher. Brand experiences that exceed expectations like Three Squirrels' early days have become fewer and fewer, including Three Squirrels itself. Three Squirrels 2012 Graffiti Contest 2012 "Squirrel One Piece" Image source: Three Squirrels official Weibo In fact, behind the rapid development of pure e-commerce snack foods represented by Three Squirrels and Be & Cheery, besides their own innovation and category development, to a greater extent they relied on the explosion of early e-commerce dividends. However, according to data from the National Bureau of Statistics, the growth rate of online retail sales in 2014 was 49.7%, in 2015 33.3%, and in 2016 26.2%, showing a clear slowdown trend. That is to say, the users most receptive to e-commerce have basically reached saturation, and other users, due to habits, geography, age, and other reasons, find it difficult to convert e-commerce consumption into daily consumption habits. In 2016, Alibaba proposed New Retail, and online capital represented by Alibaba, JD.com, and Meituan poured into offline. NetEase Yanxuan, Suning Jimu, Yitiao, etc. also laid out offline New Retail. The integration and complementarity of online and offline has become an inevitable trend for future development. The main venue for snack food category competition is also about to shift from online to full channels. 『 02』 For online-offline integration, Bestore must be mentioned In the snack food field, brands adhering to the online + offline model are represented by Bestore and Lai Yifen. Even during the most difficult period for stores, they insisted on offline operations. Bestore CEO Yang Yinfen said in a 2018 interview that with the arrival of New Retail, the conflict between online and offline has ended, and the hardest days are over. Offline purchase of snack foods is a very typical type of immediate random consumption, and most purchase behaviors are not planned. Unlike the online whole-bag sales method, offline snack food stores mainly sell small bags and bulk items, which is more convenient for consumers to experience and try, especially for snack foods with thousands of SKUs. Lai Yifen offline scene Bestore made a major brand upgrade in October 2018, quickly matching its 2100+ offline stores. Now Bestore has built an omni-channel coverage of e-commerce platforms, store terminals, mobile apps, and food delivery platforms, established a unified membership center while completing informatization construction, achieving information network surrounding members while sharing warehouse goods across all channels. Behind such a layout is the unblocking and construction of each link, which has certain barriers in both time and cost. Bestore store in Shenzhen central area 『 03 』 Problems in offline snack foods But regarding the current state of online-offline integration in snack foods, there are still obvious problems. During the years of rapid e-commerce development, the advantage of online compared to offline lies in its efficiency in shortening the intermediate links from manufacturer to consumer, saving the series of costs generated by each layer, thus having an unmatched price advantage over offline; at the same time, online search mode makes product information transparent and expands the consumption radius. In today's snack food industry, the online advantage compared to offline still exists. At the price level, besides the basic price difference of the product itself, online often has various discounts that cannot be synchronized offline and are quite significant. Imagine if a consumer just bought a product at a store and then turns around to find the same product on e-commerce is on Juhuasuan or with a 188 minus 100 promotion, the mood should not be too beautiful; at the product level, offline stores obviously cannot include thousands of SKUs, and the number of products cannot compare with online. If the advantage of physical stores lies in better offline experience, then besides renovated store decoration and more enthusiastic sales guides, displaying hundreds or thousands of products in front of consumers with SKU as the center, a small amount of tasting, and looping loud advertisements, in essence is still typical supermarket thinking, and the obvious advantage of experience has not been formed. So in the process of transitioning snack foods to New Retail, how can an effective path for online-offline integration be formed? Bestore store 『 04 』 How to open a brand-new offline experience 1. Become someone who truly understands them The core of New Retail is that "people" are more important. Whether it is product development or scenario construction, it will be carried out and reconstructed around consumers. The communication process between brands and consumers also transforms from educating consumers to truly becoming someone who thinks for them. As mentioned earlier, the currently visible forms of offline snack food operations are almost still updated versions of traditional supermarket construction. With the acceleration of product launches, the shopping environment of traditional stores and supermarkets makes it difficult for consumers to easily make choices and find the products they want. Regarding the current offline display of hundreds of SKUs in front of consumers by category, it is hard to say it is truly from the perspective of "experience," let alone a pleasant process. Most consumers' offline purchase behavior for snack foods does not belong to highly planned purposeful consumption, but rather impulsive consumption during "shopping" where they hope to try. In this process, the obvious difference in consumers' purchase thinking is "I need a certain product, I want to find it" versus "I discovered a certain product, I want to try it." The key to conversion is that the need changes from "search" to "match." Taking Tsutaya Books as an example, founder Muneaki Masuda's earliest logic of converting user value into matching methods was: people who like hard-boiled movies probably also love Chandler's novels, and might also want to listen to the cool jazz the protagonist loves, and then he associated and combined these products together. Image source: Internet There are various ways to set up matching, and the core is based on a deep understanding of consumers. Today, data empowerment is clearly a shortcut to help brands understand consumers. We need to clarify what truly effective big data and membership systems are. Member information is no longer used to push promotional information, but through data to assist consumer research, product development, communication with consumers, brand marketing, and supply chain management, ultimately improving the efficiency of the entire chain from production line to consumer hands. Transform brand thinking into user thinking, understand possible needs earlier than consumers, make the selection process smooth and pleasant, use data empowerment, and become the one who truly understands them. 2. Product focus division, how to complement circulation and support offline value Physical stores have limited space, and internet e-commerce search product efficiency is obviously better than offline. When building the offline product system, relying solely on quantity and category cannot support its advantages. At the product level, two core issues need to be considered: How to form complementary advantages of online + offline and product circulation, and how can the product end of offline stores support a higher sense of value? Complementary advantages of online + offline form product circulation The ideal path is to leverage offline space advantages to deeply establish brand image, allowing consumers to complete a broader product experience; online leverages efficiency and price advantages to achieve repeat purchases, and offline consumption simultaneously drives online traffic. Based on product complementarity and circulation, with online search and offline matching, we will find that physical stores are more suitable for combining hot products with new product promotions, because unlike e-commerce shopping where people can only see pictures and text information flows, in a physical environment "seeing and touching" is more conducive to enhancing consumer trust, and they are more likely to try new products they have not come into contact with. Provide more flexible and personalized product solutions based on the offline environment Consumers who come to the store in person generally have a higher budget acceptance for a single purchase than when they compare prices on their phones, but if in this process the crude method of different prices for the same product is used, it is obviously asking consumers to pay an IQ tax. In April 2018, Uniqlo joined forces with JUMP to bring T-shirts and peripherals from as many as 28 manga works. Before this, Uniqlo's collaboration series with graffiti artist KAWS and former Hermès art director Christophe Lemaire had already triggered buying frenzies, and the collaboration with JUMP pushed Uniqlo's buying frenzy to a peak. Even the process of queuing, waiting, and snapping up was widely discussed on social networks. Image source: Internet Many customers went offline specifically to buy Uniqlo's limited-edition shopping bags. This bag was once so popular that scalpers specifically sold it on Taobao. Image source: Weibo In the past, the product development thinking of snack foods was very typical, centered around single products, widely seeking hot products to meet consumers' broad and comprehensive needs. Sales growth relied on the number of SKUs, and because the threshold for product R&D was not high, product homogenization was common. In this case, consumers later almost had no significant brand loyalty, and purchases largely depended on discount intensity. There are only two paths to solve this product status quo: rational breakthrough or emotional breakthrough. That is, either through innovative R&D methods, make products that others cannot make; or seek paths that can resonate with consumers and have empathy, provide unique emotional touchpoints, and ultimately transform into unique memories associated with the brand. 3. Let them spend more time with you Most people have probably felt the transformation of the New Retail environment. In traditional department stores in the past, every salesperson carried an air of "if you don't buy, leave quickly." But today, New Retail seems to try every means to make consumers stay a little longer, even without clear shopping needs. The attack on consumer minds has extended from direct product needs to the occupation of time. In a highly fragmented information environment, being able to make consumers spend more time with you means the greater the probability that consumers remember you. What e-commerce lacks while being efficient is the sensory experience during the purchase process, leading to no unique and deep impression of the brand and low brand loyalty. Such a lack can just be made up by brand stores. Brands are obviously consciously hoping to let consumers stay. In the spatial design of most stores, changes have been made, leaving certain seats and idle areas. But if it is just for having a place to sit and rest, various shopping malls have more spacious and comfortable environments. Such area division is still based on space utilization thinking, rarely considering consumer experience and the direct impression transformation it can bring to the brand. Lai Yifen in Shenzhen central area, the store reserved a large empty area as a free area for consumers to stay, but the foot traffic was not much. Such a crude and simple space utilization plan is a bit regrettable in a prime location. We must first clarify that letting consumers stay is not the ultimate goal. The ultimate goal of staying is that through the process of staying, users interact with the brand, thereby deepening their understanding of the brand and ultimately transforming into brand impression and loyalty. So in this process, it is necessary to find the impression that the brand expects consumers to perceive and its effective transformation method; both are indispensable. Taking FMCG giant P&G as an example, in 2017 it developed and promoted the SBD5.0 terminal shelf. By unifying category theme colors and adding new product and hot product theme end caps to attract consumer attention. And based on the insight that consumers increasingly dislike in-store salesperson push and trust professional beauty consultants more, it independently developed a digital smart shelf applied to brands under P&G. When consumers pass by the digital shelf, the shelf quickly profiles the consumer. When picking up a product, the smart shelf screen automatically displays product information and consumer reviews, and at the same time, consumers can take a skin age test and get an exclusive report. While consumers enjoy professional one-on-one service without manual intervention, the image of P&G's professional beauty consultant is strengthened in the process. Image source: Internet So, before more intelligent terminal experiences appear, is there no way for snack foods to make users stay more effectively in stores? Not really. What snack foods need most offline is an experience that refreshes consumers and effective value output closer to brand attributes. In Shenzhen Futian central area, less than 500 meters from Lai Yifen and Bestore, a lipstick challenge machine displayed by a beauty college attracted a large group of young people, forming a sharp contrast with the empty seating areas of snack food stores. It was lively here. Everyone scanned QR codes, played games, discussed, and carefully read every piece of prompt information in the process, hoping to win in the game. Image source: On-site shooting Although most snack foods spend a lot of cost emphasizing their "fun" in advertising and promotion, in terms of this experience process, the fun interaction of the beauty college clearly surpassed the supermarket display of snack foods. If snack foods combine effective space utilization, set up interactive game devices, start games by scanning membership points codes, and exchange for product rewards, then in the process of choosing rewards, users will understand product information more carefully, and the experience of staying will also be combined with the brand's "fun" impression. There are actually many similar solutions. The core idea revolves around how to make customers stay, generate effective sensory experiences during the stay, strengthen brand impression and loyalty, and thus maximize the offline role. **** 『Epilogue 』**** We must admit that snack foods, based on category factors such as R&D, unit price, and repeat experience, face more problems in the process of online-offline integration than categories such as electronic products and daily necessities. In this process, the core of solving problems is to carry out subversion and reconstruction of past offline thinking and environment around consumers. Without such courage and determination, the past disadvantages of offline will remain disadvantages, and will not change because of the clarion call of New Retail. All success must ultimately return to innovation and transformation of thinking. Text source: Pentawards Platinum Award winner Pesign Design (ID: Pesign-design) -END-