---
title: "Is Internet O2O Convenience Stores Really a Dead End?"
description: "The validity of a rule doesn't need proof: the more time you spend on something, the deeper your understanding of it, as the '10,000-hour rule' also states. Focus is important, but career height isn't solely determined by focus; the direction you choose determines the space's size and competition intensity, while the degree of focus determines the height you can reach within that space. The author (Zhang Chenyong) focuses on retail O2O, how supermarkets and convenience stores integrate with the internet, having spent much time and effort, participating in or leading several related projects, writing dozens of articles, and publishing a book."
author: "紫藤园张陈勇"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-05-17"
language: "en"
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---

# Is Internet O2O Convenience Stores Really a Dead End?

> The validity of a rule doesn't need proof: the more time you spend on something, the deeper your understanding of it, as the '10,000-hour rule' also states. Focus is important, but career height isn't solely determined by focus; the direction you choose determines the space's size and competition intensity, while the degree of focus determines the height you can reach within that space. The author (Zhang Chenyong) focuses on retail O2O, how supermarkets and convenience stores integrate with the internet, having spent much time and effort, participating in or leading several related projects, writing dozens of articles, and publishing a book.

The validity of a rule doesn't need proof: the more time you spend on something, the deeper your understanding of it, as the '10,000-hour rule' also states. Focus is important, but career height isn't solely determined by focus; the direction you choose determines the space's size and competition intensity, while the degree of focus determines the height you can reach within that space.
The author (Zhang Chenyong) focuses on retail O2O, how supermarkets and convenience stores integrate with the internet, having spent much time and effort, participating in or leading several related projects, writing dozens of articles, and publishing a book. If retail O2O is a false proposition destined to fail, then the author's efforts might be in vain. Many companies have tried innovating how the internet combines with convenience stores, but currently, there is no universally recognized successful case.
How to break through on this path? The author has previously proposed several models. **In this article, a new concept is proposed: 'Crowdfunding Convenience Stores'** **,** using an APP to help realize the formation, operation, and profit-sharing of crowdfunded convenience stores, significantly boosting store sales, enhancing competitiveness, and reducing site selection difficulty. Perhaps a single crowdfunding convenience store innovation isn't enough for success, but **combined with the several solutions previously proposed, it might create a chemical reaction and achieve disruptive change.**
Crowdfunding Convenience Stores
The **idea behind crowdfunding convenience stores is to recruit community residents as store owners, enjoying profit sharing and appreciation, thereby attracting crowdfunders to shop as much as possible, increasing store sales** **and achieving more substantial profits:**
The concept is as follows: 1: Recruit investors in the community where the store is located, 200 people, each contributing 3000 yuan. (Specific figures can be adjusted based on costs, ensuring sufficient customer traffic.)
2: Investors pay via the APP to track their shopping, and customers who register with an investor's invitation code and shop also count towards that investor's shopping amount.
3: If the store is profitable, 50% of net profit is equally divided among investors, 30% is distributed based on each investor's shopping proportion, and 20% is headquarters profit.
4: If the store incurs losses, 20% is borne by headquarters, 60% is equally shared by investors, and 20% is apportioned inversely to shopping amounts.
5: Establish an online supermarket; investors purchase goods via the APP, which are delivered to the store for pickup. The convenience store meets convenience shopping needs, while the online supermarket meets family bulk shopping needs. Online supermarket purchases also count towards investor shopping amounts.
6: Fresh produce and fruits can be pre-ordered via the store or APP, with sales and profits included in store calculations and sharing.
7: The store is co-owned by investors, in a franchise relationship with headquarters, which manages and supplies. If dissatisfied with headquarters' management, investors can vote via the APP to change the sign and operate independently, or sell the store and share proceeds.
8: The logic is to attract investor shopping demand; 200 investor households shopping at this store can basically sustain it. Therefore, investors cannot be too few. Stores should prioritize locations with many supermarkets, as there's no shortage of market and stronger customer attraction than competitors. (Easier site selection, faster development, less capital needed.)
9: Develop an investor backend APP to view store costs, sales, profits, personal shopping records and rankings, with voting and communication functions for business decisions. When collecting crowdfunding funds, consider store operating capital. If losses occur and operating capital is exhausted and investors are unwilling to continue bearing losses, headquarters can buy back the store at a discount or close it and distribute proceeds to investors. Recruiting enough investors may take time; consider recruiting during store renovation and operation, with unsold shares temporarily held by headquarters. Besides monthly profit dividends and appreciation, making the APP a social tool for investors and a voting tool for store decisions is also attractive.
Other Concepts
The basic idea of 'crowdfunding convenience stores' is that investor shopping amounts correlate with returns, boosting store sales, making site selection easier, and driving the online shopping platform.
The author (Zhang Chenyong) believes 'crowdfunding convenience stores' is worth trying, and combined with previously proposed solutions, it should be more feasible. **Innovation is clever combination; below are brief introductions to other concepts. For details, readers can search for the author's previous articles.**
1. Fragmented Shopping Model
Traditional shopping incurs costs beyond product prices, such as shipping fees or minimum order requirements for free shipping online, and time and effort for travel offline.
Fragmented shopping means buying needed items anytime via mobile without worrying about shipping or travel, with one-click purchase for the fastest speed. If you notice soy sauce is almost out, you buy it directly, with no minimum order, shipping, or travel, minimizing time cost.
In traditional shopping scenarios, you need to remember what's missing and make a special trip. Although it's customary, it's actually a poor experience. **Fragmented shopping breaks tradition: buy whatever you want, without remembering items or meeting shipping thresholds.**
**The foundation of fragmented shopping is free shipping with zero minimum order** , relying on extremely low delivery costs. The method is to establish inventory points in communities, with all orders before 18:00 delivered centrally between 18:00 and 21:00, reducing delivery costs through consolidated delivery and enabling low-threshold delivery.
Most shopping needs can accept delivery within a few hours. If immediate delivery is required, customers can choose 1-hour delivery and pay a fee. Place high-frequency items with high delivery costs in community points, and long-tail items in central warehouses. Orders for long-tail items via the APP before 12:00 are delivered centrally that evening, **thus fragmented shopping can meet almost all consumer needs (except fast delivery with fees)** .
2. Points Integration
Traffic logic is fundamental internet thinking: QQ and WeChat are Tencent's traffic sources, Taobao is Alibaba's, and security software and browsers are 360's. **Can we turn convenience stores into traffic entrances, attracting store foot traffic online?**
The method is to label two prices on convenience store items: one retail price and one APP price. Paying via the APP gives a 15% discount on all items but consumes APP points.
Points guide customers to purchase online platform products and spend at nearby alliance merchants. Shopping on the online platform earns points, as does spending at other nearby merchants.
**The points-funded discounts (product discounts) come from two sources** : first, the online platform's promotion costs and saved logistics costs (centralized delivery to stores for pickup is cheaper), about 5-12%; second, alliance merchants' promotion costs (pay-per-performance), about 10-30%. This model creates a closed loop: **convenience stores are the traffic entrance attracting users into the loop, high-rebate one-way points keep customers in the loop, and the promotion fees and saved logistics costs from merchants within the loop are the source of rebates, ultimately building a high-frequency community O2O APP.**
3. Channel Brand
In the market, 'bad money drives out good' is not uncommon. Consumers aren't experts on products; many bestsellers aren't necessarily the best value but may have entered the market early or have better marketing. Japan's 7-Eleven gets 60% of sales from private-label custom products, and European consumers trust Aldi's products regardless of brand. Because 7-Eleven and Aldi have become channel brands, consumers trust them.
In fact, raw material costs are a small proportion of product costs; promotion and marketing expenses often exceed them. Promotion and marketing build trust in consumers' minds. **Channel brand stores can save marketing costs; the channel itself endorses products.**
Offline businesses typically use prime locations, upscale decor, and store image to endorse products, driving emotional consumer thinking, implying quality products. **Can we use APP tools to stimulate rational consumer cognition, proving product value with real data, thus building a channel brand at low cost?**
For example, establish a curated section in physical stores, requiring APP purchase for immediate pickup and free returns. Only high-repurchase products stay, and buyers who discover high-repurchase products get bonuses. All data is transparent to customers, buyers recommend products on the APP, reveal industry secrets, show curation processes, and build product fan functions, letting consumers endorse products. **In short, use online tools to build trust in products and channels at low cost, which is also a practical approach to supply-side reform.**
4. Convenience Store Stock-Up Shopping
Convenience stores are retail formats for convenience shopping, while hypermarkets are for one-stop stock-up shopping. **Can we use convenience stores to meet one-stop stock-up needs and use the internet to unlock their potential?**
The method: all convenience store items have two prices on labels: one normal retail price for standard shopping, and another stock-up price, averaging 20% lower.
To enjoy stock-up prices, customers must use the APP and pay a fixed 10 yuan service fee per order. The APP offers not only convenience store items but also over 10,000 items from central warehouses, meeting one-stop shopping needs. After ordering via the APP, central warehouses deliver to the store for pickup. With lower prices and the 10 yuan fee, the more you buy per order, the more cost-effective, attracting consumers to use this platform for stock-up needs.
This article first introduces the 'crowdfunding convenience store' concept, then briefly introduces four models: 'fragmented shopping,' 'points integration,' 'channel brand,' and 'stock-up shopping,' constructed from angles of shopping habits, traffic monetization, product endorsement, and meeting more needs. Many retail peers consider convenience store O2O a false proposition because many companies have tried and failed. In fact, spending more time thinking, researching, and practicing reveals different scenery. The author has invested much energy and time in innovating how community physical stores integrate with the internet, summarizing some concepts worth trying. These concepts can combine and reinforce each other, potentially finding a path and innovating true internet O2O community stores. Finding, implementing, and realizing these ideas is the author's most important career goal, and peers are welcome to discuss and exchange.
To communicate with the author: Ziteng Garden Zhang Chenyong, WeChat csdso2o, focusing on retail O2O, supermarket O2O, and last-mile innovation.
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