The author recently participated in a home delivery retail project for a large group. The preparation process involved considering many factors, such as how to utilize group resources, how to promote cross-system communication and coordination, how to balance the suggestions of important executives, and also how to design and advance the project to reduce negative impacts if it ultimately fails. Facing a complex situation, it is even more important to stay true to the original intention and ask ourselves: what should we do to truly make the project successful? The key factors for success or failure cannot be compromised for any reason. There may be different paths in the process, but the most critical musts must not change. To this end, this article summarizes the three musts for home delivery retail success, as a reminder of what to adhere to and what to vigorously promote. -01- First Must: Must Solve the Traffic Problem Home delivery retail without sufficient orders is bound to fail; traffic is a necessary condition for sufficient orders. Currently, the most successful representatives of home delivery retail are Hema Fresh (store-warehouse integration) and Dingdong Maicai, Miss Fresh (front warehouse models). Hema Fresh's traffic mainly comes from the conversion of in-store customers. Customers who shop at Hema Fresh basically install the Hema Fresh app, and their proactive installation gives Hema Fresh a low traffic cost. Dingdong Maicai and Miss Fresh's traffic mainly comes from ground promotion and old customers bringing new ones. Each new front warehouse opened has a ground promotion team that does blanket promotion. Typically, each promoter brings in 10-20 new customers per day, and each new ordering customer can earn the promoter a 10-30 yuan reward. The biggest challenge Hema Fresh faces is high operating costs; the biggest challenge for front warehouses is high traffic costs; the biggest challenge for JD Daojia is unstable service experience. The biggest challenge for front warehouses is high traffic costs. Acquiring a new customer costs 30 yuan in promoter incentives, 10 yuan for the first-order hook product, 10 yuan for first-order fulfillment, 30 yuan for new customer red packets, plus organizational, material, and site costs. So each new customer acquisition actually costs the platform 50-100 yuan. The retention and repurchase rate for new customers is usually only about 20%, so the actual acquisition cost per loyal customer reaches 200-500 yuan. Although the construction cost of a front warehouse is only a few hundred thousand yuan, to get enough traffic to shop there requires marketing expenses of several million yuan. Moreover, customers will always churn, so marketing investment may be endless. The biggest challenge of the previous model is often the opportunity for later entrants. If a new model can solve the traffic problem, it can create enormous value. Currently, we have already conceived a design to solve the traffic problem. This is the key point of the project's value, and it needs to be implemented to the greatest extent. We cannot let communication issues, positional perspectives, or cognitive issues affect the implementation of this key point. We need more communication and support on the traffic issue. -02- Second Must: Must Operate a Full Range of Fresh Products What products must home delivery retail operate, and what product structure is needed to succeed? Currently, representative home delivery retail companies include Hema Fresh, Dingdong Maicai, Miss Fresh, JD Daojia, Yonghui Life, Duodian, and RT-Mart Youxian. There have been influential but failed home delivery retail companies such as Ai Xian Feng, Zai Jia Diandian, Kuai Shubao, Miao Shenghuo, Shanguangou, Shequ 001, Shequ Quan C, and Linwei Wang. Home delivery retail has tried various entities, methods, and categories. From the final results, only those focusing on fresh products have made an impact and have a chance to win. Home delivery retail is a last-mile business. Each site serves a small area, and order volume depends on density, not coverage. Therefore, high-density orders are needed to reduce delivery costs and share traffic costs. The basis of high-density orders is high-frequency demand categories, and fresh products are undoubtedly the highest frequency category. Home delivery retail is e-commerce and an internet project. As long as it is e-commerce, it follows the principle of high frequency eating low frequency and traffic being king. Operating fresh products can bring high traffic and the highest usage frequency, and thus a future. Operating fresh products is challenging. Procurement management is difficult, standardization is hard, quality monitoring is tough, customer complaints are easy, and spoilage is high. But to do home delivery retail well, we must face these challenges and solve them. Hema Fresh and Dingdong Maicai have faced these challenges in operating fresh products. Now they rely on scale and systematic operations. For startups, they need unified awareness, focus on the first site, over-invest, proactively embrace challenges, flexibly respond with purpose, and build systems in the process of discovering and solving problems. -03- Third Must: Must Be Customer Experience-Centric Why must home delivery retail be customer experience-centric? The answer is in the first two musts. Because the main business is fresh products, which are most likely to cause customer experience issues. Fresh products are non-standard, difficult to maintain consistent taste and appearance, have shelf life and freshness issues, and the fulfillment process may damage products. Also, it is the picker who picks goods for customers, not customers themselves. All these are hard to fundamentally solve. To solve fresh product experience issues, Hema Fresh implements a last-in-first-out picking principle for online products (in some categories) and strongly promotes the "Fresh Daily" series (sold only for one day). Hema Fresh stores have a dedicated team that checks fresh product quality daily and sets shelf life for fresh products. When they reach the shelf life, they are discounted or written off, even if quality and appearance are fine. Dingdong Maicai also attaches great importance to fresh product quality. The author once visited Dingdong Maicai's warehouse and saw a banner that read: "Never send any product with quality issues to customers." This left a deep impression on the author. Being customer experience-centric is also because traffic costs are extremely high. As mentioned earlier, the cost of developing a loyal customer for a front warehouse is about 200-500 yuan. Losing customers due to experience issues means losses. Being customer experience-centric must be instilled in every team member, implemented in the product system, system processes, after-sales system, and all aspects. The author believes that in home delivery projects, there must be a dedicated experience role, with someone responsible for discovering, following up, and analyzing experience issues. A system of "everyone is an experience officer" should be established, driving every team member to find and solve experience problems. Customer experience is the top priority in execution, and a customer experience system should be built in the process of discovering and solving problems. Summary: The three musts for home delivery retail are: Must operate a full range of fresh products Must solve the traffic problem Must be customer experience-centric The author believes that to do home delivery retail well, all three musts are indispensable. Missing any one will inevitably lead to failure. Facing complex situations, we should center on the three musts, adhere to principles, repeat them, influence more people, and achieve goals and value with perseverance. Source: Old Zhang Talks Retail (ID: csdso2o), Author: Zhang Chenyong