It has been well known to all people in the industry that the Lianxiang Bridge branch of Wumart in Beijing is the star among all its branches.
On October 25, 2017, the Lianxiang Bridge branch and the Jinbao Street branch from Wumart in Beijing were reopened after their upgrade. The two branches’ upgrading was regarded as significant projects for Wumart last year with an explicit purpose of transforming the old stores and upgrading the model branches.
A whole year has gone by, what’s the effect after the branches’ upgrading? Recently, a journalist of Supermarket Weekly visited the Lianxiang Bridge branch of Wumart, experiencing the delivery case of Wumart’s digital retailing strategy.
The noticeable changes for the customers:
- The Lianxiang Bridge branch was a two-layer building before its upgrading. Now nearly half of the total area of the store has been reduced with only one-layer structure;
- The storage shelves have been lowered, allowing the store to become more spacious;
- The situational layout and the interactivity electronic screen have been implemented, enhancing the visual richness and improving interactions with customers;
- The electronic price labels are fully adopted in the store;
- The Wi-Fi without password is available for customers free of charge;
- The customer traffic route has no longer restricted the customers. With open customer traffic route, they can walk along the shortest route to get in any district of the store to achieve “entrance-in and entrance-out”, saving much time for customers;
- A great number of new retailing elements have been added and Dmall is also involved.
Although Mr. Liu, store manager, joined this branch in January 2018, he knows the store like a book. He is quite proud when it comes to the performance of this branch. The untaxed average daily turnover in September and August was 410,000 yuan ($58.966). The best performance appeared in January and February, reaching up to 700,000 yuan ($100.714) per day on average before paying tax. The turnover all year around is about 150 million yuan($2.1581.492), which is not the best performance among all branches of Wumart. However, it ranks higher in Wumart with its average gross margin of 23% (foreground and background).
The advantages of upgrading can be found easily.
- The profit growth has doubled. The profits in September and October have achieved a year-on-year growth of over 113%. As for its overall performance, it has increased by 49% on average.
- The proportion of the fresh food has increased from 30% or 40% to 50%. At the same time, the EA pattern and standard products have been vigorously promoted.
- The number of staff has been reduced from 178 to 98 now, achieving higher productivity with lower cost.
- There are many changes in its operations: the vegetables and fruits have started to have their own brand of “Colorful Gardens (Binfen Tianyuan)”, changing its sales strategy from sales in bulk to sales in packages. The products can be delivered to stores directly after being processed by PC. It will save time and manpower as well as reduce loss for the stores. The monthly loss has been lowered by 13 yuan, and the environment has been improved. Besides, it has guaranteed the products to be fresh daily, no selling leftover leaf vegetables. The package bags are in 7 different colors in accordance with each day of the week in order to guarantee its freshness. This way, it can avoid selling leftover leaf vegetables. The meat products have been changed from sale in bulk to sale in packages in the “Colorful Pasture (Binfen Muchang)”. These products can be delivered to stores only if they are processed and cut by PC and packed in a vacuum package. The net margin has therefore increased by over 80%, and the problem of the greasy and messy environment has also been solved.
- The business model has changed, with the profit of aquatic products raising by over 60%. Relying on the investment of relevant equipment and technologies, the survival condition of the fresh and live goods has been improved, bringing good effects. For example, it sold 210 Boston lobsters in the Mid-Autumn Festival of 128 yuan($18.4) per lobster.
- The SKU (Stock Keeping Unit) has been decreased to 9,500 from the original 17,000; and the sales rate has been up to 96% from less than 70%.
- The catering proportion has been increased: it has enlarged the total area of aquatic eat-in. The area of processing and seats has been increased by 100 square meters. The sales of beefsteak processing has been added.
- The easy-matching counter around the store is a new attempt, with enough area to promote products.
What does Dmall bring in?
In April 2015,Wumart has started its cooperation with Dmalll, and upgraded Lianxiang Bridge branch of Wumart to serve as a pilot. The Lianxiang Bridge branch has been benefitting from the Dmall, according to Mr. Liu.
- Promoting the overall online performance: The current online business has accounted for 15% of the total sales. During a period with big promotions, it can account for 25% of the total sales.
- The Dmall’s members are also members of Wumart. Relying on more targeted marketing, the number of members has accounted for 70% of the total customers.
- In the past, customers were required to complete a form on paper to become a member of Wumart. But now, they can become members by downloading its APP. Besides, the customers can also become member when they use the Cloud POSS or the smart shopping cart to pay. And the customers’ profile can be completed easily with the help of online-push services.
- The Dmall plus Wumart: The cooperation between the Dmall and Wumart has improved the fundamental operation of work. It has solved the stockout problem, achieving no-stockout all day long. It has adopted online service to in turn spur the off-line avoiding stockout, unless it will badly influence the online performance.
- Boosting the optimization of categories: It will examine good-sale and bad-sale products after the product-selection. It will eliminate the bad-sale products and re-select with the help of smart technology, saving much time and energy.
- The Silver Line Revolution: A series of methods, including the sec-payment (the Dmall shake), scanning a code, smart shopping, self-shopping and self-guided shopping, have solved the problem of checkout queue. During the period of the Spring Festival, the store can achieve its daily sales of 1.5 million yuan ($215.834) with less than 10 customers waiting in line, greatly improving its efficiency. The Dmall has cooperated with 475 stores of 35 retailers. Distributing 25 provinces and cities, these retailers have brought benefits to the total population of 350 million, achieving an annual transaction of 203.9 billion yuan ($29 billion).
- The LSH123: As another new cutting edge tool of Wumart, the LSH123 works on online wholesaling. The Lianxiang Bridge branch was the first pilot of the LSH123. Before 9:00 am, 11 delivery staff deliver food ingredients to the catering enterprises within a three-kilometer radius. After 9:00 am, they will then deliver orders to the customers of Dmall. The delivery strength has been fully utilized. Some delivery staff can earn more than 1,000 yuan ($144) each month, with the total monthly-income of over 10,000 yuan ($1439). It is learned that the Hema Fresh earns 15 yuan per order within 3 kilometers and 30 minutes; while the Dmall earns 7 yuan per order within 3 kilometer and 90 minutes. The Dmall is upgrading its back stock without increasing its own cost, striving for reducing the delivery time to 30 minutes.
(Source: LONGSOK, Oct 22)