What is the success of 7-11’s business ideas and operations?
7-Eleven's "mouse" plus "cement" online marketing model integrates the Internet with traditional marketing methods, transforming what is produced and sold into what is sold to customers... ...
Founded in 1927 in Dallas, Texas, 7-eleven was originally named Southern Company. Its main business was the retail of ice products, milk, and eggs. In 1964, the "initiative" of convenience services at the time was launched, and the business hours were extended from 7 am to 11 pm. Since then, the legendary name "7-Eleven" was born. In May 1972, Japan's first 7-Eleven store opened in Tokyo. Since then, 7-Eleven in Japan has entered a period of rapid growth, opening 15 stores that year. At the same time, 7-Eleven in the United States is at a crossroads of destiny. First, it failed to develop in the urban market, and then The key to irrationally participating in the wave of speculation is the intensification of competition among convenience stores in the 1980s and the emergence of large-scale shopping malls and discount stores in the suburbs, which made them mistakenly adopt the form of price discounts to respond hastily. The result will inevitably be the competitive advantage of convenience stores. Lost everything. As the "son", Japan's 7-Eleven quickly became powerful in a short period of time. In 1987, the American 7-Eleven, which was dying in 1987, mortgaged the franchise contract to the leasing company in order to get out of the predicament. In 1989, it had to plead for a paid transfer. American 7-Eleven stores in Hawaii and Canada were given to the Japanese 7-Eleven company that had once looked down upon them. In 1992, Japan's 7-eleven, as a franchisee, officially took over and completely took over all the work of its headquarters. Now, its business covers more than 20 countries and regions on four continents, with more than 23,000 retail points nationwide, serving nearly 30 million customers every day, and firmly ranks as the world's largest convenience store chain.
What is the reason why Japan’s 7-eleven company has achieved such impressive results? The main reason is the application of 7-eleven's e-strategy to communicate electronically with customers:
1. Fast and easy-to-use computer network
In the mid-1980s, 7-eleven has The old cash registers were replaced with POS systems that can monitor customer purchasing behavior. When 7-eleven started to build such a system, the hardware equipment was produced by nec company. Because it was so difficult to create such a complex software system, it finally turned to the American software giant Microsoft to help it build a Windows-based system. Customized system. In 1996 the software was installed on approximately 61,000 computers scattered throughout 7-Eleven's stores, headquarters and suppliers. In 1998, a system upgrade costing 60 billion yen (US$490 million) was completed. A dedicated line connected directly to Microsoft's Seattle office provided real-time technical support for the new system. The software support situation was under continuous monitoring. If the system failed, it would Automatic repair, if more than two paralysis occurs, the local maintenance company will be notified in time. Analyzing several years later, it was a wise move to hand over software development to Microsoft, because as Microsoft became a must-have on PCs around the world, the connection between 7-eleven's network system and customers became easy. 7-eleven's online platform fully utilizes its capabilities.
Every 7-Eleven store now has a satellite receiver installed. Using satellite reception is not only cheaper than using terrestrial fiber optic cables, but it is the only viable option for suburban stores in earthquakes. In Japan, a high-risk area, satellite receivers also provide two sets of guaranteed telephone lines for stores, with hosts in Tokyo and Daban respectively.
This kind of internal network system that can closely connect suppliers, stores, employees and banks is still a dream for many retail companies even today when Internet technology has reduced the cost and complexity of system construction. , this new technology system has four major advantages compared with other chain retailers in Japan.
First, you can monitor customer needs. "We believe that the essence of competition is change. What companies have to do is not to sell products to customers, but to let customer needs drive the development of the company." said Makoto Usui, director of the information system department of 7-eleven.
Second, 7-Eleven can use sales data and software to improve the company's quality control, product pricing and product development. With this system, 7-Eleven can collect sales information from all stores three times a day and analyze it within 20 minutes. This allows 7-Eleven to more quickly identify which products or packages attract customers. "7-Eleven's sales and product development capabilities are formidable. Its ability to sense new trends and develop high-quality products is far superior to other manufacturers." Now 7-Eleven is using these skills to increase Development of private label products with higher margins.
Third, the new system can help predict annual market trends. Customers are becoming more and more fickle, and product life cycles are generally shortened, becoming a new development trend.
It was once common for boxed lunches, rice balls and sandwiches to account for almost half of a convenience store's daily sales, but the trend was short-lived. 7-Eleven says it can keep up with trends in part because it's always concerned about changing weather conditions. Reports from hundreds of private weather centers arrive at all stores 5 times a day, with each center covering an area within a 20km radius. This is very useful in Japan because small towns 40km apart can have temperatures that vary by 5 degrees. . Each report compares today's temperatures to yesterday's.
Fourth, 7-Eleven’s electronic investments have improved the efficiency of the company’s supply chain. The flow of orders has sped up. Orders are placed at 10 a.m. and picked up at 4 p.m., and the electronic processing of orders takes no more than seven minutes. These goods are sent to 230 distribution centers dedicated to 7-Eleven. Truck drivers delivering goods carry barcoded cards that can be scanned on a store computer when they arrive at the delivery point. If a driver is always late, dispatchers will review the route or add other trucks to lighten the load. Likewise, 7-Eleven helps suppliers and manufacturers control their replenishment.
7-eleven is not satisfied with this system based on enterprise network technology. The development plan based on Internet technology is already in progress. It is planning to install an e-commerce software provided by Ariba Japan for office work. Bulk purchases of supplies, etc. to reduce expenses. It has already tasted the sweetness in this regard. In the past 10 years, 7-eleven has been committed to becoming a "paperless" company and now reduces administrative expenses by 70 billion yen every year. The application of Internet technology will enable the company to save even more. In addition, based on its huge convenience store chain, 7-eleven wants to turn itself into a payment point and pickup point for online transactions. Many customers of e-shop! books (a book-selling company) choose to pick up and pay at 7-eleven. This application also helped attract customer traffic, making 7-eleven's average daily sales 1.5 times that of its competitors.
2. Use practical payment methods to continuously expand your business scope
After installing a barcode recognition system in 1987, 7-Eleven turned its stores into payment services Where utility bills (water, electricity, gas, etc.) are billed. Nearly 15 years later, this change (requiring only a minimal investment in software systems) has given 7-Eleven a 3% share of a huge market in which banks and post offices are among its competitors. .
Now, the company is increasing its foot traffic by converting its stores into online buy-and-pick-up points. It's a smart move in a country where consumers are wary of using credit cards on the Internet and prefer to pay cash in stores. Indeed, as 7-Eleven says, about 75% of online shoppers pick up and pay for their purchases from physical brick-and-mortar stores. Daily sales at 7-Eleven stores are approximately 50% higher than those of its largest competitors. Its website, 7dream.com, launched in July 2001 with seven other partners, including nec Corporation and Nomura Research Institute, offers an extremely wide range of goods and services, including books, CDs, and concert tickets. and travel services.
Mr. Ma Shihao, general manager of 7-eleven South China, also said when summarizing management experience in this area: In Guangzhou, 7-eleven became the first 24-hour retail store to set up a "Haoyi" self-service payment terminal. In addition to providing functions for paying various fees, the terminal can also purchase insurance and order air tickets for customers. In Shenzhen, 7-eleven has found through a series of market surveys that Shenzhen customers prefer to pay mobile phone bills in cash. In view of this, 7-eleven has opened up alternative payment channels and actively expanded its mobile cash payment service platform in Shenzhen, becoming the first A retail network that collects China Mobile phone bills in real time 24 hours a day. Customers only need to go to the checkout counters of all 7-eleven branches in Shenzhen and state the phone number they need to pay, and the entire payment procedure will be completed after payment.
In order to meet the needs of the majority of Internet users, 7-eleven uses the current bill payment service platform to expand its application scope and provide "e-currency" outlet prepayment services for websites. The first to use this service was Sina.com (sina.com), which has a huge number of views and registered members. Since Sina launched the online paid platform "sinaplay (Sina Leyuan)" last year, it has been widely welcomed by netizens and the number of registered users has continued to increase. In order to make this service more popular, Sina has integrated this service through 7-eleven's retail network. A brand-new outlet prepaid service makes it easier for users to purchase "sinaplay"; it cooperates with the business online bookstore cp1897.com to provide middle school textbook ordering and pick-up services, with the main purpose of providing parents and middle school students with the convenience of shopping in a one-stop bookstore; Formed a strategic alliance with gipex.com to provide 7-eleven with new development and digital imaging services.
In recent years, 7-eleven has continuously supplemented its service content based on customer requirements. It has also taken advantage of the 7-eleven store network to expand eight major 24-hour convenient services, including: 1. Telecommunications-related services: including various Phone cards, mobile phone recharge cards, SIM card replacement and mobile phone charging, etc.; 2. Internet-related services: Internet cards, game point cards and website point cards, etc.; 3. Ticketing services: including sports lottery, lottery betting cards, various Tickets for concerts, exhibitions and lectures, as well as parking cards, etc.; 4. Collection and registration services: registration procedures for various trainings; 5. Ordering services: ordering exam textbooks, trendy supplies, gifts, etc.; 6. Delivery Door-to-door service: Provide door-to-door service according to customer needs in different areas; 7. Traditional convenience services: selling stamps, copies, faxes, etc.; 8. In addition to taking advantage of the store network, 7-eleven also uses the characteristics of processing transactions at the counter , becoming the first network to provide alternative payment methods in the market and develop payment services.
3. Centralized Logistics Management
A typical 7-eleven convenience store is very small, with an average site area of only about 100 square meters, but these stores only provide daily necessities There are more than 3,000 species. Although convenience stores offer a wide range of products, they usually do not have storage space. In order to increase product sales, the sales space should in principle be as large as possible. In this way, all goods must be replenished in a timely manner through the distribution center. If a consumer cannot buy the goods they are supposed to buy when they visit the store, the store will lose a sales opportunity and the convenience store's image will be damaged.
First, set up a regional distribution center
In order to ensure the efficient supply of goods, 7-eleven Japan had to rationalize its old distribution channels. Many Japanese wholesalers used to characterize themselves as specialized agents for a particular manufacturer and were only allowed to carry products from one manufacturer. Under this system, if a retailer wants to sell a range of goods, it has to deal with many different wholesalers. Each wholesaler has to use a separate truck to deliver goods to the retailer. The delivery efficiency is extremely low and the delivery time is very long. Not sure, but the inefficiencies of this distribution system are often overlooked. 7-eleven is reforming by integrating and restructuring distribution channels. Under the new distribution system, an entrusted wholesaler is designated to be responsible for several sales activity areas, authorized to deal in products from different manufacturers. In addition, 7-eleven can develop efficient distribution channels to connect all stores by signing sales agreements with wholesalers and manufacturers.
7-eleven is divided into different regions and commodity groups to form a unified distribution center, which collects goods in a unified manner and then distributes them to various stores. The geographical division is generally 35 kilometers around the central city's business district, and 60 kilometers around other local markets. A unified distribution center is set up in each region to achieve high-frequency, multi-variety, and small-unit distribution. After implementing unified logistics, the number of transportation vehicles received by its store every day dropped from more than 70 to 12. In addition, this approach allows the distribution center to fully reflect the information of product sales, in-transit and inventory, and 7-eleven gradually takes control of the entire industry chain. As price competition in the chain industry becomes increasingly fierce, 7-Eleven has gained considerable room for overall profit improvement by reducing costs.
Second, tailor-made logistics system
Although the expansion of business scale and the establishment of a centralized logistics system are led by 7-eleven, the construction of the logistics system is led by Partnering manufacturers and dealers are tailor-made for 7-eleven's outlet expansion based on its unique business processes and technologies. These technologies include ordering and delivery online networks, digital sorting technology, incoming vehicle standardization systems and dedicated logistics barcode technology.
For example, in Japan, 7-eleven’s snack distribution is undertaken by wholesaler Company A. At first, they used one of their idle warehouses to engage in logistics activities for 7-eleven and arranged a dedicated However, with the rapid expansion of 7-eleven, Company A increased the construction and development of logistics centers in order to ensure its right to supply goods, and established four major distribution centers in the Kanto region. Each distribution center distributes all snacks to about 500 nearby stores, with about 650 to 700 varieties. Every morning, goods are purchased from the production company from 8:00 to 10:30, and the goods to be purchased are put into storage before noon. In order to ensure stable supply, each distribution center has a 4-day safety inventory, and the inventory level is replenished in a timely manner based on sales and production conditions. At around 11:30 noon, the distribution center began to arrange the next day's delivery. The delivery routes, delivery stores, delivery varieties, delivery notices, etc. were printed out in a timely manner and handed over to the relevant departments. At the same time, digital stocking requirements are sent to the stocking department through the computer.
Setting up the distribution process is calculated in minutes: Looking at the logistics activity time of a distribution team, the stocking time of a store takes about 65 seconds, and the freight handling time takes about 5-6 minutes; it takes 15 minutes from nodding sorting to the end, all 170 -180 stores take more than 4 hours, that is, the entire logistics activity time is about 4 hours (not counting the time when trucks stay in the distribution center waiting to depart); trucks usually stay in the distribution center for one night and arrive at 4:30 the next morning. to 5:30, and deliver to each store according to the principle from far to near; the earliest truck arriving at the store should be at 6 a.m. If the operation is correct, the travel between stores will be 15 minutes, plus a 15-minute rest time , the time required for product delivery in each store is half an hour; that is, the product delivery tasks for all stores should be completed around 9:30 or 10:30 in the morning at the latest. Judging from the delivery efficiency of each vehicle, except for special climate reasons, the average amount of goods delivered per vehicle is 750,000 yen, and the loading rate can stably reach 80%. The average monthly supply of goods by the distribution center is 5 billion yen, which is equivalent to supplying 1 million yen of goods to each store. The truck operating cost is 24,000 yen per day, which is equivalent to 3.2% of the supply. Within the cost target management value range of 3.0%-3.5%, 7-eleven has compressed a large amount of logistics costs.
Now, 7-eleven has implemented a three-times-a-day delivery system. This includes a special delivery of additional items when weather conditions are expected to change the next day. This enables 7-Eleven to provide high-freshness and high-value-added products to all its outlets in a timely manner, thereby providing consumers with more convenient and fresh food, and achieving operational optimization with other convenience stores through its centralized logistics. The management system has successfully reduced logistics costs equivalent to 10% of the original price of the goods.
Managing products with information as the center is what 7-eleven is most proud of. As early as 1978, 7-eleven began the construction of information systems. Since then, it has gone through four information system reconstructions. At present, 7-eleven has developed into the enterprise with the highest degree of informatization and automation in the Japanese retail industry. Through its advanced information system and the help of satellite communications, 7-eleven can segment the ordering status of goods, give active guidance to stores, and manage goods by time periods. Really achieve single product management. Because of this, 7-eleven's logistics efficiency is very high. Not only does it have a huge logistics and distribution system, but its practices such as integrated distribution and global logistics are accepted by the world as effective business methods and strategies. .
The collapse of the Internet economy has made companies’ understanding of Internet marketing more realistic. The Internet has its unique advantages and characteristics. Its powerful communication capabilities and interactive information dissemination are conducive to companies’ market research and help It enables enterprises to achieve full-process marketing before, during and after sales, while at the same time reducing the cost and expense ratio of goods in the entire supply chain from production to sales as much as possible in operation and management, and shortening the operation cycle; however, the Internet also has its The open structure can bring a huge amount of information, but it also affects network security, especially electronic payment systems. Before most people accepted electronic money, using over-the-counter transactions was a very practical method; at the same time , the logistics system established by using the Internet is very efficient, especially chain business, the status of logistics in it is equivalent to the blood system in the human body.
To sum up, Japan’s 7-Eleven Company’s “mouse” plus “cement” online marketing model integrates the Internet with traditional marketing methods, transforming what is produced and sold into what customers need Based on the concept of what to produce, we orient customer needs into an information-centered management and operation model, establish the enterprise's information network marketing strategy on the basis of high technology, and firmly grasp the new trends in the ever-changing market competition. To win the market, it remains invincible so far. It has very important inspiration and reference significance for foreign chain stores trying to enter the Chinese market after China joins the WTO, or for local Chinese chain stores.