Text | 阑西
Historically, the major e-commerce platforms have probably never reached such a consensus as they do today: do a good job of price power.
Behind this, it is caused by the market environment in which consumers tend to be rational and the information gap is smoothed out, and e-commerce platforms have also recalled the reason why this industry was originally established: to maximize the optimization of intermediate costs and deliver high-quality and low-price goods to users.
Now this return of the e-commerce platform, for some service providers who are accustomed to the past business environment, there is some pain of passive transformation, and even simply equate the price power with "low prices", which produces contradictory feelings: when the merchant's goods are sold cheaper, their operating profits will also be reduced, so accept the price power, it will inevitably suffer.
If you think in the wrong way, you can't get close to the right answer.
It is becoming more and more common for consumers to compare prices across the network before placing an order, which is a decisive trend about price power, and service providers who cannot get the right signal from it can hardly be called "competent".
In other words, users may not only care about the price at any time, but they must care about whether their money is worth it, just like a popular quip says, "you can buy expensive, you can't buy expensive", this kind of consumer demand that is highly concerned about the sense of gain is the soil for the growth of price power.
Service providers must also be aware that in the new distribution rules, goods and stores that meet or even exceed the price power standard will be exchanged for explosive growth in GMV.
After all, the operation of price power has begun to become the basic ability of e-commerce competition, and professional service providers should actually be ahead of the brand, turn passive into active, integrate price power into their full pallet operation, and manage price power well, which is also for the GMV growth service of the whole store, rather than an isolated strategy, and only regard price power as a short-term promotion means.
At least, judging from the case of Douyin e-commerce, the first batch of service providers who have learned to operate with price power have been at home in this version and have achieved huge commercial returns.
The price power on the supply side is the sense of gain on the consumer side
Whether the service provider does a good job in price power depends on whether the consumer's shopping experience is full, taking the operation of the service provider Xingluo on the FMCG giant Procter & Gamble as an example, it is very representative.
The characteristics of the FMCG industry are very prominent, that is, the product use time is short, the frequency of consumption is high, and explosive products are very important to the long-term operation of the business as a weapon for brands to quickly occupy the market and increase their share. However, FMCG brands have limited SKUs, and although they are prone to explosive products, the life cycle of explosive products fluctuates greatly, and how to extend and achieve secondary growth as much as possible is one of the most important KPIs for service providers.
As we all know, large multinational brands have many considerations for price control, and it is difficult to make big ups and downs in pricing. The overall idea is that on the basis of controlling the price, through rich means such as exclusive gifts and multiple sets, the value of the best-selling products is full.
For example, for Procter & Gamble's popular washing and care set, we created a price advantage for the whole network of the same specification, and launched an exclusive gift and exclusive set for the first time on Douyin e-commerce, which leveraged the traffic blessing of the platform.
Obviously, Procter & Gamble is not – and probably cannot – the most affordable FMCG brand on Douyin, but after reinforcing the value of the product, users can perceive the message that ordering the package is very cost-effective from multiple scenarios, which in turn triggers purchase behavior.
After Xingluo did a good job of price power for Procter & Gamble, the exposure of single products increased by 140%, and the GMV of Guess Xi increased by more than 500%.
The underlying logic of price power is actually the embodiment of the value of goods, which can be divided into two parts: hard rules and soft mechanisms, the former is a rational number, the goal is not to sell more expensive than others, and the latter is a perceptual experience, with higher configuration and services, to make consumers feel "value for money". Service providers need to implement both soft and hard, and the platform will give enough resources to direct more customers to the store, and the sales volume of merchants will naturally rise, which in turn will bring more business opportunities and revenue sources to service providers.
Service providers should understand price power as a set of preferential price growth schemes
On the surface, price power is acting on the commodity, but a smart service provider will let it benefit the whole pallet, so that the sustainable growth track of the brand is also based on the competitive advantage of price power.
Different from the above FMCG industry case, the apparel industry is more affected by seasonality, and there are more SKUs, and brands usually have to worry about clearing the backlog of inventory and bursting the new products of the season.
In the early spring of this year, Qifei formulated an anti-seasonal special price strategy for the brand's popular winter clothes, which was greatly reduced from 999 yuan to 586 yuan, which successfully attracted a large number of users who came to "pick up leaks".
In this example, the price power strategy plays the role of a "hook", and the service provider used to spend money to purchase traffic, but now in the form of cost pass-through, it reduces the unit price within an acceptable range - and even selects inventory products that have room for price reduction - so as to leverage the platform's traffic incentives.
In the end, during the promotion period, the men's clothing brand became a benefit to consumers, and the inventory was sold out, while the new products of "Stained Light" achieved a 26% GMV growth, exceeding expectations, and experiencing a small shock of price power + full pallet operation strategy.
A reasonable price reduction can be a means, or more precisely, a skill to reach users, but it is definitely not the ultimate goal, after establishing a price advantage, the merchant has room to show his skills and seek the growth of the overall business.
From this point of view, the price power is very much like a ticket, only by holding it, can you enter the new round of competition in the e-commerce market, and only when you enter, you will have a chance, if you are stopped outside, no matter how many moves, you can't play.
Therefore, for all service providers who are still struggling to explore increments, they must read and adapt.
Service provider Qishi Media to the home appliance brand Thunderbird"Anchor"The example is also very classic,This is a consumer goods market,The user's consumption decision-making chain is long,Placing an order is relatively cautious and hesitant,The choice of Qishi Media,It is to promote the main Thunderbird TV85Crane6PRO 24Formulate a unified price for the whole network,Ensure that it will not be more expensive than other platforms in Douyin station,At the same time, upgrade benefits for users who prepay the final payment,Add membership rights,Exploded618Promotion。
After the main promotion was endowed with the unique economic value of the whole network, Qishi Media used the shelves with richer SKUs to undertake the overflow traffic, and transported the consumer groups who were drained but not suitable for explosive products to the whole store, because the user awareness of price power was established in advance, which stimulated their judgment that Thunderbird has a good price, and finally outperformed the sales volume and gained the volume.
You know,Thunderbird is a relatively new brand in the TV industry,Compared with its peers,The popularity is weak,But after this time with the price power strategy to drive the sales of all pallets,It became the first place on the full-screen TV popularity list during the event on the Douyin e-commerce platform,The GMV of the whole store has increased615%,An astonishing increase。
The Evolution of Service Providers: Only by standing higher can we see the clouds
Dr. Tom Nag, known as the "father of global strategic pricing", has talked about two completely different pricing ideas, one is from the cost pricing method, starting from the cost, plus profit margins, you can get the price, and the other is the value pricing method, the priority is how much the customer is willing to pay, and then design the price of the product.
In Tom Nag's view, although the value pricing method is obviously superior, measuring the economic value of commodities is an extremely complex process, and when he did his research - in the 90s of the last century - neither the total amount of data nor the details of the market was far from enough.
But today, the scale and quality of data feedback are no longer a problem - the weakening or strengthening of price power will quickly reflect the conversion rate - service providers must also have the same sensitivity to judge the value of goods from the customer's point of view.
The operation of price power may reduce the unit price of customers in the short term, but the healthy growth of long-term business after winning the market is the most important, which is also the rule of the game that service providers need to digest as soon as possible.
According to the "2024 China Consumer Trends Survey" report released by McKinsey, the optimism of Chinese consumers has increased this year, and consumption downgrades have also existed, but there has been no consumption downgrade significantly higher than consumption upgrades.
It can only be said that "it's not that xx can't afford it, but xx is more cost-effective" The network stalk continues, service providers should understand that price power is not an overnight trade-off, the low-end bureau relies on price power to open the market and drive growth, and the high-end bureau uses price power to rebuild the brand and define the value, the sooner the service provider learns to control the price power, the more it can be like a fish in water in the new ecology of Douyin e-commerce, and get the most favorable resources.
In any case, this is another starting point for the e-commerce industry, and everyone needs to get back to the starting line and rebuild the competitiveness of participating in building business models.