Author | Qi Minqian
Edit | Miao Zhengqing
After more than three months’ repeated consideration, we established a 17-year-old good shop for leisure and snack enterprises and made the biggest personnel and business strategy adjustment since we started our business.
On November 27th, in Liangpin Building in Dongxihu District, Wuhan, Yang Yinfen was elected as the chairman and general manager of Liangpin Store, responsible for daily business affairs. Before this new job, Yang Yinfen served as the vice chairman of the company. With the change of the helm, Yang Hongchun, the former chairman and general manager, stepped down and retained the positions of director and member of the strategy committee.
Yang Yinfen and Yang Hongchun used to be old colleagues who worked together in Kelon Electric Appliances and entrepreneurial partners of Liangpin Store, and both of them were actual controllers of Liangpin Store.
After Yang Yinfen took office as CEO, the first knife was cut to the price. On November 27th, Liangpin Store announced the largest price reduction for the first time in 17 years. The average price reduction of 300 products was 22%, with the highest drop of 45%. Tiger sniff learned that in the core team of good shops, Yang Yinfen always tends to adjust his business according to the needs of consumers. After becoming the helm of a good shop, his first move coincides with this style: first, to meet the needs of consumers and reduce prices on the basis of ensuring quality; After that, focus the main line of reform on innovation and improving internal efficiency.
Inside the boutique, Yang Hongchun is called "Yang Zong" and Yang Yinfen is called "Manager Fen". Among them, Yang Yinfen got a nickname of "Yang Yidao" because of his decisive work. In the eyes of people who are familiar with Yang Yinfen, he prefers to study new technologies and trends, which played an important role in the transformation of quality shops to online channels more than ten years ago.
This coaching change and price reduction of the good shop is also interpreted as an important step taken by the good shop at a critical moment.
At present, this snack company is facing the most difficult moment since its establishment: online sales are sluggish, and offline channels are being chased by peers. In the first three quarters of this year, the company’s revenue and net profit both fell by double digits. As Yang Yinfen said in an open letter after taking office: "It is not only a question of living hard, but a question of living or not."
On the surface, the business difficulties encountered by good shops are related to the consumption environment and the fierce turmoil in the snack industry in the past two years. Consumers pay more and more attention to cost performance, and discount snack shops that focus on the concept of cost performance are attacking the city through offline channels. However, apart from the external factors such as competition and price war, from the point of view of the good shop itself, many large enterprise diseases have also bred in the company. When the external environment changes suddenly, the problem of "elephants are difficult to turn around" has appeared.
In fact, as early as August this year, Yang Yinfen, then vice chairman, said for the first time in front of all employees that "the company is facing a life-and-death test and needs all employees to change." He told Tiger Sniff that before that public speech, he spent two weeks taking the detours taken by the market and resumption companies in recent years and thinking about what to do next.
"Expensive, become out of date"
In the communication with Tiger Sniff at the beginning of November, Yang Yinfen attributed the "difficulty" of good shops to "the superposition of three waves": First, the changes in the consumption environment; Second, the discount snack shops in the industry are "besieging" offline. Third, there are some big enterprise diseases inside, which are too slow to respond to changes in consumer demand.
The reason why Yang Yinfen emphasized the "superposition of three waves" is because if these three waves hit alone, it may be just a "skin injury" for a good shop. But now, the three waves are superimposed together, which makes the good shop somewhat unprepared.
Among these three waves, the most menacing one is the discount snack shop that the whole consumer industry is very concerned about this year. According to the statistics of third-party organizations, the size of the whole discount snack shop has exceeded 10,000 stores. These discount snack shops focus on "low-priced mind". With the blessing of capital, they not only opened stores quickly, but also set off a price war in the industry. In mid-November, Zhao Yiming snacks and snacks were busy merging, which was regarded by the industry as a signal for the further scale of discount snack shops.
Discount snack shops have a direct impact on good shops. "Some stores are opened with good shops, which not only saves time for site selection, but also can use good shops as price anchors." A senior practitioner in the snack industry commented.
Pictured: discount snack shop
It is worth noting that this "surprise attack" from discount snack shops is not "unexpected" for good shops, but before, snack big brother did not make timely changes in the face of "trouble".
Yang Yinfen told Tiger Sniff that in fact, as early as 2019, they paid attention to the format of discount snack shops, but at that time, they did not expect that this format could open the offline channels of the sinking market.
Even in this year, the good shop resolutely embarked on a different road from the discount snack shop: to develop high-quality snacks. Yang Yinfen said that their judgment at that time was: "I believe everyone wants to eat something good if they eat it directly."
Today, Yang Yinfen also firmly believes in such a strategy. They prefer to describe the past as "the strategy is correct, but the specific tactics are worth repeating."
Yang Yinfen told Hu Wei that in the past, in the pursuit of quality, good shops may have done some innovations and quality control that consumers don’t care about. He gave an example: according to the product requirements of good shops, the walnut kernel in nuts must be half intact every day, and the brown skin on the outside of walnuts can’t even fall off. In the procurement of nuts, good shops require suppliers to purchase raw materials with specified specifications. The direct result of these "requirements" is that the grade of raw materials is high and the procurement cost remains high.
However, the increase of some production costs has not directly made consumers feel the sense of value.
Over time, more such products have become a "trap": on the one hand, the company has the genes to pursue quality; On the other hand, this pursuit has not been faithfully conveyed to consumers. "As mentioned in the book" Innovator’s Dilemma ",the performance of leading brands is getting higher and higher, and the price is getting higher and higher, and it is gradually deviating from consumer demand." Yang Yinfen concluded.
Even, in Yang Yinfen’s view, before, good shops didn’t convey the "high quality" of good products to consumers at the communication end, which led consumers to have insufficient mental knowledge of the product quality of good shops and only felt expensive.
Under such circumstances, with the more obvious consumption stratification in the post-epidemic era, some consumers began to be more sensitive to prices, and the situation in front of good shops became complicated. An industry insider said: "Expensive, in this era, especially against the backdrop of discount snack shops, is very out of date."
In the face of market changes, according to insiders, there has been discussion and struggle for some time about whether to reduce prices and change business strategies in good shops. But a subtle thing happened in this process, which may have accelerated the decision-making process within the good shop.
In mid-2023, a discount snack shop opened in Wuhan, the base camp of Liangpin Store. In the eyes of an insider, this incident has a great impact on good shops.
"Yang Yidao" cut two knives.
Shortly after the "competitor opened the store to the door" incident, the top management began to carefully review the company’s past products and channel strategies and try to adapt to market changes.
Since August, Yang Yinfen has intensively visited stores and reorganized internal and external relations to prepare for price reduction and business adjustment. But for a company with a history of 17 years, it is obvious that such a key decision as price reduction cannot be hastily customized. In order to give a reasonable plan, after more than three months’ research, the executives of the good shop decided on the final plan at the end of November: the explosion with high repurchase rate is the main force of the price reduction of the good shop this round.
Yang Yinfen confessed to Tiger Sniff that a key problem he thought was how to find a balance between profit and price.
Although both good shops and discount snack shops belong to channel brands and do not directly undertake production links, there are obvious differences between them from the business model: discount snack shops are pure channel models, as long as they do the work of selecting goods; However, good shops are the logic of channel plus products, and will participate in product research and development and production in the upstream supply chain. The cooperation mode between good shops and suppliers determines that the company can’t keep down the price of suppliers, let alone change suppliers at will. In short, in the matter of price reduction, the interest relationship that good shops have to straighten out is more complicated.
Yang Yinfen also gradually realized his own changes. He thought that he was a big spender in business. Before doing business with suppliers, his idea was: "You make the products according to what I want first, and the price is easy to talk about." Now, although Yang Yinfen still meets with suppliers from time to time, she often gives psychological massage to suppliers to make them adapt to market changes and realize the necessity of price reduction.
Communication alone is not enough. Good shops focus on the supply chain. In order to strive for space for product price reduction, good shops began to do "squeezing water" at the supply chain end. Externally, Yang Yinfen strives to make suppliers regular and market-oriented. "For example, pistachios, as long as they are new products in the United States that year, have little difference in taste, I will go to the market to compare prices and then squeeze out the water in the supply chain."
In view of some explosive products, good shops began to adopt the practice of "considering the scale first, then managing the profit". Purple cashew nuts are a new explosion of good shops this year. This raw material product can greatly reduce the raw material cost through direct mining of bulk raw materials. Good shops directly provide funds for suppliers to purchase raw materials, and suppliers only earn processing fees, so there is more room for price reduction. Tiger sniff learned that the current price of this product has been lower than most brands on the market.
The second knife of "Yang Yidao" was cut at the product cost that consumers could not perceive. A related person told Tiger Sniff: "In the past, consumers didn’t pay so much attention to cost performance as in the past two years, and the life of good shops was better, so many similar costs with no practical value were ignored."
This year, Yang Yinfen put all the people inside on the standpoint of consumers and re-understood the matter of "quality". "Every penny the company spends on quality must be perceived and recognized by consumers." In the past few months, people with various backgrounds have often been invited to Yang Yinfen’s office on the third floor of Liangpin Building to discuss what consumers are like, what products and brand expressions they like.
At the executive level, in order to ensure the implementation of the price strategy, Yang Yinfen drew a "gross profit red line" for the team. As long as the gross profit of the product exceeds this red line, he must be asked to personally approve it. In addition, he is still asking the technical department to develop a system for terminal sales. Regardless of online channels or offline stores, as long as a product is sold too expensive, the system will prevent order payment.
We should "cut down" the organization
Although the price reduction is the most important work of a good shop at the present stage, in Yang Yinfen’s view, price alone cannot solve the real problem of a good shop.
"The industry will go through a price war from immaturity to maturity," said Yang Yinfen. Under the appearance of price war, the deeper reason is the overcapacity in the upstream of the industrial chain. In the short term, this is also the dividend of discount snack shops.
A senior practitioner in the snack industry said that there are a large number of small factories in the upstream of the snack industry. Because of the low threshold, after one person did it, relatives and friends around him followed suit. "If the demand goes down, the upstream will be paralyzed directly. We have encountered factories whose orders have been withdrawn and whose production capacity is idle, and they have to lose money to supply us."
The environment in front of good shops is becoming more complicated: upstream, overcapacity; Downstream, consumers began to be more sensitive to prices; In the competitive landscape, old and new rivals are making the competition more intense. This means that good shops need to adapt to this more complicated environment through an evolution.
Some analysts in the snack field believe that price reduction is actually a short-term powerful medicine for good shops. In the long run, good shops need to adjust from the company’s own products, channels and organization and management. "It needs to become more flexible and be able to respond more quickly, flexibly and sensitively to different consumers." This person believes that many big brands are actively cutting the product matrix and organizational structure "small" in order to adapt to different needs more flexibly.
Yang Yinfen also agrees with this approach. After the price war, organizational upgrading will be one of his adjustment directions.
At this stage, Yang Yinfen focuses on products and stores. He hopes that good shops can innovate in these two aspects and become more and more "fine".
Taking products as an example, in Yang Yinfen’s planning, good shops will learn from other brands in the future, and the product positioning and price range will be separated, and there will be products at the pyramid end. At the same time, on the basis of ensuring quality, there will be more affordable products to attract young people.
On the offline channel side, in recent months, Yang Yinfen spent a lot of time actually looking at the stores, looking at the stores of his own brand, and also looking at the stores of competitors. Yang Yinfen hopes to make differentiation in the store after the good shop.
Take Hubei market as an example. There are many kinds of shops in good shops, including community shops, shopping malls and transportation hubs. In the past, these shops all used a set of standards. "Decoration, display and product mix are similar," said Yang Yinfen. Next, he will focus on shop differentiation. Different stores have different products, decoration and sizes.
The picture shows Liangpin Puzi store.
Compared with the innovation of products and stores, Yang Yinfen regards improving organizational efficiency and countering the inertia of internal operation as another key test.
In the letter to all employees after taking office, Yang Yinfen spoke bluntly about the problems of internal large enterprises: bloated organization, pursuit of standardization and rigor of process details and loss of organizational vitality …
In the past, when doing management, Yang Yinfen liked to solve problems through "substitution", but now he feels that the enterprise is a system, and substitution cannot solve long-term problems, so it is necessary to change the elements, processes and cultural atmosphere of system operation.
In terms of internal management, Yang Yinfen’s current strategy is to unify his thinking first, and let the company unify its thinking through repeated preaching; Then set goals, speak with facts, and be result-oriented. "There is no particularly good way, because it is very difficult to change people. Adults will only take the initiative to change if they are in pain."
At present, the assessment mechanism of "KPI" plus work tasks is adopted in the good shop. Yang Yinfen told Hu Wei that next year, the performance of the business entity will be more emphasized in the internal assessment, and the intensity of the last elimination will be strengthened. In terms of organizational structure, he is not prepared to make great changes, but he will try to make the organization smaller. For example, the product department may separate out the categories that have opportunities according to categories, forming a small product department, and people in this department can directly connect with departments such as channels and be responsible for their product sales.
Yang Yinfen set herself a goal of "two and a half years": in the second half of this year, the goal is to stabilize the company from the continuous decline; In the first half of next year, a series of adjustments should see results in business performance.
"Now the competition is so fierce, we must first know the direction we are going, and then we must adapt to external changes and live to go there." Yang Yinfen told Tiger Sniff that he thought "changing his own life" was the most painful, but only in this way could he survive. "If you don’t take this road, you will die," Yang Yinfen said meaningfully.
