He Zhiyu nodded:
"That's the truth, but the competition in the large supermarket sector is quite fierce now. Although we are a local enterprise in Dongjiang, our brand recognition can't compare to those multinational corporations. So, we can only sell things slightly cheaper than our competitors, otherwise we'd have no advantage at all."
Liu Cheng wisely smoked silently by the side.
As an outsider, it was inappropriate for him to comment at such a moment; leaning towards either side in his words would not be good.
Chen Pingjiang nodded with deep emotion:
"It's all difficult, but precisely because of this, we need to find new sales channels. Only with large volumes can we achieve small profits but quick turnover, and have enough capital to negotiate with suppliers. You surely understand this principle."
He Zhiyu also agreed with Chen Pingjiang's words, but even so, business is business, friendship is friendship; when doing business, it's still about negotiating prices.
Chen Pingjiang, however, changed the subject:
"I predict that our brick-and-mortar industry will be hit by the massive waves of the internet in the next few years. If we don't embrace new channels and new retail methods now, we are very likely to sink in this tsunami."
The imminent rise of the internet economy was not a new argument; the emergence of Taobao had already introduced new retail methods.
"I'd like to hear the details."
Even Liu Cheng, who was by the side, felt that Chen Pingjiang's words were a bit alarmist.
Chen Pingjiang smiled and said to the two of them:
"The latest mobile phones on the market can now do many things, like chatting on QQ, reading news, and even watching videos. Compared to Nokia phones a few years ago that could only make calls and were like bricks, the progress is quite obvious.
Have you two thought about it, if technology continues to develop, in the near future, phones will be able to do more and more things. We can browse and order products on Taobao via phone, make payments via phone, and naturally also order takeout or supermarket items via phone, which will then be delivered to our homes by dedicated personnel."
Liu Cheng and He Zhiyu exchanged glances, both seeing deep agreement in each other's eyes.
"This is indeed possible, but how do we solve the payment problem?"
"What's so difficult about that? You all know Alipay, right? Everyone has an independent account and can transfer money to anyone, just through a U-Shield. If technology continues to develop, the U-Shield is replaced, and Alipay moves from the PC end to the mobile end, do you think it can solve the payment problem?"
Parting the mists of the future, Chen Pingjiang knew that the first generation iPhone would be officially released just two months later.
People in later generations generally considered the iPhone a groundbreaking product, but it was actually the first generation iPhone that was truly revolutionary.
Its emergence redefined the mobile phone, truly ushering in the smartphone era, and it was hailed as a revolutionary product.
With the advent of the 3G era, the concept of mobile internet became increasingly known to more people.
In 2009, with the emergence of mobile Alipay, the path of mobile payment also became clearer.
He and Liu had previously focused on offline business and didn't know much about the internet.
Chen Pingjiang's perspective gave them a fresh outlook, and the more they thought about it, the more they felt that the scene he described was very likely to be realized in the future.
Chen Pingjiang saw that the two were somewhat swayed and continued:
"Developing online sales channels will not steal offline traffic; instead, it will complement offline sales, making the Yuanfang Supermarket brand even more deeply ingrained. When consumers have purchasing needs in the future, the first thing they will naturally think of is Yuanfang Supermarket."
At this moment, He Zhiyu stood up and stretched his legs, smiling as he said,
"Xiao Chen, don't say I'm dawdling. Business is business, and I personally still lean towards cooperating with Renren.com. It's still the same question: can the commission be a bit lower?"
Chen Pingjiang gave a bitter smile.
He Zhiyu wasn't letting go until he saw the rabbit.
Even after half a day of persuasion, this cunning businessman remained unmoved.
"The commission really can't be lowered."
Chen Pingjiang finally decided to pull out his trump card:
"However, I can give you a plan for Yuanfang Supermarket's future operations, which will at least allow Yuanfang Supermarket to remain invincible in future market competition."
"Oh?"
Chen Pingjiang's words were quite bold, surprising He Zhiyu considerably.
"First tell me what the differences are."
Chen Pingjiang did not hold back,
"Let me give you an even more thought-provoking perspective: if Yuanfang Supermarket doesn't reform, it will slowly fade from public view."
Seeing He Zhiyu about to interject, Chen Pingjiang waved his hand, signaling him to listen:
"Rising rents, increasing wages, and the impact of the internet economy seem like superficial issues, but in reality, they point to a problem with the profit structure of large supermarkets.
Selling vegetables and packaged snacks yields extremely limited profits, but to attract customers, supermarkets not only need to stock a wide variety of items but also sometimes have to sell some goods below cost.
Meanwhile, the spoilage rate for fresh produce remains stubbornly high. Any store selling goods has both loss leaders and profit-generating items, but in reality, your profit-generating products are being gradually eroded by competitors.
Your competitors are not other supermarkets; for example, for home appliances, people would rather go to places like Suning, Gome, or Wuxing, where prices are lower, professionalism is higher, and there are more choices."
He Zhiyu said somewhat unconvinced,
"If we don't sell home appliances, we can still sell other profitable items."
Chen Pingjiang raised an eyebrow and retorted,
"Really? Pots, pans, cosmetics, daily necessities – I imagine you've already been affected by the rise of Taobao, haven't you? Don't worry, this is just the beginning. The rapid development of online shopping will block Yuanfang Supermarket's last path.
Prices are lower than yours, quality is no worse than yours, so why buy from you? Being large and comprehensive is sometimes not an advantage. Smaller, more specialized stores can eat away at your market share with their cost advantages. The bigger the plate, the more you lose, and the faster you die."
This time, He Zhiyu finally stopped being stubborn.
If anyone else had said that, He Zhiyu would have certainly scoffed and retorted,
"What do you know?"
But he couldn't ignore Chen Pingjiang.
At such a young age, just a freshman, the other party had already made a name for himself, clearly possessing genuine talent and knowledge.
He knew his own business.
Although Yuanfang Supermarket had a certain brand recognition in Dongjiang and several branches, business had become increasingly difficult recently.
They faced encirclement and obstruction from large hypermarkets like Carrefour and Tesco, and the rise of online shopping had indeed led to a decline in Yuanfang Supermarket's turnover.
Furthermore, its single product offerings couldn't compete with hypermarkets focused on specific channels.
Currently, they could still barely get by through small profits and quick turnover, but as Chen Pingjiang said, if they didn't change, they would only die!
Thinking of this, He Zhiyu let out a heavy sigh, then smiled and raised his hand in invitation.
"It's quite noisy here, General Manager Chen. Let's go to the tearoom to chat over tea."
He no longer presumptuously called him Xiao Chen but changed his address to General Manager Chen.
Although seemingly more distant, it actually conveyed respect.
After sitting down in the tearoom, the three of them brewed a pot of excellent Biluochun tea.
"The way to break the deadlock is simple: no matter how the market changes, as long as you firmly capture the hearts of customers and ensure the supermarket has sufficient traffic, you will remain invincible."
Liu Cheng, who ran a private kitchen, had a good grasp of this:
"It's easy to say, but hard to do. There will always be someone cheaper than you, someone with more dishes than you, someone with more variety than you, and customers will vote with their feet."
He Zhiyu also sighed,
"Old Liu is right. This is a common problem encountered by all types of stores. Big brands are fine because customers recognize the brand, but small brands really struggle."
After taking a sip of the fragrant and charming Biluochun, Chen Pingjiang smiled as he put down his teacup,
"You all seem to have overlooked a key point."
"What key point?"
"Service!"
Liu Cheng was somewhat puzzled,
"Aren't all services pretty much the same?"
Chen Pingjiang looked at He Zhiyu and asked,
"General Manager He, do you also think so?"
Seeing that He Zhiyu remained silent, Chen Pingjiang chuckled softly:
"This might be a common ailment among most businesses. They always think they provide pretty good service, or that their store's service is no worse than others, but you truly don't understand what extreme service means.
Whether it's a supermarket or a private kitchen, you're essentially dealing with repeat customers. Therefore, the quality of service directly determines whether they will return.
The Harvard Business Review conducted a study: '70% of a company's profits come from old customers, and the factors that attract them back are, first, service, second, the product itself, and finally, price.'
Good service is not just about greeting customers with a smile, or simply serving tea and water. It means offering returns if unsatisfied, establishing free services, being responsive to requests, resolving all complaints, and so on. It's about truly understanding and internalizing the concept that the customer is king."
He Zhiyu didn't recognize the importance of service, waving his hand with a smile:
"You probably haven't worked in the brick-and-mortar industry. What you're saying is easier said than done. First, it will greatly increase operating costs. Second, it's difficult to control service standards among employees. Sometimes, many customers are quite difficult to deal with. We are just sellers of goods; products and prices are the decisive factors."
Chen Pingjiang drank his water, smiling but saying nothing.
This was the inherent arrogance of the current brick-and-mortar industry.
The future internet economy would teach them a lesson.
Only when Yuanfang Supermarket found it difficult to continue, and Pang Donglai attracted public attention with its excellent service, would they shed their arrogance.
Old He wasn't a bad person, but like his wife Qin Han, he carried a unique arrogance and stubbornness, an arrogance that would only disappear when he had nothing left.
The atmosphere suddenly became awkward.
Seeming to sense that Chen Pingjiang was a bit displeased, Liu Cheng quickly stepped in to smooth things over.
"Have some tea, have some tea. Old He, you too, let Xiao Chen finish what he's saying."
He Zhiyu also showed an embarrassed expression,
"Xiao Chen, please continue."
In a private setting, among acquaintances, Chen Pingjiang couldn't really show his displeasure.
He could only patiently continue:
"In the short term, it will increase operating costs, but in the long term, it will attract more customers. Either way, it's a profit. If it's difficult to control service standards at the employee level, then increase training and implement a survival of the fittest approach.
Yuanfang Supermarket is not an electronic product with technological barriers; what you sell, others also sell, and others can offer your prices. Therefore, the breakthrough can only be service and embracing online sales. With all due respect, Brother Liu's private kitchen can still rely on the advantage of its dish flavors, but Yuanfang Supermarket has no such capital."
"Xiao Chen, could you elaborate on what exactly constitutes humanized and refined service? What you just said was quite general."
Liu Cheng was also a shrewd person, seemingly sensing some tension between Chen Pingjiang and He Zhiyu, and had been trying to mend things.
"Free parking, pet boarding, umbrellas and raincoats provided at the service desk, ice provided in the fresh produce area to ensure product freshness, clearing inventory with real-time discounts, providing candies and toys for children, offering priority service for special groups, three-day no-questions-asked returns even if they simply don't want it anymore, and so on.
There are too many details to explain all at once. In short, it's about thinking what the customer thinks and providing high-quality service to different groups of people. Additionally, we need to improve the service awareness of service staff, reward those with good service quality, instill in them the idea that service is their lifeline, and give frontline sales staff certain autonomy, etc. I will include all of these in the plan later."
Liu Cheng listened, secretly clicking his tongue,
"This isn't broad service; it's practically treating customers like fathers. Oh, no, I'm not even that good to my own father."
After saying that, he turned to He Zhiyu,
"Old He, I think we can give it a try. If I were a customer, given the choice, with the same product prices, I would definitely choose this store."
He Zhiyu was also quite moved by what he heard, not expecting there to be so many service details.
After turning the teacup in his hand for a long time, He Zhiyu finally made a decision:
"General Manager Chen, our Yuanfang Supermarket is willing to establish a deep partnership with Renren.com's food delivery platform, and the commission will be as you said.
I only have one request: in addition to providing us with a detailed plan, I also hope you can serve as a reform consultant for our Yuanfang Supermarket, with a monthly salary consistent with our top management at Yuanfang Supermarket. Don't worry, I know you're busy; you won't need to be in the office."
Unexpectedly, there was an added bonus.
Chen Pingjiang naturally couldn't refuse; it wouldn't take much of his time anyway, and besides, top executives at Yuanfang Supermarket surely earned hundreds of thousands a year, right?
What Chen Pingjiang lacked most right now was money.
(End of Chapter)
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