After the epidemic, which should be prevented first, fresh e-commerce, traffic and customer unit price?

A sudden epidemic has completely changed the development track of fresh e-commerce.

Many years before the outbreak, fresh e-commerce was originally one of the areas that were questioned. During the epidemic period, fresh e-commerce companies represented by platforms such as Box Horse and Ding Dong Shopping got huge traffic overnight: the isolated life at home made large and small families "grab food" day and night, and only the delivery staff of fresh e-commerce companies were still flying around the road during the epidemic period. The story of Box Horse renting Siebel employees was once passed down as a beautiful talk.

However, the happiness brought by isolated life to fresh e-commerce is not only as simple as the surge of traffic, but more importantly, the change of supply chain, the rapid cultivation of user habits and the substantial increase of customer unit price.

In the supply chain, the inventory cost of fresh products is too high, and the strategy of ordering from suppliers and the network optimization of distribution to consumers are more demanding. However, the strong demand during the epidemic suddenly weakened the optimization pressure from consumers-how much can be sold.

The cultivation of user habits is self-evident-how many new users, especially the elderly, start their first mobile shopping experience with a grain of salt.

But what is more important is the change of the unit price of customers-the demand for fresh vegetables corresponding to a light meal after work before the epidemic and three meals at home during the epidemic is very different.

What does the unit price of several hundred yuan mean? It means that the fresh e-commerce that has been questioned for a long time has truly realized the profit under large flow-the ultimate goal pursued by investors and e-commerce platforms for many years. The logistics cost of each fresh delivery order is 6–10 yuan, and the industry gross profit margin is 30%. If an order does not lose money, the customer's unit price needs to be around 33 yuan. This is why many platforms set the threshold of free shipping around 30 yuan. During the epidemic, the average customer price of several hundred yuan made the entrepreneurs of fresh e-commerce truly taste the joy of making their dreams come true.

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However, as the epidemic situation tends to be stable, the big test of fresh e-commerce also comes ahead of time: on the one hand, offline supermarkets, stores and convenience stores not only divert user traffic, but also reduce customer unit prices. On the other hand, the newly established procurement network, distribution system and logistics outlets during the epidemic period cannot be zero overnight.

Fresh e-commerce has reached a new crossroads: which one should be guarded first, traffic and customer unit price?

First of all, the pursuit of traffic is the starting point and ultimate goal of fresh e-commerce. From Amazon to SF Express and JD.COM, the reason why investors, e-commerce and logistics providers push forward wave after wave is nothing more than the just-needed attribute of fresh products, which is that the theoretical traffic is large enough, and the surge in traffic during the epidemic also confirms this point.

Although the traffic will inevitably be halved, the user data and operational experience accumulated during the epidemic will become the main tools to ensure traffic. Now that we have fully understood the characteristics of users' domestic fresh demand, how to arrange procurement and distribution after the outbreak, what products and discounts to provide consumers, how to reach users, and how to ensure users' continuous activity, we will begin to test the data analysis and precision marketing capabilities of fresh e-commerce.

However, the above content has become commonplace for the e-commerce industry. In contrast, keeping the unit price of customers is the unique challenge that fresh e-commerce needs to face at present, and it is also the key to its survival and long-term development. If we can't ensure that users continue to spend more than each item in 30 yuan (if the labor cost is higher, the threshold will be higher), then the business of fresh e-commerce will return to the old road of getting worse and worse. If consumers can be assured to combine their needs (for example, once a day during the epidemic is changed to once a week after the epidemic), buy complementary products (for example, buy non-fresh products with lower inventory costs), try high-margin products or buy large packaging products (for example, similar to Costco's approach), the business of fresh e-commerce can still attract enough support. However, this will really test the insight and education ability of fresh e-commerce to consumers-this will be the re-cultivation of shopping habits.

As the epidemic subsided, the postponed college entrance examination was only less than a month; For fresh e-commerce, the epidemic has also brought unexpected big exams-traffic and customer unit price are indispensable, but each faces challenges. How to choose fresh e-commerce after the epidemic, or both, will soon give your own answer.

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Prof. Dou Yifan, Associate Professor, Department of Information Management and Information System, School of Management, Fudan University. His research interests include electronic commerce, information system economics and supply chain management.