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any hot money has a methodology.
On May 24, Ruixing coffee released its unaudited financial report for the first quarter ending March 31, 2022, and held a performance communication meeting for the first time every two years. According to the financial report, Ruixing’s total net income in the first quarter of 2022 reached 2.404.6 billion yuan, an increase of 89.5% year-on-year. In this quarter, Ruixing also realized the company level profit for the first time since its establishment, with an operating profit of 16.1 million yuan under the U.S. accounting standards (GAAP) and 92.1 million yuan under non-U.S. accounting standards (non GAAP). During the period, there were 556 net stores added, with a total of 6580.
It is worth mentioning that even though the number of store closures increased due to the epidemic, the same store sales growth rate of Ruixing’s self operated stores maintained a strong growth of 41.6%, although it was lower than that of last year.
Compared with Ruixing, which suffered brand damage due to the financial storm two years ago, today’s Ruixing has been reborn – it has completely achieved disruptive changes and breakthroughs in product R & D, store operation and user operation, which is the fundamental reason why Ruixing can achieve counter trend growth in the adverse environment of cold consumption and repeated epidemics. Ruixing’s increasingly solid basic skills are reflected in the consumer side, which is the popular products and marketing activities that frequently appear in the circle.
From thick milk latte, raw coconut latte to the latest “first day single product king” coconut cloud latte; From the cooperation with Li Lu Xiu, a popular son, and Gu ailing, a talented skier, to the cooperation with EDG, a well-known E-sports team, these products not only helped Ruixing win the favor of consumers, but also improved the company’s brand.
Following the interview with zhouweiming, senior vice president of Ruixing coffee (person in charge of product R & D) and caowenbao (person in charge of store operation), Dazheng entrepreneurship talk talked to Yangfei, co-founder and chief growth officer of Ruixing coffee, and listened to him share Ruixing’s marketing methods and growth methodology.
Yang Fei emphasized the younger positioning of Ruixing brand, put forward various user operation strategies such as “integration of product and transportation” and “refined management”, cooperated with Ruixing’s product R & D strategy and digital store operation strategy to create a new consumption and retail business form with three pillars of people, goods and market, and continued to provide customers with products and services of “high quality, high cost performance and high convenience”.
Yang Fei Yang Fei is currently the chief growth Officer (CGO) of Ruixing coffee. As one of the early co founders, Yang Fei once served as the chief marketing officer (CMO) of Ruixing coffee, responsible for brand marketing and user growth. He is also the namer and brand founder of luckin coffee, building “little blue cup” into a phenomenal consumer brand from scratch; He is good at mobile internet marketing and user operation, and takes “flow pool thinking” as the core concept to realize the fission growth and private domain retention of coffee users. Yang Fei graduated from Communication University of China with a master’s degree in communication and has more than 20 years of practical marketing experience. He once wrote the book “flow pool” (CITIC Press).
what changes has Ruixing made in terms of brand and operation?
Q: What changes have been made in the brand and marketing after the Ruixing thunderstorm in 2020? What is the reason behind this?
Yang Fei: 2020 can be said to be a watershed for the development of Ruixing. Since 2020, we have connected marketing and user operation, forming a development model of “integration of product and transportation”, that is, integrating brand marketing and user operation, and making user operation more refined.
At the same time, my personal responsibilities have also changed accordingly. After becoming the chief growth officer, on the basis of continuing to be responsible for the original marketing work, I am also responsible for income growth, user growth, user operation and other growth businesses, and began to participate in cup / price formulation.
Under the “integration of product and transportation”, on the one hand, there is the traditional marketing method, that is, promoting sales through products, prices and channels; The other side is the user growth and operation under the Internet mode, involving attention, innovation, transformation, frequency increase, retention, fission and other work. “Integration of product and transportation” has three significant advantages:
First, it can reduce costs. The traditional marketing department is a spending department, while the user operation is a money making department. The combination of the two will make the brand marketing money more efficient and know where to spend the money more effectively;
Second, it can improve the flow conversion efficiency. Marketing is to increase traffic, and user operation is to transform traffic. When combined, marketing can provide guarantee for operation, and the two form a closed loop of traffic;
Third, the integration of product and transportation increases the way users operate and improves the controllability of user operations.
After getting through the traditional marketing and user operation, our brand and marketing are more closely integrated with the company’s overall development strategy, closely linked with various departments such as product R & D and store operation, and become one of the important growth engines.
Q: Many new local retail brands are targeting young people. What is Ruixing’s experience of being widely loved by young people? What are the reasons for choosing Gu ailing as a spokesperson? Why did you lock her in early?
Yang Fei: in addition to the above “integration of product and transportation”, Ruixing’s brand positioning has also been significantly adjusted in 2020. We emphasize the rejuvenation of the brand. Internally, we say that we firmly embrace the post-90s and post-00s. This adjustment has brought a series of changes.
First of all, we made adjustments to our products. After studying the preferences of young people, Ruixing’s product R & D team believes that milk coffee is a general direction, and then determines the “big latte strategy”. Many of Ruixing’s popular products today, such as thick milk latte and raw coconut latte, belong to this system. “Thick milk”, “raw coconut” and “velvet” lattes have become our three swordsmen of lattes in 2021 and become popular products.
From the aspect of marketing, we have gradually formed a “point, line and area” playing method of using popular products to drive the product line and then the brand.
In the follow-up, we also supplemented the positioning of the brand tone, emphasizing “professionalism, youth, fashion and health”, and put these concepts into the products. For example, the cherry blossom series products returned in March this year have added 0 calorie sugar, emphasizing 0 calorie and 0 fat, which conforms to the needs of young users for “healthy” drinks.
Earlier, we made a small black cup of SOE coffee and established the image of “professional” coffee, thus forming a three-dimensional strategy with both explosive and professional strategies. After establishing a professional brand image, we have also established our own “price anchor”, which can take the initiative in pricing, and then gradually return the price to the product value through refined operation.
Based on the new brand positioning, we are also more inclined to look for idols loved by young people as spokesmen. Gu Ailing and Li Luxiu are both very familiar with the “family” after the 1990s and the endorsement of them is indeed favored by young consumers.
We did decide on Gu ailing quite early. We began to understand Gu Ailing in June 2021, officially signed the contract in August and officially announced it in September. There are two main reasons for choosing her: first, we have great confidence in the Winter Olympic Games to be held in Beijing. This confidence comes from the great attention paid to the 2008 Beijing Olympic Games and last year’s Tokyo Olympic Games and the upsurge of national sports. Second, Gu Ailing’s experience really touched us. The brand image she and Ruixing want to create perfectly matches the brand tone.
Gu Ailing’s participation is of great significance to Ruixing’s brand and thanks her for her trust in us. Ruixing is at a historical turning point. We hope that “professional, young, fashionable and healthy” will be injected into the soul of the brand. We also hope that we can join hands with Gu ailing to make the slogan “young, Ruixing” deeply rooted in the hearts of the people.
From expansion fission to fine operation, how does
Ruixing do private traffic
Q: Ruixing now has nearly 20 million private domain users. How do we do it and how do we operate these users?
Yang Fei: the private domain actually has three characteristics: self owned, free and reusable. I divide the private domain into three levels: large, medium and small.
Many people think that the private domain is a community and a circle of friends. However, in fact, the community is only a supplement to the traffic communication. It is not the most effective closed-loop transformation tool. The real core is the understanding of the rules after user stratification formed by the large private domain.
Ruixing mainly orders through app or applet. After the crisis in april2020, we began to establish our own private domain traffic pool. Within three months, we have linked to 1.8 million users through enterprise wechat. By constantly doing fine operations in touch, innovation, retention and frequency improvement, we have not only retained a large number of users in the trough period of 2020, but also achieved good marketing results at a lower cost.
Ruixing has long established its own marketing data center. It has chosen the CDP (customer data platform) mode, accessed data from multiple contacts, and formed its own large private domain traffic pool. After years of accumulation, it enables Ruixing to better understand users and realize a number of automation functions.
By the first quarter of 2022, Ruixing had 16million monthly average trading customers and more than 29million corporate fans. At present, Ruixing has accumulated nearly 20million users on enterprise wechat alone.
Q: You just talked about the refined operation of users. How does Ruixing carry out the refined operation under the “integration of quality and transportation”? What is the difference with traditional retail?
Yang Fei: in fact, the operation of new retail is mainly divided into two parts: store operation and user operation. Traditional retail enterprises have almost no real user operation or are relatively weak. Our user refined operation is the ultimate refined user service. To provide good user service, we have adhered to two aspects:
First, deeply explore the needs of users, so as to have more efficient and accurate interaction and communication with users. We understand users, do not harass users, and push good products and personalized services to users’ hands.
Second, we insist on automatic marketing. At present, the automation of rules in our marketing has exceeded 90%. In the face of our users, we will realize automatic push, automatic coupon loading, automatic material recommendation, etc. based on the accurate understanding of users’ preferences and according to users’ personalized needs.
For example, according to the influence of temperature and weather in different cities, we will recommend different coffee and services to users, including cold coffee and hot coffee. In rainy days, many users are inconvenient to go out. Ruixing found that many users like to buy coffee together. At this time, Ruixing will invest more takeout and share coupons (coupons for buying multiple cups of coffee) and appropriately exempt some delivery fees. In Ruixing’s marketing system, these functions are all automated.
After the fine operation is completed, combined with our powerful contact tools such as private domain traffic and ecological app, it can bring better conversion rate.
Display of hot and cold products of smart screen when the temperature changes
“People and goods yard”
- Small private domains are enterprise wechat, circle of friends and community. These private domains can bring certain user precipitation and user re purchase. However, without the data support of large private domains, the communication between small private domains and users can easily become an inefficient harassment;
- The middle private domain refers to the public and private accounts, as well as enterprise numbers and small programs of the entire wechat ecosystem, which will form some combination methods to enrich the private domain operation, and their conversion rate will exceed that of the small private domain.
- The big private domain is a broader user group based on the enterprise’s own app and user data management platform. Of course, it can also be regarded as an enterprise’s digital operation system. With this system, the platform can truly understand users and formulate the rules of “people and goods yard”. With this digital system, the above-mentioned small private domain and medium private domain have become a contact point for touch users and become touch tools.
under new retail
Q: Ruixing has always emphasized the digital ability. How do we use the digital ability to formulate the rules of “people and goods yard”?
Yang Fei: the biggest difference between new retailing and traditional retailing is that it can empower “people and goods yard” with digitalization. The empowerment of data to “field” is reflected in site selection and operation optimization; The empowerment of “goods” is reflected in the optimization of selection; The empowerment of “people” is the above-mentioned refined operation to improve the retention rate of users and the consumption frequency of users.
In the e-commerce era, people customize rules based on “people and goods”. For example, many e-commerce RFM models layer users. However, I don’t think this set of rules is suitable for the new retail scene. The “field” rules in the new retail are obviously different from the “people and goods” rules. Therefore, we need to make a new “field” rule on the basis of the previous one.
For example, there is a difference between a store that has been open for six months and a store that has been open for one month; However, stores in different scenarios such as schools, office buildings and shopping malls also have different consumption characteristics. For example, some stores in shopping malls may find that they are actually more in line with the consumption model of office buildings through attribution analysis. Therefore, although this store is opened in shopping malls, it is actually more suitable for office stores.
In short, we hope not to rely on human eyes to judge the store attributes, but to hand over the decision-making power to the data model.
Therefore, Ruixing is carrying out some research on user stratification based on “field” rules, which may bring some contributions to the global retail industry in theory and practice.
Q: Ruixing has always maintained a rapid pace of innovation, and is also continuing to produce new hot models. How does Ruixing help the products out of the market on the marketing side? The
Yang Fei: there is a set of methodology for creating any popular model. In order to develop a popular product, we will make preparations 3-6 months in advance to link the product with the marketing department. Before a product is launched, our promotion department will have an internal discussion to see what node is more appropriate for the product to be launched and can push the volume to a high point to achieve rapid explosion.
For example, the new coconut cloud latte launched on April 11 this year has become Ruixing’s “first day single product king” with the help of these marketing actions. On the first day of listing, the whole network sales exceeded 660000 cups, and the single store sales exceeded 130 cups.
For example, in the Winter Olympics marketing in February this year, two valley ailing special drinks were out of stock in stores on the day of their launch. We began to develop these two special drinks after the official promotion in September last year. In January this year, we opened two flash theme stores in Beijing in advance, and the surrounding areas such as cup covers, paper bags and refueling tags were ready before the Gu ailing competition.
On February 8, after Gu ailing won the first competition, our official microblog immediately issued a celebration poster, and quickly updated Gu ailing elements in the app, applet screen, banner, pop-up window, menu page and other positions, so as to achieve a wide range of low-cost coverage with the help of its own traffic Pool Layout. Less than an hour later, the advertisements put into office buildings, airports and cinemas were also launched simultaneously. Threeorfour hours later, a number of media have published articles on the same theme as “Ruixing Valley ailing coffee hot sale”.
Original title: Ruixing coffee Yang Fei: from Gu ailing to Yeyun latte, Ruixing’s growth methodology | entrepreneurship theory source: id:centuriumcapital, reprint has been authorized.
reprint authorization and media business cooperation: Amy (wechat: 13701559246);
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