Located on Shenyang's bustling Dongzhong Street, the address happens to be halfway between Apple's Apple Store and Huawei's flagship store, which would have been a three-star store a few years ago, but now it's the new site of Xiaomi's 5000th Mi Home.

We walked in from the intersection of District C of Dayue City in Shenyang. Huawei's flagship store was eye-catching, but you only needed to look aside a little bit, and you would see the transparent glass on the upper and lower floors, and the brand Logo in the middle was covered by a piece of happy red cloth. Take a closer look-MIX FOLD-- knew it was a millet store. A fellow media colleague joked: I thought it was an Apple store.

The very "Apple" style store in front of us really comes from the designer of the Apple store.

Tim Kobe is the founder of Eight Inc and CEO, has worked with Steve Jobs for a long time, and the Apple Store on Fifth Avenue in the United States was written by Tim. Prior to the Shenyang Xiaomi Home, he helped Xiaomi design another Xiaomi flagship store to open in Shenzhen in 2017.

But the significance behind Shenyang, the 5000th Xiaomi home, is to showcase the results of Xiaomi's offline retail transformation.

Lu Weibing, general manager of the Redmi brand, said at the Redmi Note9 conference in November 2020 that Xiaomi would have a Xiaomi home in every county in the coming year. Since then, Xiaomi offline channel stores began to speed up.

In five months, Xiaomi announced that the stock of Xiaomi House had exceeded 5000, which translates to an average of about 1000 offline stores per month. This is very amazing for the expansion rate of the channels under the millet line in the past.

Xiaomi brand has been a strong channel online since its inception, but the offline channel has experienced several transformations. The first Xiaomi House officially settled in Beijing Contemporary Mall in September 2015, but the number of stores in the country did not exceed 50 until the end of 2016.

In 2017, Xiaomi began to try to open and cooperate to expand the offline market, successively launched Xiaomi direct supply stores without stores, and then upgraded to Xiaomi franchise stores. At the same time, Xiaomi offline channel also has several modes of Xiaomi authorized store, Xiaomi specialty store and Xiaomi Home.

"now they are all called Xiaomi House," said Gao Ziguang, vice president of Xiaomi Group and head of the new retail business in China. Unifying the name Xiaomi House means service standards, decoration standards and input standards, including prices and even nearly uniform per unit-another comprehensive upgrade of Xiaomi to offline channels.

Gao Ziguang said that Mall store of Xiaomi House is now developing steadily and has become the main force of Xiaomi offline channel. He also believes that after several offline channel adjustments, Xiaomi has gradually found its own offline retail system.

Millet is another kind of seafood.

The problem with Xiaomi's offline model is that it is different from other channel models such as Huawei, OPPO and vivo-"other offline brands have basically reserved offline rebates on prices, which are added at the first level, ensuring profits at all levels from the very beginning," a practitioner in the mobile phone channel industry told Pingpong. "

But when it comes to Xiaomi, the low interest rates and high turnover that make it famous online can easily become a backlog of seafood if mapped to offline channels.

Lei Jun had previously calculated in an interview with the Indian media that Xiaomi's marketing model was to control the profit of mobile phones at 1% to 2%, but this could not bear the risk caused by the backlog of goods. "this is not a gamble. Once Xiaomi's data estimates are wrong, it will cause the company to get into trouble. If Xiaomi is unable to turn its money around and Xiaomi is unwilling to sell its shares, then Xiaomi will face the loss of bankruptcy." "

An owner of a mobile phone store also told Playplay that the biggest risk of making a mobile phone is inventory. "the rent and labor risk are limited and easy to calculate, but if you want to maintain turnover in the store, the most difficult indicator is inventory. "

In the past, channel merchants were often oversold by brands. For example, easy-to-sell products often have to be purchased with some hard-to-sell products, and sometimes the brand will specify how many products must be sold each month to match the purchase target of the new product. However, if merchants restock according to the official website price, and the mobile phone market release cycle is so fast, then dealers are likely to face losses.

For Xiaomi offline, the low interest rate price set according to the online model is not suitable to directly apply the OV offline channel model. In the final analysis, these cases-the channel business is not a common advance and retreat with the brand, it is a game relationship, can not find consistent interests.

Since June 2020, Xiaomi retail team began to go offline to run the market, the focus is to figure out how to find a suitable model for Xiaomi. "to be honest, we didn't go very well in the first few years, and we were all groping for a suitable model," Gao Ziguang said frankly. "the previous 6000 offline terminals were essentially wholesale coverage, but they needed to walk a very long chain. The biggest difference we have today is that we don't have these. I hope every piece of goods is from millet to consumers. "

Build Xiaomi's retail know-how

Wang Xiang, president of Xiaomi Group, highlighted an "important development" at the 2020 annual results report-Xiaomi has gradually found the most effective way to expand offline retail channels in Chinese mainland. This effective way is "based on digital management and real-time data", and "the new efficient online and offline all-digital store model has been verified on a certain scale".

The answer is "Xiaomi Retail pass".

According to product play, Xiaomi Retail Tong was released in September last year, which can be regarded as an app, for goods matching management, but the bottom layer is to digitize all Xiaomi's goods, markets and people.

This is somewhat similar to the retail pass developed by Ali, that is, through a digital software, the operator of each store can accurately see the ROI, sales, sales and inventory of each area and each store. What is more important is that "through this software, you will interpret how many phones your boss is concerned about, how many phones have been sold and how many units have been sold as a broader daily cost and net profit." "

This is the "true retail" understood by Gao Ziguang, through digital means to achieve the automatic distribution of goods, the monitoring of the conversion rate of the flow of people, and the monitoring of the flow of goods. "because you are a real retail, we traded as soon as the POS machine was brushed, and the goods were sold. Instead of saying that it has been sold, enter the system at night. "

According to his understanding, true retail also does not have a second link from millet to consumers. "sell directly to consumers, not to wholesalers. "

In fact, this is also to solve the problem of pressing goods on the side. A very important point in channel digitization is to achieve automatic matching between goods and stores. The automatic matching of goods requires that the turnover of various indicators such as the size and area of the store, product model and so on are all digital.

All the goods will be counted as millet goods, and the channel merchants no longer need to consider the problem of pressing the goods. "what is our common task? In the case of ensuring that there is no shortage of stock as far as possible, use the least inventory to achieve higher turnover. "

The distribution ratio of popular models is also based on the sales ability of the scene. In the early strategic support period, the offline distribution ratio is a little more than expected offline. Xiaomi currently has 5000 stores, but it is still not enough compared to several other stores. Through digital retail distribution, some offline merchants are willing to open more stores.

It is also an attempt of a high-end brand.

It seems that this is a digital upgrade that takes into account both product supply and price protection model.

But for the old channel merchants who accompany Xiaomi to feel the stones all the way across the river, can they balance their interests in the process of upgrading the channel policy?

Gao Ziguang said that the most fundamental guiding ideology of Xiaomi channel construction is real retail, and those who do retail will certainly be willing to do it with Xiaomi, but he also said that those who do wholesale, distribution and all kinds of reverse goods will definitely not be happy.

Because it is very difficult to dump the goods after control, Xiaomi still wants a batch of goods to go out or to consumers, rather than saying that a hundred folding screens are taken away by a dealer and then divided by themselves. "the benefit of doing this is that the price of each product is stable. "

For several problems to be solved in this store, Gao Ziguang also mentioned the high-end brand. "there are two logics in the construction of this store, one is to use standardized methods to do high-end, and the second is comprehensive digitization, which is our big logic. "

The Shenyang Xiaomi Home has upper and lower double-layer design, the first floor is mainly for experience of mobile phones, televisions and other hardware products, focusing on science and technology, while the second floor focuses on the experience of smart home and lifestyle products, facing life. The store of Xiaomi House in Shenyang also uses huge "apple-style" log desktops; it turns out that there are two floors between the first and second floors, with separate floors, but I heard that Xiaomi spent a lot of money to knock down the floor and designed a ladder for users to rest.

The so-called stores are products, and high-end stores tend to leave more space, but Gao Ziguang smiles that he hopes to design more space to sell goods in the future.

Xiaomi highlighted the development of high-end products at its 2020 annual earnings report. Take Xiaomi 11 as an example, after 21 days on the market, sales exceeded 1 million. Among them, more than 50% of Xiaomi 11 users are new Xiaomi users. For the whole of 2020, Xiaomi shipped about 10 million high-end smartphones worldwide.