Analysis of community group buying operation logic!

Preface: At present, with the entry of giants such as Meituan, Didi, and Pinduoduo, the entire community group buying industry has become more lively. There are already many analyses online about the further impact of the entry of these Internet giants on the industry, so I will not go into details.

This article mainly starts from the perspective of commodities and explains the operational logic of commodities under the community group buying model. I hope it can be of some help to friends who are interested in this area.

1. Product Category Classification

The above picture is a summary made by the author based on the logic of product operation. In terms of category classification, the current community group buying can be mainly divided into several categories, including fresh fruits, fast-food frozen products, aquatic seafood, vegetables and soy products, dairy products and beverages, meat, poultry and eggs, grains, oils, rice and noodles, snacks, and household goods.

Among them, fresh food products such as fresh fruits, vegetables and soy products, seafood, meat, poultry and eggs account for the bulk of the sales volume and sales revenue of the current community group buying platform. After all, the current community group buying is mainly to meet family consumption, and the kitchen and living room are the main scenes for family consumption, so it is understandable that the above-mentioned products sell well.

Based on these product categories, the author further divides them according to product attributes and product operation strategies. Among them, product attributes are easier to understand. They are mainly divided into standard products, differentiated products and Internet celebrity products based on the characteristics of the products and their current popularity.

The product operation strategy is also the focus of this article, and the author will make a detailed explanation of this aspect.

2. Product Operation Strategy

1. Product selection

When we operate each product, we actually have a certain purpose. Here, the author divides the products into four categories according to the product positioning (the desired purpose), namely, traffic-generating products, hot-selling products, promoted products and basic products (conventional products).

On the one hand, this is based on the logic and standards of product selection; on the other hand, it is also considered from the user level, through the use of lead products to allow users to enter the group buying platform to complete their first order, through the use of explosive products to make users like our platform, and then to the main promoted products.

Let users know the characteristics and differences of our platform, slowly develop usage habits, and then finally buy regular products, so that users do not need to rely too much on social networks or group leaders to guide them, and can habitually consume on the group buying platform.

Of course, there are certain differences in the selection criteria and pricing for products with different positioning.

1) Drainage products

As the name suggests, the main purpose of traffic-generating products is to attract users to the group buying platform and complete their first order.

Therefore, in terms of product selection criteria and prices, it will have its own characteristics. Generally, it is mainly based on fruits, vegetables, eggs and other low-priced products. On the one hand, this can increase the user's order conversion rate; on the other hand, it can also reduce the user's first-order customer acquisition cost, thereby achieving the purpose of attracting traffic at a low cost.

2) Hot Products

Hot-selling products are a term often mentioned by many platforms or e-commerce companies. Let’s go back to the product positioning or purpose itself. If we say that a product is a hot-selling product, it means that it must be liked by a lot of users, and the sales data of this product is excellent, so we will describe it this way.

If we consider it from the perspective of selection, if a product wants to meet the prerequisite of becoming a hit product, there are generally certain requirements in terms of product selection standards and prices. For example, it must have certain brand attributes, and users must already have a certain degree of awareness of the product. Then, we can cooperate with the community to carry out a wave of activities to lower the price to a level that is high enough to overwhelm users' normal perception of the product's price.

At the same time, this product is in great demand, so there is a high probability that it will become a hot seller.

Whether a product can become a hit or not, the assessment indicators of different platforms are also different. For example, Hubei Shihuituan mainly assesses based on sales. In each group, as long as the sales data of a certain product exceeds 50,000 (it is unknown whether the current standard has been changed), the product is called a hit.

Generally, the proportion of hot products in the total number of products in each group is very low. Generally, there are only about 3-5 hot products in one group. Otherwise, if a product can easily become a hot product, it would be too easy to become a hot product. In this way, many product operators don’t have to worry about how to create hot products every day.

3) Main products

We have talked about traffic-generating products and hot-selling products before. Relatively speaking, these two products can still have a good order conversion rate as long as the product selection standards are met and the group leader and the community provide a little guidance. The main promoted products should be the core of the product operation level, and they are also the ones that most require strong interaction between product operations, group leaders and the community.

The main products are often the most purposeful, so they are promoted. However, this purpose is based on the platform itself and may not be what users want or need most.

Therefore, the guidance and education process in the middle is very critical. For example, if a platform wants to differentiate itself and sell its own brand, it needs to continuously educate users in the community and cultivate their awareness of the proprietary products.

Or a platform may want to make nutritious breakfast its own specialty, so that users will think of this platform first when buying breakfast, thereby driving consumption of other categories. In this case, the selection and promotion of breakfast products in the early stages are very critical and require more energy to maintain.

In short, the quality of the main product operation directly determines the user's stickiness to the platform and whether the user habit can be formed, so it is very important.

4) Basic products

The last part is basic products. As the name implies, the main purpose of basic products selection is to enrich the product categories of the platform and meet the daily needs of users. At the same time, in terms of gross profit, the gross profit of basic products is generally relatively fixed, which also paves the way for the subsequent overall profitability of the platform.

2. Quality

It is difficult to achieve product positioning or operational goals by just selecting a product without taking any other actions. So after the products are selected, the next step is how to send them. Below, the author has sorted out the conventional sending of products:

1) Marketing Tools

In terms of product operations, marketing tools are often used. According to different product positioning, there are relatively suitable types of marketing tools. Marketing tools such as flash sales, which drive the price down to the bottom and create a feeling that once you miss the opportunity, you will never see it again, are more suitable for traffic-generating products and hot-selling products.

Coupons, a common marketing tool, are mainly used to increase order conversion rates, so they are more suitable to be combined with some main promoted products. However, for group buying, in addition to liking the product very much, in order to get it at a cheaper price, other people need to participate. The audience's preference for the matching product must be very high.

Therefore, marketing tools such as group buying are more suitable for hot products. Of course, in the actual operation process, the combination of marketing tools and products is still relatively flexible and changeable, but in the end, data can be used to evaluate the effectiveness of marketing tools to see whether the operational goals have been achieved.

2) Special topics

Thematic pages should be a marketing and promotion method that is often used in product operations. Mainly to meet the purpose of operation, some products with the same purpose will be packaged and presented on the thematic page.

Of course, compared with regular categories, the traffic of special pages on the platform is still guaranteed to a certain extent, so there are certain requirements for matching products. Generally, they are more suitable for main promoted products, so that the purpose of main promotion can be achieved to the greatest extent.

3) Classification

Classification is mainly based on the attributes of the goods to distinguish the goods. The more common classification is based on product categories, such as fresh fruits, vegetables and soy products, dairy products and drinks, etc. There are generally 8-10 basic products in each category that rotate to meet the daily household consumption needs of users.

3. Quantity and rotation of goods in each group

Currently, most community group buying platforms achieve next-day delivery, and goods ordered today will be delivered to users tomorrow.

Therefore, the products will be rotated every day. At present, the number of products on the group buying platform is generally 100-150 SKUs per period. The rotation rhythm varies according to the different positioning of the products. Generally speaking:

As for the number of products:

In short, as community group buying has developed to its current stage, with the influx of more Internet giants, the requirements for supply chain and product operations are becoming increasingly higher. Only by finding good products and selling them well can we stand out in the current highly competitive market.

Author: Awang

Source: awangblog