Suning 苏宁Omnichannel Business Practices

Michael Ling

2015

The omnichannel customer

• Customers can engage a company through multiple channels.

• Omnichannel is an integrated approach that offers customers a seamless experience.

• Customer experience should be consistent, relevant and personalized.

1

Company background

• China’s largest consumer electronics retailer: 1,600 stores, 180,000 employees, and USD40 billion revenue.

• Ranked #1 in China’s Top 500 Private Enterprises.

• Suning.com ranked #4 in China’s B2C market.

• Household appliances, consumer electronics, books, clothing and fashion accessories.

• R&D facility in the Silicon Valley; Suning bank; international courier license.

2

China’s e-tail market

• The world’s second largest e-tail market with 120 percent CAGR.

• In 2011, China’s e-tail market reached US120 billion and had overtaken those of Japan, the UK and Germany.

• Over 90 percent of China’s e-tail market are transacted over marketplaces.

3

Chinese online consumers

• Incredibly large, diverse and heterogeneous.

• Consumers prefer a retailer that has an online presence and a physical store.

• Consumers prefer speed and convenience in online shopping.

• 550m mobile internet subscribers.

• Smartphones are popular.

4

Suning’s omnichannel business practices

• Integrate the online/offline channels.

• Transform the retail stores.

• Integrate the information systems.

• Gather/analyze data across channels.

• Open up the supply chain & IT platform.

• Change and align the organization.

5

Integrate the online/offline channels

• Customers can shop online or at physical stores.

• Online and store prices are consistent.

• Multimedia kiosks in-store.

• Online customers are provided with options offered to store customers.

• Customers can download mobile app to smartphones.

6

Transform the retail stores

• Continue to build new types of retail stores.

• Expo Superstores to improve shopping experience.

• Future retail is a combination of online and offline channels.

7

Integrate the information systems

• Online and physical stores are supported by an integrated information system.

• Requires substantial investment.

• Strategic partnership with IBM.

8

Gather & analyze data across channels

• Collect, monitor and respond to customer interaction data in real-time.

• Use technologies to keep track of customer traffic flow in-store.

• Use data to build customer insights.

9

Open up the supply chain & IT system

• Open up supply chain, distribution and logistics networks to suppliers.

• Allow suppliers to access ERP, CRM and B2B e-commerce platform.

• Centralize procurement at group level.

10

Change & align the organization

• Change organization structure and culture.

• China’s “Wal-Mart and Amazon”.

• Online and offline channel business units should not be “silos”.

• Online and physical store teams are collocated.

11

What are the lessons learned?

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