New consumption: a major shift in marketing tactics

Regardless of whether it belongs to the new consumption field or not, brands have never been short-term businesses, but long-term markets. In the new consumption era, brands are worth fighting for. This article analyzes in detail the shift of the three axes of new consumption marketing, and is recommended for students in the consumption field.

"In the new consumer era, every brand deserves a fresh start."

This is almost the most widely circulated slogan in the consumer goods industry in 2019. New brands have sprung up in the fields of cosmetics, skin care, food, beverages, etc.

Only in its fourth year, the new consumer brand has gradually cooled down from its booming period.

According to the financing situation of the new consumer track in 2022 compiled by Clour, except for the financing amounts of more than 5 billion yuan in January and March, the financing amounts in the other 10 months almost hovered around 2 billion yuan, and the financing amount in December directly bottomed out at 1.159 billion yuan.

Image source: Claure

New consumer companies represented by Pop Mart and Perfect Diary have all seen their stock prices plummet after their IPOs. Compared with their highest market value since their listing, the evaporated market value has exceeded 100 billion yuan. Capital "darlings" such as Heytea, Nayuki, and Zhong Xuegao have begun to fall into the predicament of layoffs, price cuts, and stock declines.

Compared to the first year of new consumption that believers were cheering for, the world has changed a lot now.

In 2019, Diao Ye, chairman of Afu Essential Oil, once proposed that behind the huge wave of "new consumer products" is the superposition of three big waves, namely "new media", "new channels" and "new products".

With the support of these three huge waves and in conjunction with China’s new generation of consumption upgrades, we will eventually get something called a “new brand.”

Regarding the rise of such a "new brand", the industry has gradually formed a unified understanding of the three marketing axes: Xiaohongshu + Zhihu + big anchors.

Image source: Internet

However, as new consumer brands have fallen out of favor, these three marketing strategies have also changed.

01 Get rid of the addiction to "Li Jiaqi" and "Xiaohongshu", and brands should broadcast on all channels

In the early stages of development, new consumer brands need labels to enhance their recognition and attract users. The live broadcast rooms of big anchors represented by Li Jiaqi have become the best "debut stage" for new consumer brands.

According to statistics from the Pinguan APP, in the first seven months of 2019, Hua Xizi participated in 45 of Li Jiaqi's 118 live sales events, showing the deep connection between the two.

At the end of September, Li Jiaqi was invited to become the chief recommendation officer of Huaxizi, and was deeply involved in the product development of Huaxizi. On Double 11 of that year, Huaxizi's GMV reached 220 million yuan, becoming the second largest domestic beauty brand after Perfect Diary. While being deeply bound, Huaxizi also developed "Li Jiaqi dependence".

Among products of the same brand, products recommended by Li Jiaqi are very popular among consumers, while sales of the opposite products are mediocre.

Not only Huaxizi, but also domestic skincare brands such as Winona, PROYA, and Quardi are frequent visitors to Li Jiaqi's live broadcast room.

Screenshot of Li Jiaqi's live broadcast

On Double 11 in 2022, Winona and PROYA invested 8 slots in Li Jiaqi's live broadcast room, second only to Lancome and Estee Lauder, and Quardy also invested 6 slots. After making their presence felt, several brands also achieved impressive results on Double 11 last year. Some media estimated that Winona's transaction volume on the first day of Double 11 pre-sale exceeded 1 billion, and Quardy also achieved a transaction volume of 600 million, equivalent to an average of 100 million per product.

However, this situation also has a distorted side. Take Winona as an example. During Li Jiaqi's suspension last year, Winona reached a cooperation with Douyin's top beauty anchor Zhu Guagua. During the 8.5-hour live broadcast that night, the overall GMV was 20.38 million, and not all of it was sold by Winona.

As a result, the era of big anchors represented by Li Jiaqi is also coming to an end, and brand self-broadcasting has become one of the ways for new consumer products to get rid of the "big anchor dependence syndrome."

According to Feigua data, from June to August 2022, Huaxizi's Douyin self-broadcasting estimated sales ranked first. During this period, Huaxizi's 8 self-broadcasting accounts launched a total of 379 live broadcasts, with an estimated self-broadcasting GMV of 188 million yuan, accounting for 52.87% of the total GMV. The TOP1 self-broadcasting account is "Huaxizi Official Flagship Store", which broadcast a total of 93 times, with an average live broadcast duration of about 18 hours, and live broadcasts every day. The total sales of live broadcasts were about 160 million yuan, reaching a peak on June 18.

Hua Xizi Tik Tok self-broadcast

By November, Hua Xizi had only three self-broadcasting accounts participating in Douyin live broadcasts. It can be seen that it is not so easy for a brand to run self-broadcasting on a single channel, but Hua Xizi's omni-channel self-broadcasting matrix has become stronger.

Therefore, brands will not limit their self-broadcasting to just one platform. Taobao Live, Douyin, and Kuaishou are all making efforts. Even Video Account and Bilibili have become honeypots that some brands cannot ignore. Omni-channel self-broadcasting has become the key to further getting rid of the "big anchor addiction syndrome."

But at the same time, each self-broadcasting room means that it is necessary to configure anchor + operation + field control and other positions, which is also a high cost for the brand. Compared with the "quick results" of the live broadcast room of the big anchor, self-broadcasting still requires personnel running-in, which is a long-termism that requires time and cost to verify.

More importantly, the brand's own live broadcast room has a certain reliance on traffic investment , especially during the cold start period of the account, during which the live broadcast room budget may be used for traffic investment. After a long journey, the marketing strategy of new consumer brands seems to have returned to the starting point of traditional brands spending money to attract traffic.

On the other hand, Xiaohongshu was originally an important place for new consumer brands to grow, but the key point is that as the new consumer track tends to cool down, brand budgets have naturally shrunk, and Xiaohongshu cannot bring direct sales conversions.

The user behavior dimensions that Xiaohongshu focuses on

In order to solve the "metaphysical" problem of brand promotion, Xiaohongshu tried to quantify the promotion effect. At the just-concluded business conference, Xiaohongshu focused on product promotion and proposed the concept of "True Interest". According to Xiaohongshu, the "True Interest" involves 11 kinds of deep reading and deep interactive user behaviors, including long-term reading, purchase comments, saving pictures, sharing, searching for product words, etc., which can quantify the product promotion results.

Although the mid-level bloggers on Xiaohongshu are "cheap and easy to use", and the effect monitoring of the grass-planting value has just been launched, it is missing the important link of "from grass-planting on Xiaohongshu to purchase on Xiaohongshu". Even if new consumer brands want to post 500 notes, the number of notes will be greatly reduced due to the pursuit of ROI and profits under the changes in the overall environment.

02 Volume to low price, price marketing starts immediately

If new consumer brands do self-broadcasting and self-created content in order to regain the initiative, then price reduction and transformation are aimed at gaining access to a more down-to-earth market.

Since the "Ice Cream Assassin" incident last summer, Zhong Xue Gao has almost always been in the midst of heated discussions.

Whenever something goes wrong with a new brand, someone always mentions “They only know how to do marketing instead of making products well”.

During the launch of new products, Zhong Xue Gao invited many bloggers and experts to live broadcast unboxing and tasting. However, compared with Haagen-Dazs, which spent a lot of money on TV advertising, celebrity endorsements, and various offline marketing activities to create a high-end feel, Zhong Xue Gao's social media placement alone was not enough to support the premium feeling generated by Zhong Xue Gao's high pricing. As a result, when Zhong Xue Gao had not yet consolidated the minds of users, it was exposed to the public too early, which eventually triggered a series of public opinion crises.

Zhong Xuegao social media placement

At the beginning of this year, Zhong Xue Gao announced that it would launch new packaging products with suggested retail prices on them. At the same time, it was reported that Zhong Xue Gao would launch an affordable sub-brand of ice cream, "Zhong Xue Bu Gao", priced at 3.5 yuan, with flavors such as red bean ice, green bean ice, and milk ice. It can be seen that Zhong Xue Gao wants to make consumers aware of the positioning of the sub-brand starting from the most intuitive name.

In essence, new consumer brands engage in price wars in order to attract more consumers in the lower-tier markets.

But at the same time, high-end consumers are still a potential user group. In order to distinguish between the two, new consumer brands can achieve a diversified business layout from creating sub-brands to launching new product lines to cover more consumer groups.

When the tide recedes, new consumer brands need to improve their internal strength and readjust their prices and positioning.

Since 2022, new consumer tea brands such as Heytea and Nayuki's Tea have also moved towards low prices. Since January 2022, Heytea has announced that it will start to reduce prices for all its products, with mainstream products maintaining prices between 19 yuan and 29 yuan, and adding low-priced products ranging from 9 yuan to 19 yuan.

In addition, in line with Douyin's determination to enter local life, price marketing for new consumption has also been launched by taking advantage of the changes in the short video ecosystem.

In the Douyin live broadcast room, with the coupons issued by various new consumer tea brands, "9.9 yuan to drink Nayuki and Heytea" has become within reach. Take Heytea's best-selling product, succulent grapes, as an example. The normal store price is 28 yuan, but in the Douyin live broadcast room, buy a cup and get one free for 28 yuan, the price is directly halved, and it is sold out as soon as it is put on the shelves.

Tik Tok screenshot

Douyin's new tea drink consumer data insight report shows that in 2022, the number and playback volume of new tea drink-related content on Douyin showed a monthly increasing trend. In June alone, the playback volume of related content exceeded 14.7 billion, and received more than 280 million likes and more than 47 million comments.

What’s even more frightening is that Starbucks, which has rarely held promotional activities, could no longer sit still after coffee brands such as Tims and Luckin Coffee issued coupons and offered buy-one-get-one-free promotions in short videos and live broadcasts on Douyin. As a result, Starbucks also started its own long “coupon-giving” price reduction marketing.

After three years of pandemic that has tormented consumers' wallets, perhaps more and more people are flocking to the word "affordability". This is why Pinduoduo has transformed itself into an e-commerce aristocrat. With JD.com and Taobao about to open fire on Pinduoduo and launch a "low-price war" in the e-commerce industry, how new consumers can take advantage of the new trend of e-commerce platforms and urgently need to do a good job of their own price marketing is bound to be a topic worthy of immediate study.

03 Offline scene marketing, new consumption flocks to stores

Chasing young people is the motto of new consumer brands.

As a generation born on the Internet, they have long regarded the Internet as their own playground. Social media platforms such as Xiaohongshu, Douyin, and Bilibili have also become bases for online product promotion, which is also the origin of "laying out evaluations."

However, as the internet traffic dividend has peaked, the online growth of new consumer brands has also been restricted. In addition, online products are visible but not tangible, and cannot provide consumers with a more intuitive experience. Consumers can only establish awareness of the brand through packaging, express delivery, after-sales service, etc. If any of these links is not in place, they may face a crisis of trust.

If new consumer brands want to establish a closer relationship with consumers, moving from online to offline has become an inevitable choice.

The first step in opening a store is to choose a location, which determines what kind of customer base the store will attract.

Anfu Road in Shanghai is a popular street that is less than 900 meters long and can be walked from beginning to end in more than 10 minutes. It is densely populated with many new consumer brands such as The Beast, Sandunban, Huamei, and Duozhaoyu.

If they cannot stay in the market for a long time, short-term flash events are also favored by new consumer brands . Fragrance and cosmetics brands such as Atypic Edition and INTO YOU have successively launched flash events lasting several weeks on Anfu Road. On Xiaohongshu, there are more than 160,000 notes about Anfu Road, part of which are check-ins at offline stores of new consumer brands, forming a closed loop of offline traffic feeding online traffic.

According to data compiled by CRIC Asset Management (CAIC), compared with other traditional popular shopping districts in Shanghai such as Nanjing East Road, Huaihai Middle Road, Jing'an Temple, and Xintiandi, the age mix of consumers in Anfu Road is generally younger, with 19-29 year-old Generation Z consumers accounting for 42%, higher than other popular shopping districts. This means that new consumer brands on Anfu Road not only have a high density of young customer traffic, but can also avoid direct competition with mature brands.

In addition to such pleasing methods as setting up stores in Internet-famous blocks, some new consumer brands will choose to open super stores with unique design styles, which is a more "wealthy" approach . For example, bosie has a store with a surface area of ​​over 2,000 square meters on Huaihai Middle Road in Shanghai with the theme of "Planet"; Hua Xizi named its first global flagship store "Yinyuan" with an area of ​​1,000 square meters in Tianmuli, Hangzhou. According to the relevant person in charge of Hua Xizi, opening a flagship store is not simply to do business offline and promote sales. The core purpose of Hua Xizi is to provide Hua Xizi users with more extreme services through offline flagship stores and to present a more unique and complete Hua Xizi to users.

Compared with the trial and error costs online, opening an offline store means investing sufficient funds and facing a more complex operating environment. If the new consumer brand has not yet established a firm foothold online, opening a store rashly may still involve huge risks.

Last November, news spread on social media platforms that "more than a dozen offline stores of Celebrity Coffee were closed overnight." Some users said that many Celebrity Coffee stores, including the Shenzhen Kexing Science Park store, were closed or suspended, and all items were moved away, leaving only empty stores. After that, Celebrity Coffee issued an announcement saying that "business operations have been adjusted and the online mall has stopped operating."

Shicui Coffee was founded in May 2019 and has received a total of five rounds of financing. But obviously, these five rounds of financing cannot support the former "darling of capital" in the face of a rapidly changing market environment.

04 From "hot product" to "long-term"

In 2019, Diao Ye, the founder of Afu Essential Oil, once pointed out that the traditional consumer brands at that time did not understand the operating principles of the "new and internet celebrity" brands, but young consumers were crazy about them.

In June of that year, Afu Essential Oil's monthly sales exceeded 200 million yuan, and its purely offline counter business increased by 65% ​​year-on-year.

On the eve of Double 11 in 2021, Diaoye lamented in an article titled "Li Jiaqi Killed Double 11" that if new consumer brands want to achieve 1 billion in a year, it will be more difficult than before.

The reason is that enough consumer minds have not been cultivated. As soon as the stimulant of the three marketing axes is stopped, sales will immediately shrink, and then the team morale will plummet, talent will be lost quickly, and a vicious cycle will be entered.

According to the data on total retail sales of consumer goods in 2022, online retail sales of physical goods accounted for 27.2% of total retail sales of consumer goods. This means that offline consumption is still the majority of the Chinese market, accounting for more than 70%.

In the development process of new consumer brands, they inevitably fall into the bottleneck of declining traffic business and saturated market. The myth of occupying the market with the help of super products is difficult to replicate.

There has also been a wavering of the view that every consumer product is worth reinventing.

New consumer brands that rely on new media channels and product channels are only established at a specific point in time , and the bonus period is phased. If you don’t seize the bonus period to become one of the top companies in the industry, you may face regretful exit.

The shift from explosive product thinking to long-term thinking has become the key to breakthrough for new consumer brands.

For this reason, more and more new consumer brands have vigorously carried out self-broadcasting in the past one or two years, retaining their customer base in their own private domain, while rushing to open offline stores. They no longer emphasize their uniqueness with high prices, but instead choose traditional low-price strategies to attract more consumer groups.

It is worth emphasizing that regardless of whether it belongs to the new consumption field, brands are never short-term businesses, but long-term markets, which also means that new consumption brands need to always maintain a sense of awe.

Author: Uncle Yi Team

Source: Yiyuguancha (ID: yiyuguancha), the telescope and sonar of the pan-entertainment industry.