Changes in the private domain: from “a small dish” to “a big meal”

  The concept of private domain has no clear concept connotation and boundary. In other words, the connotation and extension are constantly changing. Therefore, when it comes to private domains, it is inevitable that chickens and ducks talk about it, and everyone’s understanding is very different. To sort out the practice and evolution process of the private domain, it can be roughly divided into three stages, namely private domain 1.0, private domain 2.0 and private domain 3.0.
Private domain 1.0: “a piece of cake”

  The reason why it is called a private domain is because it corresponds to the public domain. The private domain and the public domain are a set of opposing concepts. This is the premise of understanding the private domain.
  What is the public domain? The public domain is the e-commerce platform. The traffic on the platform is public domain traffic, and e-commerce companies need to buy traffic. Traffic is very expensive, so private domains are derived.
  What is a private domain? Private domain is traffic de-platforming. Private domain traffic is customer data that can be used for more than two links, reach, sales and other marketing activities. Therefore, the private domain is not buying traffic, but drainage.
  The private domain not only “smuggles” traffic from the public domain, but also poachs the traffic of all partners. Doing a private domain does not seem to be so business-ethical. However, it is true that the public domain traffic charges are too harsh, forcing platform merchants to do “sneaky” things. Therefore, the first people to do private domains are those who play e-commerce.
  In 2021, Tencent announced 70 “top students in the private domain”, mainly focusing on beauty and daily chemicals, clothing accessories, shoes and bags sports, and baby and child players. These are the major players in e-commerce. Take Bubble Mart, which has done the best in private domains, as an example. In 2021, there will be 15 million private domain users, and the transaction volume on the mini program will reach 898 million yuan.
  Is this big? It is not small for an e-commerce company. However, it is simply a piece of cake for a top fast-moving consumer goods company.
  Tsingtao Brewery’s e-commerce scale is far ahead in the beer industry, but it only accounts for 2.5% of the company’s total. If it is a private domain, it is difficult to divert more than 10% from the public domain, and it can only be a few per thousand in terms of sales. The share is too small to be worth doing, let alone a strategic option for the company.
  Many digital personnel in leading companies are confused by this: they mistakenly think it is a trend, but it is too small. It’s not worth the fuss, but it has to be done.
  The private domain 1.0 method of poaching the foot of traffic is destined to be small and not go far.
  It is such a small and absurd approach, because digital packaging seems to be a digital trend. Some tens of billions of companies even bet their future on this, thinking every day how to attract traffic from partners.
  But the private domain has also done a very happy thing – de-platforming. In the past, the mission of the platform was “to make business easy to do in the world”, but now the platform is the most expensive business.
  It’s a great pleasure to fight against someone the public hates, even if it’s not so above board.
  Under the banner of “de-intermediation”, platform e-commerce has gathered a lot of traffic. Now it is the turn of the private domain to raise another banner – “de-platforming”. Therefore, de-platforming is also a means of gathering traffic.
  I have repeatedly said that the platform is not B2C (business to consumer), but B2P2C (P is platform, Platform). Platform vendors are invisible middlemen.
  The platform is the business logic of Alibaba, and the private domain has entered the business logic of Tencent.
  Private domain is direct e-commerce F2C (manufacturer to consumer), truly de-intermediate and de-platform.
  The merits and crimes of the private domain all stem from this.
Private Domain 2.0: “A Main Dish”

  When private domain 2.0 comes out, the original private domain will automatically become private domain 1.0. Private domain 2.0 is currently a model with many benchmark cases. For example, KFC has 330 million+ registered private domain members, and 7,900 stores are conducting private domain operations through corporate WeChat; the new consumer brand Naixueの茶 will have 43.3 million registered members in 2021, and the member repurchase rate will reach 30%; MINISO In 2021, the product will have 14 million private domain users and 7.8 million monthly active users of the official mini program. The consumption frequency of members is nearly 1.5 times higher than that of non-members.
  If you observe these cases, you will find a common feature: they all have offline stores.
  Offline stores are a typical feature of Private Domain 2.0. Reaching users, connecting users, and activating users through stores to form private domain traffic is the duty of business compared to diverting traffic from public domains. A store is a stronghold for gathering private domains.
  This is a major difference from Private Domain 1.0. Private domain 1.0 is a centralized private domain. Customers operate at the headquarters, and no matter where they are diverted from, they will eventually be led to the headquarters. The private domain 2.0 is a distributed private domain, and the private domain is scattered in stores.
  The second feature of private domain 2.0 is chain or franchise stores. Because of the chain or franchise stores, the interests of the main store and the store are highly consistent, regardless of each other, dare to put the private domain in the store. It is this feature of private domain 2.0 that makes private domains less “selfish”.
  The third feature of Private Domain 2.0 is that the headquarters and stores can be connected through WeChat, and the headquarters and stores share a private domain. Qiwei + Gewei has become the main tool of private domain 2.0.
  Connecting users’ distributed private domains through stores gives Private Domain 2.0 the opportunity to be larger than Private Domain 1.0.
  First, stores have more contacts with users. The main drainage methods of private domain 1.0 are platform drainage, product scanning and official account. However, private domain 2.0 connects users through stores, and completes the connection synchronously during the transaction process. The transaction process is originally a trinity of cognition, transaction and relationship.
  Second, the scenario of the store is more conducive to connecting users. For example, Helens customers can only order by scanning the code. This is a scene design that is very conducive to user connection.
  Xibei was an early adopter of stores to connect users. In 2016, Jia Guolong, the founder of Xibei, believed that digitization was the trend and invited experts to come in and implement it. In 2017, it gained 10 million registered members. At that time, there was no concept of private domain, let alone the concept of private domain 2.0.

  Third, connection and activation are done synchronously. User connection is a problem, and activation is an even bigger problem. The official account of a leading FMCG company has 40 million fans, but the followers are mainly zombie fans, which have basically no commercial value. Connect users in the store scene, and some customers “connect and activate”. For example, Xibei has been insisting on the “parent-child activities” until now, and obtaining a large number of paying users is a good way to activate users.
  It is precisely because of these values ​​of private domain 2.0 that it has been well applied in franchise enterprises: local services, such as catering, entertainment, etc., McDonald’s, Helens, etc.; retail chains, Watsons, Pagoda, Aunt Qian, etc. Belongs to this category; short-chain channel brands, such as shoes and clothing, luxury goods, etc.
  Private domain 2.0 is similar to an upgraded version of the membership system for franchise companies. However, it is different from traditional members: traditional members are one-way, users do not consume, and lose contact with users; private domain users can communicate in three dimensions offline, in the community and online. McDonald’s and KFC’s takeaways can be delivered through O2O platforms or store mini-programs. Therefore, they are one of the few stores that have their own delivery riders.

  At present, the value of private domain 2.0 is still not fully utilized. Connecting users has been achieved. For example, KFC already has a massive 330 million+ members, but how to activate and operate it is a new topic.
  KFC has 330 million+ members, which has exceeded the number of users on the entire network of any brand. The scale of private domain 2.0 can be made large enough, and its importance is definitely at the company’s strategic level. Therefore, private domain 2.0 can already be called “a main course”.
Private domain 3.0: “One table feast”

  The concept of private domain is somewhat exclusive. As the direct e-commerce F2C with the shortest business path, private domain 1.0 is not only de-intermediate, but also de-platform. Exclusivity means exclusion of any intermediary. In the context of the Internet, “middlemen” seem to have “original sin”.
  Private Domain 2.0 is different from Private Domain 1.0 in that it introduces a middleman—store. The mode of private domain 2.0 can be expressed as F2b2C.
  A small step can be taken, and a giant step can be taken. Since private domain 2.0 can introduce b-terminals (retailers), why can’t it introduce more intermediate business entities? Thus, Private Domain 3.0 based on the distribution system was born, and the model can be expressed as F2B2b2C.
  Private domain 3.0 has the following characteristics: First, b-end stores are still a scenario for connecting users. In addition to the not-so-glamorous platform drainage and one-item-one-code scanning to connect users, other means are roughly based on the connection of people, goods, and venues.
  Connecting users with people is the strength of the b-side. Between the b-terminal and users, there is a strong offline relationship and strong interaction in the community, extending to the online, which is an Internet-based private domain.
  Connecting users with scenarios is exactly the advantage demonstrated by store connecting users (Private Domain 2.0). Scene connection users have three characteristics: first, scene connection has potential energy; second, scene connection is activated immediately; third, scenes can be connected in batches. Scene connection is a big topic, which will be discussed later.
  Second, private domain 3.0 is a shared private domain. As long as the b2c connection is completed, any business entity on the channel chain can share the connection. Private Domain 2.0 (F2b2C) is a shared connection between two entities (headquarters and stores), and Private Domain 3.0 (F2B2b2C) is a shared connection between three business entities (manufacturers, distributors, and stores).
  There is no profit distribution problem in the private domain 2.0 shared connection, and there is a profit distribution problem in the private domain 3.0 shared connection. The problem of profit distribution also exists in traditional channels, but it is now transferred to online.
  Third, online and offline integration issues. Private Domain 1.0 transactions must be reflected online; Private Domain 2.0 does not require transactions to be reflected online, even offline transactions can still identify users; Private Domain 3.0 also does not require transactions to be online.
  Fourth, private domain 3.0 is a marketing perspective. In practice, it has been found that viewing private domains from a marketing perspective is the most efficient. Connecting customers online is for easier activation and operation of customers. As for converted transactions, there is no difference whether online or offline.
  Private domain 3.0 is the distribution of private domains. With the help of millions of terminals formed by in-depth distribution, hundreds of millions of users are connected. Private domains are no longer “a piece of cake” or “a main dish”, but can lead the digitalization of channels “One table feast”.
Evolution logic of private domain

  The evolution process of the private domain from a severely exaggerated “small dish” to a “big meal” whose importance is under-recognized is very interesting.
  The scale of private domain 1.0 is too small, on the order of tens of millions, billions, or at most one billion. It is only suitable for traditional e-commerce companies, has no promotion value for FMCG companies, and cannot undertake the mission of digitalization. However, private domain 1.0 has frozen many people’s perception of private domain and cannot extricate themselves. Therefore, getting out of the shadow of private domain 1.0 is very important for the development of private domain.
  The scope of application of private domain 2.0 is too narrow, it is only applicable to retail chain enterprises, and it is difficult to expand to other fields, but the expansion of the concept of private domain is decisive. After learning the business logic of private domain 2.0, there will be no obstacles in the evolution to private domain 3.0. The concept of shared private domain derived from private domain 2.0 is revolutionary, which is the beginning of the combination of online and offline private domains.
  There are too many successful cases of private domain 2.0. It is recommended that everyone pay more attention to and study private domain 2.0, and jump out of the private domain pit formed by private domain 1.0.
  Private domain 3.0 is too big. In fact, it is not a matter of the digital department alone, but a change of the entire distribution channel system, so it is too difficult. In particular, the concept of shared private domain is proposed, which solves the sharing and collaboration of the omni-channel chain. This is the right way for the private domain of FMCG.
  Private domain 2.0 has shown that stores (including the head of the community group) are the best point to connect users. This is true regardless of franchise channels or distribution. The three touchpoints of people in the store (relationship), goods (one code for one item), and venue (scenario) reach users. Therefore, the store is the best connection point for the private domain.
  Stores have three means of offline, community and online to connect and activate customers. Therefore, there are fewer zombie fans connected to the store, which is also the strength of the store. However, we must also face up to a basic reality: the store does not have the ability to operate in a private domain. The proportion of stores in the infant and child industry with WeChat users exceeds 90%, but many stores are guarding the decline in private domain traffic. Because the store is good at connecting customers and activating customers, but not good at private domain operations.
  Private domain 2.0 solves this problem: the store is responsible for connecting, activating, and serving customers, and the headquarters is responsible for operating customers. This changes the link, activation, and conversion of the private domain from one entity to a combination of multiple business entities. This is a major difference between digitalization of traditional channels and pure online channels.
  Connection requires relationship, enthusiasm, and scene, while operation requires professionalism. In the centralized private domain, the operation is handed over to customer service or even AI, and the user experience is not good.
  In private domain 3.0, the store is still the main body of connection and activation, and the operation can be completed by the manufacturer and the dealer. I even proposed the concept of “dual middle platform”, that is, the middle office of the manufacturer and the middle office of the dealer are jointly responsible for user operations. The more offline it is, the more important the dealer’s role is. Many dealers with forward thinking are already practicing.
  The difficulty of shared private domain is channel profit distribution. As long as increments can be created, profit distribution is not a problem, and a solution will definitely be found in practice.
  The principle I put forward is “traffic sharing”, which is different from the “transaction sharing” of traditional channels.
  ”Transaction profit sharing” is to obtain profits in transactions, and “traffic profit sharing” means to distribute profits backwards regardless of who completes the transaction and where the traffic comes from. For example, if the traffic comes from the store and the transaction is completed by the manufacturer, then even if the manufacturer does not make money from the transaction, the store and the dealer can still make a profit.
Private domain 3.0: the combination of new marketing and new retail

  When discussing community group buying in the group, friends proposed. New marketing or new retail are digital thinking from different positions.
  New marketing is digital thinking from the standpoint of brand owners and dealers, with the purpose of selling the same product to more people; new retail is digital thinking from the standpoint of retailers, with the purpose of selling more products to the same person.
  Private domain 1.0 is a typical new retail thinking, and it can also be called F2C direct e-commerce.
  Private domain 2.0 is a new dimension of marketing in the new retail thinking. The operation of private domain 2.0 pays equal attention to online and offline roles, and does not pay special attention to online transactions.
  What is the difference between new retail and new marketing thinking? New retail focuses on one subject and one dimension. Cognition, transactions, and relationships are all completed by one subject (manufacturer) in one dimension (online).
  On the basis of traditional marketing, new marketing pays attention to multiple business entities (manufacturers, dealers, retail stores), multi-dimensional (online, offline, community), and the separation and integration of the three business roles of cognition, transaction, and relationship. seamless connection. For example, the relationship is offline, the cognition is in the community, the transaction is offline, or the three roles are reversed, all of which are completely possible.
  Private domain 3.0 is a new retail thinking from the perspective of traffic sources, and a new marketing thinking from the perspective of emphasizing relationships and cognitive roles. The combination of new marketing and new retail has completely opened up online and offline and integrated them into a whole, making commerce truly an integrated omni-channel rather than separate multiple channels.

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