According to the data released by Master Wan from the Home After-sales Service Industry Report 2020, the online penetration rate of the home furnishing market exceeds 10%, and the market size has reached 626 billion yuan, which has shown a continuous upward trend in the past five years. This year, 618 is coming soon. As one of the top ten popular categories of e-commerce platforms, home furnishing products are expected to exceed one trillion yuan in scale, and there are more than 50 home furnishing brands that exceed 100 million yuan.

With the rapid development of home furnishing e-commerce, after-sales services such as intra-city distribution, installation and maintenance for the last mile of home furnishing services have undoubtedly become a major problem.

For consumers, the supporting services of online shopping have become the main factor in deciding to purchase. "If you don't include after-sales, don't buy" is the shopping psychology of many consumers.

Therefore, after-sales service is extremely important for e-commerce companies. Home building materials depend on products for three points, and services for seven points. Logistics and transportation of household after-sales service delivery links, installations closest to consumers, repairs for handling abnormalities, and later insurance protection. The last mile of home furnishing goods delivery, even the last staircase or a screw, may become a pain point for home furnishing e-commerce merchants.

After-sales service is increasingly valued by home furnishing e-commerce companies. Different after-sales service models have appeared in the industry. What are the characteristics of each model? What model is more suitable for enterprise development?

Logistics: Layout of five packages of home furnishing services

Representative brands: Deppon, SF

In order to adapt to the needs of the e-commerce market and improve their own development competitiveness, logistics companies slowly joined the home after-sales camp and started "five packs" home logistics services, namely: package logistics, package delivery, package upstairs, package installation, package return and exchange, for the maintenance service, which accounts for up to 17% of the after-sales demand, it is not involved.

Five packages are mainly divided into logistics transportation and installation technology. Warehousing and transportation are the housekeeping skills of logistics enterprises, while installation technology requires additional professionals. The home furnishing business only occupies a part of the logistics, and the management and operation cost of the installation master is not low, so it is almost impossible to build a team of masters. Therefore, the installation services provided by logistics companies for home furnishing e-commerce companies are actually searching for local master resources for cooperation.

Service costs are rising, and for logistics companies with fierce price competition, profit points continue to drop, which is even more detrimental to continued business development. If logistics companies want to seize the 618 home logistics market, the top priority is to continuously improve distribution efficiency, improve informatization and flexibility, and reduce packet loss and damage rates. The cargo damage compensation mechanism should be more complete, so that large home logistics can be as fast and good as express delivery. 

Deppon and SF Express have perfected the informatization of home logistics in recent years, and realized the intelligent storage and transportation of large-scale home furnishing commodities. Strong logistics, distribution and transportation capabilities are the natural advantages of Deppon and SF Express, but they are slightly struggling in the installation and maintenance links that they are not good at. Especially during the 618 and Double 11 periods, the end-of-line service flexibility is not enough to cope with the high concurrent order demand.

Third-party general contracting platform: Move the intermediary model to online

Representative brand: no recommendation

Various industries have used the internet to propose solutions, and vertical companies in the home after-sales service industry have grown up accordingly. The internet home furnishing service industry has been developing for seven or eight years, and different service models have emerged according to the diverse needs of the market.

Part of the home service platform model is the general contract model, that is, the traditional intermediary model is moved online and realized through a website or APP. The intermediary company sends an order customer service to communicate with the order master online.

The third-party general contracting platform brings convenience to home furnishing merchants. After-sales work can be completed without the need for a master, and the service is guaranteed. But there is no doubt that the general contracting model is not the most economical way. Communication costs and service costs are difficult to control, and the efficiency of dispatching orders and the regional coverage rate need to be improved.

Take the home furnishing supply chain integration service platform of Home expess as examples, integrate the resources of tens of thousands of masters across the country, and provide home furnishing e-commerce with localized one-stop services of warehousing, transportation, distribution and installation. Due to the fixed number of masters, insufficient service flexibility, poor consumer experience, low overall service evaluation, and capital flow problems, they eventually disappeared from the market.

Third-party crowdsourcing platform: Big data helps after-sales service

Representative brand: Wanshifu

For small and medium-sized e-commerce companies, it is enough to meet the basic service guarantee and service timeliness while reducing costs. For large and medium-sized e-commerce companies, the service efficiency and service quality during the high concurrency period of 618 orders are more important.

The essence of the traditional general contracting model is still in the era of customer service dispatching orders. It is just shifting offline dispatching orders to online. This model cannot meet the service needs of large and medium-sized e-commerce in terms of service efficiency only the real system pushes orders. In order to achieve a qualitative leap in service efficiency, completely deviating from the mode of "artificial" factor intervention.

The crowdsourcing model is to use the internet to achieve after-sales service, relying on big data to match orders and masters, and release manpower. The biggest advantage of the unique and innovative crowdsourcing model is sharing. Merchants and masters can freely choose and trade directly through the platform to maximize information symmetry and direct access.

Examples of the crowdsourcing service model include Wanshifu, Jiangduoduo, and Qibingdaojia, using the master's independent entry into the platform to take orders, and the merchants are free to choose the master's docking method.

The service advantage of the crowdsourcing model is more obvious than that of the general contracting model. Take the leading brand Wanshifu as an example. Wanshifu platform independently develops LBS map positioning technology, intelligent ordering system, etc., with more than 40 million service data, based on platform big data + intelligent algorithm to build an independent portrait system for users and masters. The system accurately and quickly matches the on-site service of the most competent master nearby according to the needs of the users in the order.

Home furnishing brands such as Linsy Wood, Igrow, Micoe, etc. all choose the crowdsourced after-sales service model, and work with Wanshifu to improve the professional after-sales service system covering the whole country and strictly control the terminal after-sales service closest to consumers.

Home furnishing giant's strategy: Self-built after-sales system

Representative brands: KUKA, IKEA

In the 618 promotion, once the after-sales service fails to keep up, consumer satisfaction will be greatly reduced and store sales will also be restricted. For merchants, the ability to provide all after-sales services such as delivery to home, moving upstairs, installation and maintenance, and packaging and returning goods will greatly increase the transaction rate.

Competent high-end home furnishing companies choose to build their own after-sales system, establish after-sales service standards and procedures that meet brand and product characteristics, and provide one-stop standardized services to consumers in most regions of the country. However, this model has a relatively high cost and is suitable for large companies with large volumes, wide coverage, and strong strength. Currently, less than 0.01% of such home furnishing companies with their own after-sales system.

The most prominent representative is the domestic furniture brand Kuka Home. It has created a "Kuka self-operated + Wanshifu" model to open up the national home furnishing after-sales service chain, so that consumers can enjoy Kuka’s door-to-door delivery and installation and maintenance service regardless of the channel they purchase. 

The other is IKEA, the international home furnishing leader. In recent years, "IKEA China" has provided after-sales assembly services to consumers of online shopping malls and IKEA APPs. At the same time, it uses localized self-built service systems and Wanshifu installation services to expand after-sales service coverage.

Which after-sales service model is strong

Fit is really good

Continuously adapting to market demand is the key winning point for an enterprise to maintain steady growth. After-sales service "last mile" and "delivery and return" are indispensable. As for which model to choose, it should be considered based on the company's own situation.

Small and micro home furnishing companies have limited profitability and value cost-effectiveness. The "dedicated line logistics + third-party crowdsourcing" model is a good choice. The price is suitable and the service quality is guaranteed. If you choose a small dedicated line logistics company to transport goods, you can find a master on the Wanshifu platform pickup and delivery installation.

Large and medium-sized home furnishing companies pay more attention to service quality and brand influence, and prefer the "professional logistics + third-party crowdsourcing" model, such as choosing Deppon logistics transportation and distribution, and Wanshifu's door-to-door installation.

Top home furnishing companies pay attention to brand image, improve consumer satisfaction from multiple dimensions of pre-sales, in-sales, and after-sales, and often choose the "self-built system + third-party crowdsourcing" model, such as improving warehousing and freight capacity and expanding the distribution network of national distributors. Cultivate localized after-sales service capabilities, and then provide terminal services through the Wanshifu platform to form an integrated service chain owned by the brand.

Choosing an appropriate after-sales service model and providing good service quality can continuously improve the consumer experience and promote the development of the sales market.