Friday, July 7, 2006

7Eleven is Taiwan's Wal-mart

I think a lot of people are amazed at the number of 7Elevens that they find here in Taiwan. Some are indeed right across from each other. Others can be found in concentrations of 3 or 4 a block.

Although the most obvious story, this is not the bigest story. 7Eleven is probably the most efficient chain store in Taiwan. Its supply chain is, in my opinion, unsurpassed. Take these things into consideration.

They have point of sale computers that can register depleted stock immediately. Add to this a daily delivery chain and you have a powerhouse. That's called one degree of separation.

Let me give you an example. You buy an item. The cashier scans the barcode and it immediately is registered in a networked database (the same way that all 7Eleven's have networked LCDs at the cash that display ads - networked so that all stores get tailored advertising from the center). 7Eleven central can then send an order to the supplier to get more stock and ship in the next day to the store. That's efficiency: customer satisfaction from not having enough stock, no over stock at the warehouse. Just think of that the next time you see the clerk walking around the store with a PDA checking stock.

As back home in Canada, convenience stores are getting into services like postal outlets. It pays to have that 24 hour convenience. Taiwan does not have postal outlets yet but they do have some other amazing services. You can buy phone cards and MRT cards you can pay most utility and credit card bills under $20 000 at any location (other convenience stores too). It's not just Slurpees and hot dogs anymore baby(Taiwan also has steamed buns and tea eggs)!!!

7Eleven also offers catalog orders for things as diverse as books, birthday cakes, holiday and seasonal foods and things like iPods. Yes, Apple iPods!!! It's all using the efficiency of the chain supply network. Order your item online and Uni-President, operator of 7Eleven in Taiwan and operator of COSMED and Starbucks here not to mention having its own line of products, will ship it using their ready-made suplly chain to the 7Eleven nearest you so, basically, around the block in no time flat!

7Eleven is at the forefront of advertising and promotion here too. It just recently concluded an extremely successful Hello Kitty magnet and button campaign that all other convenient stores have copied but have yet to match. It was brilliant. When the shopper bought $77 or more of products, they got a Hello Kitty magnet. It was extremely popular with the trendy Taiwanese kids and adults alike. 7Eleven even manufactured and sold magnet boards to display the collections of magnets. At one point there were even private magnet swap meetings to trade magnets and complete collections!

And that $77. How did they choose that amount? Well, contrary to popular thinking, it has nothing to do with the name 7Eleven although it was 'convenient'. It was arrived at from looking at the point of sale numbers in the database. Through a 'simple' calculation it was determined that sales could be increased by getting people to buy this amount. To understand this you need to know that most lucrative sale in 7Eleven is with drinks (one of Uni-Pres' important products). On the average a drink might cost between $20 and $25. So in order to get the magnet, customers had to buy more than 3 drinks and go well over $77. So the incentive worked amazingly and drastically boosted sales. 7Eleven was mopping the floor with the competion!

An interesting aside: 7Eleven is called that since its original operating hours where from 7am to 11pm. How things have changed! As 'The World is Flat" author Thomas L. Friedman would say, that's 365-24-7 convenience, especially in Taiwan's case!

One final thing, remember to keep those receipts (from any business) for the big (free) lottery. The government wants to keep businesses honest with their taxes by having them issue receipts for all purchases. Give them a hand and have fun (good luck) with the draw at the same time. Posted by Picasa
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