Backed by 300,000 stores, how can Youluke use the operator model to attack smart retail?

Picture from: Youluoke

C Company’s Troubles

The chain franchise industry attaches great importance to the standardization of stores. As one of the leaders in the global automotive after-service market, Company C has set very strict standards for its stores, which mainly include five links:

The first is the environment and display of the store, how to place the goods on the shelves, and whether the equipment is clean and tidy; the second is the appearance of the store staff, whether they wear work clothes and work ID cards as required; the third is the operation of the store, employees Do you wear gloves when replacing brake pads, and do you wear a helmet when working under the car? The fourth is the sales and consumption experience, for example, when a store sells tires, you must use a physical quote; the fifth is the store's system operation, such as whether all sales documents are accurate Entry system.

It is not difficult to set standards, but it is difficult to implement and supervise them. Company C has nearly 1,500 stores in China, scattered in various large, medium and small cities.In the past, in order to supervise the implementation of standards in each store, Company C would send auditors to the store for assessment every quarter. The cost of a store inspection for each store is approximately thousands of yuan, which means that Company C needs to spend millions of dollars every year just on store inspections.

Spending money is a small thing, the key efficiency is still very low, and the effect cannot be guaranteed. It's like a health inspection in school. The dormitories are messy on weekdays, but they are immediately tidied up when the inspection day comes.Stores will also prepare for inspections, but the effect of store inspections is very limited.

At the end of 2016, Company C decided to launch a remote store inspection system to replace the traditional manual audit. It was at this time that Youluoke came into Company C's sight. Also participating in the bidding are Hikvision, China Telecom, Tyco, Secom and other industry giants. Yoluoke has no advantage in terms of corporate size or popularity.

According to the bidding process, Company C selected seven or eight stores in first-tier cities for testing. Each bidding company corresponded to one store, and Youluoke was assigned to a store in Guangzhou.

The entire bidding process lasted for nearly three months. After some testing, Youluoke, which was originally not optimistic, actually led the way. The staff member responsible for the bidding told Lei Feng.com, “The most intuitive feeling during the test is that Youluoke's system is easier to use and the code flow is faster."In addition, Youluoke also has certain competitive advantages in terms of equipment costs. But what attracts them most is the platform advantage of Youluoke. The main function of remote store inspection is to watch surveillance videos. In addition to these, Youluoke's platform also has There are many useful functions, such as shaking to visit stores, video interception and forwarding, etc.

The root of this difference is thatYouluoke positions itself as an Internet company and a cloud platform, not a security company.

Inspired by iPhone

After many years, Shen Xiuping still clearly remembers the shock when he saw the first generation iPhone. He had never imagined that a communication tool could include a camera and a game console, and achieve almost all the functions that users want. Shocked, he couldn't help but wonder whether he could transfer the iPhone's approach to the camera and install an "iOS system" for the camera through the cloud platform to create an "Apple model" in the security industry. With this idea in mind, Shen Xiuping founded Youluoke in 2009.

At the beginning of the company’s founding, Shen Xiuping’s positioning and mission for Youluoke was very clear: “My idea is to connect the camera to the cloud platform and realize all the functions required by the retail store on the cloud platform. It is mainly divided into three major modules: first, to cloudify the original security functions; second, to add management functions such as store patrols; third It is an AI-related intelligent module."

Youluoke has an APP that contains many functional modules. Customers in different industries can choose the corresponding modules according to their own needs. The functions implemented by each customer are different, but they are all within the framework of Youluoke's front-end and back-end integration.

Shen Xiuping believes that Youluoke's solution is the most comprehensive and flexible among all retail solutions. The camera or NVR at the front end of the system can preprocess the video stream and upload structured image data or video stream according to user needs and bandwidth conditions.

Different from ordinary startups, after nearly ten years of hard work, Youluoke has created a complete closed loop from hardware to cloud to user end. "We provide a complete set of support from front-end products to back-end services, including consulting and technical support. It is a very complete system."This means that Youluoke's engineering implementation capabilities are difficult for AI startups to match.

Shen Xiuping told Lei Feng.com,Retail brands have stores all over the country, which requires AI technology to be implemented in the form of a platform or operator."That is to say, you cannot be a company that sells algorithms, technology or hardware, but must be a platform operation company."

Shen Xiuping introduced that Youluoke currently serves 300,000 stores and has more than 1,000 service providers across the country, covering more than 2,000 counties and cities.

Youluoke speed

The person in charge of Company C recalled that another important reason why Youluoke attracted him was its strong implementation and execution capabilities.

Company C has nearly 1,500 stores across the country, and they are particularly scattered, ranging from first-tier to fifth-tier cities. The company's project cycle is also very tight, requiring suppliers to install at least 500 stores within 3 months. Unexpectedly, Youluoke installed 500 stores by the end of 2016, and all 1,500 stores by May 2017. "Calculated, on average, it can be installed in more than 200 stores every month, and most of them are in third-, fourth- and fifth-tier cities, which is something other suppliers cannot do."

The installation process was not smooth sailing, but more resistance came from the store. According to the person in charge of Company C, nearly 50% of the 1,500 stores of Company C have already installed surveillance cameras. The store owners believe that installing a new surveillance system is completely unnecessary. Fortunately, after some negotiations, Youluoke impressed these shop owners with its rich functions, and the project was successfully promoted.

And facts have proven that this decision is extremely correct.

According to the person in charge of Company C, compared with traditional manual store inspections, Youluoke's store inspection system has three main advantages:

The first is cost. Company C has done calculations,The hardware cost can be recovered within one year after the introduction of Youluoke's system, and two-thirds of audit costs can be saved every year thereafter."Before 2016, we had an audit team of more than 30 people, and we had to send people to the store to conduct an assessment every quarter. Now we only need to go once a year, and the audit team has also been streamlined."

The second is efficiency improvement. In the past, store audits required door-to-door inspections, but now they can be viewed through the Youluoke terminal anytime and anywhere. The efficiency has been improved several times and the store has been prevented from having to prepare in advance for inspections.

In the end, it is mutual benefit and win-win. Headquarters, customers (dealers, agents), and consumers are the iron triangle of the retail industry. Youluoke's system can connect the three and benefit together.

On the one hand, the headquarters can better promote and supervise store standardization and understand store sales. According to the person in charge of Company C, every time a tire is sold in the store, the QR code on the tire will be scanned, automatically entered into the Youluoke platform, and bound and matched with the license plate information captured by the system. This way the company can accurately track how many tires each store sold and to which vehicles.

On the other hand, store owners can also use their mobile phones to check the situation in the store anytime and anywhere, such as whether employees are passive or slack at work.

In addition, this system is also conducive to the promotion of the "transparent workshop" concept. In the past, store maintenance and repair processes were not transparent, and customers were often wary. NowWith the help of Youluoke's platform, stores can push a link to customers, through which consumers can view the surveillance video of a certain workstation within two hours and understand the maintenance status of their car throughout the process.

The person in charge of Company C revealed that it is not ruled out that the company will introduce cutting-edge technologies such as face recognition and face payment in the future. However, for Company C, vehicle information is more important than face information, so they envision using AI technology to identify the driver's license number to obtain all the vehicle's information.

Attack smart retail

Shen Xiuping believes that it is normal for Company C to have this kind of demand. Because the retail market is rapidly transforming towards digitalization, if companies are still using the original business methods, they are bound to encounter many problems.

He said that smart retail has reached the eve of an outbreak. “Many retail brands have started to use it in 2018.2In 2019, many customers will gradually increase their sales, so this year is a critical period for major technical service providers to occupy their positions."

For Youluoke, smart stores are just an inheritance and continuation of the store patrol function. The billion-level platform architecture independently developed by Youluoke not only supports high concurrency, but can also be flexibly adjusted and upgraded on this basis, providing functions such as facial recognition shopping guide, repeat customer analysis, cash register loss prevention, and accurate customer flow. Simply put, it can not only help enterprises improve store management efficiency, but also provide data reference for managers to make scientific decisions based on intelligent analysis results.

Youluoke got involved in the field of AI very early. In 2012, it started the research and development of AI technology. Its main research directions include face recognition, humanoid detection and behavior analysis. However, the shallow learning method used at that time was not satisfactory. It was not until the turn to deep learning in recent years that it slowly became commercially available.

In terms of segmentation algorithm, Youluoke does not fall behind at all. Take face recognition as an example. Currently, the world-renowned face recognition technology verification platforms include LFW and MegaFace. The former has a face database of more than 10,000 people, while MegaFace has a face database of millions. Youluoke mainly focuses on the latter.Not long ago, it ranked among the top five global companies in the MegaFace Million Face Test with an accuracy of 97.4869%.

Shen Xiuping rarely emphasizes this point deliberately, because in his opinion,With the development of AI today, there is not much difference in the algorithms of each company, but the moat of data and platform is higher.

The advantage of Youluoke lies in its mature platform system. Algorithms honed in actual combat are also incomparable to algorithms in the laboratory.

Shen Xiuping introduced that the AI technologies currently implemented in Youluoke include face recognition and action behavior recognition.

Among them, facial recognition is a very important technology in retail digitization, with a wide range of application scenarios, such as VIP shopping guides, repeat customer analysis and accurate customer flow.

Although the traditional membership system collects a lot of customer information, the clerk does not know the customer at all when he comes to the store and cannot provide precise shopping guidance. And members must carry their membership card or provide their card number to enjoy exclusive discounts and benefits. Facial recognition solves these problems very well, not only improving efficiency, but also helping to increase consumers’ shopping frequency and increase unit price.

"For example, if you go to a clothing store to buy something, the clerk will tell you the next time you go there that clothes of a similar style have arrived recently. Do you want to try them on? Another example is a beauty salon. When a customer arrives at the store, the clerk will know her immediately. There is no need to ask again which cosmetics you are allergic to.”

Another example is the analysis of repeat customers: "Although I don't know who a certain person is, I know that he has been to the store 2-3 times this month; or 10,000 customers have been to the store this month, and 50% has visited 2-3 times, which means that My store is very attractive.”

In addition, Youluoke's system can also analyze the gender and age distribution of consumers from a macro level, helping merchants to flexibly adjust product selection strategies.

Action behavior recognition is also widely used. For example, as mentioned earlier, Company C needs to check whether store employees wear gloves when replacing brake pads and whether they wear safety helmets when working under the vehicle. These functions can be realized through AI algorithms.

The person in charge of Company C also told Leifeng.com that he would be happy to use algorithms to replace manual assessments. "If we introduce AI technology suppliers in the future, we will strictly follow the bidding process, but under the same circumstances, we will prefer Youluoke."

This may represent the voice of other Youluoke customers. At present, Youluoke has served customers from all industries including retail, catering, automotive aftermarket, medicine and other major categories, with a total of more than 300,000 stores. This will be an important bargaining chip for it to remain competitive in the future.

In addition, Youluoke is a SaaS+PaaS platform, which means that it can well connect different algorithms and scenarios. Shen Xiuping introduced that the algorithm of Youluoke 90% is currently independently developed, but it is not ruled out that more good third-party algorithms will be introduced in the future to form an algorithm warehouse.

At the same time, it can also be easily connected with POS, CRM, ERP and other systems to integrate data and truly realize big data insights.

Summarize

There has been a lot of discussion in the industry about the future pattern of the smart retail market. A common view is that retail is a fragmented market and it is difficult for one company to dominate. People who hold this view often use retail SaaS as an analogy. There are many invisible giants in the retail SaaS field, but players who can truly dominate the market have not yet emerged. The reason behind this is that the retail industry is mainly localized SaaS and it is difficult to form a monopoly.

Retail AI is a completely different way of playing, Shen Xiuping believes,There will be several giants in this field. "Platform-based companies will have certain competitive advantages. This war is coming very quickly and will basically be decided within two or three years."