Tutwo, the leading Chinese outdoor wholesaler and retailer, has started implementing an omni-channel strategy that requires significant adjustments for the company.
Tutwo has turned into a huge player in the Chinese outdoor industry, boasting more than 1,100 directly-owned and franchised stores around the country at the end of last year. The company says the number of stores increased by more than 30 percent last year and they cater to a wider range of customers than specialist stores such as Sanfo.
Most of the stores are small outlets, with an average size of 80 to 100 square meters, and about 25 percent of them are franchises. But Tutwo has been investing in 47 larger specialty stores, which are located for the most part in shopping malls. Separately, Tutwo has a wholesale operation covering about 2,000 Chinese stores and other accounts, such as outdoor clubs.
In 2015, Tutwo recorded a turnover of 537 million yuan renminbi (€72.9m-$82.9m) and a net profit of RMB 5.4 million (€732,736-$833,707), according to a recent announcement by Toread, the leading Chinese outdoor brand, which acquired a stake of 20 percent in Tutwo around the end of 2014.
Tutwo declined to provide details on its financial results because the company is currently finalizing B-round financing. However, the company added that the entire group's turnover in 2015 was above RMB 1 billion (€136.0m-$154.6m). Tutwo also indicated that its comparable store sales were up by 38 percent last year.
Tutwo's omni-channel investments started in October, when it began to establish the required infrastructure. The retailer's larger stores were upgraded to make their operations compatible with the omni-channel system, it adopted smart CRM systems and began to trade through WeChat.
Then, Tutwo intends to install beacons and a facial recognition system. Beacons using Bluetooth enable the retailer to send customized tips or push notifications to the customers on their smart devices, depending on the products they're viewing or how much time they are spending in particular areas of the store. The system is meant to work for customers who have installed the relevant Tutwo application on their mobile devices.
Earlier this year Tutwo wanted to rapidly install beacons in about 50 stores and a pilot test was run in two stores, but the retailer resolved to adjust its selection of beacons as the hardware didn't match its requirements.
Apart from this “near field” equipment, Tutwo said it could take advantage of partnerships with mall operators to recognize shoppers as soon as they walk into the complex, and to alert them to novelties. The system could also recognize the shopper on his or her next visit, and make recommendations matching his or her interests.
While rolling out more and more stores across the country, Tutwo has invested in its megastores, led by the renovation of an outlet of 2,300 square meters in Shenzhen The store has been divided into eight outdoor activities, such as hiking, climbing, cycling, water sports and fishing, each of them with distinct colors and displays.
Since April last year, Tutwo has been setting up outdoor sports clubs in more than 20 Chinese cities, where its largest specialty stores are located. The clubs encourage members to join in various short outdoor activities, from rock climbing to cycling, fishing and inline skating, among others. The group has also been building up its travel activities, which are used by thousands of members. Another investment to increase recognition for the retailer in the last weeks was its sponsorship of players from the national bandy and ice hockey teams.
As previously reported, Tutwo sealed an agreement for the distribution of Salewa earlier this year. The company says it's holding talks for such arrangements with several other international brands.