---
title: "Brand Owners & Distributors—Terminal Systems: Use with Caution!"
description: "As internet technology continues to penetrate the FMCG industry, digital empowerment is increasingly valued by enterprises. Most manufacturers have entered the shallow waters of digital transformation, gaining 'clairvoyant' insights and enabling products and services to reach further down the chain. Terminal systems, essential for market operations, have proliferated with various competitive strengths, yet they also bring confusion to all manufacturers. This article discusses terminal systems from a personal perspective, emphasizing that while they are crucial for data collection, their core logic should focus on tasks rather than personnel management, and their true value lies in enabling precise and authentic data-driven decision-making."
author: "高级研究员 海游"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-09-10"
language: "en"
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original_source: "https://mp.weixin.qq.com/s/6WuOhX2Go-aqtWS4mlFzNg"
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---

# Brand Owners & Distributors—Terminal Systems: Use with Caution!

> As internet technology continues to penetrate the FMCG industry, digital empowerment is increasingly valued by enterprises. Most manufacturers have entered the shallow waters of digital transformation, gaining 'clairvoyant' insights and enabling products and services to reach further down the chain. Terminal systems, essential for market operations, have proliferated with various competitive strengths, yet they also bring confusion to all manufacturers. This article discusses terminal systems from a personal perspective, emphasizing that while they are crucial for data collection, their core logic should focus on tasks rather than personnel management, and their true value lies in enabling precise and authentic data-driven decision-making.

As internet technology continues to penetrate the FMCG industry, digital empowerment is increasingly valued by enterprises. To date, most manufacturers have entered the shallow waters of digital transformation, equipping themselves with 'clairvoyant' and 'clairaudient' capabilities, and continuously pushing products and services down the chain.
From distributors to wholesalers, then to terminal stores, and directly to consumer insights, the collection of the entire data chain has been continuously refined. In this process, terminal systems, essential for market operations, have played an indispensable role.
**Various terminal systems have sprung up like mushrooms, each with its own core competitiveness, but also causing confusion or even bewilderment among all manufacturers. Today, I will share my personal views on terminal systems.**
**-01-**
**Terminal systems are the endpoint of data collection and the starting point of market operations**
Recently, I saw a leading industry enterprise establish a digital transformation department. My first thought was: digitalization is more about a shift in operational thinking, with enterprises leading and distributors following.
**In practice, the biggest resistance comes from the change in distributors' thinking, especially for veteran distributors. Only by first letting distributors feel the benefits of transformation through digitalization can the push be fast.**
Indeed, many large trading companies have realized the importance of digitalization, but they mistakenly believe that having their teams use terminal systems for operations is the core of digital transformation. Furthermore, some terminal system products even claim to achieve automated marketing management—this dehumanizing mindset is completely wrong.
**The core of digital transformation is data collection, data analysis, and digital operations, while the core of terminal systems is only a part of it: data collection.**
For example: if a person feels unwell and goes to the hospital for a check-up, is the main reason for choosing a top-tier hospital over a non-top-tier one the difference in examination equipment?
Of course not. The equipment may differ, but both can basically meet the needs. The key difference lies in the strength of the medical staff. The role of equipment is to better detect abnormalities in the body, but the treatment itself depends on the doctor's skill.
Returning to terminal systems: for leading enterprises with strong think tanks, what is needed more is the precision of data collection. However, for 80% of mid-tier and lower-tier enterprises, what they need more is what lies behind the data. The reason is simple: those who understand IT don't understand business, and those who understand business don't understand IT. There is a mountain between them, and they need a high-speed tunnel to establish an efficient connection.
I once served as a vice president of marketing at a company. Being a math graduate, I was both sensitive to and eager for digitalization. After choosing a terminal system software, the biggest problem I felt was:
**It was like a chicken talking to a duck—market issues couldn't be translated into system language, and system language couldn't be applied to market operations.**
This step can only be taken by system providers first, especially at the distributor level. **They need to cultivate a group of empowerment personnel who understand both the market and IT, to support the development of SMEs and distributors. I believe that in the near future, this will become the core competitiveness of terminal system software providers.**
On the other hand, looking at the functions of terminal systems: first, data collection is the endpoint. The purpose of collection is to identify market problems, such as whether slow growth is due to the number of outlets, outlet quality, single-store SKU variety, market competition, etc.
Slow growth is a symptom; the underlying issues must be diagnosed through terminal system checks. Its role is to accurately, specifically, and timely describe the core logic behind slow growth, facilitating later strategic adjustments.
Second, terminal systems are the starting point for market operations. With digital empowerment, the strategic direction becomes clear, providing a solid basis for the next market moves. At this point, terminal system empowerment is needed, and further integration of market and system is required to complete the subsequent work.
**Precise data collection yields data; data analysis empowerment yields services.** Most terminal systems on the market sell the former, and very few can combine both.
The user experience between the two is vastly different. I also believe that only terminal system providers that achieve an intelligent closed loop of both can truly realize their core competitiveness and genuinely treat enterprise matters as their own.
Having said this, many enterprises or distributors should now understand how to choose a more suitable terminal system from the myriad options available.
**-02-**
**The core logic of terminal systems is to get things done, not to manage people**
Many enterprises and distributors dedicate the use of terminal systems to personnel management. As a result, many terminal system providers continuously develop and upgrade their systems in response to customer needs, using AI to collect massive amounts of information with the aim of:
How to supervise personnel's market operations? Are they slacking off? How to supervise the implementation of market expenses and channel promotional allowances? Are they being embezzled?
In fact, this goes against human nature.
With over ten years of marketing management experience, my conclusion is: **Do not do things that go against human nature.** People are not machines; they have emotions and desires. Especially the post-90s and post-00s generations in the workforce—the stricter the supervision, the stronger the backlash, and the worse the results.
The core logic of terminal systems is to get things done. What things? Things that are conducive to market competition and things that facilitate personnel's performance.
For example: Jinmailang launched soda water to attack Mingren Soda Water in local markets by 'hitching a ride on the big guy,' highlighting competitive advantages and shaping new consumer perceptions.
Everyone knows that Mingren Soda Water is the category leader in many regions. Jinmailang chose to engage in close combat with the leader in category displays, shaping new consumer perceptions:
> **1. The retail price is the same at 3 yuan;**
>
> **2. The pH value is 8.0,**
>
> **3. The volume is 74ml more than yours, and there's a chance to win another bottle.**
If you are not a die-hard fan of Mingren Soda Water, consumers will definitely waver. At this point, the market strategy is set, and the role of the terminal system is:
**As long as the salesperson arranges their shelves in this way, they can receive rewards. The function changes from supervision to reward, greatly enhancing market competitiveness. This is the core mission.**
Mr. Cao Jun, CEO of Molihuutong, once proposed an early viewpoint:
**We should look at problems from the end to the beginning; all market actions must be accountable for results. What are the results of market operations?** Obviously: higher sales and more profits. This is one thing, and the core work of terminal systems revolves around the results of these things.
Second is managing people. How to manage people? There are many misconceptions in people management. For example, many manufacturers play spy games with their employees. Through the system, they monitor when employees go online and offline, and check their trajectories to see if they are doing other things.
Employees rack their brains to counter-surveil: taking photos of previous photos, asking friends to hold their phones while doing personal errands, or handing their GPS-enabled phones to drivers to carry, etc.
**Brand owners, distributors, software providers, and sales personnel are all tirelessly turning market operations into a spy movie—it's mind-boggling.**
Terminal system people management should also revolve around tasks. Frontline employees should focus on process items.
For example, daily operations should revolve around: the number and quality of outlets visited that day, new and lost outlets, whether display comparisons show improvement or regression, achievement of daily visit targets, product movement actions, and replenishment and sales situations.
Managers should focus on result items, such as: the sales volume and growth of subordinate teams, the quantity and quality of new product distribution, etc.
All personnel management should be based on specific tasks, not on the individuals themselves. The core of personnel management in terminal systems is: **to implement the principle of 'change management to motivation.'**
**That is, goal orientation should involve interlocking and game-playing, stimulate employees' subjective initiative, fully respect the value of their proactive efforts, and never exploit their motivational gains.**
Thus, terminal systems also have their limitations. Their effectiveness is achieved through human intervention; the less human involvement, the greater the limitations. For example, in areas with highly developed CVS channels, the effectiveness of terminal systems is weaker.
**-03-**
**How do terminal systems empower manufacturers and distributors?**
In the first half of 2020, the overall market experienced the test of the pandemic: factories shut down, markets closed. This forced more consumer goods companies to seek more efficient development models. Two issues were at hand:
First, how to reduce the impact of uncertain market events?
Second, how to regroup and improve efficiency in a short time?
This is precisely the value of terminal systems in collecting information and analyzing data.
The most eternal thing in the market is change, involving national macro-control, industry chains, competitive landscape, unexpected events, personnel skills and attitudes, etc.
Almost all changes pull at the nerves of manufacturers and distributors. How to reduce these disturbances or how to predict them in the first place becomes particularly important.
At this point, terminal systems can adjust market strategies by timely statistics on competitor distribution information and establishing competitor analysis. **While maintaining data collection on themselves, they can also gain insights into the strengths and weaknesses of every strategy, plan, and personnel work, thereby achieving refined operations across the entire channel from distributors to terminal stores, greatly reducing the impact of unstable factors.**
The prerequisite for market efficiency is the formation of an intelligent closed loop between precision and authenticity. By managing different distributors, different stores, and different SKUs well, clarifying which categories are suitable for each distributor and which products each store should sell, it is possible to aggregate dispersed traffic point-to-point and convert it into product sales—this is precision. Ensuring that information collection cannot be falsified, process execution cannot be falsified, and personnel incentives cannot be falsified, safeguarding precision—this is authenticity.
**Only when precision and authenticity form an intelligent closed loop can the efficiency of resource allocation be maximized, thereby increasing the competitiveness of enterprises.**


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