The marketing situation for manufacturers is now beyond description with just the word "miserable," with a few exceptions. Recently, I've asked many bosses: What is your brand's WeChat Index? Most are surprised: What WeChat Index? One boss, after seeing his WeChat Index, immediately sent messages to arrange hiring and set up a department. I've also attended many manufacturer conferences recently, and surprisingly, the theme was all New Retail. I asked: Why make New Retail the theme? Many said, "Now, besides New Retail, there's nothing else to talk about." Can New Retail save manufacturers? Do you know the allusion of "carrying firewood to put out a fire"? An expert published an article in Sales and Market titled "New Marketing, or Just Say New Retail?" The article said marketing is intangible, while New Retail is tangible. New Retail has typical success cases like Alibaba, JD, and Tencent. What amazes me is not the rise of New Retail, but the decline of marketing. The reason manufacturers have less and less say is that marketing hasn't found a foothold in the Internet age. New Retail not only has figures like Jack Ma and Richard Liu but has also found its voice. Manufacturers should certainly understand New Retail and can participate in it. But from the manufacturer's standpoint, without New Marketing, they might as well surrender to New Retail. New Marketing and New Retail are not a contest of methods but a competition for voice based on different positions.
01. Starting from the manufacturer, the value chain is divided into three segments: manufacturer, channel distributor, and retailer. The relationships among them are transactional, a mutual game under the banner of "manufacturer-distributor integration." In the early days, manufacturers were strong. With the rise of KA (Key Accounts), manufacturers and retailers became strong. Now, New Retail is very strong. Whoever is strong dominates the value chain. With traditional plus Internet, the three segments still exist, and the corresponding transformations should be New Marketing, New Channels, and New Retail. For retail, traditional plus Internet means New Retail. Retailers have no choice. For channel distributors, it's New Channels, such as B2B, warehouse-distribution integration, supply chain finance, etc., all part of New Channels. Of course, some distributors may venture into New Retail, which can be seen as individual cases. For manufacturers, the options are the most numerous: they can do New Marketing, New Channels (B2B), or New Retail. But among the three options, which is the main one? For manufacturers with existing business, revitalizing the existing business is definitely the main focus. Manufacturers can only revitalize existing business through New Marketing or New Channels, because existing business is mainly sold through channels, and New Retail may not go through channel intermediaries. Without New Marketing, manufacturers will have no main position in the future. (Scan the code to enter the New Marketing book mini-program)
02. Here, we must clarify: What is the relationship between manufacturers and retailers? My answer: They are game opponents. No matter how beautiful the words, they cannot hide the essence of the basic relationship. Even in a married couple, there's the question of who is in charge. Even for a slightly better small store, it's hard to get in without paying. Ask Yili or Six Walnuts; they buy out small storefronts to get in. Traditional KA is even more so; with dozens of fees, isn't each one a "toll fee"? After B2C rose, the early goal was "to make it easy to do business anywhere," and it supported a batch of "Taobao brands," but now without paying traffic fees, there's no traffic. The essence of retail is "differential rent." To get a "good location," you must pay more "rent." The forms of "rent" can be storefront fees, display fees, or traffic fees. These fees are the "rent" that retail collects from suppliers. If manufacturers only engage in New Retail, unless they build their own New Retail platform, they can only pay "rent" when joining others' platforms, and they'll have to act according to New Retail's whims, unless they have the ability to guide traffic through New Marketing.
03. Of course, New Retail still needs to be done. For example, Jiangxiaobai, Handu Yishe, Three Squirrels, and Baicaowei have done well in New Retail. Among them, some started with New Retail from the beginning, like Three Squirrels. Others did channels first and then New Retail, like Jiangxiaobai. The premise is that their New Marketing is also particularly good. Because of this, their traffic fees for New Retail are very low. Nevertheless, I checked that Handu Yishe's profits are not high; they still have to pay traffic fees. Both New Marketing and New Retail are processes of creating traffic and then monetizing it. If you don't create traffic, you have to pay others traffic fees. New Marketing is about creating independent traffic for manufacturers in the Internet environment. With independent traffic, you can monetize it in traditional channels, like Jiangxiaobai, or on New Retail platforms, like Three Squirrels and Baicaowei. If manufacturers don't have independent traffic, then sorry, they must pay traffic fees to New Retail platforms. For example, most traditional manufacturers entering B2C platforms do so. B2C's profit model is to charge traffic fees to manufacturers without traffic, because they have "platform traffic." Jiangxiaobai has a better time on New Retail platforms because its New Marketing is well done and it has independent traffic. Even when entering New Retail platforms, it can get better treatment. In short, the more traffic you have, the better New Retail treats you. Without independent traffic, just wait to pay.
04. Besides New Retail on B2C platforms, traditional retail is also transforming to New Retail, such as KA. Take Hunan's Bubugao as an example. They are currently piloting three New Retail models: Dmall, mini-programs, and JD Daojia. The common feature of these three New Retail models is acquiring C-end customers. Regardless of the retail method, traditional retail is "sitting business," at most "binding" consumers through membership. Now, with Internet tools, acquiring C-end is not difficult. There are many sayings about New Retail, such as unmanned retail and new experiences, but these are not the mainstream of New Retail. The mainstream of New Retail must be establishing closer connections with consumers. "Capturing the C-end" is not only what New Retail needs to do but also what New Marketing needs to do. Without "capturing the C-end," there is no traffic. I've always said that [IP + Community] is the standard configuration for New Marketing. Through this standard configuration, manufacturers can also "capture the C-end." In the past, manufacturers were far from the C-end, so they had to go through channel distributors and retailers. Now, with Internet tools, they can bypass all links to "capture the C-end." Manufacturers' logistics and capital flows may still need to go through channel distributors and retailers, but information flow can bypass all links without issue. From this perspective, New Marketing and New Retail are consistent in "capturing the C-end." Because they are consistent, the competition between New Marketing and New Retail will be very fierce in the future. If New Retail "captures" the C-end and manufacturers don't, retail platforms can charge traffic fees. Therefore, New Marketing from the manufacturer's standpoint and New Retail from the retail standpoint are essentially hedging against each other.
05. In the past, manufacturers were far from the C-end. The farther they were, the more they were constrained by channel distributors and retailers. To solve the problem of communicating with the C-end, manufacturers had two approaches: brand-driven and channel-driven. Brand-driven means communicating with the C-end through mass media, building brand memory, and winning the qualification to counterbalance channel distributors and retailers. Channel-driven, over the past decade or more, manifested as deep distribution. Deep distribution means manufacturers reach the terminal and meet consumers at the terminal. However, they still couldn't "capture the C-end." Now, "Internet+" is actually "Social+". The rise of social platforms (WeChat, QQ, Douyin, etc.) has given manufacturers a set of tools to "capture the C-end." Therefore, the standard combination of [IP + Community] is a standard configuration for both traditional manufacturers' transformation and pure Internet companies. IP can be seen as a brand in the Internet environment. If a brand is "brand memory formed by paid mass media communication," then IP is "social sharing communication that ignites autonomous communication momentum." If a brand lacks autonomous communication capability on social platforms, it will gradually disappear from consumer memory. Management expert Mr. Shi Wei proposed the theory of "three-dimensional space": offline, community, and cyberspace. In the Internet era, IP must connect these three dimensions, and community is both a tool to connect the C-end and a key link to connect the three dimensions. When manufacturers form New Marketing with [IP + Community], they capture the C-end and have independent traffic. Independent traffic can be monetized offline, for example, Jiangxiaobai's offline channel and terminal capabilities, or on New Retail platforms. At least, they won't be constrained by New Retail platforms.
06. In doing anything, there must be a standpoint. Social roles determine standpoints. "Who are our enemies, who are our friends" — this question is still very important. In the mobile Internet era, first B2C became the focus, now New Retail is the focus, and even B2B (New Channels) has a relatively good voice. But there is no voice for marketing. Since the end of deep distribution in 2013, marketing has entered a "window period." However, now a group of manufacturers have achieved success through New Marketing. Manufacturers can certainly learn about and understand New Retail, and they can also enter New Retail platforms. That itself is not a problem. But if they have no standpoint, no main position, and give up their basic survival capability—marketing capability—then they will be the weak in the value chain game. In any society, balance is the ideal state. Once, manufacturers were relatively strong; later, KA was relatively strong; now, New Retail is relatively strong. Manufacturers should use New Marketing to form a balanced pattern of New Marketing, New Channels, and New Retail. That is the normal pattern. Manufacturers can dabble in New Retail, but please first do New Marketing well.
Source: Teacher Liu's Forum (ID: liuchunxiong1964) -END-