The most beautiful April days should be a time of growth and vitality, but the nationwide COVID-19 outbreak has disrupted the daily work and business rhythm of many city managers. From Xi'an to Jilin, Xiamen to Nanchang, Shenzhen to Guangzhou, Quanzhou to Suzhou, and the most severely affected economic center, Shanghai, still under lockdown... Official information shows that the Omicron variant spreads and reproduces seventy times faster than the original strain, leading to rapid transmission, especially with a surge in asymptomatic cases! This has led to irregular outbreaks in many cities, with repeated lockdowns at various scales—some city-wide, some in designated urban areas, some in specific business districts, some in defined streets, some in residential compounds, some in individual malls, and even smaller units... These irregular and unpredictable lockdowns, controls, lifts, re-lockdowns, and re-lifts have left grassroots sales teams in affected cities exhausted, constantly responding, reporting, and patching holes... In the second quarter of 2022, our city managers in first-tier cities must adapt to the situation. They need to promptly adjust their local 'people, goods, and places' tactics to 'epidemic-fighting mode'— During the epidemic, we must: target the most accurate 'people,' sell the hottest 'goods,' and operate the nearest 'places.' Target the Most Accurate 'People' Once an outbreak occurs in a city, consumers are immediately subjected to varying degrees of lockdown, testing, and isolation. The activity trajectories and routes of confirmed/suspected cases and close/secondary contacts directly determine the scope of city controls and epidemiological investigations. This scope, updated daily as the epidemic evolves, determines the activity status of the city's population—whether they are under full lockdown, partial lockdown, or normal—and this directly influences their shopping behavior during the epidemic. It is crucial to recognize that after an outbreak, the usual tidal flow of in-store shoppers will change dramatically! Every city manager must respond quickly to this change at the first moment of an outbreak. To lead the local sales team efficiently and react swiftly, one question must be considered: How to target the most accurate people? 1. People Flow Status! Survey of Lockdown and Control Status Across Outlets and Channels First, quickly compile the administrative lockdown status of the main urban areas and counties in the city, then map channel dimensions by business contribution, matching the latest epidemic prevention lockdown levels for key channels in each area. Determine whether key regions and channels are under full lockdown, partial lockdown, or normal operation. For core urban areas and counties with significant sales contributions, further investigate people flow control status at the street level to achieve clear awareness of the city's overall people flow. For reference, here is a simulated case of Shaoyang City, Hunan Province, as an ordinary prefecture-level city: red indicates full lockdown, yellow indicates partial lockdown, and green indicates normal no-control status. By sorting out the channel lockdown status across the urban area and subordinate counties, the city manager can objectively understand the overall people flow situation. 2. People Flow Profile! Quick Sketch of Shopper Profiles in Normally Operating Outlets After confirming people flow status, the second step is to combine channel priorities and further sketch shopper profiles from the populations in normal and partially locked-down areas. For example, in the case above, community group buying and home delivery platforms in the main urban area remain in normal operation, so it is necessary to quickly sketch the shopper profiles for these two channels. From this, further analysis reveals that community group buying, which mainly targets low- and middle-income groups, is not a sales focus in the main urban area, while home delivery platforms, which serve more middle- and high-income white-collar workers, are identified as the primary focus channel during the epidemic in the main urban area. 3. People Flow Efficiency! How to Increase the Basket Size of the Sellable Population Confirming the shopper profile of the operable population aims to maximize the basket amount, i.e., increase the value of each purchase. During the epidemic, due to psychological factors and epidemic prevention considerations, even in normal living communities without lockdown, the frequency of in-store shopping is limited, so maximizing each purchase amount becomes crucial. City managers should promptly launch promotions such as full-reduction discounts and gifts for additional purchases to boost single-purchase amounts. For example, in the case, since the main urban area will focus on home delivery platforms, it is essential to immediately distribute electronic coupons for home delivery to encourage consumers to buy more per order. In two sentences, the purpose of people flow efficiency during the epidemic is: use the increment from open stores to compensate for the losses of closed stores! Even for closed stores, use online platforms like home delivery to minimize sales losses as much as possible. Sell the Hottest 'Goods' Recently, in Shanghai, the epicenter of the national epidemic, friends' circles are celebrating grabbing a bunch of greens or a bottle of cola... The more severe the epidemic in a city or region, the more it highlights a fact: people's needs are not that high-end; in relatively extreme states, meeting basic needs is sufficient. In the face of the 'epidemic fight' during extraordinary times, ensuring supply is the top priority! Shanghai colleagues still locked down at home have the most say about 'supply guarantee materials.' In the first phase of lockdown, everyone was stockpiling rice, flour, oil, vegetables, and meat; in the second phase, they were scrambling to stock fruits, cola, chips, snacks, and seasonings; in the third phase, mainly daily chemicals and household items... In the face of the epidemic, there is no consumption upgrade, little brand preference, and no trendy categories. If no one in Shanghai's recent group buying has ordered or asked about a category or brand, don't think too much about it; relevant sales colleagues should conserve energy and wait for the lockdown to lift. It is crucial to recognize that after an outbreak, the usual product strategy of gradually pushing higher-value new products should shift in the short term to hot products for supply assurance, i.e., selling the hottest goods! This genuinely addresses the livelihood supply issues during the epidemic. Every city manager usually pays attention to hot products because they sell quickly, turn over fast, and require less effort. However, after an outbreak, the operation of these hot products often differs significantly from usual. From temporary production increase requests to epidemic logistics clearance, to sorting and mobilizing sales channels, we need to think more and monitor more closely! 1. Hot Product Volume Reporting! Submitting Temporary Increase Plans for Core SKUs After an outbreak, whether under lockdown or not, consumers will adopt an emergency mindset to purchase and stockpile basic necessities and core SKUs in each category. They focus more on basic functions and care less about high-end added value. Due to the irregular recurrence of epidemics in different regions across the country, demand for basic hot products has surged among consumers everywhere. Every city manager should temporarily increase order volumes for these basic and core hot products. If the local weekly consumption is normally 500 units, the estimated weekly volume during the epidemic can be expanded by 1.5 to 2 times, and safety stock estimates should also be increased. In fact, core SKUs are also the most logistics-friendly during the epidemic, as loading and unloading a truck with 10 SKUs is far easier than the usual 100 SKUs. 2. Hot Product Logistics! Clearing Inbound and Intra-City Logistics During the Epidemic Temporary production increases are just the first step. From the practical experience of the past three years, the most uncontrollable factor during the epidemic is logistics. Due to epidemic prevention needs, provincial and intercity highways, national and provincial roads, and even township and village roads have been subject to varying degrees of restrictions and closures at different times. This requires every city manager to actively and frequently contact the company's logistics team to arrange the most reasonable and efficient routes for each truck, maintain timely communication during transit, and ensure coordination and clearance at every checkpoint along the route. During the epidemic, if you can ship a full truckload, don't share a truck! If you can ship directly, don't transship! If you can use one logistics company, don't use multiple third-party logistics handoffs! However, solving inbound logistics does not mean intra-city logistics lines are problem-free. Often, many of our distributors and company warehouses are already deep in epidemic zones, unable to even drive out, and drivers may have yellow health codes before they even depart. At this time, every city manager needs to lead the team and distributors to design and update intra-city logistics routes daily, based on the administrative lockdown status from the first chapter! The epidemic is a battle, and logistics dispatch during the epidemic is also a battle. 3. Hot Product Sales! Consumer Supply Priority Determines Channel Priority Logistics clearance is to deliver goods to the shelves of every sellable channel after the last mile. This requires designing channel priorities in advance. Because hot product supply and logistics capacity are very limited during special periods, city managers must allocate limited resources to the channels and customers that need priority supply. For example, home delivery platforms are one of the few remaining circulation channels in lockdown areas, so order fulfillment rates for home delivery platforms must be guaranteed. Operate the Nearest 'Places' The epidemic has indeed changed many consumers' shopping habits! Since the outbreak in the Spring Festival of 2020, COVID-19 has been around for three years. Home delivery e-commerce has been the biggest beneficiary channel over the past three years. Many stores' home delivery sales share has reached over 30%, and during the epidemic, it can even exceed 50%. Additionally, authoritative data shows that fresh supermarkets and CVS convenience stores in residential communities have flourished over the past two years. The former (home delivery e-commerce) is online, while the latter (community fresh supermarkets and convenience stores) is offline. Compared to mid-field (community group buying and hypermarkets) and far-field (traditional e-commerce), their common feature is that they are closer to consumers! During the epidemic, 'closeness' is king! Distant water cannot quench immediate thirst. The closer the place, the more important the channel. The epidemic tests speed and efficiency, and near-field priority should become the channel emergency strategy during the 'epidemic fight.' 1. Channel Identification! Sorting and Identifying Online and Offline Channels During the Epidemic

  • Offline channels are easily affected by epidemic lockdowns, but there are still active channels that can operate and sell.
  • Online channels are less affected by epidemic lockdowns, but there are still sudden restrictions on offline logistics fulfillment.
  • During the epidemic, based on logistics accessibility and fulfillment guarantees, online and offline near-field channels should be integrated and dispatched as 'one chessboard.' City managers should use the contribution rate of each channel in the local market as a baseline, combined with the impact level of the epidemic, to sort and rank online and offline channels. For example, in the case in this article, some subordinate counties have less severe epidemics than the main urban area and are in normal non-lockdown zones. In these county-level markets, hypermarkets, which contribute the most, are still operating normally. At this time, our sales team should increase resources in these hypermarkets—adding promoters, promotional mechanisms, and physical gifts—to maximize in-store sales and compensate for the established losses in main urban area hypermarkets due to the epidemic! 2. Channel Adaptation! The Epidemic Litmus Test Requires Not Only Matching but Also Readiness Under the magnifying glass of the epidemic, channels are both a mirror and a litmus test! Just because you identify and sort out which channels are key during the epidemic does not guarantee sales. You also need to match your and your distributor's capabilities, i.e., channel adaptability. If a city manager does not usually pay attention to new retail, knows little about home delivery platforms, or even retailers in some prefecture-level cities are unwilling to connect to home delivery e-commerce platforms, then when the epidemic suddenly triggers a surge in home delivery orders, especially in the one or two days before lockdown when there is a massive concentration of orders or even an explosion of orders! At that time, you and your distributor cannot grab sales because you cannot cram at the last minute; it is the consequence of not paying attention to this channel in normal times. It is important to know that home delivery platforms will see a surge at the beginning of the epidemic, especially in the one or two days before lockdown when volumes are highest. Promoters can even place orders through home delivery platforms to stock up and then deliver and fulfill themselves. So for every city manager in first-tier cities, channels must not only be identified and sorted, but also examined for whether your capability system matches. Readiness is the instant explosive power built on continuously consolidating basic capabilities in normal times. You cannot take it for granted; no pie will fall from the sky! 3. Channel Tactics! Channel Portfolio Layout Is Not Only for the Present but Also for the Lifting of Lockdowns Three years of experience tell us that epidemics in each city market break out in waves. Even a single high-severity epidemic will eventually end. So our channel portfolio cannot be hastily assembled just for emergency response. We need to treat each epidemic as a new growth opportunity for each city. Don't just focus on channel concentration during the epidemic; plan ahead. Fighting the epidemic is for lifting lockdowns. After each lockdown is lifted, the local market's channel landscape will evolve. This change may be obvious or hard to detect, but over time, new retail and new business formats are continuously becoming new channel forces. Remember that channel portfolio layout must be tailored to local conditions and focus on the long term. Perhaps by the next epidemic, your home delivery platform management capability will be fully up to the task. Of course, we hope the epidemic never recurs. Letting the market return to normal order is the voice of every frontline FMCG person. More Articles