Late autumn nights are cool, and the streets near midnight are empty. But no matter how late it is, Lao Wang knows a light is always on for him... Just after working overtime on a headache-inducing community group-buying response plan, exhausted Lao Wang dives into his daily convenience store, eating a hot bento and drinking black coffee. This 24-hour store always revives him instantly! The light and door of the corner convenience store are always open for hardworking FMCG workers... CVS convenience stores have always been a relatively hot topic in channel management, but many frontline city managers in daily chemical FMCG may think CVS stores are a chicken rib—low sales but high costs. But from a higher dimension, CVS convenience stores are not just a place to sell goods, but also a very important brand promotion front. Behind CVS stores are generations of young urban consumers, making them one of the core channels for future mainstream consumer groups. Therefore, we must firmly grasp such channels. Of course, the CVS convenience stores discussed here are true chain modern convenience stores, not small shops or tobacco stores with convenience store signs, nor convenience stores in gas station networks like Sinopec Easy Joy or PetroChina Kunlun Hao Ke. I believe those two are more accurately classified as special channels. For city managers, the two types of convenience stores they face most in frontline sales are local chain convenience stores and professional national chain convenience stores. Local chain convenience stores are relatively common, present in first-, second-, and third-tier cities to varying degrees, but mainly concentrated in first- and second-tier cities. Examples include Haode in Shanghai, Jianfu in Xiamen, Every Day in Xi'an, Hongqi in Chengdu, Wanjia in Fuzhou, and Today in Wuhan. Professional national chain convenience stores are mainly in Beijing, Shanghai, Guangzhou, and Shenzhen, such as FamilyMart, Lawson, and 7-Eleven. The difference between the two lies in the proportion of ready-to-eat food (fresh food). Local chain stores focus more on cigarettes, snacks, and some daily chemical groceries, with fresh food often below 20%. In contrast, Japanese-style national professional chain stores, represented by 7-Eleven and FamilyMart, often have fresh food proportions of 30%-50%, selling breakfast, coffee, oden, and boxed meals. Regarding daily chemical categories in CVS stores, whether local chain or professional national chain, the proportion of daily washing and chemical products is generally stable in the 5%-10% range, corresponding to two to three shelves in regular stores, and one to two shelves in smaller stores. From a sales perspective, with average monthly sales per store in core cities around 150,000 yuan and in first- and second-tier cities around 100,000 yuan, numerous daily chemical manufacturers compete for about 10,000 yuan of limited sales in CVS channels. How to divide and seize more share is the daily "10,000-yuan battle" played out in hundreds of thousands of convenience store terminals. For these two or three shelves, manufacturers engage in close combat, with blood and rain in every inch. Of course, if further subdivided into subcategories like toothpaste, toothbrushes, paper products, shampoo, laundry detergent, soap, and razors, for a specific subcategory manufacturer, it's a fight for every centimeter of shelf space. This article, from the perspective of regular daily chemical categories, discusses the evolution trends of CVS convenience stores, the pain points and thoughts of frontline city managers managing this channel, and the corresponding tactics and strategies within the 10,000-yuan sales and limited two or three shelves, hoping to provide some inspiration and thinking for frontline city managers. -01- CVS Trends: Downward Coverage, Category Upgrade, Digital Operations Frankly, although CVS convenience stores have developed for many years and are considered a traditional mainstream channel, their development prospects remain promising. Even today, with internet-empowered new retail e-commerce getting closer to consumers, convenience stores still have two incomparable advantages of "15." What are the two "15s"? First, closer to consumers, meaning physical distance. A consumer completes a convenience store purchase in about 15 minutes round trip. Currently, even the fastest e-commerce cannot achieve such response speed. Second, an average order value of about 15 yuan. The average transaction in convenience stores is 15 yuan, a price range that e-commerce costs cannot serve. E-commerce shipping costs at least 3-4 yuan per order. With a 15-yuan order, it cannot cover the 3-4 yuan shipping cost. Therefore, even if today's e-commerce tries all sorts of tricks, CVS stores can effectively avoid them. Against this backdrop, let's look at the overall evolution trends of current CVS stores. 1. Downward Coverage, Slower Growth The slower growth here is mainly due to the impact of the pandemic, compared to previous growth rates. At the same time, convenience stores in first-tier cities have become saturated after years of development. On the other hand, rents and labor costs are rising, and operating costs are increasing, leading to more "store-keeping." But this doesn't mean there's no growth. The downward trend of CVS stores in second- and third-tier cities is obvious. Stores are moving down, for example, in October this year, Henan's first 7-Eleven store opened in Zhengzhou. In the future, downward expansion in second- and third-tier cities will become the main battlefield. Of course, by the way, the CVS convenience store business has a long history, but it hasn't developed rapidly. The core reason is that it's a heavy business, not very internet-thinking, and not favored by capital. Unlike platform e-commerce, which has imagination space and can drive several-fold growth in a short time, convenience stores do business in a small circle within a 3-kilometer radius, relying solely on per-store profitability. Because of this, lacking capital support, development has been relatively slow. 2. North-South Regional Differences Remain Obvious The development of convenience stores is not only related to overall economic level but also strongly correlated with region. In May this year, Quanshi Convenience Store announced the closure of 160 stores in Beijing. Setting aside internal operational issues, careful observation shows that the overall development of convenience stores in northern cities has been unsatisfactory. I believe one key reason is the weather. From November to April, the north is basically in winter. After 10 PM, except for a few night markets, streets are basically empty. Even at home, northerners are unwilling to re-dress in thick clothes to go out shopping. Therefore, in the north, true convenience chains are rare and develop very slowly. On the other end, the south is a different world, especially in Guangdong. Whether in coverage, density, sales per square meter, or average transaction value, CVS stores are significantly higher than the northern market. Why is Dongguan, Guangdong, the "originator" of convenience stores and the largest convenience store location? Key factors include hot weather and long nights. On the other hand, convenience stores are also most concentrated in South China. Besides hot weather, economic development is good, many migrant workers, fast-paced life, and precious time... these are the soil for 24-hour convenience stores! In fourth- and fifth-tier cities, more young consumer groups are poor but have leisure time. They have plenty of time, so "fast life" elements like convenience stores are not a necessity for small-town youth; at most, they are for novelty. 3. Category Upgrade, Differentiated Structure To improve sales per square meter, CVS stores usually do two things: First, adjust category structure, focusing on increasing gross margin; second, meet young people's needs, focus on hot products, and increase turnover. In category structure, first, private labels are increasing. Because CVS stores have very few SKUs, and store rents and labor costs are rising, stores have to operate private labels to increase overall gross margin. Second, the development of ready-to-eat food categories, which have higher gross margins than regular standard products, and can effectively avoid penetration by fresh food e-commerce and community group buying. This is also the foundation for convenience store survival in highly developed e-commerce and new retail cities like Shanghai. In focusing on demand, young consumer groups pay more attention to hot products in regular daily FMCG, which also fits the small-and-beautiful consumption demands of young people. 4. Digital Operations, Increasing Stickiness Digital operations are a common topic. The pandemic accelerated the use of digitalization and technology across industries, and convenience stores are no exception. Through digital operations, they reduce labor costs, improve operational efficiency, and increase user stickiness. For example, electronic payment, digital marketing, smart coupon pushing, membership systems, etc., reduce costs and increase efficiency through digitalization, while increasing member stickiness, repurchase, and average transaction value. These are the current development trends of CVS stores. Although the overall prospects are bright, frontline city managers of daily chemical FMCG manufacturers face many pain points when dealing with convenience store channels. -02- High Gross Margin Requirements, Difficult Management, Significant Impact First, gross margin requirements are high! CVS stores generally require 30%-40% gross margins, making it difficult to sell market hot products. Cost transfer leads to increasing pressure on distributor trade terms year after year. Of course, they often have no choice. Store rents are rising, labor costs are rising, especially in first- and second-tier cities where costs are climbing. Gross margin is inevitably a core indicator. At this time, frontline city managers are in pain: truly best-selling products have low margins; non-best-selling products require promotional subsidies. Besides gross margin requirements, category management is also becoming stricter. The more formal the convenience store management, the higher the efficiency in product selection, and the shorter the replacement cycle. Some internet-concept convenience stores even require weekly product selection and weekly replacement. Of course, the replacement cycle for standard SKUs in regular convenience stores is also getting shorter. Previously it might be half a year, now there are slight adjustments every 3 months, with elimination of the bottom performers. At the same time, the cost of maintaining store management is also rising. The cost of distributor personnel visits, logistics and distribution, and the implementation of secondary activities are all increasing. The main reasons for operation and execution difficulties remain limited per-store output and scattered stores. For a single-category FMCG manufacturer, it's hard to make dedicated and regular visits to CVS terminals that produce only a few hundred yuan a month. So they often have to settle for secondary maintenance through unified warehousing and distribution, and remote monitoring. The overall strategy can only be daily grazing-style management plus strong headquarters push. The impact of multiple channels was most evident in 2020. Due to the pandemic, community group buying, O2O home delivery e-commerce, WeChat marketing, and other models and players emerged and grew rapidly. To further acquire users and traffic, new channels did not hesitate to use high subsidies on standard FMCG products for low-price traffic diversion. These short-term behaviors have, to varying degrees, impacted and influenced convenience store management. -03- Convenience Stores: The Never-Disappearing Offline Channel! Combining the review of convenience store evolution and the analysis of current pain points for frontline city managers, I have sorted out the planning and layout of CVS stores from the three dimensions of "people, goods, and place." 1. Professional People, Professional Sales, Full Attention First, FMCG manufacturers, whether dealing with traditional local convenience stores or more professional modern convenience stores, need a professional team to connect. From formulating trade terms, selecting hot and new products, advancing secondary activities, implementing promotions, and empowering with the latest digital marketing, professional people are needed to precisely connect with head customers. Convenience stores are not grocery stores or community supermarkets; they require attention to both points and surfaces. Therefore, both headquarters cluster and store operations must be considered. Having only headquarters negotiation capability is not enough; efficient management capability is also needed. In the context of widely distributed stores, remote product management tests basic skills. For distributor partners, four words must be achieved: comprehensive innovation. In the past, many of our distributors used traditional supermarket and grocery store thinking, but that no longer works. Chain CVS convenience stores, as relatively professional retailers, adopt internet technology very quickly and are in a process of continuous iteration. Therefore, training for distributors on new retail and business integration must be accelerated. For some head stores, consider deploying mobile promoters for key store maintenance and improvement. Finally, frontline city managers themselves must pay full attention and no longer consider it a chicken rib channel. Because convenience stores are scattered and have low per-store output, many city managers think they are unimportant, even a supplement to business. This is a serious cognitive deficiency and trend misjudgment. Frontline city managers must realize that no matter how retail formats develop, convenience store channels are irreplaceable in the future and are the never-disappearing offline channel. 2. Target Consumer Profiles, Push New and Sell High, Don't Be a Pioneer Martyr In terms of goods, select hot products to ensure basic store gross margin, but also promote price realization. Hot products are the foundation of channel business, ensuring traffic and sales. Frontline city managers should know the consumer profiles of CVS stores, such as white-collar workers, workers, young people, and males, and select high-margin new products based on different profiles behind stores. Push new products to be pioneers but not martyrs. Pushing new products is not to die but to live. New products in convenience stores are more of a promotion window, not just a sales window, fitting the positioning of young white-collar groups. In the context of digitalized logistics and supply chains, timely attention should be paid to the sell-through of distributed SKUs. First-line brands have resources and strength to enter convenience stores, but distribution is only the first step; the core is to focus on the second step of sell-through. At this time, the product's silent selling power will be tested. Choose products carefully, and ensure strong silent selling power. Finally, more and more local CVS stores are starting to try community group buying platforms. At this time, FMCG manufacturers can consider using these platforms to try new products, especially internet-famous traffic products. Hot products build the foundation, internet-famous products build gross margin. 3. Store Classification, Digital Marketing, Reposition Store Value For stores, whether in first- or second-tier cities, classification management must be based on consumer groups. For example, office building stores, shopping district stores, residential community stores, factory stores, etc. For example, a city manager has 150 terminal stores of a certain CVS chain in their area. For these 150 stores, they must clearly know the number of each type, corresponding distribution items, promotion mechanisms, and marketing tactics, and treat them differently, focusing on head stores. In actual store operations, since regular daily visits are difficult, it's even more important to actively leverage the store's membership system and digital marketing models, use digital promotion methods to drive secondary sell-through, and continuously deepen member brand stickiness. Of course, for some regional head stores and quality stores, ensure personnel visits, execution, and POSM exposure. Here, I emphasize what head stores are: the most direct method is to look at per-store output. They could be stores near factories or in high-end residential communities. Finally, I want to talk about the special value of CVS stores. Whether in big cities or first-tier cities, many convenience stores are open 24 hours. What does this mean? In fact, it's a never-extinguishing brand lightbox, an ever-standing billboard. Don't underestimate two or three shelves; the products displayed on these shelves are actually a brand promotion front. Behind them are countless young consumer groups. In high-frequency, low-average-transaction consumption scenarios, high frequency means high reach, and high reach means high brand exposure opportunities. The more displays, the more conspicuous, the fresher the stock, the higher the brand reputation! For ordinary people, convenience stores are the warmth of a city, the eternal wait on late-night streets, insignificant yet so important. For FMCG people, convenience stores are still a sales channel, an eternal wait in the future, insignificant yet so important. After finishing his bento and tidying the table, Lao Wang gets up, walks to the daily chemical shelf in the store, crouches down, and carefully counts each distributed SKU: 1, 2, 3, 4... Perhaps this is the simple joy of a frontline FMCG city manager... With the doorbell sound of "Welcome again," he pushes open the door, and the chill of the night instantly seeps into Lao Wang's Nanjiren jacket, but the song from his earphones warms him. "The brave youth plants the flower of dreams, he once thought it would never wither. If he knew the price of flying, would he still be so brave? Woo..." Bio: Xu Xiang, currently Sales Director for South China at Unilever, with 20 years in FMCG daily chemicals, dairy, and condiments, deeply involved in regional market management and customer marketing. Willing to exchange and learn with peers. The above article represents only personal views. Tips will be paid 400-2000 yuan once adopted.