Click to read the original article for details. In a region, the number of distributors is bound to decrease. With the convenience brought by mobile internet technology, consumers' purchasing channels are no longer limited to traditional offline channels. B2C e-commerce, community group buying, content e-commerce, O2O new retail enterprises... various retail scenarios have emerged in recent years! More and more purchases are made online, leading to a decline in offline sales, which is the main reason. This triggers a series of chain reactions. For example, those with poor daily management die out; those unable to bear the pressure from manufacturers flee; urban demolition, warehouse and distribution relocation, rising costs lead to voluntary abandonment; store chains, increased online ordering, declining offline sales year by year, and so on... The decrease in the number of distributors is bad news, but the good news is that the quality of distributors will improve, and those with competitive advantages will survive. Survival of the fittest is an eternal law of nature. What kind of distributors will stay? They must be those who "move," proactively reform, and focus on terminal distribution and sell-through in the market. This article focuses on "brand operators" for analysis and explanation. New Distribution believes that with industry changes and optimization of channel structures, leading FMCG giants will deeply bind with local distributors for in-depth operational cooperation, achieving stock optimization and incremental expansion in regional markets.

Brand, Binding? Why do brand owners deeply bind with distributors? Obviously, labor costs are rising, and brand owners can no longer rely on their own strength to connect with millions of terminals through deep distribution. Besides these, there are two other reasons:

First, diversification and personalization of consumer demand. The era of big single products is over. To meet consumers' increasingly rich needs and sustain business growth, brand owners will inevitably develop more and more new products. When the number of new products increases and becomes more segmented, a single sales team cannot meet the requirements of product distribution. At this time, brand owners need to leverage the local strength of distributors for differentiated distribution. Looking at recent changes, FMCG giants represented by Nongfu Spring and Snow Beer are all adjusting channels, integrating or supporting regional distributors, transforming single logistics distributors into brand operators, transferring frontline business to distributors, becoming exclusive or shared sales representatives, and increasing the proportion of self-sales by distributors. Jinmailang, the "growth dark horse" in the FMCG industry, implemented the "four-in-one" model early on, extending channel management to distributor salespeople, enhancing distributors' channel promotion capabilities.

Second, channel digitalization. At the beginning of 2019, more and more brand owners joined the self-built B2B army. As Mr. Liu Chunxiong said in a recent article: Brand owners' self-built B2B will empower channel distributors, making channel promotion and management more precise. During the rise of the deep distribution model, brand owners valued distributors most for their capital and warehouse distribution resources. As the distributor group evolves and matures, and having been influenced by brand-led markets, they have acquired basic market operation capabilities. In the future, brand owners will definitely return power to local distributors, using efficient digital tools for efficient and seamless communication, making channel promotion and management more precise. In summary, brand owners will deeply co-operate with distributors. Manufacturers act as platforms, developing good products, building strong brands, and outputting good marketing concepts, allowing distributors to serve as frontline combat teams, going out, moving, and expanding territory.

Trust, Concerns? Almost all distributors have hated upstream manufacturers at some point, which is why distributors are reluctant to put all eggs in one basket. In fact, when distributors and brand owners "fall out" and part ways, besides the limited operational capabilities of distributors themselves, it is also largely related to the inaction of middle-level brand managers. Channel managers, to meet their own KPIs, often impose various excessive tasks on distributors or promise various market supports that cannot be fulfilled. But in the future, with the efficiency and transparency brought by digitalization, manufacturers will set various key indicators to protect distributors' interests; market support and expense allocation will also be transmitted to distributors through tool systems, giving distributors a basis to rely on. In the future, the right to remove a distributor will no longer be the right of middle-level managers, but will return to the company headquarters, and the value of distributors will be amplified. If you do well, there is no reason to be removed; if you do poorly, even if the city manager cannot remove you, the headquarters will!

If You Don't Move, How Can You Talk About Distribution and Sell-Through? When brand owners fully authorize the market to distributors, and distributors become local brand operators, what characteristics should distributors possess? A person in charge of the East China region of a leading beverage brand told the author that they proposed the slogan "increase the proportion of self-distribution" to internal distributors. In their view, the greatest value of distributors in the future is distribution and promotion, not warehouse distribution. A considerable number of distributors lack commercial flow capabilities and rely on the sales teams provided by brand owners. Once the sales team withdraws, it means no orders. If warehouse distribution is also stripped away, distributors will basically have nothing to do! Some distributors may say that warehouse distribution cannot be stripped away in the future; third-party urban distribution has been clamoring for so many years without much movement. But in fact, more and more brand owners are now actively cooperating with third-party urban distribution or trying to lead warehouse distribution integration themselves. A leading beer brand piloted in Tianjin, integrating the warehouse distribution of 8 local distributors, with unified warehousing and unified delivery. It is certain that the intensification of FMCG warehouse distribution is a high-probability event in the future. When brand owners deeply unite with distributors, what they need is definitely not the warehouse distribution and capital of distributors, but the operational capability of the local market. When the warehouse distribution and capital functions of distributors mature with third-party urban distribution or brand-led intensive urban distribution, they will no longer be the criteria for manufacturers to choose partners; instead, business philosophy and operational capability will replace them. Behind the business philosophy is the initiative to improve one's own distribution and sell-through capabilities. If you don't move, how can you talk about distribution and sell-through! When it comes to market strategy, it is specifically reflected in two aspects: the ability to optimize the existing stock market; and the ability to capture incremental markets.

1. Distribution in the Stock Market Distribution in the stock market refers to tapping the potential of existing channels. The key here is to improve distribution efficiency. How to improve distribution efficiency? In the stock market, basic distribution strategies have already been tested by the market. At this time, improving distribution efficiency includes two levels: first, organization; second, business. The improvement of organizational efficiency ultimately needs to be implemented in the assessment and incentives of frontline business. Regarding organizational assessment and incentives, the author has detailed in previous articles: The improvement of business efficiency is implemented in business management methods, using digital tools to achieve data-driven business management.

2. Sell-Through in the Stock Market Sell-through in the stock market, perhaps in the eyes of distributors, is nothing more than promotions and discounts, buy one get one free; doing vivid displays, posting posters, hanging wobblers. More sell-through work seems to be only at the product packaging and design level, which distributors cannot influence. Is it only possible to do this? Not necessarily. In fact, consumer demand has been fully satisfied. What manufacturers and distributors need to do now is to move consumers, making them choose you, not others! How to move them? The key is insight. A simple example: a milk distributor organizes all employees every weekend to go to KA stores to promote old inventory. On weekends, when foot traffic is highest, almost every milk brand is doing buy one get one free or buy one get one gift promotions. At this time, does adding more people have an effect? Certainly, but are consumers going for the "buy one get one free"? Maybe not. Would it be better to change the cold "buy one get one free" to something like "Welcome Dragon Boat Festival, Welcome Children's Day, stock up early for more savings!" Would such a poster change increase the chance of being chosen by consumers? Distributors must not "sell dead." The FMCG industry itself is a low-involvement, high-homogeneity industry. Is there really a difference between Mengniu's Purezen and Yili's Ambrosial in terms of products, brands, and meeting consumer needs? No. At this time, as a distributor in the frontline market, what you need to do is not to promote how great Mengniu or Yili is, but to move consumers: for family health, for visiting relatives and friends, you should buy a box of milk, you should stock up a box of milk in advance. In the past, distributors usually worked around terminals and brands. Even when doing consumer promotions, it was either discounts or shouting. But in fact, consumers do not lack products; they lack a reason to buy a product! This reason is not that the brand is great, the product is good, or the price is low, but that at this moment, in this place, I really need your product, and it can help solve my problem.

3. Distribution and Sell-Through in Incremental Markets What is an incremental market? Different from conventional channels such as KA stores, circulation channels, and catering channels, it can be understood as retail scenarios in the new era. For example, local community group buying, Meituan and Ele.me food delivery, O2O home delivery, etc. For such emerging retail scenarios, distributors of any category should first try to understand and familiarize themselves with them. Today's emerging scenarios may become mainstream. Understanding in advance and actively cooperating may allow you to harvest dividends. For example, a distributor of Arawana cooperated with local Vanke Property. Vanke has more than 20 residential communities in the local market, with large ones having 5,000-6,000 households and small ones 2,000-3,000 households. Vanke Property needed to promote the "Vanke Community" APP. How to cooperate specifically? The distributor helped Vanke Property promote the APP for free, and the APP could feature Arawana series products. While promoting the APP, the distributor also promoted their own products and added homeowners to their WeChat. This is the logic of incremental markets. Recently, when communicating with an executive from Unilever, the author was surprised to find that Unilever's series products have grown rapidly in food delivery home business. Following this logic, distributors might consider cooperating with food delivery merchants, placing products at the top of category pages, or designing product combination packages. In the mobile internet era, with the diversification of retail scenarios, every category has new ways to play and new forms of distribution. As founders of companies, distributors should not only focus on optimizing the current stock market but also appropriately look to the future and seek new incremental opportunities. Opportunities always favor those who are prepared. As a distributor, you should see clearly where your direction is and where your opportunities are!

Final Thoughts: What is a brand marketer? Deeply bound with upstream brands, rooted in the local market. Do a good job in distribution and sell-through in both stock and incremental markets. Diverse products and diverse scenarios inevitably require distributors to have diverse operational capabilities. The stock market is the foundation, the incremental market is the opportunity. Both must be grasped, and both must be strong. Only by moving, preserving stock, and digging incremental can you survive this round of market changes!