Lao Wang is a local city manager with over 20 years of experience in the FMCG and daily chemical industry. The sudden outbreak of COVID-19 not only caught distributors and retailers off guard but also came as an unexpected "black swan" event for this seasoned city manager.

During these days of working from home, the sales reports in Lao Wang's email are still updated daily, but the achievement rate has not changed for many days...

Distributors' employees are gradually returning to work, but there are no signs of recovery in store replenishment orders...

Every day, the boss's urgent calls are always on time. Facing the customer's full warehouse inventory and fully stocked store shelves, Lao Wang falls into deep thought...

For a frontline city manager, this pandemic should not be used as an excuse, nor should one stay at home waiting and relying on others. Instead, it is crucial to summarize experiences and learn from lessons! Actively organize business restart after the epidemic, and fully guide and promote distributors and retailers to recover lost sales as soon as possible.

In summary, this pandemic has brought eight major lessons to frontline city managers:

Lesson 1: Regarding O2O — If you don't pay attention to business in normal times, you can't rush to embrace it in emergencies.

In the work of a city manager, the O2O channels generally involve five major national home delivery platforms (JD Daojia, Taoxianda, Duodian, Ele.me, and Meituan), local home delivery platforms (such as PUPU, Miss Fresh, etc.), and community group buying (such as Xingsheng Youxuan, Tongcheng Life, etc.).

Since the O2O emerging business model requires time and effort to cultivate from scratch, and without additional staffing, many city managers in the past, under the pressure of high daily targets and strong execution, were generally unwilling to divert team energy to O2O channels, especially since these platforms initially had low sales.

Over time, O2O business remained only at the planning and training level, with little actual implementation. During this pandemic, retailers who did not connect with home delivery platforms could only watch helplessly, and the relevant sales teams could only envy.

After resuming work, the O2O channel must be heavily invested in!

The founder of Japan's 7-Eleven chain once summarized, "Once people experience convenience, they will have higher expectations." After this pandemic, the shopper mindset for home delivery channels has been steadily established, and the proportion of this channel will inevitably grow in the future.

Expertise matters! City managers can add or transfer personnel to focus on developing this channel, preferably leading and helping local small retailers connect, and establishing platform influence ahead of competitors.

Lesson 2: Regarding B2B — Always hesitant and timid, doing it half-heartedly.

Under the pandemic, although the resumption rate of small stores under Alibaba's Retail Link and JD's New Channel has slightly decreased compared to the same period last year, the overall GMV of the two platforms has remained basically flat, which is a secondary sales achievement that distributors cannot match.

Compared to O2O, although B2B channel business can achieve sales breakthroughs in a shorter time, city managers' attitudes towards ERTM vary greatly, ultimately influenced by three major issues: sales attribution, distribution network fit, and market price impact.

Actions speak louder than words; the GMV of the two major B2B ERTM platforms must be included in the performance assessment of the local sales team.

As for the impact on existing distributor business, I believe that FMCG companies fully promoting ERTM will not significantly affect the business of existing core distributors, because daily chemical companies have not done well in deep distribution to small stores. ERTM precisely fills this distribution shortfall through "unified warehousing and distribution."

As for the impact on market prices, ERTM actually erodes and seizes the business of traditional wholesale customers, shifting indirect sales to more benign and controllable direct coverage through the platform. The benefits far outweigh the drawbacks, and occasional minor price frictions can be strategically tolerated.

Lesson 3: Regarding B2C — Never cared, no planning for e-commerce store opening.

Pinduoduo and Taobao are the two main platforms for distributors to open online stores. Relatively speaking, Pinduoduo has lower entry barriers and simpler account opening procedures, so during this pandemic, many daily chemical distributors recovered a lot of business through online store sales.

After experiencing this "black swan" pandemic, more and more distributors realize that "offline business gradually moving online" is an inevitable trend. Recently, many customers have started asking about the process and qualifications for opening online stores. City managers need to coordinate with headquarters, help distributors obtain authorization letters, complete procedures, and select product portfolios.

Lesson 4: Regarding CVS — Only focusing on short-term big store business, neglecting convenience channel development.

Convenience stores have also been a channel easily overlooked by FMCG sales teams, because the overall daily chemical category accounts for less than 5% of each CVS store's sales. In this small pie, it takes effort to compete for a share, and many salespeople are unwilling to do work that requires effort but yields little volume.

But don't underestimate the convenience store channel. During the pandemic, many convenience store chains had an opening rate of over 70%. Additionally, convenience stores have relatively even foot traffic, and the risk of virus transmission is much lower than in hypermarkets and supermarkets, so the average decline in overall performance was only single digits.

This is a channel that accumulates grains into a tower. As long as you settle down to consolidate the basics — do more distribution, better display, and more precise promotional mechanisms, you can definitely maximize category share.

Lesson 5: Regarding Group Buying — Always waiting, lacking proactive focused development.

As a city manager, some things need to be done personally with the team, while others require partners to go all out. Enterprise and institutional group buying!

Local distributors must bear the main responsibility for developing and maintaining this channel, because the premise for distributors to cooperate with major manufacturers is having strong local resources and social connections. As the local representative of the manufacturer and brand, the distributor's boss and core team must be accountable for group buying channel targets, not only setting sales targets but also new customer development targets.

Once group buying customers are developed to a certain number and scale, the sales of this channel become very stable, with volume not only in normal times but also during extraordinary times.

This pandemic has stimulated a huge demand for group buying, especially for disinfection products. As the pandemic gradually comes to an end, there will also be huge opportunities for condolence group buying after resuming work, and demand will expand from disinfection to daily washing and care products.

Lesson 6: Regarding Special Channels — Poor channel infrastructure, channel mix needs optimization.

In this pandemic, pharmacies in special channels were undoubtedly stars. Even if the government closes all stores for epidemic prevention, pharmacies are definitely allowed to open, as they are a livelihood guarantee channel during the epidemic. Many pharmacies can sell daily chemical products on behalf of others. These are usually inconspicuous small channels, but with gradual cultivation, they become big opportunities and can be useful in extraordinary times.

In addition to pharmacies, closed channels such as military units, prisons, and schools are also worth developing. For example, military units never take holidays, and their monthly orders are very stable. During this pandemic, orders remained as usual, fully demonstrating the anti-risk function of this channel.

It is recommended that after resuming work, city managers systematically screen all local special channels, determine development goals, plans, and schedules, and work with distributors to gradually break the ice of special channels.

Lesson 7: Regarding Downward Expansion — Small volume, long distance, high cost, slow development of lower-tier markets.

Data shows that during this pandemic, hypermarkets and supermarkets generally performed poorly, but further analysis reveals that hypermarkets in peripheral cities performed better than those in central cities, and foot traffic in township large stores was significantly higher than in county towns.

The reasons are: First, peripheral cities have limited floating population from outside; for these cities, the Spring Festival is a net inflow of population.

Second, lower-tier townships are acquaintance societies, where people feel they are "own people" with known backgrounds, so their awareness of prevention is relatively weak. Even if township roads are blocked, they can still enjoy their own local life. Additionally, without home delivery platforms, foot traffic in town large stores did not decrease significantly.

Third, the business base of peripheral large stores was originally small, and with no significant decrease in foot traffic, it is reasonable for business to remain flat or slightly increase.

Markets that were previously considered too far, too small, and too costly to reach have now become "hotcakes" during the pandemic. Instead of envying the fish in the pond, it's better to retreat and weave a net. In normal times, frontline city managers should formulate systematic plans for developing lower-tier markets, using more efficient local second-tier customers or ERTM for high-efficiency coverage, at least achieving effective coverage of the top three stores.

Lesson 8: Regarding Risk — Distributors have weak risk awareness, urgently need guidance and improvement.

After this pandemic, whether the market under each city manager's jurisdiction can withstand risks has become a visible issue! It is necessary to learn lessons in time and guide distributor partners to gradually make their business models lighter. For non-core parts, they should start trusting and adopting professional outsourcing resources. For example, outsourcing warehousing and logistics would have recovered many economic losses during this pandemic.

Of course, outsourcing must be to professional and reliable partners, preferably with state-owned or listed company backgrounds. Otherwise, even if the government issues subsidies, it is difficult to get compensation from private landlords.

In addition to supply chain security, city managers should also guide distributors to optimize product portfolios (transitioning from focusing on conventional daily chemicals to a full category including disinfection) and channel portfolios (transitioning from relying solely on retail terminals to multiple channels such as special channels, group buying, online stores, home delivery, and community group buying). Only in this way can they proactively resist unknown risks to the greatest extent.

Lao Wang finally figured it out completely. This pandemic has been more beneficial than harmful to him! It made him truly understand that embracing omni-channel marketing and new retail should not just stay in training classrooms but must be practically implemented in daily execution work.

As a city manager, as the head wolf of the team, even if injured in adversity, you must lick your wounds and get up to continue fighting! Resolutely refuse to be a "flock of sheep" following the crowd; persist in being a "head wolf" that turns the tide!

With this thought, Lao Wang now looks forward to the boss's urgent calls. He is ready to have a good talk with the boss about the next resources and start a big push...

About the author: Xu Xiang, currently the Sales Director of Unilever South China, with 20 years of experience in FMCG daily chemicals, dairy, and condiments, deeply engaged in regional market management and customer marketing, willing to exchange ideas with peers for mutual progress.