The Current Situation We Face 1. E-commerce Dominates with an Absolute Monopoly Advantage In 2021, China's total retail sales of consumer goods reached 44 trillion yuan, with e-commerce enterprises holding a 25% market share, approximately 11 trillion yuan, concentrated mainly in the hands of major e-commerce players like Alibaba, JD.com, Pinduoduo, Meituan, and Douyin. Currently, in any other country globally, the top market position is held by physical retail enterprises, but only in China is the top position occupied by e-commerce, with the second, third, fourth, and fifth positions also held by e-commerce. In fact, if we carefully count, it's likely that the top 8 in China's retail market are all e-commerce. E-commerce, due to its significantly lower transaction costs, exhibits a strong Matthew effect, where typically only one enterprise survives in each business model. Examples include Alibaba for platforms, JD.com for self-operated and logistics, Pinduoduo for social group buying, Meituan for life services, and Douyin for live streaming and private domain traffic. In each e-commerce business model dominated by these players, the top e-commerce companies hold a market share of 70-80%, far exceeding the concept of a monopoly market, establishing them as super monopolists. It is precisely because of the strong Matthew effect in e-commerce that domestic e-commerce companies once fought fiercely in the fresh food e-commerce sector, the last difficult-to-conquer area, using community group buying models. In 2021, they burned through 150-200 billion yuan, roughly 50-60 times the annual profit of the largest physical retail enterprise in its best year. Under such aggressive attacks, it's no wonder that physical retailers like RT-Mart and Yonghui suffered huge losses. 2. Consumer Consumption Upgrading: Where Should It Go? The e-commerce slogan "No middlemen to earn the difference" is objectively valid, so e-commerce has unique value for producers and consumers. From the perspective of commodity circulation—the role of moving goods—e-commerce is indeed efficient and has significant market value. It's undeniable that thanks to e-commerce, consumers in Shanghai in the east can enjoy fresh vegetables and fruits from Xinjiang and Ningxia, thousands of kilometers away, at not-so-high prices. As China basically reached the threshold of high-income countries in 2021, the upgrading of national consumption has become very evident. Additionally, the average household size in China is now only 2.62 people and continues to decline. Starting from 2022, 25-29 million people will enter the 60-year-old aging stage each year, while only about 10 million are born annually. In China, the post-60s and post-70s generations have enjoyed the most benefits from reform and opening up, with the greatest concentration of wealth in society. As these individuals age, their consumption patterns will be vastly different from the previous post-40s and post-50s generations. The post-60s and post-70s, with generally higher education levels, have both the financial strength to upgrade their consumption and the knowledge of what consumption truly benefits their various needs. So, in the supermarket sector, how will consumers upgrade their consumption? Do the dietary solutions provided by membership-based supermarkets like Costco and Sam's Club, as seen in Shanghai, represent the direction of China's dietary consumption upgrade? Do the current wave of pre-prepared dishes represent the direction of consumption upgrade? Personally, I believe the dietary solutions offered by these membership supermarkets and pre-prepared dishes are clearly superior to our current monotonous diet of braised pork with greens and radishes. After all, they allow middle-class consumers to buy high-cost-performance food at lower prices, and they enable us to easily enjoy dishes that previously could only be tasted in restaurants. However, we will certainly not stop there, as determined by the strong tension of China's rich dietary culture. 3. China's Unique Dietary Culture Different from the Rest of the World In the four major livelihood areas of clothing, food, housing, and transportation, based on my personal research, I believe that in housing, even after 50 years, China will find it difficult to catch up with Europe and America. In clothing and transportation, we are roughly on par, and it's likely to end in a draw. But in food, we are likely to lead the global trend of delicious, diverse, healthy, and longevity-promoting dietary culture, thanks to our unique comprehensive advantages. The unique dietary culture of "food is the heaven for the people," with the pursuit of deliciousness as the soul of Chinese cuisine: China has a civilization history of over 5,000 years without interruption, and Chinese people place great importance on food (food is the heaven for the people, agriculture is the foundation; the post-40s to post-00s generations all grew up with the national greeting "Have you eaten?"). Over 5,000 years of civilization, the dietary cultures of 56 ethnic groups have merged. Since ancient times, China has had 8 major cuisines and over 5,000 types of pasta products. Now, each province and city has its own unique cuisine, as it's easy for any province to present 100 delicious classic dishes. Unique species resource endowment: China has the most complete range of species in the world (because China has the most special geographical environment among all countries, spanning about 50 degrees of latitude from tropical to cold zones, and from a few meters above sea level to the world's highest peak at 8,848 meters, with the largest elevation span. This vast, diverse, and rich ecological space is unique globally, meaning most plants and animals in the world can find suitable soil and environment in China). Chinese agriculture is predominantly small-scale peasant economy, with large-scale farms accounting for a small proportion (in the US, each farmer has 3,000 mu of arable land; in Europe, 300 mu; in Japan, 30 mu; in China, only about 7.5-15 mu). This provides an innate farmland system guarantee for our diverse vegetables, fruits, aquatic products, and other agricultural products. Large farms in Europe and America inevitably lead to the homogenization of vegetable varieties, resulting in a relatively monotonous diet. China's significant advantages in vegetables, fruits, meat, poultry, and aquatic products: According to online data, the per capita annual vegetable consumption in China is 505 kg, 5 times the average level abroad. It's particularly noteworthy that this is also 5 times the per capita vegetable consumption of the US, EU countries, Russia, etc., 3-4 times that of Japan, and about 2.5 times that of South Korea. Moreover, vegetables in Russia and the US are mainly potatoes and beets, with concentrated and monotonous varieties. In China, root, stem, leaf, flower, fruit, and fungus vegetables are produced in a balanced manner, presenting a flourishing situation. China's per capita annual fruit consumption is 200 kg, more than double that of foreign countries. Chinese people have long achieved freedom in eating melons and fruits; the next step is to solve the new challenge of making various fruits tastier. China's per capita annual meat and poultry consumption is 66 kg, roughly equivalent to the 50-100 kg in Europe and America. China's per capita annual aquatic product consumption is 46 kg, more than double the 17-20 kg in Europe and America. China's aquaculture production accounts for 60% of the global total, and our aquaculture technology has reached a world-leading level, even capable of placing a 100,000-ton aquaculture vessel in the deep sea for fully natural farming. Therefore, in another 20 years, China's dietary solutions and supermarkets will sweep the world, because we bring the world truly healthy, delicious, and diverse dietary solutions. In nutrition, the eight essential nutrients for the human body (protein, fat, carbohydrates-sugar, inorganic salts-minerals, vitamins, fiber, probiotics, and water) are emphasized. Europe and America focus on protein, fat, and carbohydrate intake, using calories as an energy indicator. However, they pay insufficient attention to the other four major nutrients (except water, which the West also values) that are not closely related to calories but have significant impacts on the internal organs, cardiovascular system, and nervous system. The dietary solutions in Western developed countries are clearly insufficient in this regard. In contrast, China's dietary solutions particularly emphasize eating vegetables, with a very high proportion of vegetables in daily diet consumption. This creates the best conditions for us to obtain low-cost dietary balance solutions (wealthy people in developed countries supplement their dietary nutritional gaps by consuming extracted and refined nutrients). Therefore, China's dietary solutions are the best at achieving comprehensive and balanced daily nutrition at high cost-performance. Moreover, with the further development of digital agriculture, more scientific and effective seed breeding, and effective control of biological pesticides and chemical fertilizers, the dietary health solutions for Chinese people will improve further. I can even optimistically predict that when China's per capita GDP reaches the current US level of $70,000, and China's per capita medical expenses rise from the current nearly $700 to the US level of $10,000 in 2019, our average life expectancy will reach over 90 years (Hong Kong has already reached over 85 years, making it the region with the longest average life expectancy in the world), which is 11 years higher than the US (79 years) at the same material and medical level in 2019. This is the huge advantage of Chinese dietary culture. 4. The Era of Physical Stores as 'Goods Movers' Has Ended; They Must Seek New Survival Space by Creating Value. Based on China's unique market structure, where e-commerce dominates and the Matthew effect is extremely high, if physical stores follow the e-commerce development approach and desperately guide their customers online, they will eventually find that those customers they painstakingly guided online not only do not increase their in-store purchases but also, because online price comparison is convenient, After comparing prices between offline stores and Tmall, JD.com, and Pinduoduo within a minute, physical stores will quickly be abandoned by consumers. Online services compete only on price and service speed, both backed by economies of scale. These physical stores naturally cannot compete with the giant e-commerce behemoths. So, they kindly provide convenience for customers, only to find they have made wedding dresses for e-commerce. For Chinese supermarket enterprises, we now face two innovation directions: One is Nokia feature-phone-style innovation, referred to as Nokia innovation; the other is Apple smartphone-style innovation, referred to as Apple innovation. What is Nokia innovation for supermarket enterprises? It is to fight to the death with e-commerce on the low-cost competition path, continuing on the path designed by Carrefour and Walmart, even with online-offline integration, still adhering to the low-cost competition mindset, always holding the idea of being an efficient goods mover. Stores do not give customers much desire to browse. They always assume customers love McDonald's and KFC-style fast food, and that customers will not pursue anything other than convenience and cheapness. Domestic retail enterprises trapped in this Nokia model are everywhere, which is indeed regrettable! What is Apple innovation for supermarket enterprises? The most valuable aspect of Apple innovation is stepping out of the feature-phone model to reflect: Why do customers need a phone? Besides calling and texting, what else do they need? This question immediately broadens horizons! In fact, we can also ask why customers come to the supermarket? Is it just to buy goods? Why don't customers come to seek delicious, diverse, and healthy dietary solutions? Why don't we think about the fact that only in physical supermarkets can customers find dietary solutions that truly excite them? This is true Apple innovation thinking—hitting the root of the problem! Apple gave customers a new reason to need a phone—connecting and controlling everything—rather than Nokia's calling and texting. We also need to give customers a reason to come to physical supermarkets: here you will find the delicious, diverse, healthy, and longevity-promoting dietary solutions you dream of. The Opportunities and Challenges We Face 1. E-commerce has established high efficiency through digitalization, achieved efficiency through scale in management, differentiation through the long-tail effect in operations, and the ultimate effect of bestsellers through massive single-item procurement volumes. Through the intuitive analysis of the chart above, it's not difficult to conclude where physical supermarkets should position themselves. When the big e-commerce players have already seized the low-cost track, we small physical supermarkets have no better path than to choose differentiation and focus strategies. 2. Every physical store is competing with a universe-level competitor with a scale of over ten trillion yuan. Many physical supermarket enterprises may still regard surrounding physical supermarkets as their main competitors, not realizing that their true competitors are not those visible physical supermarkets, but the invisible giant e-commerce consortium of over ten trillion yuan. Although each e-commerce company is independent, for consumers, all e-commerce is one, because they can jump between several major e-commerce platform apps and select products in about a minute. If physical supermarkets do not use their differentiated specialty products to develop their online business, but only expand online business in familiar and standard products, they will find it difficult to seize market share from existing e-commerce. Physical supermarkets must have their own killer feature and give customers a compelling reason to visit. This compelling reason is: Physical supermarkets can offer customers a better dietary solution. When physical supermarkets have such a powerful differentiation weapon, and then actively expand online business from the perspective of customer convenience, they can achieve a multiplier effect, truly realizing the effect of 1+1>2 for offline and online. 3. E-commerce also has obvious shortcomings. Many physical supermarkets are intimidated by the big e-commerce players before even competing. In fact, e-commerce, like the US military in the Korean War, has obvious shortcomings. The US military's weakness was over-reliance on equipment and logistics, fear of deep penetration, and poor performance in close combat and night battles. In mountainous terrain, equipment advantages are hard to exploit! The Volunteer Army used these relative disadvantages of the US military to find their comparative advantages and won the first three battles of the Korean War. So, what are the disadvantages of e-commerce? We believe: First, there is no certainty. It cannot determine product quality through the five senses (sight, hearing, smell, taste, touch). This is particularly fatal for non-standard products. Physical stores can strengthen interaction with consumers, allowing them to confirm they can truly buy delicious things while shopping. Second, finding a good lifestyle is too difficult and time-consuming. When you don't know what to eat today, you browse e-commerce for two or three hours and still can't find a satisfactory answer. But if you go to stores with life taste like Pangdonglai, Yashi, Ito Yokado, or Xiangjiang Department Store, you will immediately get the answer: this season and solar term, you should eat these things; this is how this thing is eaten; your life can be so colorful and within reach. You only need to browse the store for half an hour, and everything you want immediately jumps into your eyes and mind. Third, e-commerce purchases often involve large quantities at once (to balance packaging and manual short-distance delivery costs), often leading to uneconomical consumption. Sometimes things seem cheap, but over the entire consumption cycle, because they cannot be consumed at once, they are often thrown away due to lack of freshness. Especially in the future, when healthy eating requires multiple varieties and ingredients, small portions of each, simultaneous consumption, and constant variation, e-commerce's disadvantages become very obvious. Fourth, e-commerce's auction logic of "lowest price wins" easily leads to adverse selection, making it difficult for good products that are not fully standardized to survive on e-commerce platforms. From 1962 to 1976, China had 25-29 million births annually. Starting this year, over 25 million post-60s elderly will join the consumer army each year. These post-60s are the group that benefited most from reform and opening up, enjoying benefits in education, employment, stock market, real estate, and rapid economic development. The huge consumption potential of this silver-haired group is the biggest business opportunity for physical supermarkets. They have money and leisure, are less interested in e-commerce's time-saving convenience, and crave moderate consumption of good things with the highest cost-performance over the entire consumption cycle (products bought from e-commerce often have high cost-performance in the first third, equal to physical stores in the middle third, and very low in the last third due to waste, so the overall cost-performance is not high). The post-60s and post-70s are well-traveled and have strong discernment of product quality, so their demand for delicious things is much stronger than the previous post-40s and post-50s. Since physical stores can use the six senses (sight, hearing, smell, taste, touch, and mind) to give consumers a full perception of good things, especially non-industrial, non-standard products (fresh products and processed catering foods), only in physical supermarkets can they be fully displayed. This makes it easier for good things to stand out and for supply and demand sides of good things to perfectly match on the physical supermarket platform. How Should Physical Stores Respond? 1. Understand that only differentiation and focus are the two broad paths for physical stores to survive; the low-cost track is already a thing of the past. It can be said that before 2015, when e-commerce was not so strong, physical supermarkets could survive and develop comfortably by learning from Walmart and Carrefour's growth models. But after 2015, e-commerce gradually grew, showed its fangs, and seized the low-cost competition track that physical supermarkets once occupied. At this point, if physical supermarkets, which are at a relative disadvantage in the goods-moving value chain (moving goods from producer warehouses to customer hands), do not wisely choose other survival and development models, they will ultimately be ruthlessly eliminated and devoured by e-commerce. 2. Selling life proposals, new lives, and better lives to customers is the core competitiveness of physical stores. Although most domestic consumers currently prioritize low prices and convenience, for high-value and valuable customers who pursue higher quality of life (these two types may account for only about 40% of purchasing power but contribute over 80% of gross profit; if you doubt this, look at the mobile phone and automobile markets), the correct solution for physical supermarkets is how to win the favor of these high-value customers who contribute a larger share of gross profit. Previously, when we mentioned high-end supermarkets in Shanghai, we thought of premium supermarkets where the same products are expensive and imported goods account for over 60%. But now that e-commerce has driven down the gross margins of imported goods, those premium supermarkets that don't know how to recommend life proposals and just act as goods movers will find it even harder to survive. Conversely, those premium supermarkets that continuously recommend life proposals to consumers, with Ito Yokado as a model, will maintain high appeal to high-value customers. 3. Find areas where physical stores have comparative advantages and amplify them as much as possible to gain sufficient competitive advantage. About three years ago, I witnessed a very interesting life case. Henan Xinyang Baijia Supermarket sold two types of cantaloupe: one with excellent appearance, crisp, watery, but bland, at 1.5 yuan per jin; the other at over 3 yuan per jin, not as good-looking but very tasty and sweet. When these two types were sold in the store, the cheaper one sold well, about three times the volume of the expensive one. One day, the supermarket owner Mr. Yang's wife bought the cheap cantaloupe home, but their son only took two bites and refused to eat it, and the whole melon was eventually thrown away. Mr. Yang was scolded by his wife. After returning, he decided to remove the cheap cantaloupe from the shelves, believing they couldn't deceive customers. But the procurement and operations departments opposed, arguing that customers are segmented, and the cheap one sells well, indicating demand. After discussion, Mr. Yang decided that the store must cut both types of cantaloupe for customers to taste and choose. If they still chose the cheap one, it would prove there is a market for cheap. What was the result? We were all shocked! After adjusting the marketing approach, sales of the expensive cantaloupe quickly rose, with urban sales roughly three times that of the cheap one, and in township markets, the expensive one sold 1.5 times more than the cheap one. Don't you think this case gives us a great revelation? The biggest competitive advantage of physical stores is selling certainty to customers! Only when they taste something and find it truly delicious, and it's real, will they truly choose what they want! Consumers won't refuse to buy just because it's a bit more expensive; as long as it's delicious, it's just one bite, so a higher price is fine! As a consumer, don't you have the same psychology? Strategies and Tactics for Physical Stores to Meet Challenges 1. Only focus brings economies of scale; only focus can win comparative advantage. Through the above analysis of opportunities and challenges, advantages and disadvantages, we can get a clear answer: where is the path to life? Where is the path to death? Which direction leads to a wider road? Which direction leads to a narrower road? Clearly, simply choosing to pull traffic online and hoping that proximity will make surrounding consumers choose you for online shopping is basically unreliable. It must have a premise: the dietary solutions you provide are superior to those offered by the ten-trillion-yuan e-commerce players, and coming to your store for online shopping is a better solution. Therefore, enterprises that excel in specialty operations can often withstand e-commerce's ruthless price suppression. For those that haven't done well in differentiation, the more they divert traffic online, the faster they die as physical stores! Suning's transformation path has already given us a warning. Previously, when buying home appliances, we often went to Suning to check things out before deciding where to buy. But when we went to Suning's stores, we saw it was just so-so, and it was more convenient and time-saving to buy online. Moreover, Suning's cost-performance couldn't compete with JD.com (determined by e-commerce's economies of scale). What reason would you have to choose Suning? Fortunately, Suning has now awakened, creating unique life solutions for offline stores, making you feel that going to Suning is not just about buying one or two appliances, but about living room upgrade solutions, kitchen upgrade solutions, dining room upgrade solutions, bedroom upgrade solutions, even balcony upgrade solutions, and pet world upgrade solutions, all being conveyed to customers through the new Suning. This solves the pain point that customers can't feel a better life through simple visual and auditory online shopping. Even a powerful company like Suning, relying solely on online-offline interaction, lost to JD.com. What about other physical retail enterprises? We must prioritize building our offline experience and give customers a sufficient reason to come to the store. So, how to create a full experience in offline stores? Many people might immediately think of store renovation and decoration. Indeed, every store renovation can refresh customers, but the cost of such hardware adjustments is very high. Generally, hardware adjustments every 3-5 years are appropriate and ensure a high return on investment. During these 3-5 years, when hardware remains largely unchanged, how can we make consumers feel that "this store changes every month, even every week, and it's a pity not to visit"? So, how to use continuous adjustments in software and soft decoration to make customers feel different every month and week is an art. In traditional drama, changing character masks is difficult, but the face-changing art in Sichuan opera easily achieves this. If we can apply the thinking logic of Sichuan opera face-changing to the soft decoration and display of the store, we can make consumers feel that our store is constantly changing. So, for physical supermarket enterprises, what specifically should be done? Mainly focus on floor stacks, end caps, top shelf displays, and other storefront areas, making the products and displays there change every week, and by displaying new products, presenting life proposals, and recommending new lifestyles, making them very attractive. Then the face-changing technique of the supermarket can be implemented at low cost. Unfortunately, it's a pity that those domestic hypermarkets and convenience stores that learned from Carrefour and Walmart still have all these face positions uniformly shouting "I'm cheap, I'm cheap." In fact, every time consumers browse the store, they question: How are you cheap? Compared to e-commerce, where are you cheap? I still spend so much time browsing, hoping to see new things/new life proposals/new lifestyles that are hard to find on e-commerce, but you keep telling me the story "I'm cheap, I'm cheap." I might as well go to e-commerce for cheap! It's time-saving and convenient, and they deliver to my door! But how many physical supermarket enterprises have listened to this national complaint of Chinese consumers under e-commerce's dominance? I only see Pangdonglai, Hubei Yashi, Chengdu Ito Yokado, and Hunan Xiangjiang Department Store listening. So they are desperately showing customers new products that are not easy to find on e-commerce, displaying these new products comprehensively, and recommending life proposals. That's the right way! Fighting the US military on the Korean battlefield with equipment and firepower is like having water in your brain! You need to fight close combat and night battles, and you need to penetrate and encircle! Similarly, when facing an opponent with such obvious scale advantages and a typical auction model where the lowest price wins, competing on low prices is like brandishing a broadsword in front of Guan Gong! You need to play games they are not good at! That is to create a store experience and take it to the extreme! 2. Plan-Perform-Adjust: High coordination among marketing planning, product procurement, and store operations can produce huge synergies. For a long time, domestic hypermarket promotion plans have been simply a so-called theme plus a bunch of unrelated cheap products. The promotion theme is forced, and product selection is even more arbitrary. In such cases, trying to form a store experience scene with strong appeal to customers through cooperation among planning, procurement, and store operations is basically wishful thinking. But if we change our approach and think differently, we can make the store experience very flavorful! For example, we lock in the marketing theme for each week two months in advance. Based on the patterns of product sales fluctuations (possibly related to seasons, solar terms, major holidays, etc.), we find key products and categories with explosive potential. At this point, procurement knows which products to focus on for marketing in two months. They then spend two months traveling across the country to find and communicate with manufacturers and suppliers, making it not difficult to find a very distinctive, cost-effective product. For example, in early September, through data analysis, we find that radishes sell well in the first week of November. Procurement wants to use this to create a radish health festival. So he starts researching radish production bases and markets nationwide, seeing the characteristics of radishes in different places, and which radish can be the main product for this festival. He then digs out the features and selling points of this radish, sees what delicious recipes can be made, and planning creates a targeted promotion plan based on this. Procurement then formulates a sales plan for stores, telling them why I chose this product, what requirements there are for store displays, and what the sales targets are for each store. Folks, when we design and execute our weekly marketing activities this way, do you still worry that customers won't have their eyes light up when they come to the store? They will definitely be surprised: There are such delicious radishes! Radishes can be eaten this way! There are such surprising discoveries when visiting the store! When we have a long list of such key product marketing plans waiting for consumers every week, do you think consumers will still be tired of our stores, suffer from aesthetic fatigue, and feel it's meaningless to come? Will they still be willing to just stay in front of their phones or computers and simply place orders? This is the great power and charm of the Apple thinking model in retail! Have you noticed that most outdoor activities and suburban trips of Chinese people are inseparable from eating? Chinese people love to eat too much and can eat too much. A food that might feel only 5% different to foreigners is, in the eyes of Chinese people, the difference between heavenly food and hellish food, because Chinese people have extremely strong discernment in eating. 3. Led by 52-week MD, with the five major technologies of customer management, Amoeba management, digital management, and talent team building closely coordinated, and the five bodies linked, can an enterprise truly exert strong competitiveness. The coordination of planning-procurement-store operations we mentioned earlier is the core concept and operation mode of 52-week MD technology. 52-week MD focuses on key products, integrating planning and marketing plans, product procurement technology, and store sales display plans to achieve three progressive effects and purposes: leveraging overall operational efficiency, activating stores, and creating a smart shared organization. However, 52-week MD technology must be combined with customer management technology to exert greater effectiveness. Customer management integrates category management and customer management, centering on target customer groups, connecting the direct correspondence between product structure and target customer groups, capturing high-value and valuable users in the market, and staying away from low-value and negative-value customers (let them go to competitors). Only by closely focusing on these high gross profit contribution customers and serving them well can physical retail enterprises truly find their survival space. Next is Amoeba management, a technology created by Kazuo Inamori, used skillfully in Japanese industrial enterprises. When introduced domestically, it has mostly been successful in industrial enterprises, with few successful cases in retail. In my view, the greatest charm of Amoeba management is not actually "separate kitchens." If separate kitchens were very successful, wouldn't the vegetable market be the best Amoeba management model? The key to Amoeba management lies in immediate intervention. In an enterprise, the fire of burning profits can ignite at any time, but under the constraints of layers of bureaucracy, everyone only focuses on their own tasks, following rules and regulations, needing to report level by level. By the time the report is completed, the profits that should have been in business activities have been burned away. This is what retail enterprises should solve most. For example, we often see stores dumping whole boxes of fruits or vegetables, causing huge waste. But if these vegetables and fruits were discounted or processed in other ways at the first sign of problems (when the profit is burning/just sparking), they could still earn back a lot of gross profit. Therefore, we believe that Amoeba management is actually eight words: immediate intervention, related to me! If we manage to do these eight words well, the power of Amoeba management will be unleashed. In the story of Kazuo Inamori saving Japan Airlines, there is a classic scene of how Amoeba works its magic: A JAL flight lands at an airport. Previously, the crew would pack up their belongings and go off duty to rest. But now they must gather to discuss the flight's operational performance and promptly identify problems (previously, only after the company's quarterly financial report came out would tasks be assigned from top to bottom for rectification, but by then, even with vigorous rectification, profits had been "burned" by the fire). So, by comparing with performance data of other flights on the same route, they found that this flight's performance was lagging. Everyone became restless and traced it back, discovering that pilot costs were too high. Further investigation revealed that the pilot of this flight was picked up by a special car, so costs were high, while pilots of other flights took taxis or the subway to work. So the pilot of this flight made a surprising move: "I promise to take the subway or taxi to work from now on, no special car needed, and I promise not to doze off while flying." For a long time, JAL had been troubled by high pilot costs, but every proposal was ultimately thwarted by pilots' collective resistance (pilots claimed that without good rest, they might doze off while flying, causing accidents). Now Amoeba easily solved this big problem for the company! This is the great power of using Amoeba management technology! Next, digital management refers to pre-event, in-event, and post-event digitalization. Currently, physical retail enterprises often pay more attention to post-event digitalization, with various monthly, quarterly, semi-annual, and annual summaries done well. But pre-event and in-event digitalization are often neglected. In 52-week MD, designing key products and marketing themes two months in advance requires high pre-event digitalization. At the same time, to achieve weekly marketing effects, we need to intervene promptly based on data changes within each week, even each day. These pre-event and in-event digitalizations can bring huge commercial value. Finally, talent team building is a headache for many enterprises. When we promote 52-week MD technology, since it's no longer about simply making systems and standardization that even fools can execute, but emphasizing that stores and procurement combine standardization and flexibility to achieve the best effect, At this point, we need to define employees as craftsmen, like Pangdonglai does, rather than standard machines in the European and American hypermarket work context. We hire employees' brains and limbs, not just hands and feet. If we only use employees' hands and feet, it's a huge loss. With such high requirements for employees, the requirements for grassroots, middle, and senior cadres who lead them are even higher. So how to use the coaching model to build a talent team is extremely important. The coaching model can be summarized in four sentences: I do, you watch; I say, you listen; you do, I watch; you say, I listen! Using the coaching model to build a talent team is also the valuable experience that Alibaba and Huawei introduced 20 years ago to successfully build high-execution teams. It is the most effective management tool to overcome the pain point that enterprises find it difficult to efficiently improve the quality of managers and professionals through external public courses and internal training. It is very valuable in current physical retail enterprises because it can teach according to aptitude and apply learning to practice, with very high efficiency in talent cultivation. 4. Category management wins by the orthodox, 52-week MD wins by the surprise. When talking about 52-week MD technology, many people associate it with category management. Besides the category management I mentioned in customer management, it should be said that "category management wins by the orthodox, 52-week MD wins by the surprise" is the best summary. The two complement and promote each other. During Emperor Wu of Han's reign, he had two great generals: Wei Qing and Huo Qubing. Wei Qing's formations were orthodox, emphasizing that the army moves only after provisions are ready, intimidating opponents with power. Huo Qubing, on the other hand, penetrated deep with a lone force, launched surprise attacks, never carried a supply train, but solved provisions locally wherever he went, moving extremely fast, making it impossible for opponents to defend. Wei Qing and Huo Qubing cooperated and won many great battles. It can be said that Wei Qing won by the orthodox, and Huo Qubing won by the surprise! In every battle, use the orthodox to engage, and the surprise to win! Using this famous saying from Sun Tzu's Art of War to define the relationship between category management and 52-week MD is indeed appropriate. The key to category management is to build various product structures around target customer groups and various life scenarios, so that customers can find the products they want when they come to the store. If an enterprise's category management capability is strong, their product homogenization and bloat will be small, and customers will find the store friendly and flavorful when carefully selecting products. However, customers are busy, and their product appreciation ability is often not as strong as we imagine. Consumers in Western developed countries mostly learned to appreciate and taste products when their grandparents or parents held them as children. But Chinese consumers often haven't even heard of the things their children taste, let alone tasted them themselves. How much appreciation ability can there be? The speed of change in China is too fast. So, just designing the product structure well and expecting customers to come and choose by themselves is often just wishful thinking! To help students understand this better, I often tell a story. Now there are 30 people at the door who want to see you. Among them, 5 are your relatives and friends, and 25 are strangers. You only have 5 minutes to go out and meet them. When you come back, I ask you who you met. What would you feel? You might only say you met 5 relatives and friends, with no impression of the other strangers. Now, in the same scenario, this time a stranger comes up to introduce himself as soon as you go out, taking one minute, then the next stranger introduces himself, another minute. After 5 minutes, when you come back and I ask who you met and what impressions you have, you might not even remember whether there were relatives and friends in the crowd. By the same logic, customers come to the store with shopping lists, possibly for themselves, their husbands/wives, their children, or their parents. They go straight to the point. At this time, if we don't recommend new products and new life proposals with high skill and high appeal, these customers won't have any feeling for the new products on our shelves. They don't have much time to compare one by one (Japanese retail experts have observed that each customer spends only 4-10 seconds on each shelf group). They go straight to the point, grab the target product, and leave. So, the 52-week MD approach is crucial for capturing customers' attention, making them stay a little longer, making them come intending to buy 5 items but leave with 7, 8, or even 10 items, and these additional items beyond the shopping goal are not bought because they are cheap. Then our stores won't have to worry about business and profits. Therefore, playing the combination of "category management wins by the orthodox, 52-week MD wins by the surprise" is very key and very effective. Folks, when we use 52-week MD technology to achieve effective face-changing through efficient operation of key products every week, every 2-3 days, even every day, or in the most extreme case three times a day, the experience of the store in customers' eyes will be completely different; When we design and implement marketing plans always targeting high-value users like China Mobile does, we will find that China Mobile only captures over 40% of users and 52% of operating revenue, but its final profit is 3-5 times the sum of China Telecom and China Unicom, because high-value customers contribute a much higher share of gross profit. With such precise positioning, then using Amoeba management technology to awaken the subjective initiative of organization members, achieving intervention at the source, then effectively utilizing digital management technology in the three stages of pre-event, in-event, and post-event, and finally efficiently building a talent team through the coaching model, if we can strengthen these five common shortcomings of current physical retail enterprises, then the market competitiveness of physical retail can definitely rise to a higher level.