"How to use digitalization to expand stores? And how to achieve higher per-store output?" In the new era, these questions have become the key breakthrough points for enterprise growth. Lu Chao, General Manager of Xuanwu Cloud Platform Innovation Center, introduced the Volume-Profit Growth Model, using offline big data + algorithms + business scenarios as the breakthrough strategy to help enterprises achieve new growth, reaching both 'volume increase' and 'profit increase'.
Breakthrough Growth: Offline Big Data + Algorithms + Business Scenarios
The FMCG industry endured tremendous pressure during the pandemic, and the recovery path after the pandemic has been very tortuous. Growth has become a challenge for the entire industry. Over the past two years, Xuanwu Cloud has been committed to creating new weapons through big data and intelligent technology, providing new growth momentum for FMCG brand manufacturers in the new era, achieving outward growth, expanding new market increments, and improving performance.
Xuanwu Cloud has been deeply involved in the FMCG industry for over 10 years, focusing on CRM in the marketing field, covering more than 20 consumer goods sub-industries including food, beverages, liquor, daily chemicals, condiments, grain and oil, and electronic consumer goods. Its market share among the top 100 enterprises in multiple consumer goods segments exceeds 20%, and it successfully listed in Hong Kong in 2022.
Although the industry expected explosive growth in 2023, the actual situation fell far short of expectations. Many enterprises face huge challenges in both scale growth and profit growth. To achieve growth, core product competitiveness is essential. As a company focused on the marketing field, Xuanwu Cloud innovatively proposed an approach and method from two aspects: 'scale growth' and 'profit growth'—the Volume-Profit Growth Model. It aims to achieve both volume growth and profit growth. The core is to increase channel coverage, achieve better sell-through, expand more outlets, and increase per-store output.
The main battlefield for the FMCG industry remains offline. Compared with e-commerce, the latter has already achieved more customers corresponding to more terminals and higher per-store output online, providing personalized recommendations for each customer. Can we empower the FMCG industry with mature online digital tools to expand more terminals? The premise is to have a comprehensive analysis and profile of terminals, just like when consumers use Taobao, Taobao provides refined recommendations. With big data support, we can obtain more offline terminal recommendation information and achieve precise strikes. Additionally, based on profiles, precise one-store-one-policy marketing can achieve higher per-store output.
Xuanwu Cloud has specially established a Platform Innovation Center. The R&D team integrates multi-source data such as map providers, offline merchant big data, and brand manufacturer terminals, making the operation status and profile information of each terminal clear at a glance.
Another key factor for promoting growth is having business scenarios—what you see is what you consume. The business scenario defined by Xuanwu Cloud·Xunxun is that once you see the terminals that brand manufacturers need, you can act immediately. In this process, there is a very critical driver and engine: algorithms. What Xuanwu Cloud·Xunxun does is transform general online big data into recommendations and profiles that can be directly used in business scenarios, mainly divided into two parts: one is the terminal recommendation algorithm for the FMCG industry, and the other is the identification algorithm for high-potential terminals.
Based on these two algorithms, the store expansion business scenario is achieved, providing customers with volume increments; at the same time, it can also achieve the identification scenario for existing terminals, facilitating brand manufacturers to do refined operations and increase per-store output.
Xuanwu Cloud·Xunxun Digital Intelligence Solutions Help Expand Stores and Increase Per-Store Output
Xuanwu Cloud·Xunxun's specific solutions and practices:
First, how to expand stores through new 'weapons' and data power? Over the past two years, Xuanwu Cloud·Xunxun has invested substantial resources to tag general big data with labels and profiles needed by the FMCG industry. Only with industry-specific profiles can it truly be applied. The commonly used channel type classification labels in the FMCG industry include scenario-based labels. Current growth is scenario-based growth. At the same time, combined with big data, Xuanwu Cloud·Xunxun also has comprehensive profile information on brands, categories, and industries. On this basis, the most critical recommendation system is formed. The recommendation system will filter and recommend offline big data labels according to the content required by brand manufacturers, and directly generate them in the visit-sales system. In this system, what you see is what you execute, truly reflecting the value of data businessization. After management conducts coverage analysis, these visit-sales tasks can be directly sent to frontline visit-sales personnel for precise visits and sales. Xuanwu Cloud provides feedback on cooperation availability, non-cooperation, existence, non-existence, etc., to continuously improve recommendations and data services.
Last year, Xuanwu Cloud cooperated with a leading dairy customer to help their distributors expand stores. The traditional distributor store expansion method is to issue tasks, and then distributors push from bottom to top by sweeping the streets. Now, with the store expansion system, visit-sales tasks are directly sent to frontline business personnel. Through the store expansion system, the accuracy rate reached 91%, and the conversion rate reached 65%. This actually achieves rapid improvement in coverage, transforming the original spontaneous, blind street-sweeping expansion method into precise store expansion.
Second, how to achieve 'one-store-one-policy' and refine per-store output? The core of Xuanwu Cloud·Xunxun's designed solution has three aspects. First, based on the terminal's channel type, offline transaction characteristics, and geographic features, through machine deep learning, score the sales points. Second, based on the scoring results, provide differentiated operational actions for different sales points. Third, convert the identified medium and high-potential terminals into business personnel's store visit and sales behaviors, transforming unvisited medium and high-potential stores into high per-store output stores, fully releasing the potential of quality terminals and achieving 'precise investment'.
In addition to business solutions, Xuanwu Cloud·Xunxun also provides a smart CRM product that integrates DI, AI, and AIGC technologies.
Xuanwu Intelligence 100 (Smart Growth Edition) is a new generation of smart SFA empowered by innovative technologies such as AIGC and DI. It is ready to use out of the box, dedicated to helping enterprises efficiently expand stores, easily create perfect stores, improve personnel visit-sales efficiency, help FMCG enterprises improve sales promotion strategies, and enable more enterprises to apply innovative technologies to transform productivity and promote business growth.
We believe that in the next 5 years, offline big data will flourish like online data and become a new weapon to help brand manufacturers achieve growth.
[This article is an excerpt from Mr. Lu Chao's excellent speech at the 5th China FMCG Conference, organized and compiled by New Distribution for readers (some parts have been abridged)].