At the Alibaba Cloud Computing Conference in October 2016, Jack Ma first proposed the concept of 'New Retail.' But what exactly is New Retail? Many people think of emerging sales channels like e-commerce, community group buying, and livestream selling, but it is far more than that. For example, when you browse or view something on a mobile web page, other platforms push related information to you—this is a situation many people are already familiar with. This is 'big data' and 'cloud computing,' which can precisely grasp consumer information and needs, and accurately push products to consumers. In short, New Retail is based on the backdrop of consumption upgrading, utilizing new technologies brought by big data, artificial intelligence, and cloud computing to connect online and offline, achieve efficient logistics, and realize the innovative operation of the entire retail industry chain. Currently, China's retail innovation has taken the lead globally, with significant breakthroughs in retail formats and technological innovation, online-offline integration, and social community retail model innovation. The FMCG industry belongs to traditional manufacturing and sales sectors. In the new era, should it stick to the old ways or try new ones? How to embrace New Retail? Most industry professionals are confused. Are the Three Axes of Sales No Longer Effective? FMCG companies commonly use the three axes of sales: advertising, promotion, and low prices, which have been repeatedly effective. But in recent years, these simple and crude methods have found it difficult to drive long-term development. Twenty years ago, advertising on TV required brand bidding, but now TV stations have to seek corporate sponsors; Promotions have been exhausted, leading many companies to a situation of 'no promotion, no sales'; The low-price strategy is a double-edged sword: it has made a few brands successful but has also ruined countless others. Wahaha is a typical example. Whenever a popular beverage appears, Wahaha quickly follows up and develops products with more competitive prices. But after the big single product Nutrition Express, it has been difficult to launch another big single product for many years. Many small and medium-sized enterprises that adopt low-price strategies start low and rise high, but their development trajectory is like a parabola, and after declining, they never recover. Why? In the era of information isolation, consumers knew little about products. Whether companies advertised or promoted, it was 'I speak, you listen; I perform, you watch.' Consumers passively accepted, and once accepted, they believed it to be true. But mobile internet has changed all this. Through the internet, consumers can check product information and consumer reviews, and if they dig deeper, they can also find out product prices. The effectiveness of advertising has become increasingly low. Moreover, as everyone knows, 'the wool comes from the sheep's back.' So-called promotions, whether buy-one-get-one-free or special discounts, exploit consumers' psychology of gaining an advantage. The key is the word 'gain'—the free gift is not truly free; it is included in the product price. In an information-interconnected society, the distance between perception and fact is getting closer, posing a severe challenge to traditional sales. The Pain of E-commerce: Not All Enterprises Are Suitable for E-commerce E-commerce covers almost all industries, including the five major categories of FMCG (food, beverages, washing and cosmetics, tobacco and alcohol, and OTC). But not all FMCG categories are on the hot-selling list. From the 'Top 10 Best-Selling Categories on Taobao,' only alcohol (mainly baijiu) and snacks/nuts/specialty products from the FMCG industry make it to the top ten; other categories fall behind. Unlike the O2O model in the service industry, which draws consumers from online to offline consumption, traditional FMCG companies, which are typical high-frequency, low-value physical sales, face relatively more difficulties on their online path. The main challenges for FMCG companies doing e-commerce include: 1. Price impact and cross-regional selling (channel conflict): The original regional management conflicts with the borderless nature of e-commerce, so cross-regional selling must be managed, and prices must also be controlled. 2. Short product shelf life: Unlike durable consumer goods, most food and beverages have a shelf life of up to one year, and some less than a month. Therefore, the cost of managing product shelf life remains high. 3. E-commerce is difficult to truly help companies build brands: For example, in the hot livestream selling of the past two years, have any brands succeeded through livestream selling? No. Most are just trading sales for traffic. But this does not mean FMCG companies should not do e-commerce; rather, they should act according to their capabilities:

  1. When unfamiliar with the market, cooperating with third parties and platforms is more prudent.
  2. Focus on R&D and product quality, especially for companies cooperating with OEM factories. If product quality cannot be effectively controlled, if offline is not done well, do not hold侥幸心理 (wishful thinking) online.
  3. FMCG e-commerce has evolved from the exploration period targeting niche markets to the mature period represented by nut e-commerce. Even Three Squirrels, which started as a pure e-commerce brand, has begun to lay out offline. So entrants should not 'look at the other mountain and think it's higher'—what suits you is the best. Is Channel King Outdated? In the FMCG industry, what is king? Channel is king. In the New Retail era, what is king? --Still the channel! What is a channel? Whether in new or old retail, the essence of marketing remains unchanged—discovering and satisfying consumer needs. Consumer needs are fulfilled in various consumption places, and the path from the enterprise to the consumption place is the channel. But consumer needs are changeable. With social development and changing times, marketing channels have become increasingly diversified. Back then, with the development of e-commerce, snack sales created a brand-new channel. Three Squirrels is a brand born under this situation, and it successfully seized the traffic opportunities of e-commerce, becoming a new internet snack brand. Three Squirrels' anime super IP (image from the internet) Coca-Cola, a century-old brand, continues to expand globally. Besides deeply cultivating channels, it is also constantly developing new channels. Early on, Coca-Cola saw the development prospects and future of the internet. Internet cafes gathered a large number of precise target consumers, so they separated the internet cafe channel from the original direct sales channel and cooperated with 'The Ninth City' to jointly develop the internet cafe channel, achieving great success. Jilin Forest Industry Group's Quanyangquan beverage is a well-known brand of natural mineral water from Changbai Mountain in China. In recent years, the company has moved south from the northeast to develop, continuously exploring experience. Many markets have taken a different path, starting from seizing family user channels and special channels, achieving one breakthrough after another. Let's look at a small category: Baifeiluo is a water buffalo milk brand that has become popular in recent years. But the company is well aware of brand gaps and channel barriers, so it did not directly break through traditional channels. Instead, through cooperation with fruit wholesalers, it brought its products into various sales channels along with fruits, completing distribution layout in many cities across the country. Baifeiluo pure milk (image from the internet) Past successful enterprises achieved success by laying out old channels; Future successful enterprises will achieve success by building and developing new channels; Without exception. No matter how times change, team management is always the winning weapon Many companies set clear sales targets for their marketing teams each year, but the process is basically in a state of 'shepherding,' typical of the 'only ask for results, not the process' approach. But the results are often unsatisfactory: products are increasingly difficult to sell, prices are getting lower, promotional activities are increasing, and staff turnover is growing... It is understandable for marketing teams to achieve sales targets, but a marketing team is an organic body and a market management organization. Only when it is well managed and the organization runs well can sales be completed. In the new marketing era, what aspects of marketing team management should companies focus on? 1. Management systems should adapt to market trends Yingxiao Li Consulting has found that the common problem in most domestic food and beverage companies' management is: market-oriented products have not been synchronized with market-oriented management mechanisms. Management problems are mainly manifested in: strategic drift, empiricism, chaotic structure, and repeated adjustments to policies and assessments, but adjustments lack overall thinking, are not effectively integrated with the market, and cannot solve practical problems. The ultimate competition between enterprises is management competition. For stable and sustainable development, companies must build two production lines: one produces 'products,' and the other produces 'people.' Only by gradually establishing sound systems, processes, standardized daily management, and strong team culture nourishment can a high-combat team be built, and can the company promote sustained and healthy development. 2. People-oriented Current marketing personnel, originally from the post-70s and post-80s generations, will gradually be replaced by the post-90s and post-00s. They no longer work just for a living, so management cannot be just assessment and KPIs. They need managers to make long-term development plans for them and guide them as mentors and elder brothers. This will also test companies and managers in refining their management methods and means. 3. Strengthen market functions Marketing personnel's time is basically spent on completing sales targets, running to markets, customers, and orders like being driven by a whip. Many companies impose many market planning and non-sales functions on marketing personnel, resulting in half the effort with twice the result. In a highly competitive marketing era, companies that have reached a certain scale need to strengthen market functions to develop rapidly. The marketing department is the business hub of an enterprise, the organization and coordination body for production, supply, and sales. By adding market function personnel, such as marketing director, product manager, brand manager, planning manager, and promotion manager, the team's comprehensive competitiveness can outrun competitors. 4. Headquarters should have a sense of serving the frontline market Many headquarters personnel are complacent, thinking they are superior to frontline marketing personnel, let alone serving them. Some headquarters personnel work behind closed doors, formulate strategies and let the frontline execute them. If execution is poor, they blame the marketing personnel. The relationship between the headquarters and the frontline market is like soil and saplings. Without the nourishment of soil, saplings cannot grow into big trees. Even if they grow into big trees, they still cannot leave the soil, otherwise they will wither. New Marketing Focuses on 'New' Entering the New Retail era, companies are not required to start from scratch. They still need product first, still need channels, and still need to meet consumer needs, but higher requirements are placed on the 'new' aspect. 1. New product development should embrace consumers, do more market research, and listen to their suggestions. 2. New brand communication can no longer rely on one-way advertising; interaction and experience are important means to effectively build brands. 3. In the future, the biggest gap between enterprises will not be product quality but marketing innovation. Brands and products are already saturated; only by continuously exploring with heart can we open up a 'new continent' for sales. Source: Yingxiao Li (ID: yingxiaoli888), Author: Shi Shunhai -END-