Introduction: Four urgent tasks: ensure operations, plan foodservice, integrate e-commerce, and celebrate the festival smoothly.
Recently, many distributors have reported that salespeople and delivery personnel, who come into contact with many people in their daily work, are successively falling ill with infections. Especially for frontline teams, once infected, they directly face a gap in service and delivery. Despite sales growth, employees cannot keep up, which is the most troubling issue. Many regions across the country have adjusted their epidemic prevention policies, with precise prevention now aimed at preventing severe cases. This means that the number of non-severe patients in society will increase. For the labor-intensive FMCG industry, this is another challenge and the darkest moment before dawn (the recovery of full growth). How can distributors operate smoothly? Let's discuss this today.
Need to continue emphasizing epidemic prevention awareness
I feel that distributors must first think clearly about these issues, otherwise they will encounter trouble in the coming months.
How to prevent employees from testing positive? First, require all employees to have received three vaccine doses; otherwise, they should not be hired or should wait until vaccination is complete before starting work. This is a hard requirement and a responsibility to the entire team. Second, purchase a certain quantity of masks and make "wearing masks" a daily management penalty regulation. Finally, timely disinfection of necessary work areas is essential, with dedicated personnel and an assessment system. Also, advocate going home promptly after work and avoiding unnecessary gatherings.
If an employee tests positive, how to prevent transmission to others? During this special period, it is recommended to temporarily cancel offline collective meetings, use the SFA system for clocking in and out, move meetings online, distribute antigen test kits, test daily or every other day, and promptly upload results to the work group chat.
How to reassure terminal customers to communicate comfortably with employees? Although many official media have recently promoted that the novel coronavirus is not scary, people's fear of the epidemic has not been eliminated. After three years of the epidemic, terminal outlets have not had an easy time and already carry negative emotions. If you cannot reassure store owners at this point, they are likely to brush you off with a few words and send you away. My suggestion: before visiting, present a good mental state, do self-protection, and preferably bring a thermometer to test yourself at the store entrance to reassure the owner.
How to arrange for "positive" employees? If there is no life pressure, employees themselves are unwilling to visit outlets at this time, as they come into contact with hundreds of people daily, making infection probability much higher. Once infected, distributors should show care and love, provide some medication to alleviate symptoms, and give certain economic subsidies to warm employees' hearts.
Distributors must not take the above lightly. A real case: a distributor's team of over twenty people, with one oversight, half tested positive, and business had to stop for over half a month.
Distributors need to re-plan foodservice
The foodservice channel is an important outlet for products to directly face consumers and the best place for consumers to know the brand and experience the product. "Those who win foodservice win the world" is a common saying among FMCG marketing personnel. However, after three years of the epidemic, foodservice is certainly one of the hardest-hit channels. A few days ago, I did a simple survey of the Zhengzhou market. As of now, at least 40% of restaurants in Zhengzhou city have closed compared to 2019, and some distributors who rely on foodservice have seen sales halved. What exists is reasonable; people's needs have not decreased. The number of restaurants will inevitably spring up like mushrooms in the next six months. It is still timely to plan now, and it is the best time. Here are 5 small suggestions:
Adjust business thinking: Distributors have two paths to profit: one is small profits with quick turnover. When gross margin decreases, sales volume increases, and with expanded sales scale, a certain amount of profit can be obtained, but this requires higher demands on manpower, capital, and warehousing logistics. The second is to control sales volume and increase gross margin, also earning profit. Many distributors often choose to sell so-called high-margin products, requiring manufacturers to provide regional protection for monopoly operations. My suggestion: pursue profitable sales volume, and base foodservice operations on profit assurance.
Leverage first, then push: If your previously operated products have little overlap with the foodservice channel, do not rush to develop it head-on, as costs are extremely high and efficiency low. So first leverage: cooperate with distributors who have foodservice customers or hire salespeople who have long served foodservice clients. "Push later" means once you have a certain foodservice scale, then invest higher costs. Foodservice channels are interconnected, and at that point, costs will be more effective. The benefit is avoiding team morale setbacks during the promotion period and avoiding cost interruptions during resource-tight times.
Notes on entering foodservice outlets: High-end restaurants generally involve entry fees. Use connections, relationships, and key personnel interests to reduce them. Mid-range restaurants are best encouraged with tiered policies. Small restaurants can be entered through small favors (bottle openers, tissue boxes, etc.). If the brand has no resources to invest, it is suggested that distributors start with small restaurants before high-end ones.
Notes on foodservice sales promotion: First, the warehouse manager responsible for outbound goods—the higher the end, the more this role cannot be ignored; without outbound, how can sales move? Second, the bar manager—the bar is the best display in foodservice; ensure products are placed in the best position with the largest facing, and reciprocity is also important. Finally, waitstaff—like with white spirits, set bottle cap rewards to stimulate proactive recommendation.
Notes on consumer interaction: First, do free tasting, sampling, and product distribution. Second, build brand image displays at key terminals. Third, use "buy one get one," "purchase lottery," "Q&A prizes" to let consumers further understand and experience the product, thereby building brand loyalty and taste preference.
B2B and community group buying should be integrated
First, clarify a viewpoint: for FMCG, B2B and community group buying are not new fields; it is best to define them as new channels. The characteristic of these channels is the separation of transaction and service: outlets place orders through the platform, distributors or third parties deliver, and sales personnel focus on in-store service. We know that in visiting outlets, more than 60% of time is spent on order suggestions. If waist-up brands achieve B2B, then a salesperson can serve more than 45 outlets a day (only service, no orders). This is a trend and inevitable as labor costs rise. Community group buying is similar. For example, if quality is acceptable and prices are affordable, many consumers are willing to try on community group buying platforms, especially for small and medium manufacturers; it is an important channel for new product launches and efforts. In channel calculations, if a product's retail price is 10 yuan, the production cost must be controlled within 5 yuan; otherwise, all channel chain and promotion costs cannot be covered. The intermediate chain can be replaced by community group buying platforms with reasonable operational methods, improving efficiency and effectiveness. So, I suggest distributors start fully engaging with these e-commerce platforms; only by integrating will they discover the operational inspiration they provide.
Spring Festival is coming soon—how should distributors handle it?
I contacted several distributors, and they are relatively pessimistic. The epidemic prevention policy has only been adjusted, not eliminated. On one hand, concerns: after three years, consumer incomes have generally been greatly affected; just because the policy is adjusted does not mean wallets will suddenly bulge and consumption capacity will surge. On the other hand, concerns: the policy adjustment does not mean everyone will proactively visit relatives and friends; the virus still exists. Although "celebrating the New Year locally" is not hindered now, returning migrants may still be "disliked" by each other; it is best not to affect oneself or others. There is also a psychological change: after three years, distributors and terminal outlets previously stocked up to earn more, but now this mentality is greatly diminished; they prefer to earn less but ensure a smooth transition. In short, confidence in future market consumption is insufficient.
Actually, there is no need for excessive worry; we should also consider the positive side.
First, over time, people's fear of the epidemic will decrease. It will not be like three years ago when people feared the virus was fatal; gradually, it will be treated like ordinary flu. So after a brief panic period, the impact on social interaction will diminish.
Second, trust the government's determination and ability to restore the economy. As the Spring Festival is China's biggest annual consumption peak, the government will use consumption vouchers and other means to stimulate consumption, boost domestic circulation, and restore economic order as soon as possible.
Finally, there is a precedent: brand owners who were responsible to distributors during the 2020 Spring Festival should be given full trust. Follow their strategies and layout; follow such enterprises without hesitation.
So how should this year's Spring Festival be handled? My suggestions are 4 points:
Plan stocking: Calculate based on outlet quantity and quality, e.g., stock at 80% of 2019 levels or 1.2 times 2021 levels. In short, have a basis matching the current situation.
Plan distribution: How to hold order meetings—online or offline? Banquet-style or walking-style? How to design the distribution schedule? Etc.
Monitor sales: Constantly monitor sales at key outlets, increase visit frequency, and give confidence to outlet customers.
Design recovery and transfer nodes for gift box products: For example, start recovering surplus stock after the Lantern Festival, and after the second day of the second lunar month, recover from outlets with no sales potential, unpacking or discounting.
Extended reading:
Hai You: Special author of New Distribution, senior researcher, offline channel marketing practitioner, enterprise channel coverage model designer. He has provided channel consulting for more than ten first-line brands, earning a good reputation.
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