-01- Three Spaces, Three Types of Traffic, Cognition, Transactions, and Relationships 1. Three Spaces In his book "Connection," Mr. Shi Wei described three spaces where products and consumers interact:

First, the virtual space of the internet (including mobile internet);

Second, the customer group composed of target customers (including old and potential customers) of the enterprise/brand;

Third, the physical space where consumers personally experience products (retail terminals and other venues). In this context, it means that for brand owners, future business must be conducted in all three spaces: offline, online, and social. However, the logic of transactions differs significantly across these spaces. In terms of trust endorsement, in offline physical spaces, consumers trust big brands; in the internet world, consumers trust platforms; but in social spaces, consumers trust friends. From the perspective of cognitive efficiency, in offline stores, brand awareness costs are the lowest; on e-commerce platforms, transaction efficiency is the highest; and on social traffic platforms, trust is built the fastest. Therefore, in these three spaces, although corporate communication and distribution channels may integrate to some extent, different categories will have different marketing emphases in different spaces. 2. Three Types of Traffic Traffic can be roughly divided into three types: commercial traffic, public traffic, and private traffic. Commercial traffic: refers to traffic that can be bought with money, such as Taobao's Zhitongche, drill exhibitions, etc. Advertising on Douyin and Guangdiantong on WeChat are also examples. These can be purchased with money. The purpose of buying traffic is very clear: to directly facilitate transactions. Therefore, all commercial traffic is centered around transactions. The main platforms for commercial traffic include Alibaba's promotional activities, Baidu's search bidding rankings, Tencent's Guangdiantong, etc. The recommendation source for commercial traffic is the platform, and the trust endorsement for user transactions comes from trust in the platform, such as Alipay. If this trust endorsement fails, it can lead to major public incidents, such as Baidu's Putian hospital incident. Public traffic: specifically refers to traffic that does not require payment but requires creating excellent content that gets recommended to more users by the platform's algorithm engine, thereby gaining traffic. This type of traffic requires strong content production and output by the operator. The algorithm engine evaluates the quality of content and provides traffic support based on that. According to content tags, it targets a certain number of relevant users. The algorithm engine then evaluates whether to give you a larger user pool based on metrics like like rate, completion rate, and share rate in the initial user pool. The main platforms for public traffic include Toutiao, Douyin, Kuaishou, etc. Even if you accumulate followers on public traffic, if your content does not match your followers' tags, Toutiao will not recommend it. Moreover, Toutiao's goal is to gain massive traffic through your good content and then sell it to advertisers. Public traffic lacks trust endorsement because content recommendations come from the algorithm engine, which cannot guarantee consistency between the products and services sold by merchants and the content. Therefore, transactions in public traffic are more prone to consumer deception. Private traffic: specifically refers to traffic accumulated through word-of-mouth on social networks based on good content and services, resulting in strong relationships. Users recognize your personal IP or content value and proactively establish social relationships with you with some emotional connection. The recommendation source for private traffic is friends' circles or word-of-mouth, and users' trust endorsement is based on recognition of the IP's value. This type of relationship has a fixed user base and accumulates slowly, but under strong relationships, it can continuously monetize and transact. However, it requires continuous value output to users. These three types of traffic appear to varying degrees in the three spaces. Essentially, for brand owners, a key factor in business success is how to utilize these three types of traffic in the three spaces to conduct business effectively. 3. Cognition, Transactions, and Relationships Cognition refers to the degree to which consumers recognize and identify with your product in which channel. Transactions refer to where (touchpoints) consumers purchase your product. Relationships refer to the kind of connection you establish with consumers: short-term or long-term; good or bad; deeply engaged or just a one-time transaction. What we need to do today is essentially to use the three types of traffic in the three spaces to build connections with users in terms of cognition, transactions, and relationships. 4. Delivery No matter what business you do in the three spaces, delivery is indispensable. In traditional offline, cognition happens through TV media, and transactions and delivery are together; in the online space, cognition and transactions are together, but transactions and delivery are separated; in the social space, transactions and relationships are together, and delivery can be integrated or separated. -02- The Transaction Logic in Social Spaces 1. The Dual Identity of Small Store Owners: Store Owner and Community Group Leader Before the internet, small store owners were simply store owners. They were characterized by small scale, low costs, high rent, and the need for cash support, so they sold popular items. But since the popularization of WeChat, especially with the development of social e-commerce in the past two years, store owners have gradually established their own WeChat groups within their communities. Generally, offline mom-and-pop store owners are also group leaders. The value of this group is mainly to serve residents around the store, providing convenient shopping and occasional group buying. Everyone in the group has a semi-acquaintance relationship; they have met, and there is a natural logic for transactions offline. Therefore, this group is naturally a high-quality community. When the store owner and group leader roles are combined, it gives brand owners an opportunity to extend from the 2B business in the offline physical space to the 2C business of consumers in the social space. This is what the title of this article refers to: digital deep distribution in the third space. Most traditional FMCG brands generate 90% of their business offline, so community stores are the strongholds for big brands and the battlefield for traditional offline infantry deep distribution. However, the community groups based on the store's LBS also have the connection of cognition and relationships through social networks. As Mr. Liu Chunxiong said, community groups are the core hub that connects the three spaces and integrates online and offline. Therefore, all FMCG manufacturers today must not only do well with offline mom-and-pop stores but also leverage the community traffic of these stores to do new deep distribution in the third space. 2. 2C Business Playbook Under Social Traffic As mentioned earlier, in social traffic business, transactions are tied to relationships. Without relationships, there is no business. This means that anyone selling in a community group must cherish their reputation to sustain long-term business and cannot fool consumers. Especially for small store owners, they have physical stores offline and community groups online, and they are familiar with people in the community, so selling goods carries a sense of "the monk may run away, but the temple stays." Although for brand owners, the traffic of small store owners is public traffic, for the store owners themselves, it is their own private traffic. Therefore, small store owners' offline sales are constrained by the physical space's efficiency limits, so they have to push sales. But in the social space, there are no boundaries, so its value lies in leveraging semi-acquaintance relationships to help users filter products, save time, and recommend products. For brand owners, the core task in doing community groups under small store owners is to successfully get store owners to proactively recommend our products. 3. The Logic for Brand Owners Selling in Community Spaces So the question is: what kind of products will make store owners proactively recommend them? First, the product quality must be good enough. Second, the product price must be low enough. Finally, the product must be scarce enough—limited editions, low stock, "once it's gone, it's gone." Any combination of two or more of these three "enoughs" can generate effective transactions. What kind of products will make consumers willing to buy? First, the total purchase price should not be too high, so the decision pressure is low and one person can decide. Second, there should be a real bargain. Finally, the product should be something the household actually needs (essential, high-frequency, low-involvement). Of course, if your product is also aesthetically pleasing and has content, and consumers' first reaction upon receiving it is to take a photo, then sales will naturally not be a worry. To sell well in a community group, I believe there are four key points: · Products that store owners are willing to recommend with their personal endorsement; · Products that consumers think are worth buying and are needed at home; · Products that distributors and small store owners find profitable; · Products that consumers are willing to recommend to others after experiencing them. 4. Three Spaces, FB2b2C, Online-Offline Integrated Marketing As mentioned earlier, in the three spaces and under the three types of traffic, the logic of cognition, transactions, and delivery differs. In fact, today's transaction scenarios are extremely complex, and this article only provides a high-level abstraction for theoretical explanation. However, every enterprise must apply business to specific scenarios. In terms of communication, there are already integrated marketing theories like New Marketing Technology, but on the distribution side, there is currently no systematic and complete theoretical system in China to support efficient delivery in fragmented scenarios. If we were to build a supply chain system for each type of transaction, it would be too costly and too complex. How to aggregate and share the backend supply chain, operations, and data systems is the core of building an integrated supply chain system for brand owners in the digital era. In recent years, Alibaba has been promoting the middle platform model, i.e., a large middle platform with small front ends. It can effectively solve the problem of fragmented front-end traffic and the effective organization of backend data and supply chain. However, this middle platform needs to be built by the enterprise itself based on its own business model. This construction is not about revolutionizing the original business system and operational logic, but about building new technology and model applications on top of new technological infrastructure. The new deep distribution model based on small stores must not only complete transactions and delivery under the original business model, but also use mini-programs and public traffic operations in community groups to build brand cognition and relationships. Finally, based on consumer demand, achieve transactions for long-tail and short-tail products, and then achieve one-stop delivery through long and short chains!

Tips will be paid 400-2000 yuan upon adoption.