---
title: "Omnichannel or Die!"
description: "The most concerning and challenging part of traditional enterprises' marketing revolution or transformation is how to transform traditional channels. Traditional channel sales have declined severely, with 56% of mall channels experiencing negative growth compared to the previous year, and 38% of malls seeing declines of over 10%. The answer, according to Shen Zhiyong, is omnichannel: integrating physical channels with PC and mobile internet to create a seamless online-offline marketing model."
author: "沈志勇"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2016-12-16"
language: "en"
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---

# Omnichannel or Die!

> The most concerning and challenging part of traditional enterprises' marketing revolution or transformation is how to transform traditional channels. Traditional channel sales have declined severely, with 56% of mall channels experiencing negative growth compared to the previous year, and 38% of malls seeing declines of over 10%. The answer, according to Shen Zhiyong, is omnichannel: integrating physical channels with PC and mobile internet to create a seamless online-offline marketing model.

Regarding the marketing revolution or transformation of traditional enterprises, one of the most concerning and difficult parts is likely the transformation of traditional channels.
Traditional channel sales have declined severely, which has been a painful issue for traditional enterprises in recent years.
Compared with the previous year, 56% of mall channels experienced negative growth, with 38% of malls seeing negative growth of more than 10%.
> According to relevant statistics, from 2010 to 2015, the compound growth rate of transaction volume in Yiwu's bazaar markets was 14.91%, while e-commerce transaction volume grew at a compound rate of 24.76% during the same period. More importantly, Yiwu's total e-commerce volume exceeded offline bazaar markets in 2014, reaching 114.504 billion yuan.
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> Meanwhile, according to AVC (All View Cloud) data, in the first half of 2016, online sales of color TVs grew 64% year-on-year, while offline channels saw declines: large chain stores fell 7.5%, department stores fell 16%, and supermarkets fell 13.1%.
There are many more industries or categories where online and offline sales have seen such a shift.
The growth rate of traditional wholesale markets is declining, product sales online grow much faster than offline, and offline sales have even seen negative growth. These situations are a true reflection of the current state of traditional channels and strong evidence of their sales decline.
Facing the impact of the internet, traditional channels have launched various response methods: some have created brand experience stores, some have implemented membership systems, and some have crafted ultimate products. However, these methods are mostly based on existing offline channel operations, fail to meet the needs of the mobile internet era for convenience, efficiency, and connectivity, and do not deeply integrate new internet technologies, resulting in unsatisfactory improvements.
So, in what direction should traditional enterprises' channels transform?
**Shen Zhiyong of Shanghai Chaoxianzhan Marketing Consulting believes:**
**The answer is: omnichannel.**
> "Omnichannel is not the multi-channel approach in traditional physical marketing. It refers to traditional enterprises, based on physical channels, embracing PC e-commerce and mobile internet channels, using internet thinking, technologies, and tools to improve distribution efficiency and cover precisely targeted consumers through a seamless online-offline integrated marketing model."
**In the future, it's omnichannel or die.**
**Why?**
> ### **Consumers shop omnichannel, so enterprises must be omnichannel**
Today's consumers spend an average of 4 hours a day on computers, giving rise to needs for search, e-commerce, and social interaction. Smartphones have become the first screen of consumers' lives, surpassing TV and movies, which will inevitably create needs for social and mobile shopping.
Changes in consumers' media habits mean they are no longer limited to consuming at fixed times and places as in the traditional era.
In this era of everyone looking down at their phones, mass consumer behavior has quietly changed. Information acquisition, sharing, and shopping are no longer limited to PCs but have shifted dramatically from PCs to mobile devices.
Because mobile internet technology has cultivated consumers' habit of using apps and phones during fragmented time, and internet access no longer depends on PCs, consumer behavior has gradually transformed into all-weather, all-location, omnichannel, and all-media consumption. Any single channel can no longer cover all target groups that enterprises need to reach.
Where there are people, there is business.
In the traditional marketing era, consumers chose supermarkets, small shops, or malls because those places gathered foot traffic. In the internet era, many people have gone online, and offline consumers are fragmented. Now, consumers can shop through all channels: malls, physical stores, catalogs, call centers, websites, and mobile terminals. In other words, future enterprise marketing must satisfy consumers' ability to buy any desired product at any time, in any way, and through any entry point.
If traditional enterprises do not go online or integrate online and offline, they will lose their foundation for survival: customer traffic.
> ### **Consumers' shopping methods have changed dramatically, so enterprises must be omnichannel**
Previously, consumers' shopping followed the traditional AIDMA marketing law (Attention, Interest, Desire, Memory, Action). The enterprise's marketing task was to attract consumers and complete the transaction, ending the marketing process.
> In the internet era, consumers' shopping methods and processes have changed to the AISAS theory (Attention, Interest, Search, Action, Share).
First, consumers may "notice" their need through traditional media, new media, or word-of-mouth from friends. Then they will search online for relevant products and information with interest, compare prices on their phones, seek recommendations on social media, visit physical stores to feel the product, and build initial confidence. Fourth, they may choose to purchase. After purchasing, consumers may write about their feelings or post pictures on communities, sharing their views on the product and even the entire purchase experience.
This shopping method includes not only the online search and share steps, which differ from traditional shopping, but also the omnichannel characteristics of both online and offline.
At this point, whether the final transaction occurs online or offline is irrelevant. What matters is that consumers switch freely between different types of channel terminals. To capture such consumers, enterprises must layout every aspect of omnichannel around this shopping behavior.
Enterprises must integrate themselves with online e-commerce, mobile malls, offline physical stores, and social media platforms (self-media) to form a fully integrated omnichannel marketing system.
> ### **PC e-commerce and mobile e-commerce each have advantages, so enterprises must be omnichannel**
In recent years, physical channels have been severely squeezed by e-commerce. Why have once-dominant physical channels failed to compete with online channels?
First, physical channels are backward. One reason is that traditional Chinese physical channels are too long and rely on information asymmetry. Products must pass through first-level, second-level, even third- and fourth-level distributors before reaching consumers, with each layer adding costs and inefficiency. Second, physical channels are too fragmented, with small channel players and overly small and scattered retail stores. These indicate that Chinese channels are still backward, seriously backward. In the internet era, the internet's disintermediation is evident, consumers have more symmetric information, and enterprises are at zero distance from consumers. Consumers no longer rely on intermediaries and expert opinions for information but can rely on social network "recommendations," greatly reducing their dependence on intermediate channel links. This forces physical enterprises' channel models to "de-intermediate" and flatten, and the role of traditional distribution channels must shift from distribution to service providers, requiring traditional marketing methods to change.
Second, internet shopping has inherent advantages over physical shopping, such as abundant products, rich price comparison information, customer reviews, recommendations, and sharing, and convenience in time and space. These advantages are not available to physical channels.
It is precisely because of these two points that after the emergence of e-commerce and mobile internet, physical channels have a strong tendency to be marginalized.
To survive in a market environment where physical channels, PC e-commerce, and mobile e-commerce coexist, enterprises must not reject the unique advantages of PC and mobile e-commerce. Instead, they should leverage these advantages and combine them with traditional channel strengths to form an integrated omnichannel marketing model.
> ### **The core of future enterprise competition is mastering customers, so enterprises must be omnichannel**
The traditional industrial era relied on information asymmetry and channel monopoly, with its value creation law being "scale."
The essence of the internet is connection—connection of things, people, information, and business with people.
In the PC internet era, internet information organization mainly focused on connecting things—web search and portal platforms centered on products/services.
In the mobile internet era, information organization centers on human behavior, with infinite connections between people becoming the essence of the world, giving "people" unprecedented voice and dominance. How consumers feel about products and services can be spread through the internet, influencing other consumers' choices.
Thus, "user first" has become an iron law of the internet era.
> In the internet era where everyone is the internet, everyone is self-media, and everyone is both producer and disseminator, enterprise business systems should also be people-centered.
In the future internet era, mastering consumers is the core of enterprise competition, and consumers are the most important resource. The outcome of market competition will ultimately depend on control of customer resources, not on "scale" as in the traditional era.
In this context, enterprise marketing work has two focuses. First, traffic: how to attract traffic to acquire more target consumers and gain more fans' attention and likes. Second, how to convert fans into purchasing customers while ensuring their satisfaction, generating word-of-mouth, sharing, dissemination, and recommendations, so that fans' purchases are sustainable and repeatable.
In other words, in the traditional era, consumer purchases were often one-time. In the internet era, we must not only attract fans but also retain them, turning fans into loyal fans and iron fans, making them loyal customers as well as our distributors and disseminators.
To accomplish this transformation of consumer roles, relying solely on traditional physical channels to contact and communicate with consumers is no longer sufficient. Enterprises must actively use the internet, which has an inherent ability to integrate fragments, to bring consumers together, allowing enterprises to directly contact and communicate with consumers, form communities, and ultimately achieve the goal of mastering consumers.
Therefore, omnichannel and community-based approaches will be the inevitable development trend for traditional enterprise channel models.
**Source: Shen Laoshi's Longmen Array**
**This article is originally created and authorized for reprint. Please contact the original author for reprinting.**
Website: www.chaoxianzhan.com.
With 20 years of marketing consulting and brand building experience, he is the author of strategic and marketing monographs such as "Big Single Product Brand," "Big Single Product Breakthrough," and "Redefining Chinese Business Models." Welcome to follow Shen Zhiyong's public account "Shen Laoshi's Longmen Array."
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