From March 14 to 16, the 9th China FMCG Innovation Conference, themed 'Supply Chain Revolution,' was held in Chengdu. During the conference, over a hundred guest speakers and more than two thousand manufacturer representatives and FMCG professionals from across the country explored how distributors and brands can seek growth in the current environment.

Among them, He Luyi, co-founder and CEO of New Can Factory, delivered a keynote titled 'POSM Visual Strategy: The Next Competitive Frontier in Snack Foods,' which sparked lively discussions among manufacturers and distributors.

New Distribution is pleased to report on the highlights of her presentation for our readers.

Online Sales Hitting a Bottleneck

Today's topic is 'POSM Visual Strategy: The Next Competitive Frontier in Snack Foods.' Why this theme?

Because online sales were poor last year. All clients encountered the same bottleneck in sales competition: online sales stalled. The tasks I received were all from offline channels—how to do well offline. I realized that offline is such an interesting and vast market. Today, I want to share with you how to excel at POSM offline.

Data shows that in the trillion-yuan snack food market, offline consumption still accounts for over 70%. When I take on projects, clients often say: 'We need to go online, do e-commerce, shoot images.' 30% of visual resources are focused on sales, while the remaining 70% are not invested in building visual identity. People say to find distributors, set the price band, and lay out the product assortment, and that's it. But that's not the case.

Offline snack food consumption has three distinct characteristics:

High randomness

High demand for novelty and variety

Low loyalty

To overcome any of these challenges requires significant effort.

So what should be done?

Five Key Points of POSM Visual Strategy

Let me share a case study: New Can Factory's POSM design for Hsu Fu Chi's Chinese New Year campaign last year. Before working on the Hsu Fu Chi project, we didn't consider POSM a strategic priority. But after completing it, we found that it helped Hsu Fu Chi achieve excellent results in year-end sales.

This is Hsu Fu Chi's 2024 CNY marketing KV. There are five core points for POSM implementation, summarized as:

1. Atmosphere creation

2. Hero product leadership

3. Three-dimensional experience

4. Trust endorsement

5. Diverse combinations

How to understand these?

First, 'Atmosphere Creation':

Most clients, when doing their POSM, usually require differentiation. How to understand this?

Most people in retail stores want to look different from others, to be more distinctive. But Hsu Fu Chi's approach is different: they pull all products together to form their own territory. This is very clever because they chose the CNY node, bringing all the red together as their main base. For most brands, this is reverse thinking.

And this thinking is effective because they created a supermarket-based 'New Year Goods Street' concept, with POSM promotional points throughout the street, without needing differentiation.

Second, 'Hero Product Leadership':

Most brands launch combinations during the New Year, and many think this creates a matrix and momentum. But what did Hsu Fu Chi do? In November, they launched their core hero product, New Year Candy, and used it as the focus of POSM sales, boosting overall year-end sales.

This was very effective because they extended a theme from the New Year candy framework, making it distinct.

It solved two problems: first, atmosphere—pulling everything together as the main base, making the core hero product and extending a theme from it. This theme is not a creative theme but a product theme, so they invested in hero product leadership.

Third, 'Three-Dimensional Experience':

Daily advertising agency outputs usually include many materials and designs, but what does a three-dimensional experience bring?

Look at Hsu Fu Chi's layout logic: there are upper, middle, and lower positions. From a flat view, it looks like this, but it's designed in three dimensions—'sea, land, and air.' What does that mean?

'Upper' includes TVs, spotlights, and hanging flags; 'middle' includes products, style boards, communication signs, price tags, and information boards; 'lower' includes floor stickers and counters. When you apply this three-dimensional logic, the evaluation criteria for all POSM materials become clearer. You know where to use them, and the limitation of materials is not restricted.

Fourth, 'Trust Endorsement':

'Eating Hsu Fu Chi New Year Candy gives you the feeling of the New Year'—this is a phrase we discussed with Hsu Fu Chi for a long time. Why this phrase? It serves as a prompt: to buy my product, you need it to feel like the New Year.

People might say why would an ad agency use such a plain slogan. Actually, it's not plain; it's an effective directive in the mass market.

Second, Hsu Fu Chi provided trust endorsement: 'A national classic snack brand selling well for over 30 years.' In contrast, other brands have scattered logic and unclear language systems. Hsu Fu Chi's trust endorsement logic is very clear.

Fifth, 'Diverse Combinations':

This is quite impressive. When designing, we only used a 1P-oriented logic, doing repetitive work, combining from 1P to 4P, 8P, and even 16P. The goal was to design with the smallest unit, and the resulting logic units are within a controllable range to meet different store area requirements.

It can be said that Hsu Fu Chi's five efforts were very solid, helping it quickly enter different channels and unify all visual identities.

Based on the entire POSM design for Hsu Fu Chi and in-depth discussions with major distributors and manufacturers, we created the AIEA model. If you use AIDA for offline material setting, problems arise. Why?

Because AIDA's starting point is to attract attention and generate interest. But offline POSM doesn't need that; it's already in physical space. What we need is input, so we change 'I' to 'INPUT'—to input a large amount of information, further strengthen the purchase reason, then efficiently induce, and finally decision.

Here, we also use the AIEA model to classify all POSM, determining where and through what to solve the problem.

Through research, we also identified the top 10 most commonly used POSM materials in the market, each with different functions. Which shelves and items solve the problem of long-distance viewing; as customers approach, which materials solve the INPUT problem; at close range or even the shortest distance, what information is used for efficient inducement... Applying the 10 POSM logics to the entire shopping process, the model looks like this.

What Will POSM Look Like in Future Offline Channels?

Here are two suggestions: first, minimalism; second, maximalism.

How to understand?

First, minimalism: Some channels are gradually eliminating POSM. For example, Sam's Club and Snack Ming (Liangpin Puzi) aim for efficiency, quick transactions, and purchases. They have integrated everything, so you'll find that Sam's PDQ has become the POSM process. A PDQ integrated box can solve the problem without needing other decorations. That's one type.

Second trend: maximalism.

An example is Japan's Don Quijote, which focuses on shopping experience, not just efficient purchasing. In our future predictions, besides supply-demand relationships and overcapacity, the focus is on consumer experience. One type of consumer experience solves efficiency; another solves experience and browsing process. That's our understanding.

Therefore, New Can Factory and New Distribution jointly released the 'Insight Report on Top 10 Commonly Used POSM in Snack Foods', which provides a detailed in-depth study and interpretation of overall POSM.

Over three months, New Can Factory, in collaboration with distributors, analyzed and understood over 2,000 offline channel outlets nationwide, conducted field visits to more than 30 offline channel outlets, and analyzed and summarized the top 10 commonly used POSM in snack foods. We creatively proposed the AIEA model, revealing how POSM influences consumer purchase decisions, providing help, inspiration, and reference for snack food brands.

Framework of the 'Insight Report on Top 10 Commonly Used POSM in Snack Foods':

1. Background

Current status and observations of snack food displays / findings (DEFINE the tactical importance of POSM in snack foods)

2. On the Effectiveness of POSM in Snack Foods

POSM classification (clarify goals and needs; AIEA model-based POSM operation and self-check guide)

3. Analysis of Top 10 POSM Materials Based on Market Display Efficiency

Node-type POSM material matrix, case analysis (Jinzi / Hsu Fu Chi)

Top 10 POSM material evaluation comparison table

4. Development Trends and Challenges of POSM in Snack Foods

Interested friends can scan the QR code to add WeChat and request the full industry report.

PS: For those interested in the on-site speech content, please follow the WeChat official account of New Distribution for recent posts. We will compile and publish all guest speeches for our readers.

Click Read Original to see more about the 9th China FMCG Innovation Conference and the 2nd China FMCG Hard Discount Conference & 2nd China FMCG Distributor Conference...