---
title: "Rethinking Channels"
description: "We define a channel as any place where consumers can buy products. In the past, sales channels were about the entire distribution chain from wholesale to retail, with fixed locations and a single distribution model. Today, the internet has transformed the logic of transactions, making channels multidimensional and complex, requiring companies to rethink their approach to cognition, transactions, relationships, and delivery."
author: "赵波"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2020-11-10"
language: "en"
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---

# Rethinking Channels

> We define a channel as any place where consumers can buy products. In the past, sales channels were about the entire distribution chain from wholesale to retail, with fixed locations and a single distribution model. Today, the internet has transformed the logic of transactions, making channels multidimensional and complex, requiring companies to rethink their approach to cognition, transactions, relationships, and delivery.

****Click "Read Original" for details****
First, let's define a channel: **a place where consumers can buy products is called a channel.**
In the past, when we talked about sales channels, we were essentially talking about the entire commercial circulation process of distribution, wholesale, and retail. In the past, the places of transaction were fixed, the types were relatively single, and the scale and quantity were large.
Therefore, the process of goods moving from factory to consumer was a step-by-step process of wholesale transactions. Through the expansion of a single distribution model, the density coverage of channels was achieved.
In the past, supply and demand were separate from mass communication and channel distribution. The sales department handled sales, while the brand department handled branding and communication, each doing their own job.
But the biggest problem today is that the emergence of the internet has fundamentally changed the logic of transactions. **In the past, it was online communication, offline transaction and delivery, with goods not moving but people moving.**
**But now, when communicating online, transactions can be made; when transacting offline, people can stay still. The logic of business has become people not moving, but goods moving.**
Mobile payment allows transactions to occur anywhere there is information interaction with users. So, **from a transaction perspective, the meaning of channels has transcended one-dimensional physical space and entered a three-dimensional, multidimensional space. Channels have evolved from one-dimensional physical nodes to three-dimensional networks.**
Teacher Shi Wei made a clear classification in "Link," mentioning three-dimensional spaces: offline, online, and social networks, which clearly express the dimensions of digital channels.
New Distribution previously made an incomplete statistic that beyond traditional channels, there are hundreds of new channel types, each with different transaction structures, methods, and category focuses.
The diversity of channels has led to an exponential increase in transaction complexity, bringing many operational challenges to enterprises. Many fragmented, small channels, especially hidden ones that require a lot of operational effort, are extremely unappealing to brand owners.
This creates opportunities for new brands. We see brands like "Adopt a Cow" thriving in community group buying channels. This is also because large brands are slow to respond to these emerging channels and are strategically conservative due to conflicts with existing channel businesses.
Today, we will look at the logical relationship between cognition, transaction, and delivery with users from the perspective of three-dimensional space.
**-01-**
**Cognition**
Today, information overload for users is a very serious problem. Describe a scenario: you scroll through Douyin, if you encounter good content, you like it, then scroll two more posts, and you'll likely forget what you just liked. This is typical content shock from large amounts of information.
But on the contrary, in a very noisy environment, no matter how loud the outside noise, if someone calls your name, you will immediately notice.
I give these two examples to illustrate that in an environment of information overload, users only care about content related to themselves and selectively ignore external information unrelated to them.
In such an environment, **companies need to rethink the logic of communication. Using user-generated content (UGC) and winning support from key opinion leaders (KOLs) in the media will become very important means to persuade consumers.**
**-02-**
**Transaction**
The diversity of channels makes transactions extremely convenient for users, but it also brings a significant challenge: user transaction touchpoints are full of uncertainty. What is certain is that the link between information and transaction is getting shorter, user operation after transaction is becoming more important, and the boundaries between marketing and sales departments are becoming increasingly blurred.
From a transaction perspective, people's behavior trajectories have changed from linear radius to jumping shopping. Information acquisition may come from offline physical stores, community discussions, or internet information, then attention, search, transaction, sharing, and purchase behavior become unpredictable.
**In the past, the core of channel management was efficiency; now, the core of building channels is user tolerance, that is, the coverage sector of target users' transaction touchpoints in three-dimensional space.**
In the past, offline stores and online e-commerce were two departments. Today, around users' life scenarios, we need to reconnect the three-dimensional space of online, offline, and community. Based on users' behavioral logic and life scenarios, rebuild transaction touchpoints.
These digital channels built on new infrastructure have an advantage: on one hand, technology brings visualization of user behavior; on the other hand, user online presence makes full lifecycle management possible.
Who users are, where they are, their behavioral trajectories, and building deep and close relationships with users, communication and interaction can also be achieved. In the past, transaction was the end; now, transaction is the beginning. In the past, the unit of operation was the store; now, the unit of operation is the person.
**-03-**
**Relationship**
In the past two years, traffic has become increasingly expensive, and many people have paid more attention to private domain traffic. But in my view, if we only look at private domain traffic from the perspective of traffic cost, we greatly underestimate its value.
Why is the relationship between us and users so important?
With increasing choices, the satisfaction and happiness that material goods can bring to people are diminishing. Moreover, as mentioned earlier, information overload makes users' attention more scattered. Whether I consume your product depends on what relationship I have with you.
If companies cannot build a closer relationship with users beyond material goods, they will find it difficult to compete with brands that build relationships with consumers in the future.
Facing highly homogeneous products, they will forever be trapped in the red ocean of competition.
New Distribution believes that **the highest level of building relationships with users is co-creation: co-creating products, scenarios, and meaning. Then let users spontaneously do secondary communication for the brand, completing the operational loop.**
**-04-**
**Delivery**
**In the past, the channel model was chain-like, called supply chain; now, the channel is network-like, called supply network.**
In the past, the marketing department handled cognition, and transaction and delivery were together, so distributors had to manage warehousing and logistics as well as distribution and sales. But today's online logic is that cognition and transaction are together, and delivery is independent. So in a sense, third-party logistics is a major trend.
**At this stage, channels can adopt a dual-track system, but in the future, companies need to consider how to build a delivery model based on integrated online and offline scenarios, where distributors can also deliver goods to homes, and 2C logistics can also deliver goods to small stores.**
This requires companies to use a system to connect central warehouses, city warehouses, and distributors' forward warehouses, based on user scenarios, to meet consumers' flexible and fast delivery needs for short-tail, mid-tail, and long-tail products. This is essentially a new channel distribution model.
**-05-**
**Digitalization**
Facing such complexity, companies must rebuild a complete digital marketing system based on three-dimensional space.
**Marketing system (communication, interaction, relationship): code system, membership system, coupons, fission tools, points tools...**
**Transaction system (transaction, order): C-end mini-program cloud store, B-end B2B, Tmall, Taobao...**
**Management system: SFA...**
**Supply chain system: ERP, WMS, OMS, TMS...**
This system can support the closed loop of cognition, transaction, and relationship for users in offline, online, and social spaces.
This closed loop is based on user behavior, supported by theory, and implemented with technology as a complete marketing system.
In the backend, it can support the full online operation of business flow, logistics flow, and capital flow:
**Business flow: distributors, wholesalers, small stores to consumers;**
**Logistics: NDC, RDC, FDC, OMS, TMS, WMS;**
**Capital flow: 2B to 2C transactions, settlement;**
It can also support BC linkage and one-stop delivery.
**-06-**
**The Ultimate Goal of Digitalization: Relationship and Efficiency**
Some marketing concepts have become explicit knowledge. Many consumer behaviors can be interpreted using behavioral psychology concepts. At the same time, if companies lack strong abstract thinking and theoretical support, it is difficult to understand many current business models. This also shows from another level that many things are gradually becoming invisible.
The US military has satellite internet, missiles, and aircraft carriers, but no matter how much high technology, once it comes to ground advancement, it still cannot do without the role of people.
So, no matter how much high technology in marketing, no matter how digitalized, it cannot do without the final drive of people.
Therefore, understanding human nature will become extremely important.


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