Opening: From the human-wave tactics of traditional deep distribution, to the traffic tactics of e-commerce, and now back to offline. This is a process of negation of negation, spiraling upward. The boundary between online and offline is now roughly clear: large items (home furnishings, appliances, 3C, etc.), high-value-added products (cosmetics, clothing, etc.), and long-tail products (snack foods, small goods, etc.) are the online battlegrounds; FMCG, high-experience products (such as wine and tea), and instant-consumption goods are the offline stronghold. In the future, the online-offline split will be roughly 30-70, with offline still holding the larger share. New Street Battle. This is our basic judgment on returning offline. This is the opening article of the 'Returning Offline' series. ——Liu Chunxiong ****In the Days Without Online—Human-Wave Tactics During the era of China's economic boom, the industry grew by more than ten percentage points almost every year, and the evolution of Chinese marketing also advanced with leaps and somersaults. Before 2000, the mainstream channel model in China's consumer goods industry was wholesale or direct operation. So-called wholesale meant that in the contradiction between the growing material and cultural needs and the backward productive forces, the producer was the boss; with capacity, there was market. After products were produced, finding a number of wholesalers could solve the battle. This period was basically the F2B era: one factory + a few big salespeople + dozens or hundreds of wholesalers, and sales were completed this way. Around 1990, many companies felt the congestion and competition at the wholesale end and took a step forward by setting up direct-operated branches or offices in some regions, bypassing wholesalers to face terminal customers directly. This was roughly the initial version of F2B2b. After a period of operation, companies found that the direct sales model was heavy, inefficient, and prone to leaks and drips; their own people couldn't be ruthless, so this direct sales model was gradually abandoned. But the market still had to be done! Against this backdrop, the deep distribution model based on the F2B2b principle was born. Deep distribution has many variants, but the general rule is grid management, seizing terminals, and the growth of enterprise performance is directly proportional to the number of terminals! Hundred-billion and trillion-yuan enterprises in consumer goods were basically beneficiaries of the deep distribution dividend. The intuitive manifestation of this model is: the bigger the territory, the bigger the brand! The implicit expression is: strength in numbers. Through deep distribution, companies trained a large number of loyal troops: direct forces (business systems), militia organizations (dealer personnel), and local organizations (store owners), and built a talent organization that swarmed forward, one after another, forming organizational momentum! Brands are flowers growing on channels and organizations, flowers piled up with human-wave tactics! The biggest feature of the deep distribution system is human-wave tactics; without people, the system shrinks! The human-wave tactic is reflected in the large number of people. Why so many? Because deep distribution needs to reach terminal stores, and there are more than 6 million terminal stores in China. Who is fighting street by street and alley by alley for these 6 million stores? Distributors. Therefore, the number of distributors for first-line brands is 5-10 times that of business managers (responsible for dealers). We call this tactic street battle! ****In the Days When Offline Was Voiceless—Traffic Tactics The rise of online roughly began in 2010. The commercial rise was mainly led by Taobao brands, with entrepreneurs flocking to open online stores. As of January 5, 2021, there were 334,511 Tmall stores and 10,260,794 Taobao stores. In 2009, Double 11 sales were 50 million yuan, with 27 brands participating. In 2010, Double 11 sales were 936 million yuan, with 711 stores participating. In 2011, Tmall Double 11 sales were 3.36 billion yuan, with Taobao and Tmall combined at 5.2 billion, and 2,200 stores participating. The time when deep distribution lost its voice was also around 2010. After the advent of the internet, it attracted a large number of young people to employment, who stayed away from and despised the deep distribution concentration camp known for execution, and went to the internet industry full of creativity and imagination. In the days dominated by platform thinking and traffic thinking, whoever could buy traffic was the king. Buying traffic requires money, so capital ran rampant in the internet world. What is traffic? Burning money! That's the summary in one sentence. The internet is a world of money and creativity. If you have an idea, you can get financing to make it happen. At the small end, you overdraw Huabei and Jiebei; at the large end, you go through rounds A to F of financing, then cash out and ascend to immortality! Giant platforms adopt a betting investment strategy: nine out of ten investments may fail, but one success can fill the coffers! Thus, deep distribution was despised, poached, and talents flew away, unwilling to live the hard life of facing terminals and turning their backs on management. Various internet languages rose and fell. The magazine "Sales and Marketing" (销售与市场), once regarded as the Whampoa Military Academy for marketers, gradually declined. Fewer people talked about channels, and even fewer about channel management. Even in many hundred-billion-level large enterprises, basic skills like street sweeping were lost. In the latter half of the internet era, the concept of new retail emerged, attracting a group of people to be fickle, chasing trends like the kitten in the story that chases butterflies and dragonflies instead of fishing, unable to sit still. When the wind stops, not only do pigs fall, but chicken feathers also land, possibly leaving a mess! When strategic investment stops, major platforms lay off employees, and Taobao and Tmall stores, like offline stores, are sold with tears... When money is gone and traffic is gone, where do people go? ****Returning Offline: The New Street Battle In 2020, the pandemic drove rapid growth in online sales, with growth rates once exceeding 30%, especially in live-stream e-commerce... After 2021, with the normalization of the pandemic, e-commerce growth began to decline. Under the influence of many media and so-called experts, many people believe that e-commerce has become the primary channel for consumption, while physical retail is weak and on the verge of bankruptcy. In reality, e-commerce sales account for only about 30% of total retail sales of consumer goods, and 70% of goods are sold through physical stores. The 30-70 split between online and offline in the consumer goods market has basically been finalized, with the east wind and west wind in a stalemate. Online has shifted from strategic offense to strategic defense. Probabilistically speaking, in the consumer goods field, online has not fundamentally shaken offline's dominant position. Except for some long-tail products, the hundred-billion and trillion-yuan brands in the mass market are still offline overlords! At the end of last year, I said in a sharing: The fate of new consumer brands: born online, built by capital, limited offline, endangered in street battles! New consumer brands appear online one by one, but offline they are disgraced. The reason is that offline, problems that money can solve are not problems; management problems are the real issue... The fate of new consumer brands: Born online, built by capital, limited offline, endangered in street battles! Offline is the myriad mountains of channels. If you can't pass the management test, can't master the basic skills of channel management, and can't endure the hardship of crossing thousands of mountains and rivers, new consumer products are like wearing high heels on a country road—you don't get far and you sprain your ankle... Online and offline are intertwined. To put it colloquially, "30 years east of the river, 30 years west of the river"; in the words of our ancestors, it's the Tai Chi yin-yang fish; scientifically, it's the negation of negation, spiraling upward. There might also be a fence-sitting view: online and offline integration, indistinguishable from each other. If traditional offline is the street battle of human-wave tactics, then returning offline is the new street battle, which is deep distribution supported by BC integration! Street battle, also known as "urban warfare" or terminal warfare, is a battle fought street by street, house by house, usually in cities or large villages. Its notable features are: first, close combat and hand-to-hand fighting, with great cruelty; second, the intermingling of enemy and us, with high danger. Urban street battles have gradually formed with the development of cities and the expansion of war scale. The development of urbanization means that if war occurs in the future, urban street battles will still be inevitable and will become an important form of combat. The logic of street battle is vastly different from the logic of traffic. Street battle requires fighting for every street and alley, taking them one by one, and not even one nail can be left unpulled. It absolutely requires long-termism. Whether it's "sweeping the streets" for terminals or "sweeping people" for users, it's harder than positional warfare. Traffic logic is capital "flooding," which can achieve quick victory, but the result may be quick birth and quick death. The new street battle is first a street battle: every alley must be contested and a red flag planted. At the same time, the new street battle has new tools—internet tools. The old street battle was bayonet fighting; the new street battle is beyond-visual-range warfare, where you might be eliminated before you even see the enemy. Traditional deep distribution visits were basically street battle troops composed of naked eyes, smell, experience, and flesh. Tactical actions were accumulated through training and actual combat experience. What is the difference between the new street battle and traditional deep distribution? The old street battle was fighting for every street and alley—fighting for terminals, a 2B battle. The new street battle not only fights for every street and alley but also for every household, and also fights 2C battles. In today's popular terms, it's a battle for bC integration. The new street battle era basically has the capability of F2B2b2c, using a system of systems + people, with tools to accurately obtain information. It can not only sweep streets but also sweep people; it can enclose land and also enclose people! The new street battle structure for hundred-billion brands: thousands of customers, ten thousand salespeople, millions of terminals, and hundreds of millions of users! Traditional deep distribution is a connection method composed of salesperson human chains. The new street battle is a new combat system based on deep distribution, armed with human chains + internet tools! The battlefield may not have changed, but the weapons and tactics have changed drastically. The legend of taking the enemy general's mobile phone from amidst ten thousand troops, strategizing and winning decisively from a thousand miles away, may become reality! Source: Teacher Liu's Digital New Marketing (ID: liuchunxiong1964) Are you "watching" me?