Currently, many companies have significant differences in how to integrate online and offline channels, and how to position the future market landscape for in-store purchases versus home delivery. Currently, many companies are thinking about online-offline integration and exploring new omnichannel models that combine in-store and home delivery. However, due to differences in understanding and positioning, there may be errors in direction selection. Some companies, either accustomed to traditional offline operations, particularly valuing the existing offline market, troubled by the complexity of omnichannel transformation, or constrained by various stakeholders, have adopted operational directions that favor offline and neglect online. For example, some companies, to protect their current offline market, have mispositioned their online channels by setting high prices on online mall products, aiming to "drive" customers to purchase offline. In the short term, this approach may have some effect. But in the long run, it is definitely wrong and even very dangerous. Of course, there are still a few companies that treat online and offline channels as opposing forces, which needs to be changed as soon as possible. Offline and online channels are complementary, not opposing. My judgment: In the future, omnichannel integration will be the main development direction. For general enterprises, it is necessary to build a development model based on omnichannel integration. For small enterprises, building a marketing system centered on online channels may be the primary choice. This is mainly based on the following three aspects: Looking at the future: Channel planning is a company's strategic planning capability. Strategic planning must clearly see the future. If you only look at the present and not the future, such strategic planning will definitely have problems. China has become a deeply internet-based society. Especially since 4G, the rapid development of mobile internet has completely transformed Chinese society into an internet society. Data shows that the number of internet users in China has reached 1 billion. But in reality, all Chinese people have integrated into the internet society. Because in an internet society, no one can live without it. Including infants and young children, they may not be registered netizens, but they are exposed to internet life from the start. The rapid development of mobile internet, as people say: 4G has changed life. Indeed, we all deeply feel the changes in lifestyle brought by 4G. 4G has brought changes to the habits, lifestyles, and social interactions of more and more Chinese people, especially changes in lifestyle and consumption purchasing methods. The essence of mobile internet development is the realization of social connectivity. It has transformed the previously "disconnected" social environment into a state dominated by mobile internet connections. 4G has achieved person-to-person connections. The upcoming 5G era will achieve connections between people and things, and between things, with connection units increasing from the current billion-level to tens of billions, hundreds of billions. The current industry status is that the internet has changed life, but many companies' marketing models have not fully integrated into the internet-connected environment. Many companies still use traditional marketing models. But this change has begun. In the internet-connected environment, all people, all companies, and all marketing activities will integrate into the connected environment and reconstruct new marketing models based on connectivity. In a connected environment, networked life is the norm, and omnichannel models are the norm. So if companies stick to traditional offline thinking and do not quickly integrate into this internet-connected society, they will certainly not adapt to the rapid changes in Chinese society in the future. Looking at users: In the new market environment, marketing transformation and model reconstruction should revolve around current changes in consumption patterns and user lifestyles, to adapt to or lead consumption changes. If users' consumption habits change, and companies do not change, or even regress, they will be eliminated by users. Current consumption purchasing methods have significantly changed, from traditional single offline in-store purchases to a combination of offline in-store and online home delivery. Moreover, more and more consumer groups are choosing more convenient online consumption methods. National Bureau of Statistics data: In the first half of 2019, China's total retail sales of consumer goods reached 19.521 trillion yuan, a year-on-year increase of 8.4%. In the first half of the year, national online retail sales reached 4.8161 trillion yuan, a year-on-year increase of 17.8%. Among them, physical goods online retail sales reached 3.8165 trillion yuan, an increase of 21.6%, accounting for 19.6% of total retail sales of consumer goods. Although the growth rate of online retail sales has gradually slowed in recent years, its growth rate is significantly faster than the growth rate of total retail sales of consumer goods. And the proportion of online retail sales is gradually expanding. More importantly, this growth is achieved despite many limiting factors, and in a situation where many companies have not yet regarded home delivery as an important purchasing method. Experts further analyze: From the total amount of physical goods purchases, online purchases account for 19.6%. But if we exclude categories like automobiles that mainly rely on offline purchases, some categories have online purchase proportions reaching higher shares, possibly 30-40% or more. So, from the numbers, home delivery has become an increasingly important purchasing method for consumers. Not only do the data show this, but in reality, more and more people of different age groups are gradually changing from single in-store purchases. More and more demand scenarios are also changing purchasing methods (for example, daughters buying things for elderly parents), and some categories (like bulky items such as large barrels of peanut oil) are gradually shifting to more convenient home delivery. More importantly, we need to see who is shifting to online consumption. Overall, this group is young, fashionable, and has stronger spending power. After Alibaba acquired RT-Mart, a key move was to leverage Taoxianda to focus on home delivery. According to data released by Alibaba executives at the recent Yunqi Conference: Taoxianda helped RT-Mart regain young users. Among new home delivery users, 34% were born after 1990; they have strong spending power, with 54% spending over 6,000 yuan annually on Taobao; they purchase an average of 2.35 times per month. This is exactly the customer base that traditional offline in-store channels desire but cannot obtain. Li Yonghe, head of Taoxianda, analyzed: Taking an RT-Mart store as an example, "Before the transformation, the store received 11,000 in-store users. After transformation, the reachable and operable potential customers are 238,000, while the total potential customers in the surrounding area are 840,000." Currently, the consumer groups purchasing online and demanding home delivery are exactly this kind: young people are the main force, with stronger spending power. Their lifestyle has become networked, and they are also affected by the high-pressure 996 work schedule, leaving them with little leisure time for in-store shopping, so they choose the more convenient home delivery option. If companies do not capture this main consumer group and serve them well, what other consumer groups will you serve? Do you dare to "offend" such valuable consumer groups? In the long run, marketing transformation must follow the changes in young people's consumption habits and methods, because they represent the future. So, the purchasing methods of the main consumer groups are changing, and companies must closely follow their purchasing method changes. "Forcing" them to buy offline is unrealistic and even dangerous, because you will drift away from them. Looking at value: Regarding building an omnichannel model, companies should not view online as just a simple sales channel. The omnichannel model will be the basic architecture for a company's future marketing system. Mainly: First, omnichannel will help companies achieve online marketing systems** In the future internet environment, online operation will be the basic architecture of corporate marketing systems. All companies will transform from traditional offline marketing systems to online marketing systems. The main goal is to achieve five online aspects: users online, products online, transactions online, marketing online, and teams online. The core of online operation is to solve the efficiency problems of traditional marketing models. Compared to online operation, traditional marketing models have serious efficiency issues.
Companies should achieve marketing online to solve the efficiency of customer operations, establish online methods to find users, build user connections, and better influence and manage customers; Through online operation, achieve direct connection between products and customers, enabling faster product reach to users; through online operation, better improve transaction efficiency; Through online operation, leverage the richer marketing tools that online operation can bring to effectively manage user value; Through online operation, achieve team online operation and improve team operational efficiency. Online operation is the basic business operation model for the future. Second, use online operation to achieve digital enterprise operations** In the future, Chinese society will gradually move from an information society dominated by human decision-making and operations to a digital era of digital decision-making and digital execution. The information society solved management process issues in enterprise operations, but at each business decision point, it mainly relies on human decision-making. This can lead to problems. In the digital era, the overall business decision-making process will become digital-centric, forming a new business system of digital decision-making, digital execution, and digital collaboration. The logic of the digital era is: connections generate data, data generates intelligent decisions, and intelligent decisions generate more accurate business efficiency. Currently, some companies are already attempting such digital decision-making systems, including companies like Hema and Li-Ning, and have achieved very good results. To achieve digital operations, companies must build an online operation system. With this system, they can continuously generate more complete full-chain data, and rely on complete data accumulation to achieve ultimate digital management. Digital operations can only be achieved in an environment dominated by online transactions. If companies do not quickly deploy an omnichannel operation system, they will miss the important opportunity for digital transformation. Third, omnichannel will help companies find users** The development of mobile internet has changed how consumers obtain product information, from primarily offline in-store to various online methods such as searching and content consumption. In other words, in the current environment, consumers are increasingly shifting to online methods for obtaining consumption information, with mobile phones becoming the main carrier. In such an environment, to find target users, companies must go online, using technical means such as apps and mini-programs, as well as online tools like content platforms and community platforms that effectively connect with users. At this stage, relying solely on offline cannot effectively find target users, especially young target users. Companies must use online means to find users, establish connections, create influence, and ultimately achieve effective management of target users through online means. Fourth, omnichannel will help companies establish an effective self-controlled channel system** In traditional offline channels, companies have not achieved effective control over channels because the overall distribution channels and terminal channels are mostly in the hands of channel dealers and terminal merchants. In the future, the omnichannel system will help companies effectively capture end users, improve channel distribution efficiency, and overall enhance channel control capabilities and marketing efficiency. Currently, some companies have made valuable attempts in innovating omnichannel systems centered on home delivery. According to media reports: Since Paris Water entered a leading e-commerce platform in 2017, it has maintained 800% year-on-year sales growth for two consecutive years. From 2017 to 2018, on another e-commerce platform, Paris Water's sales exceeded 100 million yuan for two consecutive years. Traditional mineral water derives over 65% of sales from modern channels, but for Paris Water, the largest sales share is online, accounting for 37.5%, followed by modern channels. As of July 2019, Paris Water placed 40% of its domestic sales on Tmall Global, compared to only 5% in the same period in 2018. During the channel transformation, Nestlé also continuously adjusted Paris Water's product forms and sales specifications to meet more consumer needs. For example, the currently popular four-bottle and six-bottle packs were a sales proposal proposed and adopted by an e-commerce platform cooperating with Nestlé after discovering that consumers were shifting from single-bottle trial purchases to multi-bottle stock-up purchases. In recent years, Nestlé has focused on expanding distribution to more channels, such as coffee chains like Starbucks, bars, more large supermarkets, convenience stores, and e-commerce. This is an interesting case. Previously, the industry generally believed that products like water are instant-consumption products and should mainly be sold offline, but Paris Water made online its main channel. This case illustrates: Consumer purchasing methods are changing, gradually shifting from single in-store purchases to a combination of in-store and home delivery. In the future omnichannel environment, home delivery will definitely become a very important consumption purchasing method. In summary: Companies must clearly see the current market reality and the future market development trends. They must transform to a new omnichannel operation model and build an omnichannel marketing system as soon as possible. Sticking to traditional offline channels, or only focusing on the immediate market without considering future market development, may lead to serious directional errors. Tips will be paid 400-2000 yuan once adoptedChina FMCG + Internet Professional New Media****Dedicated to FMCG manufacturers' transformation and upgrading and channel digital solutions