What is the essence of digitalization? It's still a tool! What is the essence of sales? It's still business! Business needs good product selection (Product), good pricing (Pricing), good distribution (Place), and promotion (Promotion). Digitalization is not the most essential! The current topic of digitalization is a bit overheated; it seems like nothing is right without digitalization, but that's not the case. Digitalization is not the core of business but a tool for doing business. In your business, if the main product selection is wrong, it won't suddenly sell well just because digitalization is added. Whether it's digital transformation or channel digitalization, digitalization solves more management problems! But is the underlying logic of sales growth management? No! Whether it's manufacturers, distributors, or retailers, the core work to do well is nothing more than the 4Ps—product selection, pricing, distribution, and promotion. The underlying logic of business is still the 4Ps! Your core business is still doing business itself, maximizing performance through efficient operation of the 4Ps, and digitalization is an addition on top of doing your core business well. This addition may reduce the difficulty of daily management and lower communication costs, but if your product quality is poor or customer experience is bad, even if you implement a system, the product experience won't improve! The benefit of digitalization is to help good people and teams that are already doing well to run the business more efficiently. For example, managing the distribution of 1,000 stores through a system can be more efficient, but if those 1,000 stores already have poor distribution, even a system won't solve it because the system can't solve the fundamental problem of poor distribution! Through practical experience, the digitalization currently discussed in our industry mainly stays at the level of solving management problems. For 1,000 stores, implementing a digital management system will improve management efficiency, but the core actions driving your 4Ps haven't fundamentally changed. Digitalization is just an addition to these core actions, just a management tool. The previous management actions through Office software reports have become digital management on mobile devices. We should not mythologize or blindly believe in this, but rather explore and think objectively and truthfully. Today, our FMCG industry talks about digitalization everywhere, and everyone thinks they are doing digitalization. However, we find that many companies and places are not truly digitalized but are IT and informatization! Of course, IT and informatization are very important, but making digitalization just a tool for communication and exchange goes against the original intention of digital transformation! Many experts who keep talking about digital transformation are either selling systems or doing consulting. In fact, these so-called experts haven't done much sales business work, or they've been away from frontline sales for a long time. They can't feel the physical and mental exhaustion of grassroots sales employees being tormented by "pseudo-digitalization," nor can they feel the repetitive labor and redundant actions that frontline operational teams put in to submit digital homework.
If terminal sales representatives spend more time and energy entering orders on mobile systems for digital transformation; If distributor comprehensive business personnel use multiple manufacturer systems to check in and report orders at the same terminal for digital transformation; If brand frontline teams, for digital transformation, have to go through the system again for actions that used to be solved with a few reports; If headquarters and middle platforms, for digital transformation, need to use new information systems to run data for analysis...Is this kind of "digital transformation" really what we need? Over the years, generations of excellent marketers have done data analysis in the era of big data, and it's not bad at all. Many information and analyses are not problems of system tools but of people's initiative and ability. Is it only when digital transformation appears that distributors and retailers will hand over all data and cooperate with manufacturers to implement systems for visualization? Problems that weren't solved before won't be solved quickly in the future. Digital tools are ultimately just tools! Whether new tools or old tools are better and more efficient in the hands of different craftsmen is uncertain! In the past, to see if a sales organization had data capability, you mainly looked at Excel usage, prevalence, and proficiency. Now? You still need to look at data usage, just that the data is on mobile terminals, essentially no different. Even if you make a Dashboard for real-time electronic boards, it still requires people to interpret, analyze, and use it. Digital transformation and upgrading should not be a top-down executive project, but a bottom-up efficiency improvement system based on daily operational actions. Don't mistake IT informatization for channel digitalization! Of course, as a veteran in the FMCG industry with over 20 years of experience, the author believes that current digital system tools have a tangible effect on channel evolution and promotion. Before the pandemic, less than 20% of the street-corner mom-and-pop stores we covered daily had the ability to operate online. After the pandemic, many offline small stores opened delivery businesses by connecting to O2O platforms like Meituan, Ele.me, and JD Daojia. This is a practical manifestation of digitalization. Previously, business personnel responsible for small stores not only had to do offline distribution but also manage cloud distribution and promotion on home delivery platforms. Enabling the vast offline mom-and-pop store owners to do business online actually allowed millions of small shop owners and vendors to touch the productivity of digitalization. They began to use more advanced internet technology to transform their traditional business models. FMCG digitalization has actually accelerated the transformation and upgrading of traditional offline retail! This pandemic turned many emergency technologies into daily technologies. In the past, delivery was an occasional out-of-plan order for small store owners, but now it's already the main ballast order for daily business. In the current FMCG industry, there are actually no truly traditional channels; it's just whether the original mainstream channels are using the most advanced and effective internet tools to upgrade and transform their business. How to use digital technology to improve their operations and promote the progress and development of traditional channels. Digitalization is a trend and a necessary path. I think we should first solve which digital transformation actions are the most urgent and efficient. Honestly speaking, if a sales organization (including manufacturer grassroots sales organizations and distributors) wants to do digital transformation, first do the following three things—
First, "online business processes" Second, "online inventory management" Third, "online data analysis"
"Online business processes" First solve the entire process and flow of sales representatives from manufacturers and distributors, from leaving the morning meeting to returning to the company to submit orders at night. This has been promoted in the industry for many years. If this can't be solved, don't advocate digital transformation. "Online inventory management" ! You heard it right. Shouldn't such basic infrastructure have been popularized and implemented by every distributor long ago? The reality is not so! Many distributors still haven't done "first-in, first-out" inventory management well... "Online data analysis" is not about moving more data analysis to the cloud, but about extracting the most important and core data based on the integration of data from manufacturers, distributors, and terminals. For example, the simplest matching of distributor secondary shipments and downstream terminal social sales data. These simple basic data look ordinary but are the most useful and efficient for business analysis. Don't fool yourself into undertaking a big "digital transformation" project. First achieve the above three "online" processes, and you can solve many practical business operation problems. Big projects often solve small problems, while small projects often solve big problems.