Due to the nature of my work, I frequently travel for market research, and a key way to gather effective market information is by chatting with terminal store owners. Many have asked me how to succeed in the tobacco and alcohol store business, so I'm sharing my thoughts here. According to Tianyancha data, there are about 2.95 million such stores in China, facing intense competition and high saturation. As I often say, 'Previously it was an era of pioneering; now it's an era of grabbing meat,' meaning the industry is undergoing consolidation and reshuffling, what is now called high-quality development.

Darwin said in On the Origin of Species: 'It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.' Here, 'super tobacco and alcohol store' does not refer to scale, but to terminals with super evolutionary ability, able to resonate with the times and the market. You can't find a new continent with an old map. Management guru Peter Drucker said: 'The greatest danger in turbulent times is not the turbulence itself, but to act with yesterday's logic.' This article elaborates on three aspects: the current situation facing tobacco and alcohol stores, key variables affecting their revenue, and super-profitable strategies.

Ten Current Situations Facing Tobacco and Alcohol Stores:

1. Three Highs and One Low, Traffic Fragmentation. Three highs: high rent, high labor costs, high utility bills; one low: declining profitability; traffic fragmentation means customers are intercepted by online e-commerce platforms, competitors, and fragmented consumer channels.

2. What Sells Well Doesn't Make Money; What Makes Money Doesn't Sell Well. Branded products have transparent prices and low margins, but consumers demand them by name; profitable products are hard to sell, such as: old brands with new products; old brands with old products in new markets; old brands with development products; new brands with new products; knockoff products; and unknown brand products. Consumers are increasingly knowledgeable and skeptical, making recommendations difficult.

3. Unwilling to Recommend, Afraid to Recommend, Unable to Recommend. Unwilling: high recommendation cost, troublesome, and thankless; afraid: intense competition, fear of annoying customers and losing them, risking losing more than gaining; unable: lack of a pleasant and non-offensive method for recommending new products.

4. Only 'Sitting at the Station,' Not 'Going Out'; Only 'Fishing,' Not 'Raising Fish.' This refers to traffic acquisition: combining positional warfare (keeping the store, inviting customers in, in-store experience and transactions) with mobile warfare (going out, developing group buying and PR activities, networking). Passively relying on natural traffic without thinking about increasing customer interaction and loyalty, improving service and satisfaction, from few to many user referrals, from low to high frequency.

5. Having a Storefront but No Image. Unattractive signage, poor interior environment, messy product displays, and unreasonable customer flow design. Customer choice is directly related to in-store shopping experience; no one wants to shop in a dirty, disorganized store, or even enter. The storefront, display combinations, lighting, product placement, and atmosphere can attract attention, generate interest, and stimulate desire.

6. Everything for Everyone, Spreading Thin. Having everything but no main products, no key brand partnerships, and nothing selling exceptionally well. While multiple categories and items are a source of traffic, stocking too many categories ties up capital and fails to secure strong support from any single brand. Companies prefer dedicated terminals, not promiscuous ones.

7. Can 'Run on the Ground' but Not 'Fly in the Sky.' Only traditional store sales, not using internet tools for traffic generation, communication, user operation, and sales conversion.

8. Can 'Fight Alone' but Not 'Fight in Groups.' Managing one store is fine, but multiple stores become chaotic; a couple can handle it, but hiring staff leads to disorder.

9. Have Moves but No System. Single-point thinking without systematization, unable to effectively summarize and replicate, overly dependent on individuals.

10. Unclear Positioning. Where do I come from, where am I going? What business am I really in? Is it a 24-hour convenience store, a tobacco, alcohol, and tea shop, or a general store? Clarifying positioning allows focusing resources and presenting a unified voice.

Key Variables Affecting Super Profitability

First: Store Revenue Formula. Store revenue = customer traffic × conversion rate × average transaction value × repurchase rate. Simply put, more customers enter, more actually buy, they buy more products, the products are higher value, and there are more repeat customers. However, for tobacco and alcohol stores, deep user operation is more important than expanding the entrance. Tobacco, alcohol, and tea are relatively high-value products; customers are cautious about channel choice and trust in the owner. VIP customers are cultivated through years of resource accumulation.

Second: Consumer Purchase Journey. Need → Enter store → Notice → Approach and inspect → Interest → Ask and learn → Meets expectations → Purchase → Use experience → Share and recommend. In-store flow design, product displays, and scenario creation all affect purchase decisions. Design around the consumer's journey and seize every potential transaction touchpoint.

Super-Profitable Strategies

1. Store Positioning. Who are your customers? How do you provide unique value? How do you communicate that value? Positioning determines survival; it's the '1' around which all operations revolve. Position based on your resources, such as specializing in aged liquor, which conveys professionalism.

2. Business Structure. Determine based on your resources, positioning, and geographic location. The best category combination is tobacco, alcohol, and tea—the social gifting trio—with high added value and similar product attributes. The best product mix: image products to establish strength and channel status, profit products to generate income, and traffic products to attract customers and convey value.

3. Expand External Traffic. Retail must find ways to open the entrance and increase footfall, typically through traffic products, WeChat Moments event posters, live streaming, paid ads on WeChat Moments/Douyin, cross-industry collaborations, and event sponsorships.

4. Build Internal Circles. Store owners' resources typically include: classmates, fellow townspeople, colleagues, relatives, and business partners. Anthropologist Robin Dunbar of Oxford University found that the cognitive power of the human brain allows stable relationships with about 150 people. Dunbar also found that this social circle is not uniform but has four layers: the innermost has four closest confidants, often relatives; then eleven people; then thirty; and then 129. KOLs are opinion leaders who endorse, create word-of-mouth, and lead; KOCs are opinion consumers who use heavily and influence others to follow; Big C are heavy users for personal use, regular drinkers; General C are light users, mainly drinking at key occasions. Understanding the consumption structure of baijiu target groups allows targeted operations. The logic of baijiu operation is: a few create word-of-mouth, circles build consensus, and breaking out forms trends. Operational orientation: vertical deepening—within a single industry or system, increase the number and breadth of drinking groups, upgrade product structure, and increase frequency. Horizontal broadening—expand from one industry to multiple, from one system to multiple. Supporting measures: tasting events for cognitive experience, taste cultivation, and relationship interaction; experience trips for strong cognitive education; entertainment trips for deep customer relationship building and maintenance. Operational methods: 'Absorbing Star Method': find KOCs and capture all their friends; 'Inbreeding': owners bring owners, friends bring friends, network diffusion; 'Persistent Pursuit': target and persist until sales conversion; 'One Go': drink three times consecutively without long intervals.

5. Integrate Upstream. Relying solely on your own strength makes some operations difficult; seek upstream brand partners with strength to form strategic alliances. Leverage brand resources and promotional expertise for win-win cooperation, co-creation, co-existence, and sharing. Be careful to choose the right brand manufacturer, or you may invite a wolf into the house.

6. Upgrade Store Functions. From a purely transactional physical space to an image store for product display and brand image, to an experience store with front store and back office, driven by evolving consumer needs. Reconstruct the relationship between people, goods, and place; the store should be a venue for scenario experience, tasting interaction, transactions, and socializing, not just a place to trade.

7. Build Personal IP. Precise positioning—your most distinctive value; memorable name—like 'Big Coat Brother,' 'Straw Hat Sister,' 'Jiang Big Tooth'; distinctive image—like Ji Gong with torn clothes, hat, and shoes; interesting stories—like Haier's story of smashing refrigerators; stories endure, and those who tell them are remembered.

8. Embrace the Internet and Digitalization. Operate WeChat Moments; although its promotional function has declined, careful management still yields results. The 'Four Pieces' (WeChat name + avatar + tag + background wall) should be aesthetically pleasing and align with your positioning. Content should be 'interesting, emotional, useful, and tasteful'—avoid posting ads all day; think from the audience's perspective and post what they want to see. Use short videos + live streaming for traffic, community interaction for engagement, and mini-programs for transactions.

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