---
title: "The Changing and Unchanging Impact of Internet E-commerce on Offline KA"
description: "KA is not just hypermarkets; it is a collection of the most important customers across various channels. Consumer behavior has given rise to different channel types, and key accounts are the most important customers selected from each channel, including hypermarkets, supermarkets, convenience stores, etc. Only by fully understanding the differences and connections between KA and hypermarkets can we further discuss how to respond to the impact of the Internet on KA. Sometimes it's easy to blame the Internet for declining hypermarket sales. If we ask corporate managers about the problems in cooperating with hypermarkets, the answers are roughly as follows."
author: "曹扬"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2021-12-15"
language: "en"
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# The Changing and Unchanging Impact of Internet E-commerce on Offline KA

> KA is not just hypermarkets; it is a collection of the most important customers across various channels. Consumer behavior has given rise to different channel types, and key accounts are the most important customers selected from each channel, including hypermarkets, supermarkets, convenience stores, etc. Only by fully understanding the differences and connections between KA and hypermarkets can we further discuss how to respond to the impact of the Internet on KA. Sometimes it's easy to blame the Internet for declining hypermarket sales. If we ask corporate managers about the problems in cooperating with hypermarkets, the answers are roughly as follows.

**KA is not just hypermarkets; it is a collection of the most important customers across various channels. Consumer behavior has given rise to different channel types, and key accounts are the most important customers selected from each channel, including hypermarkets, supermarkets, convenience stores, etc.**
Only by fully understanding the differences and connections between KA and hypermarkets can we further discuss how to respond to the impact of the Internet on KA. Sometimes it's easy to blame the Internet for declining hypermarket sales.
If we ask corporate managers about the problems in cooperating with hypermarkets, the answers you get are roughly as follows.
  * **Issues with various fees charged by hypermarkets, and accounts receivable.
  * **Low input-output ratio, how to invest fees, and who to invest fees with?**
  * **Issues with communication cost and efficiency with customers.**
  * **Issues with store execution and refined management.**
This shows that these are pain points faced by brand owners!
In fact, cooperation issues with customers have always existed since hypermarkets entered China, but the Internet has fully exposed them.
This article focuses on the changing and unchanging impact of the Internet on KA, revealing the deep-seated issues in key account management and providing cognitive solutions.
**Change includes two levels of meaning:**
1\. The impact of online e-commerce on offline, with reduced foot traffic, brings about significant changes. This is a macro trend. If we look at channels in detail, the Internet's impact varies by channel; for example, hypermarket customers are hit hardest, while convenience stores are relatively less affected.
2\. From the enterprise perspective, adjusting channel strategies and adjusting the list of key accounts.
**Unchanged: From the enterprise perspective, whether online or offline, they are all customers of the enterprise, and key account management will not change.**
Therefore, the underlying logic of key account management has not changed, and the need for enterprises to improve their key account management capabilities will not change!
The question left for enterprise managers: How to keep the enterprise invincible in the changing Internet era?
This article provides recommendations from the cognitive level, namely, to achieve growth amidst change, enterprises should do three things:
**1\. Achieve growth by increasing product distribution in the existing market.****2\. Achieve growth by taking market share from competitors among existing customers.****3\. Achieve growth by developing new customers.**
To achieve the above goals, it is necessary to improve the enterprise's key account management capabilities.
It's like if you want to play basketball or football, to win the game, you first need to improve your physical fitness and stamina to avoid injury during intense exercise, and good stamina ensures you can last through the game.
I repeatedly emphasize this to draw the attention of enterprise managers. Most of the changes brought by the Internet to KA are external and superficial.
Whether you want to increase distribution, take share from competitors, or develop new customers, the enterprise needs customer management concepts, professional people, and professional methods.
Therefore, **to respond to the impact of the Internet on KA, enterprises need to improve their key account management capabilities!**
#### **The Changing Impact of the Internet on KA**
**I. The Impact of the Internet on Physical Stores**
As everyone knows, offline physical stores are experiencing reduced foot traffic and declining sales, which is an indisputable fact. For enterprises, we face "seeking growth amidst change."
What you may not know is that when looking at modern trade channels—hypermarkets, supermarkets, and convenience stores—the situation is not entirely the same.
The hardest hit are hypermarkets, followed by large supermarkets. For example, in the first three quarters of this year, Yonghui Superstores reported a net loss of 2.178 billion yuan.
This is Yonghui's first loss since its listing 11 years ago. Ten years ago, Yonghui was recognized as the retailer with the most development potential in the industry.
Of course, Yonghui's losses have multiple causes, but under the impact of mobile Internet, declining offline foot traffic is an indisputable fact.
The opposite is true for small formats: small supermarkets and convenience stores are thriving. The main reason is that online e-commerce cannot effectively address the pain point of serving the consumer's last mile.
For example, if a consumer at home wants to eat a piece of bread or ice cream, note that they want to eat it immediately. Ordering from JD.com would take at least 6 hours, and even Ele.me would take at least 30 minutes.
The consumer has an option: go downstairs right away and buy bread or ice cream at a convenience store or small supermarket within 15 minutes.
Thus, small-format convenience stores and community supermarkets can solve this consumption scenario.
It must be acknowledged that the pandemic has added insult to injury for physical stores. For convenience stores, the impact of online competition is less than the impact of the pandemic.
So, **when breaking down modern trade, hypermarkets and large supermarkets are more significantly impacted by the Internet, while convenience stores are less affected.**
As company managers, you can combine the above ideas with your own market and channel characteristics to conduct a detailed analysis of your channels.
**II. Under the Impact of Online, How Should Brand Owners Treat Offline Modern Trade? Is It Still Worth Significant Investment?**
Facing declining traffic in modern trade, Mr. Liu Chunxiong said: "Huge stock, declining traffic. Two aspects of one entity. Huge stock means you have to do it; declining traffic means find a way out early."
Here is my understanding of this issue.
**1. Huge stock means you must do it:**
  * Many enterprises' main business is still offline, and modern trade is the absolute main force. The increment from online business cannot compensate for the loss of offline sales. First, for traditional, large brand owners, most business still comes from offline. Online retail does impact offline, but it will not completely replace offline business.
  * Modern trade is an important scenario for brands to communicate with consumers; it is a brand promotion front. Of course, brands now have online promotion fronts, but truly big brands will not bet solely on online or offline; they will definitely adopt a multi-channel development strategy. Moreover, offline is more direct and provides a stronger experience, which online promotion cannot match.
  * Whether from the perspective of sales volume, brand promotion, or consumer communication, modern trade is a front that brand owners cannot abandon. Unlike the past, you need to use input-output analysis to ensure resources are invested in stores with high sales.
**2. Declining traffic: find a way out**
  * Make your performance growth faster than customer growth and faster than all competitors. For example, if customer business is -2% growth, you need to achieve -1% or +2%. Of course, this requires professional operational methods. This is from a theoretical perspective; if applied to your enterprise, specific data analysis is needed.
  * Achieve growth by increasing product distribution in the existing market: One terrible thing is that the sales team complains about declining foot traffic while many points of sale have no product distribution. The team needs to focus on: **ensuring all points of sale have stock, and continuously increasing the number of SKUs at each point of sale.**
  * Achieve growth by taking share from competitors among existing customers: When you have products at the point of sale and a full range, what you need to do is take share from competitors through display and promotion. This is an important way for you to still grow in a declining hypermarket environment.
  * Adjust investment strategy in segmented areas: From a channel perspective, don't be confined to hypermarkets; seek growth from supermarkets and convenience stores. From a regional perspective, focus on developing modern trade in third- to fifth-tier cities.
To achieve the above four points, **as an enterprise manager, you need to have a professional team and professional operational methods!**
******The Unchanging Impact of the Internet on KA**
At the end of the first section, the answer was already revealed: key account management will not change. I will combine the actual problems and corresponding solutions in enterprise cooperation with KA customers to give you a preliminary understanding at the cognitive level.
**I. Enterprise Pain Points**
We select three representative pain points from enterprise issues: planning, execution, and strategic cooperation. We will introduce them in detail through problem description, solution ideas, and key skills needed.
**Pain Point 1: High investment rate, losing money in hypermarkets**
  * Problem description: After investing in display and promotion for a hypermarket, the ratio of invested costs to revenue from sold products exceeds 50%, resulting in no profit from selling products, and the more sold, the more loss.
  * Solution ideas: As a manager, you need to know whether there is an annual customer plan for that customer? Is there a rolling three-month market plan each month? Are the planning methods and budget professional? Are there issues with plan execution? Any problem in these operations can affect profit.
  * Key skills: Solving the problem requires corresponding skills, namely the ability to develop annual customer plans, the ability to develop rolling three-month market plans, expense management processes, and customer communication and negotiation skills.
**Pain Point 2: Customer non-cooperation, difficult store execution**
  * Problem description: Low execution rate of annual agreements, low promotion execution rate, and stores not executing displays or activities agreed with headquarters.
  * Solution ideas: As a manager, you need to analyze the reasons for low execution rates. Are the execution standards too high? Are there issues with the execution team? Are there communication issues between customer headquarters and stores? Does the team have the necessary communication skills? Is it resolved through regular business reviews?
  * Key skills: Skills involved in solving these issues include annual agreement development and negotiation skills, coordinating customer headquarters and stores, team store execution skills, and regular business review skills.
**Pain Point 3: Poor customer relationships, growth problems**
  * Problem description: Unable to get good display positions in stores, unable to get good promotion slots, difficulty meeting customer senior management, and planning and execution issues remain unresolved.
  * Solution ideas: Determine whether the communication level between the two parties is relatively low? Do enterprise senior management and customer senior management have regular visits? Is a strategic cooperation agreement signed? Do they have the capability for joint business planning (JBP)? Are regular business reviews conducted with the customer?
  * Key skills: Strategic cooperation skills, joint business planning capability, and regular business review capability.
**II. Master Key Account Management Methods to Respond to All Changes with Unchanging Principles**
**Unchanging refers to continuously improving key account management capabilities.****All changes refer to Internet impact, channel changes, customer changes, customer cooperation difficulties, etc.**
Modern trade channels—hypermarkets, supermarkets, convenience stores—are imported goods, brought to China by world-renowned retail enterprises such as Walmart, Carrefour, Sam's Club, Metro, 7-Eleven, and Lawson. The Chinese have built upon this, taking category management, display and promotion, and consumer communication to the extreme, and of course, also taking fees and the use of merchandisers to the extreme...
Key account management is also an imported product, introduced to China by Fortune 500 FMCG companies. Both management concepts and operational methods are advanced and professional. After thirty years of sedimentation, these good methods have been localized and are more suitable for China's national conditions.
Key account management methods have gone through three stages:
**Stage 1: Copying from abroad, using it first, characterized by fragmentation and lack of system, with multiple methods and schools.****Stage 2: Systematically learning advanced methods through capability improvement projects, first letting one team master professional skills.****Stage 3: Establishing systematic management capabilities and gradually migrating them to every KA team nationwide.**
The underlying logic of customer management is:
**1. Possess systematic and complete operational skills, solve problems in a targeted manner, accumulate experience, and improve capabilities.****2. When encountering new market and customer challenges, take measures based on operational skills, accumulate experience, gain new methods, and improve capabilities.**
This is responding to all changes with unchanging principles!
**Final Thoughts:**
We have delved from the surface of Internet impact, through the pain points faced by enterprises, and introduced the ideas and methods of key account management from the cognitive level. I will introduce them more systematically and specifically in later articles.
Key account management concepts and methods are a complete and systematic methodology. For various reasons, their role and value are greatly underestimated by enterprise managers and sales teams. The reasons are roughly as follows:
  * **No opportunity to learn the complete methodology; if you haven't seen it, you naturally don't know it.**
  * **Having been exposed to and mastered some techniques, thinking you've mastered everything. Often focusing on the operational level, neglecting the strategic and planning levels.**
  * **Position issue: Because the enterprise is losing money on customer business and lacks more professional methods to improve, affecting the achievement of profit targets, they suppress business expansion with these customers. This is common at the enterprise management level.**
  * **Talent issue: No professional team, or no talent who has mastered professional methods. Cultivating a key account management talent takes time and cost, and once cultivated, they are easily poached with high salaries.**
What is also underestimated by enterprises is customer professionalism. Some enterprise managers have a single channel for obtaining customer information, mainly from the frontline sales team, and information is easily organized and processed as it passes through layers. This leads to managers knowing very little about the true situation of customers, resulting in many misunderstandings...
What is an enterprise's goal? What is its corporate culture? What are its main KPIs?
I believe managers must know these by heart and have a deep understanding.
Do you know the customer's goals, strategies, and main KPIs? I believe many managers may not be clear. In the next article, I will introduce key indicators (KPIs) to give you an in-depth understanding of customers!
**Are you "watching" me?**


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