Recently, because of the flames of community group buying, many dealers have suffered. It's no exaggeration to say they feel lost and anxious. The market is changing too fast; supermarket owners are becoming group leaders, and the prices of distributed products keep dropping. Many are engaging in cross-channel dumping. In the past, dealers were squeezed from both ends; now another mountain has been added, making it three-sided pressure. When confusion and anxiety set in, thoughts begin to spread... Does the dealer business have a future? Will the often-rumored 'being eliminated' actually happen one day? In places like Wuhan, Nanchang, Nanjing, Changsha, and Shijiazhuang, where community group buying giants gather, the battle is intense every day. The soil that dealers once relied on for survival is being crushed by the giants.
This article discusses the survival value of dealers from an overall industry perspective. Regarding the question of 'whether there is a future and whether they will be eliminated,' I think we must not look at the future from the present, but rather look at the present from the future. If we remain anxious about the current impact of community group buying and the difficulty of doing business, we will never escape the vicious cycle of survival. The current state of a dealer's business is not determined by what you are doing now, but by what you did in the past and what you have prepared. Similarly, whether you have business opportunities in the future and whether you can do well often depends on your current judgments and choices, as well as the corresponding resources and capabilities you have prepared. Therefore, when we are anxious and confused, we should make some short-term follow-up strategies, but for long-term planning, we must first set aside the current business and look at what changes will occur in the industry over the next 3-5 years. Based on the direction of industry changes, start planning and laying out now.
This article aims to solve two core problems: First, how will the market change? Second, what is the business path for dealers? Answering these two questions clearly will help dealers see the blueprint of their business.
-01- What exactly is changing in the market? As intermediaries, dealers must not only look at upstream brand owners but also downstream retailers. The future changes at both ends are the key to determining the survival of dealers. Only by understanding the changes in brands and retail, finding certainty in the changes, and seizing the right opportunities can dealers continue to do well. To help dealers deeply understand these changes, I use the internet's hot topics 'New Consumption' and 'New Retail' to differentiate and facilitate understanding.
****1. New Consumption: The Era of Big Single Products is Over, Small Single Products Prevail In recent years, the most obvious change in the consumer goods industry is the emergence of more and more innovative consumer brands. Brands like Genki Forest, Wang Baobao, Zhong Xuegao, Zihaiguo, Daily Dark Chocolate, Saturnbird Coffee, Hankow No.2 Factory, and many other new consumer brands have sprung up like mushrooms after rain. Whether driven by capital, e-commerce traffic, or changes in demand, more and more innovative consumer brands have completed rapid growth from 0 to 1, ranging from half a year to a year. Of course, FMCG giants are not idle either, launching various differentiated new products.
What does this phenomenon indicate? The young consumers of today, the future mainstream consumer group, have truly entered an era of diversified and personalized needs! This is the first certain trend.
At the same time, we can also see that whether it's innovative consumer brands or FMCG giants, when launching new products, most of them put the new products online first. Why choose online? Because online, segmented target consumers can be precisely captured. Online directly reflects the personalization and diversification of demand. Offline, how should new consumer brands or products be laid out based on changes in demand? Faced with the inability to directly connect with consumers and the presence of channels in between, how should they be implemented?
Today you produce a bottle of yogurt, and online, it receives praise from many post-00s consumers. When it goes offline, what should you do? I think it's definitely not full-channel distribution, but rather finding, among existing channels, the channel most likely to have post-00s consumers, or the channel most likely to reach the target consumer group. That is, extending the personalized and diversified demands to offline distribution, pursuing not the breadth of offline channel distribution, but the precision of offline channels. Channels are scenarios; in the future, when every new product is laid out offline, the consideration will be where the segmented scenarios are.
Recently, while visiting KKV Life Hall (a physical chain store mainly selling daily chemicals, beauty products, etc.), I found Parallel Universe (a new brand) flavored sparkling water under Hankow No.2 Factory. I had been curious about where such a 'maverick' product would be sold. This is the path and method for new products to enter offline.
According to the popular saying 'People, Goods, Scenes' , it means delivering the right product, in the right scene, to the right consumer. The combination of these three elements places higher demands and challenges on dealers in the delivery process. It is important to know what products to distribute to which channels, and in what form or means to attract or present them to the corresponding consumers.
Why mention innovative consumer products when looking at upstream brand changes? Because in my view, for dealers, those who cannot handle new products and only hold onto bestsellers have no future. How to handle new products? The business logic for new products offline is segmented scenes and precise channels.
We have been saying that the era of big single products has passed, with the core being changes in demand. I won't elaborate on the reasons. Big single products will become fewer and fewer. In the past, brands pursued market-wide density, but that is gradually failing. In the past, one product could be distributed nationwide, which can be understood as unified, undifferentiated consumer demand. But now that basic materials are abundant, and consumers are increasingly concerned about emotion, health, quality, and function, relying on a single product to conquer the market no longer works. In the past, dealers could make a good living from one product for many years, but that won't work in the future.
2. New Retail: The Era of Single Retail is Over, Multiple Retail Prevails Obviously, whether it's community group buying, O2O home delivery, or various innovative retail stores like KKV and Tonalist, more and more segmented retail scenes are emerging. The era of single retail has passed, and multiple retail prevails. Behind multiple retail is also the manifestation of diversified demand, but more so the diversification of demand transmission or demand scenarios.
For example, the hottest topic currently, community group buying, although it enters with subsidies, I think in the future it will definitely not be like that. It will be based on family consumption scenarios, with better products, more reasonable prices, and better convenient consumption as the core. In the future, the combination of FMCG and community group buying will definitely not be simple bestsellers, but new products based on scenarios. What new products? Coca-Cola's approach is to adjust the specification to 100ml (commonly known as the 'one-cup'). You might think this is to differentiate from traditional circulation channels, but in fact, Coca-Cola adjusted based on the underlying consumer demand because the main consumer group of community group buying is married women in families. To consider health issues while satisfying children's demand for cola, the 100ml one-cup is just right.
The diversification of retail scenarios, especially the emergence of platform-based retail with internet genes, has increased the share of channel share, posing higher challenges to the front-end business of dealers, including distribution and sales promotion. In the past, dealers relied on visits and relationships to seize shelf space. In the future, besides doing these well, they may also need to operate mobile screens. In a screen of beverage categories, how to make consumers choose your brand? Compared to traditional shelf displays, the unlimited shelf exposure online makes past skills and expertise seem useless.
Of course, this is still traditional e-commerce. Now, through social + algorithms, people are grouped by type, and recommendation-based e-commerce has emerged. Product promotion and sales activation require dealers not only to manage retail ends but also to study target consumer groups. Where are they? What are they interested in? What products and promotions can attract their attention?
By the way, the current subsidy war in community group buying has indeed had a huge impact on dealers, especially in some first- and second-tier cities, which have become the focus of community group buying giants. Facing the direct impact of price subsidies, there is indeed no good solution. In the short term, it is inevitable that a batch of dealers and wholesalers will die. But dealers should believe that subsidies will not last long. In the short term, they can supply goods, but in the long term, dealers need to prepare for segmented products and multiple channels.
The above are certain trends and directions for the future. Both upstream and downstream are undergoing drastic changes because consumers want better products and more convenient experiences.
-02- What exactly should dealers focus on? The essence of a dealer's value is the link between products and channels. Conventional dealers either focus on channels or products; excellent dealers focus on both, but this tests the dealer's management capabilities. Let's first talk about the practices of mainstream dealers.
1. Sell more brands (categories) in one type of channel; 2. Sell a single brand (category) in multiple types of channels.
1. Sell more brands in one type of channel Here, channels refer to: CVS convenience stores, KA hypermarkets, TT traditional small stores, professional retail stores, special channels, etc., and of course, community group buying, O2O new retail, etc. Based on the characteristics of the channel, build the ability to select products in that segmented channel. Regarding selling more brands, it doesn't mean selling everything, but rather deepening and penetrating the categories you have previously represented and the categories you are in.
For example, in the past, I was a dealer for a snack food brand and chose the single channel of TT traditional small stores. The core research and focus direction for the dealer was to increase share on the snack food shelf. How to make the most of the snack food shelf in a traditional small store of 50-100 m2? Limited by the business area, in the traditional small store channel, the dealer's core capability should be in seizing categories.
Another example: in the past, I was a dealer for a condiment brand and chose the single channel of KA hypermarkets. The core research and focus direction for the dealer was to increase share on the condiment shelf. Unlike traditional small stores, KA hypermarkets have relatively more space to maneuver. The dealer's core capability is not only to seize categories but also to have the ability to drive sales, especially during key CNY nodes, through promotions and sales efforts to achieve volume conversion and product sell-through.
It should be emphasized here that product selection is a major subject. For first-tier brands, product selection is more passive, with the core consideration being the channel attributes, choosing products with suitable prices, specifications, and tastes. For second- and third-tier brands, product selection is more active, testing the dealer's vision, especially in the current context of abundant products, which poses a huge challenge to dealers.
2. Sell a single brand in multiple types of channels Here, the single product is most likely a single brand, such as products under Yili, Mengniu, Arawana, Nongfu Spring, etc., serving a specific brand. The core is to continuously explore more selling channels based on understanding the consumer demand behind the product and the target consumers. At the same time, it's not just about distributing to channels but also designing distribution, promotion, and sell-through strategies tailored to each channel's characteristics.
As mentioned above, channels are diverse and fragmented. Traditional mainstream channels include traditional circulation small stores, CVS convenience stores, KA hypermarkets, special channels, etc. There are also innovative channels that are not yet mainstream: community group buying, O2O e-commerce, FMCG B2B, catering B2B, unmanned vending machines, and professional segmented retailers like KKV Life Hall.
Most dealers' business is mainly in their local area. Besides doing well in traditional mainstream channels, they must also promptly grasp and follow up on non-mainstream channels. Follow up on future mainstream channels promptly to gain traffic and resource dividends.
When facing new things, as a businessman, you can complain but should not resist. Although the emergence of new things may affect traditional mainstream channel business, it's not something you or I can control.
For traditional mainstream channel business, study the channel's operating rules and consumer shopping paths. Expanding channel coverage is the foundation, but different channels should be studied based on the nature of the business and consumer purchase action paths.
For example, the key tactic for traditional circulation channels is to seize shelf space and use related POSM promotional materials; the key tactic for KA is promotional activities during CNY nodes; the key tactic for convenience stores is product selection, product adaptability, and limited in-store actions; the key tactic for special channels is key personal networks.
3. Should you focus on channels first or brands first? Looking back at the birth of commercial circulation and the emergence of the dealer group, historically, most dealer businesses started with products. For example, when starting a business, you happened to represent a beverage brand, then supplied to small stores, internet cafes, and restaurants; or you resigned from a daily chemical company to start your own business, combined with your past resources, represented a paper brand, and then supplied to KA hypermarkets and supermarket stores.
Therefore, product representation is the starting point for dealers, supplying to corresponding channel stores, and then a dividing point appears: whether to continue representing brands and grow bigger and stronger, or to continuously expand channels and increase coverage breadth and density. Although products and channels are 'intertwined,' there is still a tilt in time, energy, and resources.
Business Path 1: When a dealer chooses a product and anchors it to a channel, they choose to expand multi-channel layout based on the responsible area.
At this point, the key risk will be the upstream brand representation risk: one is regional segmentation and grid distribution. Simply put, brand owners won't let you grow too big; the other is the risk of losing representation due to personnel relationships and performance games with middle management.
Business Path 2: When a dealer chooses a product and anchors it to a channel, they choose to expand the number of products based on the channel.
At this point, the key node is the choice of upstream brands. Catching a good brand at the start is an opportunity; being able to continuously catch good brands and products relies on operational capability.
In the past, many dealers reached a watershed here. Those who could continuously catch good brands and products saw their business rise continuously, and after stabilizing multi-product combinations, they further expanded channels. Of course, some dealers failed to catch suitable products, losing everything or stagnating.
Frankly, many mainstream dealers today face the problem of not knowing whether to focus on one channel and deepen it, or focus on one brand and deepen it. There is no standard answer to this question; the core is to see where each dealer's core competitiveness lies. But from the quality dealers I've visited recently, most dealers (except daily chemical and alcohol categories) initially focused on one channel, continuously improving product selection capabilities, outputting more products on a well-built highway, and later gradually extending to multiple channels.
Why?
First, the risk of representing a single brand; second, the operating cost is mainly on channels and management. Multiple channels mean salespeople for multiple channel types, and the complexity of managing multiple channel businesses is relatively high, with high hidden time management costs.
Of course, some dealers might say that the cost of product selection is also high; once you choose poorly, you lose everything. But think carefully: who is the decision-maker for product selection? The boss himself. The boss handles product selection, and employees handle channels. Comparing the two, the boss's own business naturally receives more dedication than employees. Once the right products are chosen, business improves, and although explicit costs are high, implicit costs are low.
Finally, from a revenue perspective, with a certain type of channel, inputting more products allows channel reuse, personnel reuse, and management reuse. From a trend perspective, product diversification is a certain trend; the more diverse the products, the more it tests the dealer's product selection ability.
Of course, is it feasible to have a single brand layout across multiple channels? Yes! But it places high demands on the dealer's internal management capabilities. What demands? With so many SKUs, they need to be sold into more channels, and these channels mainly rely on front-line salespeople for development, visits, maintenance, and in-store execution. At this point, the boss faces higher challenges in designing performance assessments for front-line salespeople, making them work as hard and execute as diligently as the boss himself.
Due to space limitations, this article has clearly elaborated on the upstream and downstream trends and the logic of conventional dealer business development. In the next article, I will focus on the development paths for dealers in mainstream categories, providing a complete interpretation.
1. Beverage dealers 2. Alcohol dealers 3. Snack food dealers 4. Condiment dealers 5. Daily chemical dealers
If the tip is adopted, it will pay 400-2000 yuan.