In 2020, what is the trend of change in retail channels? I want to summarize it in five words: 'channel nanoization.' 'Channel nanoization' is a metaphor, conveying that the channels for selling goods are shifting from shopping platforms like Yonghui and Tmall to smaller and more diverse channels. Simply put, channels are becoming smaller and more numerous.
-01- Channel Nanoization: A New Round of Reshuffling Begins In the marketing system, which factor's change has the greatest impact on the industry? If you ask me this question, my answer is channels. In marketing, 'channels' refer to the places where products are distributed and sold, such as supermarkets, restaurants, airport lounges, and breakfast kiosks—these are all types of retail channels. By simply observing the shopping channels around us, we can easily perceive the following changes:
1. The places selling goods are getting closer to you From the earliest product channels like supply and marketing cooperatives, farmers' markets, department stores, and large supermarkets—these 'shopping centers' where we used to go to a dazzling large shopping point to buy daily necessities. Later, small convenience stores appeared on street corners, fresh food stores selling meat, fruit, eggs, and milk emerged in residential areas, and vending machines appeared under office buildings. Now, many office pantries have snack shelves; you can just scan a code and take a pack of spicy strips. In the corridor of my residential building, Nongfu Spring has installed many vending machines for mineral water, and there is also a Nongfu Spring water station in the community. I can choose to have them deliver water to my home, or carry a bucket upstairs when I go up.
2. Your purchasing decisions are getting faster Think about it: how do we make up our minds to buy a product? In the early days, when we bought daily necessities in supermarkets, we had to look at the product packaging, recall product advertisements, and ask store clerks to determine which brand was more trustworthy. After Taobao and JD.com, we judged which seller's product was better by reading user reviews and checking store credit ratings. Later, 'curated e-commerce' platforms like NetEase Kaola and Xiaomi Youpin emerged, where we could trust every product entirely based on the platform's positioning. Then came influencer带货, where we naturally chose products recommended by Li Jiaqi because we trusted him. Recently, the owner of a street-side barbecue stall you often visit created a WeChat group. To avoid 'administrative enforcement,' the owner posts daily in the group where they will set up the stall, and everyone can also pre-order skewers in the group. When weishang (micro-commerce) and content e-commerce appeared, products were actively pushed in front of you. You just wanted to relax and scroll through Kuaishou, and you found a fruit farmer selling ugly apples from his hometown. The apples had a sugar core when cut, and you could feel their sweetness and crunch through the screen, so you entered the Kuaishou store and bought 5 kilograms online. Platform e-commerce, curated e-commerce, community e-commerce, content e-commerce, weishang... As channels become smaller, commercial endorsements become more powerful, and consumers' decision-making efficiency becomes faster. Consumers are constantly being segmented and divided into various types. To meet their individual needs, products and their shelves will also begin to 'decentralize' and 'fragment.' For example, in 2019 alone, there were more than 150 mainstream community fresh food group-buying platforms nationwide. In 2020, many of these platforms may die off, but the essence of business development is to continuously improve shopping efficiency. As long as you want to make it more convenient for consumers to buy things, the distribution of shelves will inevitably be smaller and more numerous, not larger and more concentrated. Some may ask: Isn't it just that before we bought things on Tmall, and now we can buy from Li Jiaqi? They are all selling goods; is it worth delving into that the store is smaller than before? Then I ask you: Is Weibo a shorter blog? Are they the same thing? Is Douyin a shorter YouTube? Are they the same thing? Weibo and Douyin have almost broken free from previous product forms and become another species. The change in channels is the same. Changes in channels will change a company's marketing model, and even change its business philosophy. The rise of shopping malls brought up a batch of 'fast fashion' restaurant brands like Grandma's Home, Green Tea, and Meizhou Dongpo. They typically have open kitchens, small portions, and seating for only 2-4 people, unlike the 'big restaurants' like Quanjude, where the kitchen is off-limits, portions are large, and there are usually round tables for 8-10 people. This change is because Chinese consumers' spending power has increased. In the past, eating out was very luxurious. Now, white-collar workers in Beijing, Shanghai, and Guangzhou can have lunch with two or three colleagues at a nearby shopping mall. If a restaurant brand wants to open in a shopping mall, it must adjust its store strategy. So, brands that seized the wave of shopping mall channels rose, and old brands that understood this trend, such as Xibei, also revitalized after improvement. But more old-style restaurants faded from public view during this channel upgrade. It can be said that every shock to channels brings a new round of industry reshuffling. Ten years ago, a company's biggest moat was not product innovation, not advertising spend, and not even brand, but its channel capability. For example, in 2008, an entrepreneur developed a beverage with a good taste. What future would this brand have? The most normal scenario would be: a beverage giant, such as Wahaha, seeing that this drink has market potential, quickly replicates its formula, and then within a week, it is on shelves in various channels nationwide, thereby kicking this new product out of the game. It can be said that in many past years, channel power was equivalent to sales power. Because once a company controls the national channels, it controls consumers' choices. Even if a product is not excellent, consumers will have no choice but to choose you. Another example: the rise of e-commerce gave birth to a batch of Taobao brands, such as Handu Yishe, Three Squirrels, and Bear Electric. The rise of these brands benefited from the traffic dividend of e-commerce channels. But when Alibaba renamed 'Taobao Mall' to 'Tmall' and started dual-brand operations with Taobao, the channels changed. Taobao is responsible for embracing all and surprising, but Tmall seeks high quality and the 'ideal life' of the future. With the entry of traditional domestic brands and international luxury brands, the rise in Taobao traffic costs, and Tmall's traffic tilt, traditional Taobao brands began to lose their positions. Take the beauty industry as an example: before 2014, the Double 11 rankings were dominated by Taobao brands like Afu, Mageline, and Yalifang, but after 2015, traditional beauty brands like Baijia, Chando, and L'Oreal dominated the list. (Image quoted from Qingyan) So, what impact does 'channel nanoization' have on a company's business operations? The biggest impact is: a company's channel operation method must shift from 'product output' to 'planning output.'
-02- From 'Product Output' to 'Planning Output' How did retail brands in the past do marketing? After having products and funds, their primary task was to recruit distributors. They sought distributors nationwide to help them sell goods. A company that could build a strong sales team and attract more and larger distributors would occupy the market. This is a bit like the battles in 'Romance of the Three Kingdoms': a company would first occupy the market of a certain province, become the local power, and then use that province or several provinces as a base to plan a march on the whole country. For most consumer goods, doing marketing is a process of 'invading' the national territory, and defending the market is defending the 'territory' from being invaded by other brands. But when there are more and more product channels, this situation undergoes a series of changes. When channels become more fragmented and numerous, channels begin to 'decentralize' like media. The market of a region will no longer be in the hands of a few large distributors, but distributed under different systems. Moreover, because channels are in the hands of many different organizations, it becomes difficult for companies to manage with a single policy. If you are facing a community fresh food chain, it may require your product to have high cost performance, because the customers here are housewives and elderly people who are more price-sensitive. But if you are facing a convenience store channel, it may require your product to be high quality and aesthetically pleasing, because the audience of this channel is mostly urban white-collar workers. But even within the same convenience store system, there are subtle differences in the listing policies of Lawson, 7-Eleven, Aixianfeng, Quanshi, and other major convenience stores. Management becoming more complex is still a small matter; the bigger impact is the change in the relationship between companies and channel partners. In the past, the relationship between companies and channel partners was more like that between landlords and tenants. For example, if a company wanted to enter large chain supermarkets like RT-Mart or Walmart in Beijing, Shanghai, and Guangzhou, it would be charged entry fees, barcode fees, display fees, and a series of other fees. After layers of 'exploitation,' product profits would shrink significantly. Facing large supermarkets, companies often 'enter neatly dressed' and come out with only their underwear. Today, new types of channels are constantly increasing. These newly emerging channel partners are still weak, and their core goal is not profit but growth. These new channels want to collect money from companies, but they also hope your brand can boost the entire store's business. If a brand's entry can boost the store's business, then the requirement for the company is: you cannot just deliver products to the channel; you must also deliver planning solutions. For example, if you are a towel brand that has just entered a local chain supermarket in Guizhou, and the supermarket wants to do a big promotion during the Spring Festival and hopes you will join the list of brands for the promotion. According to the old tradition, this towel brand only needs to agree on a promotional price with the channel and discuss the profit distribution during the promotion. But if this Spring Festival, you happen to obtain the IP license for the movie 'Leap' (Chinese Women's Volleyball), and produce a batch of 'Never Say Die' towels with the promotional copy 'The so-called success is not afraid of bleeding or sweating,' you can customize a batch of movie IP product displays in the local chain supermarket and also hold a lottery activity of 'buy towels, get movie tickets.' Then, this towel brand empowers its products with the IP of 'Leap,' and also empowers that supermarket with the IP planning activity, bringing it greater customer traffic and transaction volume. This is the difference between outputting products and outputting planning. If a company wants to do this, it must transform from a sales-oriented company that sells goods into a service-oriented company that sells and plans. This is not just a change in mindset, but also a reorganization of the entire marketing team. This transformation means that the previous marketing department must transform from a 'pitcher' to an 'operations middle platform.'
-03- From 'Pitcher' to 'Operations Middle Platform' In a volatile marketing environment, the role of a company's marketing department has undergone two important transformations and is about to face a third major transformation. Initially, the marketing department was a 'pitcher' because their core job was advertising placement. At that time, the company's advertising materials were very simple: a few versions of TV commercials and a few product posters. After the company established its brand positioning, it would find a creative agency to produce product TVCs and visual key visuals. Then, it would start looking for matching media positions for advertising placement. The marketing department's most core annual work was media buying. For example, having a drink with the director of a TV station's advertising center, or signing an annual advertising framework with a portal media, to ensure they could buy more advertising resources at a lower price. The most primitive marketing department was a 'pitcher.' The company's requirement for the marketing department was to invest accurately, invest more, and invest cheaply. Later, the marketing department changed from a 'pitcher' to a 'operator.' With the advancement of the internet and digital marketing, the advertising environment has become more complex, and the available advertising resources have become more numerous. In terms of advertising models alone, there are SEM, SEO, EPR, programmatic buying, content placement, IP marketing, co-branding, self-media operations, and many other marketing methods. The marketing department can no longer just focus on a few fixed targets for projection; they must activate resources across the entire domain and integrate resources. For example, if you are an e-commerce brand that rose on Taobao, in response to Tmall's Guochao (national trend) campaign, you and your competitors plan to do a creative activity before 618. But your competitor has obtained the exclusive IP license of the Forbidden City and made a co-branded gift box. You only found a creative agency to design a national-style product set. Obviously, because your team did not expand suitable BD resources in time, you lost this battle. And this situation will not happen only once.
If you want to do content placement, you need to connect with multiple film and television production companies;
If you want to do programmatic advertising, you need to master the bidding backend operations, know what CPC, CPA, OCPX, RTB, DMP... mean;
If you want to do content seeding, you need to contact MCN companies, understand Douyin's Xingtu, Weibo's Micro Tasks, Bilibili UP suppliers...; The most critical thing is that you also need to organically integrate all resources, reasonably predict the ROI of each investment, and PK with the CEO for marketing budget... This is a bit like the evolution of warfare. In the past, battles were fought with both sides lined up in a row for a frontal attack. Now, battles are fought very irregularly, with 'sniper battles,' 'flank battles,' 'blitzkriegs,' 'tunnel warfare'... So, the work of the marketing department has changed from 'pitcher' to 'operator.' You need to understand the overall situation, grasp all details, and organically integrate resources from all parties. Now, 'operator' cannot accurately describe the work of the marketing department. In the future, the marketing department will become an 'operations middle platform.' During the 'operator' period, the core of the marketing department's traffic acquisition was integrating external resources. 'Operations middle platform' means that the company can activate the entire market by operating its own traffic. In many past years, the biggest traffic area we wasted was the shelf terminal traffic. No matter what kind of advertising we did, the ultimate goal was to get consumers to come to the shelf and buy our products. So, the shelf terminal is the most important traffic operation area. Why do consumers in front of the shelf buy our products? In the past, our judgment relied on professional experience, on-site observation, and at most third-party research reports. But with the layout of 'new retail' and the penetration of big data into all aspects of business, we can truly understand consumers' purchasing decisions. The two images above are Tencent's TDC and Alibaba's Brand Databank. Online, we can already 'visualize' consumers' shopping psychology through big data. By opening the right to use data and the right to operate users, channels allow B-end not only to sell goods but also to create scenarios and operate users. In this way, brand owners will treat the platform as their own home, rather than as a 'weekend exploiter.' In the next few years, offline consumption scenarios can also be measured with data. We can use thermal sensing, facial recognition, and other technologies to understand who the consumer in front of the shelf is, which product their gaze lingers on, how many seconds it stays, and which product packaging they read. It is clear that in the future, our sales terminals are not just a set of shelves for selling goods; their greater function is to provide business analysis for corporate marketing and provide the most reliable business decisions for corporate operations. I believe that in the future, supermarkets should also learn from Taobao, providing consumption data to companies for free, allowing入驻 merchants to independently analyze, judge, and plan the shelf space in their own domain to attract more customers. Only in this way can channels and merchants form a fish-and-water relationship. After the marketing department becomes an 'operations middle platform,' their core adjustment is the personnel organizational structure, transforming from a sales company that outputs products to an operations company that outputs planning. If the 'operations middle platform' wants to effectively drive the market, this organization must have three output capabilities: output 'analysis,' output 'content,' and output 'integration.'
1. Output 'Analysis' Store data will become increasingly rich and detailed. Faced with massive data, how do we make reasonable judgments? Faced with data sources from different channels, how do we do cross-analysis? This will test the team's ability to re-analyze and reuse data. Suppose you are a lipstick brand. Since cooperating with Li Jiaqi, your sales have surged. At the end of the year, when counting sales data, you find that Li Jiaqi contributed 40% of your company's sales. What does this data mean? First, this data means danger. Because a certain channel's sales share is too large, and this channel is 'unstable.' If Li Jiaqi's fans' purchasing power is exhausted, your product sales will return to their original state. To verify our conjecture, we can pull out the total sales growth for all 12 months of the year and compare it with the sales growth brought by Li Jiaqi, to see whether the latter is slowing down or continuing to increase. If it is slowing down, it proves that you need to find other带货 channels besides Li Jiaqi in time; if it continues to increase, then Li Jiaqi's traffic has not been fully tapped. This is outputting analysis. If the team can continuously output valuable analysis, it can provide correct judgments for corporate operations. If the team possesses huge data but lacks the ability to analyze, it is like a nouveau riche who does not know how to spend money.
2. Output 'Content' We have said that the era of one TVC and one set of posters conquering the world is over. In the past, we either played Muay Thai or wrestled. Now, we must learn mixed martial arts, using different techniques and tactics against different opponents and situations. Should the activity planning for Double 11 be the same for Tmall and for Yunji? Should the offline promotion policies for community fresh food stores and Aixianfeng not be different? Should the supermarket displays in Beijing, Shanghai, and Guangzhou be designed the same as those in Tonghua, Jilin? For market activity planning, the biggest obstacle now is not whether a creative idea is good, but whether the number of creative ideas is sufficient. So, the marketing department is about to transform from a content supervision center into a news center. It is not about having a team that produces content, but a team that produces a large amount of content. Only then can it respond to different channels, different media, and different nodes, completing the planning empowerment of 'thousand people, thousand faces.' In the past, the marketing department was a typical small department in a company. A marketing director led two marketing managers, and then used external suppliers to solve specific marketing work. But now, this 'super individual soldier' model definitely won't work, because there is a lot of trivial work that cannot be delegated to others. Companies cannot fully open the 'post-link' data to agencies, and the operation of private domain traffic cannot be outsourced to a social company. The activity planning on the channel side has little money, much work, and no value, and no agency is willing to undertake it. The scope of marketing is getting wider and wider, radiating to more and more departments. Senior executives should use the tens of millions of budget previously spent on 'Running Man' to subsidize users and cultivate a more professional content promotion team. This is the right way and the right path.
3. Output 'Integration' Outsiders may think that so-called 'resource integration' is just a resource expansion capability. Thinking so underestimates the difficulty of this work. Expanding enough resources only allows us to have more chips on the table, but how to play a good hand depends on your mastery of the rules. That is to say, resource integration is not just resource expansion; behind it, we must be familiar with the application methods of each resource, its price, and its true value. This tests the learning ability and cognitive ability of marketers. To put it bluntly, the marketing departments of most Chinese companies are unqualified, because marketing is a profound discipline, but most marketers cannot even finish reading 'Positioning.' Their understanding of marketing stays at the level of WeChat articles and乙方's PPTs, with no systematic marketing system in their minds. If a marketing department wants to output a set of 'integrated' resources and 'integrated' planning activities, it must first thoroughly understand the function of each component in the resource pool. Otherwise, it can only see the mountains but not the peaks. Therefore, many top foreign design or marketing companies, when cooperating with them, have not only financial thresholds but also knowledge thresholds. They require the client to have at least one person who can understand their expertise, because only when both sides are on the same level can the client truly discern the quality of the service.
To summarize: We say that retail channels will show a trend of 'nanoization' in the future, that is, from large to small, from few to many. Because channels have begun to 'decentralize,' the relationship between channels and brands has evolved from a simple 'rent collection' relationship to an 'empowerment' relationship. Correspondingly, companies should not only 'output products' to channels, but also 'output planning.' To this end, the company's organizational structure should be adjusted accordingly, and the marketing department should transform from a 'pitcher' to an 'operations middle platform.' Many companies are anxious about traffic. They start to think about sinking market traffic, overseas traffic, and private domain traffic. Please look down and re-examine yourself. Perhaps the terminal channel is your biggest traffic gold mine.
Source: Liang Jiangjun (ID: liangjiangjunisme)