The 6th China FMCG Channel Innovation Conference, hosted by New Distribution, a professional new media platform for FMCG, was held grandly from April 1 to April 3 at the Chengdu Agile Howard Johnson Hotel. The event attracted 3,000 industry professionals including distributors, community e-commerce platforms, brand owners, and internet companies from across the country, with a full house and unprecedented scale.
On the afternoon of April 3, at the China FMCG Marketing Digitalization Implementation Summit, Mr. Xu Yonggang, Director and General Manager of Zhengzhou Swire Coca-Cola Beverages Co., Ltd., delivered a keynote speech titled "Online Empowerment, Borderless Marketing – BC Integrated Omni-channel Circulation Ecosystem."
As a traditional enterprise, at the most difficult time in 2020, it broke through itself and completed a perfect digital leap. Since the digitalization project of Swire Coca-Cola last year, Mr. Xu has successfully explored a set of RTM digitalization and BC integrated omni-channel circulation ecosystem digital models.
New Distribution has carefully organized and excerpted the essence of Mr. Xu's speech at the conference, and now publishes it for the benefit of New Distribution readers.
Today I want to bring you a formula and two "gold mines."
-01-
Entry, Traffic, and Monetization
Before sharing the formula, let me share a sentence: "The ultimate purpose of business is monetization." Monetization can be in RMB, brand value, or other product value, but the core is monetization, without a doubt. The ultimate goal of all our chain operations is the possibility of monetization.
The formula I want to talk about has three key words: entry, traffic, and monetization. That is, starting from the entry, through traffic, and finally realizing the possibility of monetization. Remember the three key words in the formula.
In the FMCG industry, the starting point of traffic was originally at the point of sale, and the traditional entry was the retail terminal; then companies put products, displays, or other promotional activities into the point of sale, forming traffic; finally, consumers enter the point of sale through this traffic to generate the possibility of purchase, which is the possibility of monetization. This is also the logic we traditionally call B2C.
Now let's explore another possibility: when the wave of the internet surges, how can traditional industries think about turning B2C into other logic? For example, is it possible to use the product as the entry, consumers as traffic, and finally bring traffic into the point of sale to achieve monetization? That is C2B. In this chain, BC integration can also be achieved. So as early as 2019, we were also researching such a full-chain project that could achieve BC integration.
-02-
Practical Verification
After talking about the formula, I should talk about the two "gold mines," but before that, let me share a case from our own experience.
In April 2020, we launched a consumer UTC promotion in Henan, which is the "cap opening prize, another bottle" activity. Everyone must be familiar with this game, after all, the industry has been playing it for 20 years.
This activity actually uses the product as the entry, consumers as traffic, and finally redeems rewards at the terminal. But this time, we no longer used physical bottle caps for redemption, but QR code online redemption. This meant that the previously mentioned C2B omni-channel traffic became feasible.
After 4.5 months of the activity, with 7.2 million QR code bottle caps distributed, the actual consumer click-through rate exceeded 62%, and in the process, 48% of the bottle caps were redeemed, entering the consumer platform website, with a final comprehensive winning rate of 38%.
It should be noted that all redemptions were achieved by store owners scanning codes, without a single physical bottle cap. The entire process was completely non-physical online information exchange. This is what we call borderless marketing, omni-channel circulation, and BC integration – a core chain that has been fully realized in the entire chain.
This UTC activity brought me great benefits.
- It showed us that this consumer promotion activity is feasible.
- The sales revenue brought by this activity was very good. The product used in this activity was called Yo Tea, and I believe most people have never heard of this brand. Why choose such an unknown product for the experiment? Because if we used Coca-Cola or Sprite, even without this activity, consumers would have extremely high loyalty, and the experiment would be meaningless.
Yo Tea was only a "second-year" newcomer in Henan at the time, only starting distribution in 2019. April 2020 was its second year on the market. After the activity, the growth rate exceeded double digits, and sales revenue exceeded 30 million yuan.
- Most importantly, it proved that the omni-channel circulation route is feasible, providing a very solid confidence guarantee for our future progress.
Products like Yo Tea are common in almost every company; there is no shortage. And precisely because of this, we have enough confidence to dig into the two "gold mines" I am about to talk about.
-03-
The First Gold Mine: Customer Database
This starts with the terminal of the chain, which is what we usually call the retail customer end. Five years ago, Zhengzhou Swire Coca-Cola began installing a customer platform mini-program called "CP" in the stores visited by sales representatives. The mini-program has some basic functions: customers can see new product information, logistics delivery information, and some financial, reconciliation, and invoice information. They can also take photos of point-of-sale displays and upload them to the platform, and after background review, receive rewards. But the most important thing is order information.
The platform provides great convenience for customers, so they will like it, but our purpose is not only for customer convenience, but also to let customers place orders independently on it more and more. That is the most important thing.
But the problem is that everyone has dozens or even hundreds of mini-programs in WeChat. How many times do you open them yourself? Initially, we also had this trouble. Because installing the mini-program is not the difficulty; the difficulty is getting customers to open it voluntarily.
So under what circumstances would you open a mini-program? Is there such a moment?
The answer is when you need it. For example, when you are at the door of Starbucks, you open the Starbucks mini-program because you know you are going to order at Starbucks.
Now the moment of need comes for customers: when consumers with winning bottle caps come to the customer, the store owner must take out their phone and use the mini-program to scan the code. But how many consumers come to redeem each day? 10? 5? I think one is enough, because that means at least once a day they need to open the mini-program, and thus have the opportunity to see the content on the page.
Will customers place orders just because they frequently open the mini-program? Not necessarily. This is where customer data comes into play.
Many traditional FMCG companies ignore the precious wealth of customer data. The company has been established for many years, with a large amount of customer service experience, from cities to rural areas, from large stores to small stores, from foodservice to GT to supermarkets, covering various types of points of sale. At the same time, these customers purchase from your system – do they buy monthly, weekly, or not at all for half a year? Which categories and brands do they prefer? Many companies have this information; this is customer tagging.
With customer tags, we can form customer profiles, and thus have a unique resource in our traditional industry: customer profiles of a thousand stores with a thousand faces.
During the rapid development of the internet, the strength of internet giants lies in their massive consumer databases. But think about it: how many internet companies have such a huge terminal customer database as consumer goods companies? This is a "gold mine" that traditional enterprises have accumulated for 10 or even 20 years. We accumulate and contact it every day; why can't we use it better?
Once we understand what we have, the subsequent problems become simple. We learn from our internet predecessors; the algorithms of companies like ByteDance over the past decade are something we can learn from. By combining algorithms with customer profiles, we can completely calculate an order suitable for these customers through the backend.
Imagine: when customers open your mini-program and find that there is a particularly suitable order waiting for them every day, what reason do they have not to place an order?
Let me share the results: taking Henan as an example, Zhengzhou Swire Coca-Cola directly covers more than 300,000 terminal customers. As of now, 90,000 customers have installed the CP mini-program, and 50,000 to 60,000 have participated in last year's UTC redemption activity on this platform.
Customer profiles are points; UTC connects them into lines. When we integrate 90,000 or even more customers into a whole surface, what a great project that is! This is the most important moat of our company.
This way, customers have more choices and more convenient purchasing methods, and partner companies have better distribution rates and networks, forming a win-win-win situation.
-04-
The Second Gold Mine: Products
As mentioned earlier, the points of sale in the chain, that is, terminal customers and their data, are the first gold mine; the other gold mine is products.
How can a bottle of beverage become a carrier of digitalization and media? Still, as just mentioned, we have been playing UTC for over 20 years.
In the past, UTC had only one mission: to make those who love to drink drink more. But it must be said that if someone doesn't like this beverage, they probably won't drink it because of a promotion. But now, UTC's mission has changed; it has become an entry for our BC integrated omni-channel circulation, which makes it extremely important.
So how to realize the value of this entry? Many products now actually have this function: one bottle, one code, or in other products, called one object, one code. What is their power?
Consumers get the product and start scanning the code, entering the consumer website, which we internally call "Every Day Has Joy+". Through cooperation with Tencent, combined with Tencent's public domain traffic, the website has the ability to fully identify consumer profiles. This allows our consumers to be led through this consumption platform to different channels, realizing other monetization possibilities.
It can be seen that this consumption platform has become a new entry. After the last wave of activities ended, data remained in the system. Now there are 400,000 monthly active users. In Henan, if we use QR codes on all bottle caps and can bodies in a year, we will have more than 1.9 billion opportunities. Nationwide, Coca-Cola would have more than 80 billion opportunities.
Imagine, based on the previously mentioned scan rate of 62%, 80 billion opportunities will result in nearly 50 billion entry traffic; conservatively, based on the UTC average of 50%, it is also 40 billion; even less, 10%, 5%, even the worst case of 3%-5% click-through rate, multiplied by the base of 80 billion, still results in a huge number.
You see your products every day. If you don't amplify the power of these products, aren't you sitting next to a gold mine every day but ignoring the value of mining gold?
Mr. Lei, the boss of Xiaomi, once said, "Standing at the风口, even a pig can fly." In fact, the风口 is in our hands, at our fingertips; our own products are the风口.
The core of digitalization is actually changing the structure of consumers, products, and customers in the traditional architecture, which internet companies call "people, goods, and places." While reconstructing "people, goods, and places," time and space are extended, and in this process, human efficiency and time efficiency are both expanded. This expansion is not meaningless labor and waste, but actually generates new monetization possibilities.
When we talk about traditional industries and the internet, imagine whether the internet will control traditional industries in the future? Don't underestimate yourself. Traditional industries hold two major guarantees: the starting point of products and the key customer data. Embrace the internet and let it become a tool for traditional industries to truly take off.
The future has arrived, and the future is promising!
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