From August 20 to 22, the 6th China FMCG Conference, hosted by New Distribution, was grandly held in Shanghai! At the "Digital Operations Practice" forum, Yang Senlin, Chief Information Officer of C&S Paper, delivered a keynote speech titled "How Decision-Making AI Can Help Physical Enterprises Break Through" . The following is the content of Mr. Yang Senlin's on-site speech (with deletions): Most enterprises today are quite pessimistic. This is neither the best of times nor the worst of times. In this context, I believe we have ushered in the best opportunity because our preparations are far more sufficient than theirs. We Are About to Face Unprecedented Difficulties 1. Surge in Competitors.
Emerging e-commerce platforms: Utilizing digital tools and big data analytics to rapidly capture market share, offering personalized shopping experiences that challenge the status of traditional retail.
Transformation of traditional retailers: Facing online competition, traditional retailers are accelerating the integration of online and offline channels, creating an O2O model to enhance shopping convenience and experience.
Market segmentation competition: E-commerce platforms segment markets, focus on specific consumer groups, and launch customized products and services to form differentiated competitive advantages.
- Changes in Consumer Behavior.
Increase in personalized demand: With the rise of consumer self-awareness and market segmentation, personalized demand has become a mainstream trend, with consumers seeking unique product and service experiences.
Diversification of shopping channels: The rise of e-commerce and the popularity of mobile payments have made shopping channels no longer limited to traditional physical stores; consumers can shop anytime, anywhere.
Data-driven consumption decisions: The application of big data analytics allows consumers to access more product information and user reviews, enabling more rational purchasing decisions. 3. Supply Chain Management Challenges. Fluctuations in raw material costs: Changes in market supply and demand lead to frequent price fluctuations; enterprises need to stabilize costs through futures contracts and diversified procurement strategies.
Logistics efficiency optimization: Facing the industry trend of rising logistics costs, adopting intelligent scheduling systems and route optimization algorithms improves transportation efficiency, reducing time and resource waste.
Refined inventory management: Using big data analytics to predict demand, implement lean inventory management, balance spot supply and capital occupation, and reduce inventory costs. 4. Increased Human Capital Investment. Rising employee training costs: As market competition intensifies, enterprises continuously increase internal training budgets to enhance employee skills and adapt to new technologies, leading to a significant rise in human capital investment. Economic burden of retaining talent: To retain key talent, enterprises have to raise compensation and benefits standards while providing more career development opportunities, increasing long-term operational costs.
Investment needs triggered by technological updates: Rapid technological iteration requires enterprises to continuously train employees in new technologies, involving not only direct training costs but also investments in new equipment due to technological upgrades. 5. Lagging Technology Application. Insufficient data analysis capability: Lack of efficient data processing tools prevents timely extraction of useful information from large volumes of data, affecting decision-making efficiency.
Slow e-commerce platform construction: Slow technological updates fail to keep pace with market changes, leading to poor user experience and impacting sales performance.
Low utilization of cloud computing resources: Failure to fully leverage the elastic scaling features of cloud services results in resource waste and increased operational costs. 6. Challenges in Adopting New Technologies. Integration of AI and automation: Exploring how to integrate AI technologies to enhance intelligent decision-making in automated processes, as well as challenges in algorithm optimization and data security.
Security and popularity of mobile payments: Analyzing how mobile payments, while improving transaction convenience, can strengthen user privacy protection and prevent financial fraud, ensuring the stable operation of payment systems.
User experience and technical support for contactless services: Studying how contactless services improve consumer experience while ensuring service continuity and quality monitoring through technical means. 7. Difficulties in Enhancing Customer Experience. Inconsistent experience across shopping scenarios: Poor integration of online convenience and offline physical experience leads to disjointed feelings, affecting overall shopping satisfaction.
Difficulty in implementing customized services: In an environment of growing personalized demand, providing tailored products or services faces dual challenges of technology and cost; how to efficiently respond to and meet customers' unique needs becomes a key issue. Taking C&S Paper as an example, online and offline users are at least 50/50. In such a large volume, user experience cannot be fully unified. So all we see are difficulties; that is our current situation. Data-Driven Decision AI Is the Best Opportunity for Physical Enterprises What exactly is digitalization? After years of hype, is there a way to break through? The essence of digitalization is enterprise change management and integrated transformation of manufacturers and distributors. The real change is the change of people, the transformation of people. If people don't change, no system or data will be meaningful. So what changes this era is not AI, but the people who control AI. Every technological update and iteration requires our attention and embrace, but spending money needs to be more cautious. My simple understanding of digitalization is: Any digitalization that does not aim for business growth is hooliganism. C&S Paper Practical Case Sharing: We made a bold attempt in Hefei, combining and reordering crowd profiles, districts, labels, and product labels in a crazy way, using the above theoretical foundation to form a precise algorithm and model. In Hefei, there are over 20,000 stores of C&S and non-C&S combined, but we only have 27 salespeople. No matter how we visit stores, we can't manage them all. After using model data screening and combination, we narrowed from 20,000+ stores to 900 stores. Even so, among these 900 stores, 300 are blank, not belonging to C&S, and there is still room for growth. What we are doing now is finding better stores, dividing them by various scenarios, and with the cooperation of business personnel and distributors, our performance grew by 56%. While performance in all cities declined, through AI decision-making, our performance still grew against the trend. Everything we do ultimately aims for performance growth, breaking through, and survival. However, as a digital operator of a physical enterprise, the pressure is immense. We may not have the ability to align all departments, but we compete with our knowledge breadth and business integration capability, the ability to deeply combine strategy, business, and technology. This is our only point of breakthrough and our only opportunity. PS: Friends interested in the on-site speech content can follow the recent posts on the WeChat official account of "New Distribution". We will compile and publish the guests' speeches for readers. Click Read Original to view more about the 6th China FMCG Conference and the 3rd China FMCG Hard Discount Conference & the 3rd China FMCG Distributor Conference...