Knowledge Post: Three Principles of Channel Digitalization Design and a Six-Tier Implementation Framework
Release date:
2024-08-21
Author:
Jinhua Logistics
When writing “New Marketing 3.0: bC‑Integrated Digitalization,” channel digitalization was still in its exploratory phase, and the practical path forward remained uncertain. Nevertheless, the overarching vision for channel digitalization was already elegantly laid out in “New Marketing 3.0.”
01 Three Principles of Channel Digitalization
New Marketing 3.0: The Integrated Digitalization of bC — At the time of writing, channel digitalization was still in an exploratory phase, and its practical implementation remained uncertain. However, the overarching framework for channel digitalization was already perfectly articulated in “New Marketing 3.0,” encapsulated in the following three principles:
Principle One: Full-Chain Digitalization. All links in the channel are involved, The F‑end (factory), B‑end (distributor), b‑end (retail), and C‑end (consumer) are all interconnected, with a particular focus on b‑C integration. That’s why channel digitalization is often referred to as b‑C integration. Since F2B2b remains under the brand owner’s control, only b2C is beyond their direct oversight. Once b‑C connectivity is established, end-to-end supply chain visibility and control are achieved.
Principle Two: Integration of Online and Offline Channels. Channel digitalization is not about simply shifting offline customers to online transactions (placing orders); rather, it involves integrating online and offline channels and bridging the three-dimensional space to enable precise marketing targeted at specific regions or customer segments. Either by focusing on… B2B should be precise, or else focus on precision at the B2C level.
Principle Three: Incremental Thinking. Channel digitalization is not about online transactions, nor is it digital promotion, and it does not hinge on online sales. KPI metrics emphasize that digital transformation should drive overall sales growth—whether sales are generated online or offline is irrelevant; what matters is incremental revenue. These guiding principles for holistic channel digitalization are highly targeted, addressing the distorted digital‑marketing environment of recent years, which was skewed by the “new retail” paradigm and private‑domain business models. Current channel‑digitalization initiatives are squarely aligned with these three core principles.
02 Six-Tier Digitalization Framework for Channels
Principles that fail to translate into action remain mere fantasies, and designs that aim for perfection in one go lack practical feasibility. As channel digitalization advances, each incremental step must ultimately be seamlessly implemented in accordance with three guiding principles. At present, it appears that progress will largely follow a six‑tiered progression, with one distinct stage at each level.
First-tier step: Connect with users and claim red packets by scanning a QR code. This is the beginner level—just get it live to practice. It can also connect with users ( On the consumer side (C‑end), it can also connect to terminals on the business side (B‑end). Users have already missed the peak of the red‑envelope benefits, and scan‑to‑pay adoption remains low. However, this phase is unavoidable, and its duration can be relatively short.
Second-tier stage: User segmentation to capture high-value customers. Without user tags, red envelopes are essentially universal or probabilistic; with user tags, users can be treated differently. The second tier must build upon the first. As for the aforementioned two-tiered ladder, it can be said to lack channel-specific characteristics—it is a digital onboarding path that all newcomers must traverse.
Third-level tier: Two-tier channel linkage. The end-to-end channel comprises four key stages. F2B2b2C: The F‑end is the dominant party, and only by connecting any two of the BbC ends can channel‑specific characteristics be realized. Of course, the optimal configuration is to link both b and C, since digital marketing necessarily requires engagement with the consumer end (C). The first two tiers represent digitization, while the third tier focuses on channel digitization—most companies stop at this stage. At present, beverage and baijiu companies have largely achieved this.
Level 4: Integration of online and offline channels, digital twin. At the third level of digitalization, we have currently fallen into a trap, reducing it to online promotions—and baijiu is… The promotional intensity at both ends of the bC channel has become so extreme that it has essentially gone haywire. The fourth-tier framework addresses this issue. While the first two tiers are unrelated to offline channels, the fourth tier must be led by offline operations—indeed, you could say that wherever offline points the way, online follows. Whenever offline seeks to target a specific retail outlet or customer segment, online resources are seamlessly aligned and amplified there. Why do we call the integration of online and offline a “digital twin”? Because it functions just like identical twins.
Fifth-level ladder: Incremental digitalization. The main purpose is to promote. “Three New, One High” refers to new products, new brands, new markets, and high-end products.
Sixth Level: The threefold dimension is unified, and the Trinity is realized. We have completed the dual mid‑platform, dual product catalog, and channel revenue‑sharing system. This marks the advanced stage. To summarize: the six‑tier ladder of channel digitalization can be further divided into three phases. The first and second tiers are for onboarding new players, bearing clear signs of digitalization and serving as a practical training ground. The third and fourth tiers focus on end-to-end integration and seamless online–offline convergence, establishing distinct channel‑digitalization capabilities. The fifth and sixth tiers represent the advanced phase, driving incremental growth and enriching marketing with a broader array of integrated elements.
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