Retail and the Internet bring new retail

Retail Queen Li Ling has successfully run several very good department stores, capturing the opportunity to fight in time during a very critical window of time, completing the transformation brilliantly and becoming a classic case in the retail industry. The retail industry is a very old industry, and there is no industry in China, other than agriculture, that is more ancient and ubiquitous than this industry. The experience of Leybell is a good reference and model for the development process of the retail industry. Under the impact of the new retail tide, it is very saddening to see so far that no traditional retail company, through positive changes and integration, has yet to achieve a comeback in the new environment, which is a very sad thing.

If Internet companies and traditional retailers are competing in the new field of “new retail”, it is like two opponents climbing and charging to the top of the mountain at the same time on different sides of the mountain. In this process, each has its own strengths and weaknesses. The companies that eventually make it to the top of the mountain, whether they come from Internet technology companies or traditional retail companies, are bound to overlap and integrate with each other after reaching the top of the new retail, and together they will drive retail to a new stage.

As Li Ling said, the essence of retail is to sell goods. Different goods have different characteristics and different people. 10,000 kinds of goods will have 10,000 kinds of selling methods, which will also form different retail channels, different business formats, different advertising and promotion methods, and different business methods. The new retail in the Internet context is the innovation in every aspect brought about by the change of the Internet to the retail infrastructure. If the new retail is viewed in the context of the whole society, the connotation and meaning of new retail is even more ambitious.

In essence, there are three underlying logics that drive the changes in retailing: First, the changes in retail infrastructure brought about by the Internet and the innovations in various aspects of the entire industry chain. The second is the change in urban space brought about by the new city movement in the past decade, which has brought about offline traffic and reshaping of residents’ lifestyles. Thirdly, the changes in consumption concepts, aesthetic preferences and behaviors brought about by the iteration of mainstream consumers in society. These three factors are superimposed on each other, and they are integrating with each other to drive the whole retail industry innovation in an unprecedented way and force. The retail industry depends on the flow in the short term, the supply chain in the medium term, and the final competition is efficiency. All innovations in the retail industry ultimately come from the improvement of efficiency.

The first wave of Internet penetration to retail is the establishment of e-commerce infrastructure, especially after the rise of Taobao Ali, the e-commerce online platform, which has greatly changed the distribution of retail traffic, and from then on, retail has a division between online and offline. The second wave of Internet penetration to retail is the establishment of payment tools system, allowing e-commerce to further infrastructure, greatly reducing the security costs of online transactions for users. The third wave of Internet penetration into retail is the most thorough digital transformation of offline retail infrastructure, which is now known as “new retail”.

Ali announced the new retail operating system, digitizing all infrastructure, especially the digital transformation of the supply chain, through the basic cloud platform and powerful ai matching capabilities, in the future it will be possible to achieve almost similar to the planned economy of c2m reverse custom e-commerce, to achieve the optimal efficiency of the entire supply chain road. When the most basic, the most standardized consumer goods pathway was e-commerce, for those who have not been e-commerce wave to the transaction mode, segmentation, now also gradually by the Internet penetration. How many kinds of traditional retail means how many kinds of retail methods and retail fields are being penetrated and subverted by the Internet, and these are all new retail.

The city-building movement of the past decade has greatly reshaped the population distribution of China’s cities. New cities with better infrastructure and better living conditions are attracting more and more new people to enter the cities and residents of old cities to move in. With the construction of new cities, the commercial malls put into operation have newer formats, better shopping experience and better cater to the tastes of new city residents, and are dramatically reshaping the offline traffic pattern. Under the impact of the new generation of commercial malls, the traditional commercial real estate’s so-called “golden horn, silver, and grass belly” offline site selection is rapidly failing. The retail giants established in the former new city era, such as Suning and Gome, are rapidly losing traffic and there is a massive tide of store closures. The new professional chain brands and service brands based on the growth period of commercial mall traffic are growing rapidly like a mushroom.

In all the variables, the human variable is always the biggest. When growing up together with the Internet, the post-80s and post-90s have become the mainstream consumer group in this society. Unlike the previous generation, the society is becoming more and more open and tolerant with the growth of the new generation, and the communication with overseas is also more abundant and direct. With the growth of each generation, some social needs will be replaced and extinguished, and new needs will be created and flourish. These behavioral approaches will accelerate the change of the retail industry in all aspects of the three most core elements of retail: people, goods, and fields. The new retail must be a new retail for the new generation of consumer population, now and in the future.

Macroscopic narratives can only express these underlying logics, however, specifically at the micro level. However, at the micro level, the new retailing is changing at different times, in different areas, and in different regions and countries, and presents different phenomena. New retail is a process of gradual penetration, and it is only after various basic conditions are gradually available that it gradually emerges, so new retail will present different themes at different stages. Fortunately, being in this big era, we can be a mindful observer and see the sun rise, the moon set and the sea change.

Leave a Reply

Your email address will not be published. Required fields are marked *