My understanding of new retail

A few days ago, I visited Jingdong House and sent a circle of friends:

Visiting the newly-opened Jingdong House (Tongzhou Store) is the landing of JD.COM’s concept of "scene fusion" in the new retail period. I stepped on the spot in advance before the activity started, focusing on the face recognition service, which was terrible and accurately outlined my notes: night owl, technology expert, passionate Aries, addicted to online shopping and so on. And listen to the staff, this service will provide members with more differentiated and customized services in the future.

Soon, my point of view was hit by friends in the circle of friends. Some people said that this was not new retail, but "unbounded retail". Others said that this was O2O retail, and even more, there was no innovation in selling online things offline, which could not be viewed with the concept of new retail.

I have created many new concepts myself, but I never like to get entangled in the concept itself, because all concepts serve consumers. But today, new retail is mentioned by almost every industry. I think it is necessary to talk to you about "new retail as I understand it" with the simplest and most straightforward topic today.

It happened that Tencent News invited me to participate in a discussion on "How to understand the new retail and what new changes it has brought to our lives" online, so this article came into being.

Before expounding my understanding of new retail, I will list some opinions about the more influential concept of "new retail".

The first thing that must be mentioned is Jack Ma of Alibaba. At last year’s Yunqi Conference, Jack Ma delivered a speech saying that the current "e-commerce" will become a traditional concept, and the future will be a "new retail" mode combining offline, online and logistics. Just like, the essence of logistics is not to be fast, but to reduce inventory. Only the real combination of offline, online and logistics can bring more benefits to enterprises. In the future, with the breakthrough of "new retail", through the deep cooperation between Tmall and traditional retail enterprises such as Suning, Intime and Bailian, Alibaba has broken the line between online and offline, and brought the retail industry in China to the door of comprehensive innovation in business form.

Then there is Liu Qiangdong, JD.COM. Liu Qiangdong recently put forward the concept of "the fourth retail", which triggered a wide discussion in the industry. Liu Qiangdong believed that there were three recognized revolutions in the retail industry: department stores, chain stores and supermarkets. The fourth retail revolution is a revolution based on Internet e-commerce and surpassing the Internet, which will bring human beings into intelligent commercial times. In the fourth retail era, the retail infrastructure will become extremely plastic, intelligent and synergistic, which will promote the arrival of the "unbounded retail" era and upgrade the cost, efficiency and experience.

The other is Suning’s "smart retail". Recently, Suning clearly expressed its disagreement with Liu Qiangdong’s fourth-party retail concept, and said that Suning has always advocated "smart retail", thinking that future retail is smart retail, that is, using Internet and Internet of Things technologies to perceive consumption habits, predict consumption trends, guide manufacturing, and provide consumers with diversified and personalized products and services.

In addition, Xiaomi, Huawei, Xinhualian and other enterprises have made their own explanations on new retail in the past two years, and they will not be described too much here.

So, what exactly is new retail? Can you understand this concept in the simplest way?

First of all, let’s look at what is retail. The so-called retail means "buying and selling things from the east to the west, and buying and selling things from the west to the east". In Mulan’s article, "buying horses in the east market, saddles in the west market, bridles in the south market and whips in the north market" is a typical retail model.

In my opinion, the so-called new retail, as its name implies, is an updated retail model compared with the old retail, which is a constantly changing concept. Compared with the ancient barter transaction, the department store that was popular decades ago is a new retail; Compared with department stores, an urban complex like Joy City is a new retail; Compared with Joy City, e-commerce companies such as JD.COM and Tmall are new retailers.

Therefore, our understanding and definition of new retail are different in different periods. I think the concepts of fourth retail and smart retail put forward by Ali, JD.COM and Suning are more advanced than the current e-commerce, and we can regard them as new retail.

Moreover, if we carefully look at the explanations of these enterprises, although they have been verbally angry and dissatisfied with each other, they are actually the same in essence, and they all have such characteristics: online and offline integration, wisdom recommendation, membership system construction, improving logistics efficiency, breaking boundaries, AI application and so on.

These enterprises are the best in China, and the ideas and models they advocate are the future development direction of China retail and even global retail to some extent, and there is no difference in essence. Of course, if you are too entangled in the concept, it is really not desirable. Again, any new concept that consumers can’t understand and apply is hooliganism.

So, since the concept of new retail is evolving in a dynamic way, what is new retail at this stage (2017)? My understanding mainly includes several aspects (of course, my understanding now will be out of date in a few years, and an updated way of presentation will come out):

① Convenient payment: In our current era, convenient payment is our consumers’ deepest perception of the new retail concept, which can directly serve our consumers more than big data recommendation, C2B, scene revolution and so on. Convenient payment means cashless payment. On the one hand, enterprises have third-party payment platforms such as WeChat payment and Alipay. Through their efforts, residents in first-and second-tier cities in China can basically bring a mobile phone to meet all their consumption.

In addition, there are smart payment terminals represented by Wang POS. The emergence of this type of products has gradually subverted the traditional POS machines. As for the more advanced payment methods such as NFC, fingerprint, facial recognition, voiceprint, gesture, etc., they have also been applied to our lives one after another. This has never happened in the business changes of the past thousands of years. This time, China is at the forefront of the world.

② Intelligent matching: This is an era of information explosion, commodity explosion and service explosion, and everything seems extremely surplus. Therefore, accurate intelligent matching has become the direction of our mainstream enterprises in every industry. From today on, we have to find the target users, and of course our users need to find the target products.

The big data push mechanism like today’s headlines is actually a typical new information retail revolution. At the same time, mainstream e-commerce companies, including Ali and JD.COM, have almost launched functions like "Guess what you like", and almost all of these functions recommend products and services that they think users are interested in through the analysis and calculation of big data. However, to be fair, no mainstream enterprise in China can be said to be qualified in intelligent matching, and the current accurate push ability is still at the level of "pushing the user’s urn for one month in a row".

③ User participation: In the past, whether in the era of supermarket or department store, new retail generally referred to the change of circulation, but now the concept of new retail has expanded to the whole process of production, circulation and sales of goods or services due to the technological change of the Internet.

So today, our consumers are no longer simple audiences, but participants. Consumers want to participate in the operation and transformation of enterprises. Many enterprises’ products are no longer developed by their engineers, but developed with users. Such statements as Xiaomi’s "making friends with users, absorbing user feedback through forums to develop products" and LeTV’s "R&D by ten million people, dissatisfaction by ten million people, improvement by ten million people" are actually typical representatives of user participation.

④ Cross-border integration: No matter how to change the three points mentioned above, they are actually the level of "value transfer" rather than the essential "value addition". The landing of the concept of cross-border integration has given our users a sense of benefits of "charging for mobile phones", and they can get other value-added services while purchasing products.

Actually, before I visited Jingdong House (Tongzhou Store), I also went to Suning Square, JD.COM’s old rival Suning. The online whereabouts of the two are really amazing, and even the newly established children’s area and experience area in the store are so similar. In fact, the fitness experience area in Suning Life Plaza and the services such as Suning IT help customers are the brand-new values brought to users by typical cross-border integration. Although JD.COM has just started, there are similar initiatives. These have started to meet our consumers very obviously, and interested parties can know it by visiting the shops directly.

Of course, the performance of new retail is far more than the above. As far as the work that our company has carried out is concerned, it also includes faster logistics and transportation, safer network environment, more dimensional products and services, etc. With the participation of consumers, a large number of ideas will become a reality. In any case, with the deepening of the new retail concept, our consumers will usher in an increasingly transparent business society.