Three levels to give you a comprehensive interpretation of “new retail”

When the concept of “new retail” is mentioned, what brands come to mind?

Perhaps most people’s first impression is of Hema Fresh Food. They still remember that when it first opened, there was a lot of news about Hema Fresh Food taking photos and checking in on WeChat Moments. This project, run by Hou Yi, CEO of JD Logistics, and heavily invested by Alibaba, has directly attracted people's attention to the concept of "new retail".

Both e-commerce and traditional retailers are eager to try out new retail.

Three levels of new retail:

The first is the dual domestic and foreign factors for the birth of new retail; secondly, experience is the most important part of new retail; and finally, the pursuit of common ground while reserving differences in experiential marketing.

1. Domestic and foreign factors for the birth of new retail:

Today, many business leaders have interpreted new retail:

Jack Ma: New retail is driven by big data and transforms the retail industry through the development of new technologies and the upgrade of user experience. Simply put, new retail is a data-driven pan-retail format centered on consumer experience. In the next ten or twenty years, there will be no e-commerce, only new retail. Online, offline and logistics must be combined to create true new retail.

Lei Jun: The essence of using Internet thinking to create a new retail format that integrates online and offline is to improve efficiency and release the consumer demand of the people.

Liu Qiangdong: We are in an era of change. The essence of the fourth retail revolution is unbounded retail. The ultimate goal is to reconstruct the cost, efficiency and experience of retail on the basis of "knowing people, products and markets".

Why are business leaders so fond of “new retail”? At present, "the wholesale and retail industry is still an industry that contributes greatly to the national economy and has good development prospects, but the growth rate has been declining year by year, indicating that there are some problems in the industry. At the same time, although traditional retail has good profits, due to geographical location Obstacles prevent us from ranking high in market share.”

Fortunately, traditional retail has achieved relatively good results after undergoing new retail transformation last year.

In the composition of the added value of the sub-sectors of the national economy, the added value of the wholesale and retail industry has always remained above 9%. The wholesale and retail industry has obvious advantages compared with construction, accommodation and catering, real estate and other industries. It can be seen that my country’s retail industry has significant strength.

We can clearly see from the table that since 2012, my country's total retail sales of consumer goods has continued to rise, but the growth rate has slowed down. Total retail sales increased from 210,896.19 yuan to 33,349.519 billion yuan, showing an upward trend. The year-on-year growth rate of total retail sales dropped from 14.5% to 10.4%, decreasing year by year. At this stage, the retail industry still has great potential for development.

In the total revenue, we can see that the total revenue of the three e-commerce companies, JD.com, Alibaba, and Suning Cloud Commerce, is far ahead. It can be seen that e-commerce has unique advantages in the retail industry.

3. Yonghui, Tianhong, BBK, etc. have all recently carried out new retail transformation, and have achieved relatively good results after combining online and offline.

After undergoing transformation, in the first half of 2017, Yonghui Supermarket's total revenue was 28.317 billion yuan, a year-on-year increase of 15.49%; Tianhong Supermarket's total revenue was 8.983 billion yuan, a year-on-year increase of 5.14%; Bubugao Company achieved operating income of 8.687 billion yuan, a year-on-year increase 9.75%. The new retail performance of Yonghui, Tianhong and Bubugao all increased significantly, with net profit growth as high as 57.57%, 31.36% and 20.86% respectively.

The above are the domestic factors for its birth. What about the foreign supporting factors?

Looking back on its path to fame, you will find another word that frequently pops up: O2O (from online to offline). This is a major reason why foreign countries are helping retail to upgrade to new retail.

The term O2O originated in the United States and was first proposed by the fresh food company Webvan. It is an online-to-offline business model.

The new concept created a stir in the U.S. venture capital circle, earning a valuation of up to 8.5 billion. However, when the development of O2O was not yet clear, the American website Groupon rejected the temptation of Googol's $6 billion acquisition, and everyone was attracted to Groupon's model. It adopted a model similar to that of Pinduoduo today.

When these two huge waves hit the country, many start-up companies were spawned to serve community life circles, including home-based services such as food ordering, takeout, and medicine delivery.

The wave will eventually pass, and various disadvantages of O2O began to appear. At this time, the e-commerce giant Alibaba proposed the concept of "new retail". When the cold winter passes, only those who persevere will be the final winners.

Maybe it's a coincidence, maybe not. The first person to propose O2O was a fresh food company, and Jack Ma's first step in his new retail layout was also "Hema Fresh."

Domestic retail dilemmas and new foreign models are integrated, supplemented and eliminated. New retail has become an industry synonym and has taken root in China.

2. Experience is the most important part of new retail

Reviewing the past and learning the new, understanding the internal and external factors of the birth of new retail, what new knowledge can we get that is helpful to the brand and marketing fields?

Experience is a very important part of the new retail field, so experiential marketing is a weapon that the industry cannot ignore. The specific reasons can be seen from two parts: industry and consumers.

First, let’s look at the industry itself:

As mentioned earlier, new retail originated from "serving community life", and experience in service is a well-known and important content. Therefore, new retail rooted in service must not lack attention to experience.

Analysys’ definition of new retail is: “New retail” advocates being consumer-centered, relying on big data, artificial intelligence and other technologies to upgrade the production, circulation and sales process of goods, thereby reconstructing the retail business structure and ecology. circle, and integrate online and offline retail service experiences to meet consumers’ consumption upgrade needs.

We can see two main points related to marketing:

1. Consumer-centered; 2. Meet consumers’ consumption upgrade needs; therefore, the second consumer-side reason can be concluded.

Secondly, from the consumer side:

A report from Analysys Think Tank shows that the proportion of consumers’ enjoyment and spiritual consumption is gradually increasing. Contents such as consumption upgrades have also been mentioned countless times.

Now that the importance of experience is clear, the question arises. How is the domestic new retail industry model and experience integrated into it?

After combing through the specific models of the domestic new retail industry, we found that there are no more than four important parts, and each part is closely related to experience.

High-quality products and personalized services → Omni-channel layout → Accurate understanding of big data → Efficient logistics to ensure experience

Products and services meet the most basic needs of consumers; omni-channel layout can improve shopping convenience and satisfaction; big data accurately understands consumers, from preferences to potential needs; logistics accelerates satisfaction while ensuring product freshness.

How do our smart Chinese people optimize their experience in new retail? Let’s take a brief look at it with the help of three cases.

Yonghui launched the "Super Species" supermarket to create a gourmet food workshop by providing cost-effective global ingredients. At present, eight new "species" have been launched, including "Salmon Workshop", "Box Cow Workshop" and "Wheat Workshop", which provide on-site production services, allowing consumers to buy and eat as they go, organically combining supermarkets and catering.

BBK has launched "Fresh Foodism" in the new retail field, combining the Internet with modern social methods. In-store, it integrates fresh food, beverages, catering and other business formats through online platforms. Outside the store, consumers use APP to place orders, integrating inventory and Products are integrated online and offline, providing an integrated shopping experience.

The long-established Wumart Supermarket has cooperated with the Duodian APP to implement the "second payment" function inside the supermarket. Users can pay by shaking the APP at the cashier, which is called "touchless" payment by consumers. Opening up multiple links such as membership points, promotions, cashiers and merchandise is also an inevitable result of the development of experience consumption.

3. Seeking common ground while reserving differences in experiential marketing

In these experiential links, as marketers, can we integrate experiential marketing to enhance brand and sales?

First of all, let’s look at the definition of experiential marketing as a marketing method that fully stimulates and mobilizes consumers’ emotions, actions, thinking, senses, associations and other perceptual and rational factors, and greatly enhances user participation and interactive interest. To enhance consumers’ recognition of the brand.

In one sentence, "use your body to experience it, and experience it with your mind."

So, how does experiential marketing attack in new retail?

1. Preserve differences: emphasize each individual consumer

Experiential marketing respects individual differences and provides personalized services and products, and consumers are willing to pay for personalization.

According to Maslow's hierarchy of needs theory, human needs develop from low-level to high-level. Consumer needs also vary due to individual differences, which reflects the subjective characteristics of individuals. After people satisfy low-level needs, their needs will rise to higher levels and pursue personalization.

In experiential marketing, it is necessary to identify the differences and demand levels of different groups of people and provide personalized services and experiences.

For example, Hema Xiansheng conducts experiential marketing through "physiological needs" eating. At Hema, consumers can not only buy and eat as they please, but can also make food on site. Consumers who cannot go to the store can also place orders through the APP. In addition, the store also provides a large number of DIY opportunities to provide consumers with a personalized experience and fully enjoy the joy of "eating".

2. Seeking common ground: Finding benchmark points makes marketing more effortless.

It is difficult to meet thousands of people in offline scenes. This has encountered many obstacles in experiential marketing that emphasizes experience because experience is subjective. Consumers are gradually transitioning from the past rational thinking to perceptual thinking. At the same time, there are differences between individuals, and different individuals will have different feelings about the experience.

What we can do is to pay close attention to consumer experience and feelings, and do a good job of analysis, summary and adjustment. Through empirical evidence, we can get an experience process that consumers like and that companies can achieve. This content can then be used to upgrade the brand experience.

For example, "Super Species" uses online questionnaires to survey customer consumption preferences, and continuously optimizes and adjusts the products and services it provides based on statistical data to ensure the most considerate service and experience for consumers.

Experiential marketing is the magic weapon for winning in new retail. In addition, word-of-mouth marketing and scene marketing also play a very important role.

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