Retail Industry: New Retail Leads a New Stage of Industry Development

1) The underlying reason for the birth of new retail: Behind the dual-line integration is the return of the essence of retail.

"New retail" immediately attracted widespread attention as soon as it was proposed. The underlying reasons for its emergence are actually the general trend of commercial retail returning to its essence: new retail solutions pursue consumption by complementing online and offline shortcomings and sharing advantages. A win-win situation for both investors and businesses.

Online channels have the advantages of low price, high efficiency and intelligence, but they have always been limited by experience. However, offline scenes naturally have the advantage of experience, and high-end consumption dominates. Despite the impact of online e-commerce, it still retains a large market share. market share, but high costs limit its further development. At this stage, the industry is facing structural transformation, the growth rate of e-commerce performance has slowed down compared with the same period, and the internal differentiation of physical retail (the operating conditions of leading enterprises far exceed the overall level of each sub-industry). If online e-commerce and physical enterprises want to achieve rapid development, they must make full use of The market can no longer stand still and needs to achieve mutual penetration and complementarity.

The two-line integration of new retail will create a win-win situation. From the consumer side, new retail will meet the four major demands of consumers: improvement of shopping efficiency, optimization of service experience, prediction of shopping needs and transformation to quality consumption; while from the supply side, companies will achieve an increase in performance.

2) New retail methodology: Model innovation under the background of dual-line integration has great potential for the industry.

We believe that new retail will use digitalization as the core driving force to integrate the industry from two aspects: first, e-commerce will leverage its technological advantages and invest offline to drive offline retail companies to optimize their supply chains to achieve transformation and upgrading; second, offline experience will be used Advantages, integrate innovative development of business formats, and rely on e-commerce online platforms to inject technological elements to expand advantages.

Technology drives the reconstruction of people and goods yards, and the supply chain continues to be optimized. The essence of retail is to continue to meet the changing needs of consumers, and the only constant original intention of consumers is high quality and low prices. Therefore, the trend of new retail returning to the essence requires retailers to optimize the supply chain based on consumer needs. The supply chain in the new retail era is not just a supply chain, it emphasizes the integration of many aspects and the minimization of the entire system cost based on meeting consumer demand levels based on marketing and data. Based on this, future retail will focus on people as the core, optimize and integrate the supply chain, including the repositioning of "people", the digitization of "goods" and the reconstruction of "fields", ultimately improving business operation efficiency.

Integrate business formats and innovate life aesthetics to reshape the retail model. In 2017, the retail industry entered a crazy period of accelerated reproduction of new species. The emergence of these new retail species means that the boundaries of retail formats are becoming blurred, service content is becoming more diverse, and life aesthetics are reshaping the retail model.

3) Investment Outlook in 2018: New retail leads the industry to a new stage of development. New retail dual-line integration provides new development ideas for the industry and also provides us with new ways of thinking. We propose to look at the future development of the industry from three dimensions: ① Under the background of dual-line integration, digitalization is the core driving force, and retail companies are transforming and upgrading; ② Online e-commerce companies are joining forces, and the industry competition pattern is increasingly emerging; ③ The mutual penetration of offline companies is increasing, and optional consumption continues to recover. In the future, we will continue to recommend Yonghui Supermarket, Suning Cloud Commerce, Wangfujing, Tianhong Co., Ltd., and Ewu Business A.