Changes and Future Trend of Retailers

Every technological innovation will bring forth a batch of new industrial stars, and new industrial models will emerge as the times require. This article will focus on the changes of retailers in the digital economy era and the future trend

Retail can be divided into traditional retail, modern retail, e-commerce retail and new retail. The thinking model of this division is “Retail Triangle”. ‘Retail Triangle’ represents the diversity of choices, the cheapness of goods and the convenience of shopping, and it is an interpretation of users’ needs. Traditional retailing can only meet one of the three conditions, modern retailing can meet two of the three conditions, but E-commerce retailing can meet all conditions.

E-commerce retailing

When e-commerce sales appeared, the supply chain level was at its peak, and the format of this period met the three demands. All the information records of the store will be connected to the internet, which also enables the information between suppliers and retailers to be synchronized in real time. Cargo management has also become real-time Internet management. The offline shop is not necessary, because online shops are rent free and can operate independently which will save money. Traditional retailers will try their best to rely on e-commerce, such as Tesco and Boots’ independent e-commerce platforms. Retailers need to hand over the goods to the transfer company for transfer, and accept payment from the original only accept cash to cash and mobile payment in parallel(Investopedia, n.d.).

In the e-commerce era, users’ needs have been met. In China, for example, JD.com’s Logistics’s high-speed distribution benefits from its excellent management and equipment and China’s complete infrastructure, enables users can place orders in the morning and receive them in the afternoon. For catering retail, most delivery time can be limited to less than half an hour. When users search for commodities on Tmall, the search results reach dozens of pages. Due to the fierce competition among retailers, the cheapness is satisfied. Under such convenient conditions, users do not have to go out shopping, resulting in a great impact of online retail on offline retail.

Is e-commerce retail the peak of retail development?

No, development is only reaching the peak of the “retail triangle”. Too much convenience makes people lack scene experience and offline environment, and too much low price makes the quality of products not be guaranteed well. However, too many choices make users lose the ability to choose.

Of course, users will pursue cheapness, multi-choice and convenience, but this is not all they are seeking. When retailers were thinking about how to reconstruct the “retail triangle”, new retail emerged.

New Retailing

This concept was put forward by Chinese entrepreneur Ma Yun. It is a completely new concept and cannot be found in Wikipedia. The new retail mainly wants to combine online retail with offline retail(Baike.baidu.com, n.d.). According to the Chinese current living conditions, the retailers with innovative spirit think the new “retail triangle” represents to preferred option, discount and experience. Preferred option refers users want to choose products which have been selected according to the quality by retailers. Discount means that the user wants the retailer to give discount to the goods demanded by the user.  Experience means that users can have options to ordering the online service of delivering goods to their door or head to their offline store to have a good shopping experience(简书, n.d.).

Now the reason why Chinese people buy goods has changed from satisfying basic needs to satisfying personalized needs. In the future, the relationship between online and offline will not be as sharp as it is now. Driven by new technologies, retailers’ behavior will change again.

In real life, people familiar with the network will first trade with online shop, and then give users a discount that can only take effect offline, thus users are guided from online to offline. The same is true for guiding users from offline to online. Thus, retailers no longer use human flow as the optimal index for choosing store locations, but rely on big data to choose centers with the most densely populated population. Retailers can also provide customized services. For example, for the same piece of clothing, the basic pattern is fixed but the pattern and color can be changed, and the fitting is completed by displaying only the user’s head through augmented reality or virtual reality technology, meanwhile, the device collects data so that users can also fitting online. Retailers will analyze the sales data set to obtain the local consumption habits so as to provide the goods to suit people’s need. Under this assumption, companies with more data will be more likely to dominate new retail businesses and retail start-ups will become more difficult.

Every change in retail mode has improved people’s lives. In this technological change, I believe retailers will attach importance to experience.

Reference：

Investopedia. (n.d.). Explaining Electronic Retailing (E-tailing) With Amazon and Alibaba. [online] Available at: https://www.investopedia.com/terms/e/electronic-retailing-e-tailing.asp [Accessed 14 Feb. 2020].

Baike.baidu.com. (n.d.). 新零售（零售新模式）_百度百科. [online] Available at: https://baike.baidu.com/item/新零售/20143211?fr=aladdin [Accessed 14 Feb. 2020].

简书. (n.d.). 重建零售三角，数据驱动市场. [online] Available at: https://www.jianshu.com/p/ecb5868f16fb [Accessed 14 Feb. 2020].