What Do We Mean When Talking About New Retail

July 5, 2018 4 mins read
What Do We Mean When Talking About New Retail

The year of 2016 was remembered as the first year of new retail, since it was in this very year this term was put forward by Jack Ma.

In 2017, new retail registered a rapid growth. And now, almost all retail companies are engaged in transformation and reform, while intensifying efforts to employ talents of new retail. As employers, today, we will share our views on how to seek chances and further growth for enterprises and individuals in the retail change, and explain new retail in the following dimensions.

I. What on earth is new retail about

16 years ago, thanks to the excellent performance of e-commerce, enterprises had seen a continuous sales growth. However, the momentum soon faded: online profits touched the ceiling, flow grew at a lesser rate and even declined, costs of acquiring customers kept increasing, and the normalization of promotion led to a reduced consumer sensitivity. All this forced enterprises to make breakthroughs in innovation. In this context, new retail was proposed as a concept.

Then, what on earth is new retail? Many people think of it as O2O, a combination of online and offline sales, such as MIUI that started an Internet enterprise and that expanse its business to offline sector, or Carrefour, a retail giant which has opened up its official website as an effort to enter the online sphere. However, new retail is not a simple combination of online and offline efforts. In its essence, new retail focuses more on enterprises’ efficiency and user experience. Whether it be smart stores, pop-up stores, or self-service convenience shops, it is enterprises for maximizing the cost effectiveness that are pursuing Omnichannel layout, integrating supply chains, and using consumer data obtained online and offline to form a more complete consumer portrait so as to increase per customer transaction and repurchase rate. As for consumers, the new digital and intelligent consumption scenario can also meet more and more personalized demand and deliver an improved experience.

II. How enterprises respond to the new retail

To ride the wave of new retail, enterprises should make active adjustments and changes. This include the construction of IT system to enable digital connectivity, integration of supply chains and improvement on warehouse and logistics. Above all, a new organizational structure should be established to empower new retail. An observation of the market shows that lots of FMCG giants and retail companies have made pioneering efforts for transformation, setting up new retail division to synergize e-commerce, channels, brands and other related departments under the coordination of the division director, and promote the shift to new retail based on data-based indicators and digital methods. We also find out that, based on market research, these two areas of work matter much for a successful transformation. First, an enterprise must see that the new retail sector shall be given real power, rather than turning the endeavor into a slogan or a strategy with little chance of implementation; and the head of the new retail department reports directly to the CEO. Second, create opportunities for young people with ambitions, understand that it takes time to reform IT system and recruit enough talents, as well as encourage employees to embrace and explore new retail so as to underpin it at a basic level.

III. How to seek the chances of new retail for a better career growth Over the year when Alibaba practiced new retail, there was a growing demand for new retail talents. Many enterprises say it is very hard to get employees who are good at both e-commerce and offline operation. Therefore, enterprises are willing to give a higher pay to such versatile talents. The battle for new retail talents has begun. If one wants to seize the new retail opportunities to promote his career development, he should pay close attention to the changes in the market, understand the new approaches and trends of new retail, study the latest new retail cases, actively participate in the new retail projects, keep in touch with peers and industry headhunters for first-hand information, and seek internal or external career transition opportunities.

Marlon Mai's picture
Marlon Mai
Managing Director, Greater China