In 2012, during the golden age of hypermarkets, if you had told their decision-makers that a wave of store closures was coming, you would likely have been dismissed as a madman. Now, any retail practitioner can explain why hypermarkets are frequently closing stores: the impact of e-commerce, changing consumer habits, and shifts in cost structures. There is a recognized direction for hypermarket transformation: strengthening fresh food operations, improving store aesthetics, reducing floor area, and decreasing the proportion of non-food items. However, pioneers like Yonghui have already gained a significant lead over those who woke up later. The latecomers, while suffering losses, are investing heavily in store renovations, which is not easy. Even with investment, catching up is uncertain, especially since the pioneers are already preparing for the next trend cycle. Were hypermarket decision-makers truly unable to foresee retail trends in 2012? Of course not. If they had understood e-commerce, they would have observed that e-commerce struggles with fresh food, impacts non-food categories, and that consumption upgrading was building momentum. If they had not been resistant to new things and had spent more time observing the environment and studying e-commerce, they should have identified the transformation direction in 2012 and acted early, rather than now being in a dilemma. E-commerce has brought challenges and transformations to hypermarkets, 3C, department stores, and apparel. While some brands and companies have declined, many have risen, such as Xiaomi, Three Squirrels, Handu Yishe, Puppy Electric, and Yonghui Superstores. In contrast, e-commerce has had a relatively small impact on FMCG brands and distributors, as the main battlefield for FMCG is offline. However, the upcoming "New Retail" is likely to have a huge impact on FMCG companies, as changes in sales methods will inevitably lead to changes in production and distribution. For FMCG brands and distributors, the current situation is like that of hypermarkets in 2012. They must gain insight and make judgments about the future. Choosing the right path is often more important than diligence and hard work. For FMCG brands and distributors, is New Retail a pie or a trap? How should they approach it? ** 1 ** Understanding New Retail Just as hypermarkets should have understood e-commerce in 2012, FMCG companies should proactively understand New Retail. New Retail is the future survival environment for FMCG companies. The essence of survival of the fittest is evolving with the environment. Actively understanding New Retail is about finding direction for proactive evolution. Do not wait for passive evolution, as the result of passive evolution is often elimination. The 2018 (4th) China FMCG + Internet Conference, hosted by New Distribution (WeChat public account "新经销"), will be held in Chengdu on March 18. The author has been invited to participate and share insights on New Retail, hoping to bring some thoughts and actions to everyone. ** 2 ** Logic Over Results In 2012, telling hypermarket decision-makers that they should strengthen fresh food operations, improve store aesthetics, and adjust product mix—directly giving them the results—would likely have been seen as an outsider teaching professionals. But if you had explained the characteristics of e-commerce and changes in the environment, such as consumers, they would have been more likely to listen. Strategy is a top leader's project. Behind strategy is logic, and the foundation of logic is information. Understanding New Retail and gaining insight into the environment requires sufficient information and self-consistent logic, not just seeking results. The thinking process cannot be skipped. If you only seek results, you may take the wrong path and struggle to grasp the pace and magnitude. FMCG companies should focus on accumulating information and thinking logically to arrive at their own conclusions. ** 3 ** Circle of Concern Different periods require different circles of concern. When an industry is stable, models are solidified, and the possibility of change is small, you should narrow your circle of concern, focusing more on your own industry, improving internal capabilities, refining details, and strengthening execution. When your industry is in a period of transformation with various possibilities, you should expand your circle of concern, paying more attention to the upstream and downstream of the industry and related environmental changes. During transformation, it is common for outsiders to disrupt insiders. Why do cross-industry and outsiders have power? Because insiders are often constrained by fixed cognition and self-imposed limitations. Currently, the FMCG market is in a period of transformation due to factors such as New Retail and consumption upgrading. We should expand our circle of concern, combining our understanding of the industry, cross-industry forces, and consumer insights. We cannot remain confined to a small circle as before, passively affected by the environment. During transformation, there are three types of people: leaders who create opportunities, followers, and those who are eliminated. Expanding your circle of concern is not only to avoid being eliminated by the environment but also to seek to become a leader and drive industry development. Summary There are still peers who believe New Retail is a pseudo-concept and elusive. In fact, New Retail represents the reconstruction of the retail industry by new technologies. Unmanned driving, drones, big data, artificial intelligence, the Internet of Things, electronic payment, virtual reality, 3D printing, image recognition, voice interaction, and other new technologies are developing rapidly. They are not illusory; change will definitely come. The difference is that some people have already incorporated New Retail into their circle of concern, are building their cognitive systems, and are ready to act, while others are still rejecting and denying it.