Retail is an ancient business. In every wave of iteration, the power of technology to move mountains and drain seas is most fully demonstrated. In 1884, Sears was founded in the United States, later becoming the famous "originator of department stores." Relying on the railway network and postal system, it successfully sold department store goods to the vast Midwest. But as the U.S. highway network and automobile industry matured, the new giant Walmart rose, ushering in the era of Retail 2.0. Subsequently, Amazon leveraged the internet and technology to successfully enter the retail arena, bringing a new e-commerce era. The development of the retail industry to this day shows that every innovation is closely related to the technological innovations of its time. Each wave of innovation brings new industry leaders to the forefront, while former giants fall behind. As an industry benchmark, Walmart's "Everyday Low Prices" strategy is often considered the key to its success, but this is not the whole story. Without the systematic management capabilities underpinned by technology, Walmart's comprehensive supply chain management would be impossible, and low prices would be out of the question. As early as the 1970s, Walmart established a logistics Management Information System (MIS) to handle system reports and speed up operations. Shortly thereafter, Walmart partnered with Hughes to launch a logistics communications satellite, which gave Walmart a leap in development. It can be said that Walmart's victory over rivals like Sears, K-mart, and Macy's offers the greatest lesson to global retailers: the crucial role of informatization in retail. Zhang Wenzhong, founder of Wumart, once described, "Retail is high-tech." This conclusion from the end of the last century is also confirming the current wave of retail industry upgrades. Looking at the long term, from the initial POS systems, barcodes, and ERP, to the internet and social media, and then to the Internet of Things, big data, and artificial intelligence, technological iterations have driven retail industry transformation, continuously narrowing the temporal, spatial, and psychological distances between buyers and sellers—including production and logistics—and making transactions more efficient. Consumer demand for consumption is always changing, but overall it can be summarized as better, faster, and more convenient. Driven by this, the retail industry is now undergoing new changes: during the pandemic, consumers' habit of achieving "everything to home" through instant delivery was reinforced. The stronger the consumer demand for "buy now, get now," the higher the technical requirements for backend supply chains and fulfillment systems. As always, technology will once again play a significant role in the transformation of retail. Instantaneity: From Fast to Faster
From "store of all goods" to "everything to home." At 0:00:03 on November 11, 2009, Yan Jun from Hejin, Shanxi, recharged his phone on Taobao and completed the payment in 14 seconds, unexpectedly becoming the first person to open the door to "Double 11." Since then, the booming e-commerce has brought a huge impact on traditional retail, with practitioners exclaiming "the wolf is coming," and giving rise to Huang Mingduan's famous quote from RT-Mart: "I beat all my competitors, but lost to the era." But he didn't say where the "era" that beat him came from—it was technological progress that changed the times. Under the e-commerce tide, two retail formats in traditional channels have remained nearly unaffected: convenience stores and fresh food supermarkets. This is because they maximize the "fast" advantage of physical retail, abandoning deep exploration of planned demand and instead meeting users' immediate needs. This also proves that no matter how retail develops, the key to success or failure is the prediction of consumer behavior and the ability to provide consumption-related services, that is, starting from consumer needs, enabling them to achieve "what you see is what you get" in the shortest time, fastest speed, and nearest distance. Today, consumers have a deeper understanding of time utility, and the number of people willing to pay a premium for "timeliness" is growing. Moreover, the long-term competition in delivery time and efficiency in e-commerce has led consumers to form the perception that "speed is a key indicator of e-commerce quality." More importantly, unlike the "zero-sum game" between e-commerce and traditional retail, instant retail can feed back offline with online traffic, expanding the service scope of physical merchants and achieving a win-win effect. For example, looking at the current distribution of merchants and products on instant retail platforms in China, they are mainly fresh food, groceries, and fast-moving consumer goods, primarily from mom-and-pop stores, key account supermarkets, and chain brand stores. Meeting consumers' immediate needs also brings new growth to these offline physical stores. The retail market is moving from "store of all goods" to "everything to home," which is especially evident in China with its advanced e-commerce. In another e-commerce stronghold, the U.S., according to a survey by Coresight Research, delivery time is becoming increasingly important in the online shopping experience, with nearly 48% of online shoppers choosing fast delivery services, including same-day, one-hour, and 15/30-minute options. To this end, companies like Google, Uber, and Walmart are heavily investing in instant retail, striving to shorten the time for goods to reach consumers. Instant retail has become a new wave of consumption sweeping the globe. New Technology from "Store of All Goods" to "Universal Store" Industry transformation is not achieved overnight. In the traditional e-commerce retail model, the richness of product supply has greatly increased. Relying on cloud computing, e-commerce has brought near-infinite supply to the "store of all goods," and through optimization of offline supply chain systems such as cloud warehouses and backbone warehouses, it has compressed fulfillment time from 2-3 days to next-day or even hourly delivery. But when entering instant retail, consumer waiting time is measured in minutes. When evolving from "store of all goods" to the "universal store" of buy-now-get-now, the business architecture and underlying technology of the e-commerce era are no longer sufficient to meet the new normal of consumption. On the other hand, the emergence of instant retail requires the traditional retail industry to re-evaluate the value of technology investment. Instant retail relies on the local physical retail supply network, which is not as simple as moving goods online. It involves the construction of a cellular supply network based on LBS location, integrated online and offline product inventory and sales management, and a whole new set of operational logic and IT support systems. In other words, the richer the product supply and the shorter the fulfillment time required at the front end, the more the backend needs to increase technology leverage investment. Therefore, a typical trend is that global technology and retail companies such as Google, Meituan, and Walmart are all strengthening their investment in technological innovation, exploring ways to improve efficiency through technology. Uber Eats, in partnership with robotics company Serve, has launched "sidewalk robots" for automated food delivery. For example, Google Wings and Amazon PrimeAir drone delivery have already been deployed in the U.S. and Australia, compressing delivery time to seconds. In Beijing's Shunyi district, Meituan's automated delivery vehicles have been in regular operation for over 2 years, covering more than 50 communities and providing delivery services for fresh groceries and other items to nearby residents. In addition, there are warehouse sorting, inventory management and counting in physical stores, all of which require breakthroughs in multiple interdisciplinary technologies. Amazon, through the acquisition of Belgian warehouse robotics company Cloostermans, is accelerating its automation layout for warehouse operations and has launched its fourth-generation air delivery drone MK27-2, offering consumers ultra-fast delivery within 30 minutes, driving the growth of its instant retail business through technology investment. In 2018, Kroger, a grocery chain with 2,800 stores in the U.S., announced a partnership with Ocado to build a fully automated fulfillment system in Florida, along with micro-fulfillment centers called "Zoom," which can compress fulfillment time to 30 minutes. This technological revolution in the retail industry is happening at every link. Demand-Driven, Catching Up on Technology Gap The integration of retail and cutting-edge technology. After the pandemic, the wave of instant retail emerged globally at the same time. Physical retailers and technology companies are standing at the same starting line again. But a current situation that cannot be ignored is that the technology investment of China's traditional retail industry, whether in terms of technology reserves or capital investment, lags far behind. Third-party data shows that global investment in retail technology reached $109.2 billion in 2021, much higher than $47.1 billion in 2020. Meanwhile, IDC research shows that Walmart, as a global retail enterprise, had IT expenditures of $11.7 billion as early as 2018, second only to Amazon's $13.6 billion in the same year. In contrast, in China's traditional retail industry, according to third-party data, based on an estimate of IT investment accounting for 0.05% of total retail sales of consumer goods, the domestic retail IT investment market size in 2020 was 19 billion yuan, less than Walmart's R&D investment alone. Driven by the new wave, the domestic retail industry is also catching up. On December 7, Duodian Dmall submitted its listing application to the Hong Kong Stock Exchange, applying for a main board listing. Duodian Dmall's core logic is to provide a set of retail digital SaaS operating system. As of the end of September 2022, Duodian had a total of 458 customers, of which 245 were operating system customers. Relying on Dmall, Wumart has successfully opened online business channels, streamlined offline business management, gradually achieved full-scenario coverage, omni-channel operations, and full-chain connectivity, promoting the digital transformation of traditional physical retail enterprises, and solving a series of retail pain points and difficulties such as logistics efficiency, goods management, and cost control, successfully transforming into a technology retail enterprise. Tianhong Digital and Meituan's drone division are jointly exploring drone delivery of FMCG, cosmetics, and other retail products, and the two parties will work together to launch a "3-kilometer 15-minute" everything-to-home model. In August this year, Tianhong Digital announced a strategic cooperation agreement with Meituan's drone division, starting from Tianhong Shopping Center, to jointly explore drone delivery models. When the new route is officially launched, more than 20 physical catering merchants in the shopping center will use drones to deliver over a hundred products, including fast food and beverages, to surrounding users, providing a new service experience of "3 kilometers 15 minutes" for everything-to-home for residents around the business district. In 2021, Meituan's annual report quietly changed "Food + Platform" to "Retail + Technology." After clearing the local life services, Meituan expanded again, entering the vast retail industry, and also regarded technology as the key to success in retail. In Meituan's retail layout, one of the core businesses is instant retail. In the second quarter financial report this year, Meituan re-adjusted its segment layout, incorporating Meituan Flash Purchase into the "core local commerce" segment. Behind these business adjustments is Meituan's strong technology reserve and technological innovation breakthroughs accumulated over many years. Compared with other e-commerce companies that focus more on internet technology, Meituan's exploration of retail technology is more comprehensive, especially in hardware technology, with industry-leading technologies such as acoustic positioning for unmanned delivery, capsule obstacle avoidance, and silent propellers; the "Baichuan System" developed for merchants' inventory needs; and the development of smart robotic arms for goods sorting. Especially in April last year, Tsinghua University and Meituan jointly established the Tsinghua University-Meituan Joint Research Institute for Digital Life (hereinafter referred to as the Joint Research Institute), leveraging the technical advantages of multiple Tsinghua departments to support the innovative development of digital life. To date, relying on the Joint Research Institute platform, the two parties have jointly initiated more than 20 joint research projects, with a "luxury" research lineup composed of experts from the Department of Electronic Engineering, Department of Automation, School of Vehicle and Mobility, School of Software, Department of Computer Science and Technology, and Department of Industrial Engineering, focusing on key directions such as unmanned delivery, air-ground coordination, automatic spatiotemporal registration, and high-performance computing. Driven by demand, cutting-edge technologies from the laboratory are continuously being implemented. Tsinghua University research group and Meituan jointly developed drone acoustic pulse signal positioning technology For example, at the 20th ACM Conference on Embedded Networked Sensor Systems held in November this year, the Tsinghua University research group, in collaboration with Meituan, developed drone acoustic positioning technology, which won the Best Paper Award at the international conference. This new technology can locate drones at heights up to 120m with a relative positioning error of 0.5%. Currently, this technical solution has been integrated into Meituan's drone flight control system and has passed testing and verification in various complex environments. It is planned to be applied in Meituan's unmanned delivery business in the future. Technology investment and business progress are mutually causal. According to Meituan's Q3 data, its instant delivery orders reached 5.03 billion transactions. These billions of orders contain rich application scenarios, sufficient to form a positive cycle of R&D. It may surprise many that retail, this "bending down to pick up coins" hard business, actually has such a strong demand for technological innovation. Final Thoughts Technological innovation is always the driving force behind commercial progress. The wave of instant retail has become a global trend, and it is about to open a new wave of technological innovation in the retail industry. From visual recognition technology to automated delivery, every technological breakthrough has the potential to bring significant changes to consumer lifestyles. From the TOP 100 Retail Technology Companies 2022 list selected by foreign institution CB Insights, we can get a glimpse. Currently, a large number of foreign startups have flooded into the retail ecosystem, engaging in new business forms such as product visual recognition, warehouse sorting robots, and contactless payment. For a long time, the technology investment of the traditional physical retail industry has been easily overlooked. And because it involves many offline links, every step forward seems challenging. But historical facts tell us that those companies that resolutely invest in technology will ultimately stand out in the wave of change and achieve greater success.