Click to read the original article for details. Currently, we seem to be blinded by the 'pseudo-concept' of New Retail.
New Retail: A Springboard 'Pretext'
Why did Jack Ma propose New Retail? Official answer: As online traffic dividends cool, the e-commerce industry, to reach the second growth curve, must shift from initially 'splitting' offline retail with low prices to 'embracing' offline physical traffic through online-offline integration, thereby expanding profit scope. Colloquial answer: It's a collective offline 'plunge' by internet e-commerce; 'New Retail' is merely a conceptual springboard.
In my view, although New Retail is a hot trend, it still needs time to mature into a truly leading concept. Between 'mature concepts' and 'pseudo-concepts' lies a gray zone of trial and error and missteps—a hurricane zone. Outside the hurricane, skies are clear; inside, storms rage. Those who navigate it find monetization; those who don't end up with a 'pseudo-concept' that starts high and fades. Currently, we seem blinded by the 'pseudo-concept.'
Where Is It 'Pseudo'? What Is Retail?
Retail is the final link in economic activities for selling goods, primarily fulfilling consumer needs by providing desired products. Products in producers' or wholesalers' hands are only conceptual use-value; they gain practical use-value only when entering the consumption sphere. Retail is the last step moving goods from circulation to consumption. As the terminal point of economic activity, it is both the logical starting point and the key link in transforming goods from 'value' to 'utility.'
Therefore, I believe the essence of retail is a commercial activity that, through certain technologies or forms, provides effective goods and services to end consumers (individuals or households).
Has today's New Retail undergone a 'qualitative change'? My answer is no.
From the historical evolution of retail, e-commerce is a new retail format driven by technology, an inevitable sales form in the information society, but it hasn't changed retail's essence or connotation.
To use an analogy, traditional retail and New Retail are like the A and B sections of the same song. No matter how varied the melody, their role is to add character to the 'retail song.' They share a progressive logical relationship, not a clear differentiation as two distinct species.
However, most industry New Retail strategies put the cart before the horse, focusing only on innovation to highlight their 'new concept' pedestal. The main reason is that people don't fully understand the existing retail system in China.
(1) Historically, retail is both the oldest form of trade and the most technologically characteristic transaction method. Barter in primitive society nurtured retail's prototype; with merchants and currency in slave society, retail's specific forms took shape. Over four to five thousand years, retail forms have evolved from itinerant to stationary merchants, from specialized handicraft shops to general stores, to modern department stores, supermarkets, convenience stores, specialty stores, and more—showing constant change. As history's wheel turns, new retail methods emerge, but they don't change retail's essence: selling goods or services directly to end consumers.
Goods and services are retail's essential connotation; meeting customer needs always comes first. No era or technology can change this essence.
New Retail is just one link in the arc of history. 'New' and 'old' cannot serve as labels for qualitative change, nor can they elevate to the 'reshaping retail' stage that many proclaim.
(2) Although retail formats change with technology, 'new does not replace old.' Jack Ma once said: "Online enterprises must go offline, and offline enterprises must go online. Only with online-offline integration plus modern logistics can true New Retail be achieved."
Theoretically, this concept isn't rigorous because retail has no inherent new or old. But online-offline integration as the core of New Retail is a correct approach, as in the internet-driven information age, e-commerce's ripple effects and widespread application will inevitably combine with traditional retail, eventually presenting a unified retail method.
Yet, observation shows that unmanned stores and online malls haven't replaced the general landscape of traditional retail like grocery stores, commercial streets, or markets. Technology only changes how consumers obtain goods; retail remains the core of commercial society and the final form of exchange, with the focus on infinitely narrowing the distance between people, and between people and goods.
(3) Consumers care about product + transaction, not novelty concepts. I conducted random interviews with consumers in various New Retail stores to gauge their views on some 'New Retail' brands. An interesting finding: except for industry-savvy consumers, the vast majority didn't know what 'New Retail' is. They aren't sensitive to retail changes.
"What's New Retail? I don't really understand. I think if the product is good, we'll buy it, whether online or in-store," said an anonymous customer in my survey.
Clearly, from concept to application, the only service target is the consumer, and the recipients aren't chasing ideas or new concepts. Their views may lack industry insight, but they reflect what the industry needs to improve.
'New Retail' is generally pursued by industry practitioners, but what drives consumer purchases is never the 'new' but the 'retail' that performs better on the 'old' foundation.
The Road Ahead: Interdependence of Virtual and Real, Fortune and Misfortune
The farther back you look, the farther forward you are likely to see—Winston Churchill
I believe home furnishing companies shouldn't overestimate the internet's power, expecting it to eliminate all real-world friction. The online world can remove some barriers, like price and inventory location effects, but not all.
Physical stores remain crucial. Especially for home furnishing, consumers' tangible feel and experience during shopping are vital. Online-offline integration is supplementary, not the protagonist in the retail process.
In a restless business environment, followers mistakenly think any new concept is a trend, eager to cash in. I believe we should calm down, combine future development trends with our own professional capabilities and resources to start ventures. We must look at the stars but keep feet on the ground. The New Retail path is full of uncertainties.
The road ahead: virtual and real coexist; fortune and misfortune are intertwined. When there's no cost to trial and error, it's okay to abandon obsession with new concepts, follow your own path, focus on the present, and serve consumers better in your own way—that's something to be proud of.
Source: YIOU.com