Click 'Read Original' for details. Source: 木木新知 (ID: gh_f14bf6c94749) Many people understand New Retail as simply moving offline to online. This understanding is, of course, wrong. New Retail is a redefinition and recombination of people, goods, and scenes, using more efficient methods to enhance user experience. This article will introduce you to the true connotation of New Retail. Traditional brick-and-mortar business owners are now facing big headaches. Those running mother-and-baby stores, selling snacks or clothes, and doing beauty salons. Because labor costs and rents are getting higher and higher. It's killing them! Traditional e-commerce is not doing well either. Traffic is getting more expensive, and customer acquisition costs are too high. Logistics costs are no small matter either. If you don't offer free shipping, who will pay attention to you? To be honest, yesterday I bought a one-yuan storage rack on Pinduoduo, and it came with free shipping. Let's mourn for the bosses for three seconds! But some bosses are doing very well.
- Three Squirrels opened 'Three Squirrels Feeding Stores' in supermarkets, and mothers and babies rush in.
- Xiaomi says its stores achieve 20 times the sales per square meter.
- JD.com and Alibaba's community stores are still being deployed.
- Hema Fresh is opening more and more stores, and requires us to pay via its app.
- MINISO attributes its success to the M2B short-circuit economy.
- Xiaomi's Youpin is being vigorously promoted.
- Pinduoduo and Yunji have gone public, and social e-commerce is flourishing everywhere. What is New Retail? Is the mystical and miraculous New Retail? Why do they succeed? People say what they do is called 'New Retail'! Do you understand New Retail? You say, it's so mystical, how can everything be called New Retail? Sorry, but it probably is. What is New Retail? Does New Retail have to be online, internet, or social e-commerce? Not exactly. The internet does not represent 'advanced', and offline retail does not represent the 'essence of retail'. In New Retail, they are like water and milk blended together. So, New Retail is not simply distinguished by e-commerce or physical stores, but uses new methods and concepts, such as data, technology, scenes, experience, communities, etc., to meet user needs and redefine the logic of 'people, goods, and scenes'. The key point is: people-centric. In the era of big data, wherever there is transaction, there is New Retail. It is the reconstruction of people, goods, and scenes. Is there a pattern to New Retail? How can bosses consider New Retail? Is there a pattern? There is. The underlying formula that never changes in retail is: Sales funnel formula: Sales = Traffic × Conversion Rate × Average Order Value × Repurchase Rate
- Traffic: How many people enter the store, which can be calculated both online and offline. Of course, online is more convenient through systems and data records.
- Conversion rate: Of the people who enter, how many actually buy something.
- Average order value: How much a customer spends at one time, and how many items they buy.
- Repurchase: After the customer leaves, how likely are they to come back next time. Sales efficiency formulas: 1. Internet companies calculate per-capita efficiency: Per-capita efficiency = (Traffic × Conversion Rate × Average Order Value × Repurchase Rate) / Number of people 2. Physical companies calculate sales per square meter: Sales per square meter = (Traffic × Conversion Rate × Average Order Value × Repurchase Rate) / Store area This refers to the sales per square meter in a store, which is the most important KPI for physical stores. 3. Sales per square meter limit: If the annual revenue created per square meter is less than the rent per square meter, it indicates that the current business model is not suitable for that location. So, what to do? To put it bluntly, whether traditional stores or traditional e-commerce, the goal is to improve 'per-capita efficiency' and 'sales per square meter'! How to break through the sales per square meter limit? First look at the traffic part in the formula, which is the 'people' in New Retail's 'people, goods, scenes': Per-capita efficiency = (Traffic × Conversion Rate × Average Order Value × Repurchase Rate) / Number of people The most prominent feature of New Retail Change from 'waiting for users to enter the store' to 'going where the users are' By changing the touchpoint logic, create new touchpoints.
"This touchpoint could be a user walking into a specialty store; it could be a knife sharpener shouting on the street and being called over by a user; it could be a user visiting a Tmall store and opening a product detail page; it could be a WeChat official account article being seen, and the recommended product being known; it could be setting up a call center to call users and recommend products; it could be specially visiting customers, calling from their office building and saying 'I happened to be passing by, so I came up to see you'." I have personal experience with 'shared massage' in taxis. Once I took a taxi and encountered a business called 'shared massage'. A massage device was installed in the front passenger seat. Scanning a QR code and paying 3 yuan gave you a 5-minute massage. I chatted with the driver and said: Not bad, you have massage service in your car. The driver was very enthusiastic: Let me start it for free to try, there's a 1-minute free service! I tried it, and it was comfortable. Interesting, selling massage services in a taxi. Riding in a car is tiring and boring, whether going out for business or commuting. A little nap in the car, plus a massage, isn't that 'treating yourself well'? This scene is great, why didn't we think of it before? Because we used to consider the 'scene' first: What can you do in a taxi? It seems there's not much else you can do. But thinking from the 'people' perspective is different. With the mindset of 'from waiting for users to enter the store' to 'going where the users are', it's different. Who are the passengers? What needs might they have? Would they want to drink beverages, use a power bank, buy urgent daily necessities? Or even suddenly get their period? What state are they in? Are they particularly tired, wanting to sleep, rest, or relax their body? Here, the people are those with needs and in scenes; the goods include physical products and services that meet needs; The scene here is a mobile, enclosed small space in a car; the transaction is easily completed through WeChat Pay and mini-programs. The key is that the whole model is very light. Installing the device is just adding a few massage sleeves to the existing front passenger seat. Finding drivers is like waiting by a tree stump for rabbits: just wait at charging stations for taxis to come, directly bypassing the company and negotiating cooperation with the driver. First, offer free trials, then give drivers free massage time at specific times. Importantly, when passengers pay, the platform and the driver split the revenue 50-50. Isn't this also New Retail? Go to new touchpoints to find where people are, and change the logic of 'goods and scenes' Selling retail in offices. Another example is the unmanned shelf company Xingbianli, which deploys shelves in offices. An office is clearly a place with precise audience, dense traffic, and high repurchase rates. In the past, white-collar workers had to go to the convenience store downstairs to buy snacks; now, unmanned shelves and snacks are placed directly in the office. It's also about going from waiting for users to come, to directly going to where users are. Hema Fresh insists on using its app. Another example is Hema Fresh, which also relies on going to find users. Traditional fresh food stores wait for users in the store, which doesn't work! We need to go online to find users and get them to come to us. The sales per square meter of a Hema Fresh store in Shanghai reached 56,000 yuan per square meter, about 3.7 times that of peers. What is the secret of Hema Fresh, which offers fresh seafood cooked on-site, only supports App payment, and promises 30-minute delivery to home? As we all know, in the fresh food sector, the internet is not as good as offline. Why? High loss, non-standard, high cold chain logistics costs, incomplete categories, and inability to meet immediate needs. Relying solely on online or offline makes it difficult to solve these pain points, so Hema adopted an 'online + offline' model, creating a fresh food e-commerce armed with offline stores. This reminds me of the 'JD Daojia' app that I often use. I shop directly at online Walmart, buying meat, vegetables, fruits, etc. The delivery fee is 5 yuan (free for members). Basically within 30 minutes, the delivery person arrives. If the order is over 30 yuan, you get a discount of 8-12 yuan, which is actually a bit cheaper, suitable for lazy people like me. But I often think, with logistics, sorting, and other labor, the cost should be quite high. Walmart's offline business is doing well, so why do this? Here, Walmart has also transformed into an online + offline model. Why do this? Going back to the underlying formula we mentioned, the sales per square meter formula. The general sales per square meter formula for physical stores is: Sales per square meter = Offline revenue / Store area But in the cases of Hema and Walmart mentioned above, the sales per square meter is changed to: Sales per square meter = (Online revenue + Offline revenue) / Store area That is, when online revenue equals offline revenue, the sales per square meter doubles. It's not hard to understand why physical stores are making efforts to develop online business. And Hema goes further. At its core, the most important purpose of its offline physical stores is to attract traffic online, and through online, change the composition of traditional physical store sales per square meter, breaking through the sales per square meter limit. Hema founder Hou Yu's top-level design is: First, if the offline fresh food store eventually becomes a traditional supermarket, even if it makes more money than a traditional supermarket, it won't do it. If it really wants to do it, online revenue must be greater than offline. Second, online daily orders must exceed 5,000 to truly be a business with scale effects. Third, under the premise of low-cost and controllable cold chain logistics, achieve 30-minute delivery within a 3-kilometer radius of the store. Fourth, ultimately, offline should drive traffic online, and the App should be able to survive independently without other traffic support. Based on this, Hema only accepts payment via its App (must download the app), uses the 'daily fresh' model for products, offers fresh seafood cooked on-site (offline experience endorses online purchases), and provides 30-minute logistics (more convenient than going to buy yourself), all to drive traffic online. This is how a fresh food store can be redefined. Let's look at the basic sales per square meter formula again: Sales per square meter = (Traffic × Conversion Rate × Average Order Value × Repurchase Rate) / Store area Hema has broken down traffic, adding the online part to the offline traffic that general physical stores only consider, thereby doubling the sales per square meter. The above are innovations at the traffic level and the 'people' touchpoint, thus revolutionizing a sales method. In fact, WeChat business, social e-commerce, and selling on Douyin are all the same. They all change from waiting for traffic and users to come, to going wherever there are users. For New Retail innovation, how can physical stores transform, and are there entrepreneurial opportunities? What may need to be done is nothing more than reconstructing 'people, goods, scenes', and considering optimizing the variables in the formula 'Traffic × Conversion Rate × Average Order Value × Repurchase'. Use tools like the internet, big data, social networks, and artificial intelligence to carry out a 'New Retail Revolution'!