What’s going on in retailing? The much-heralded demise of bricks and mortar is not as straightforward as originally thought.
True, this year’s Singles Day in China clocked gross merchandise volume of US$25.3 billion, 39% above last year’s US$17.8 billion, while Sears and Macy’s are closing stores and Toys “R” Us, Payless, Gymboree and Radio Shack are part of a string of recent retail bankruptcies in the US.
However, something more was happening as, via pop-up smart stores and in-store technology, Alibaba and brands helped drive online traffic to brick-and-mortar stores, further erasing the boundaries between the two. In fact, over 140,000 brands and merchants, 60,000 of which were international, took part in T-mall’s shopping extravaganza, offering 15 million product listings to consumers. While still a relatively small part of 11.11, Alibaba’s expansion of efforts to bring more stores and retail consumers online – even down to the “mom-and-pop” convenience store and the village level – means a broadening of its reach across China and its consumer base.
As consumers strive for instant gratification through online orders with delivery, retailers struggle to meet the demand and reduce costs of delivery and free merchandise returns. To do this they are engaging customers online to interact with the product—inviting them to virtually try on the color, the style and accessorize—and then go to the store to pick up the merchandise. With pop up stores of fast moving merchandise, and smaller format stores for Walmart and Target in high traffic areas, the omni-channel shopping experience is underway in the US as well.
What is unique about China is that the brick-and-mortar infrastructure has never reached the level of density that the US and Europe had reached before the online revolution. Therefore, there are no big powerful “brick-and-mortar” incumbents to displace.
In fact, the penetration of online retail is only 15% (on average) of total retail in China. This percentage varies by category (higher in apparel, lower in groceries). Therefore, there is still a lot of “white space” to conquer.
Brick-and-mortar formats are changing. Alibaba’s Hema Supermarkets, for example, offer a unique blend of experiences, social interactions and services that pure play E-Commerce players cannot replicate online.
There are several good reasons for mixing online and offline retailing strategies, consistent with Amazon’s recent decision to buy Whole Foods and Alibaba’s to create Hema Supermarkets.
Partner
要访问完整报告,请填写以下表格。
"*" indicates required fields