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Digitization + Experiencing, A Reform of Traditional Retailing

Digitization + Experiencing, A Reform of Traditional Retailing. S peaker: Zhu Xi, from Wuhan Department Store Group Co., Ltd., China. September, 2013. I. Wuhan Department Store Group Co., Ltd. II. 2012-China’s E-commerce Year. III. Experiencing Commerce, the Ultimate Way.

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Digitization + Experiencing, A Reform of Traditional Retailing

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  1. Digitization + Experiencing, A Reform of Traditional Retailing Speaker: Zhu Xi, from Wuhan Department Store Group Co., Ltd., China September, 2013

  2. I. Wuhan Department Store Group Co., Ltd. II. 2012-China’s E-commerce Year III. Experiencing Commerce, the Ultimate Way IV. The Two Technical Trends Are Changing the Retailing Pattern V. Change Commercial Pattern and Embrace the “All Channels”

  3. The proportion of E-commerce sales volume in Chinese retail market will exceed 50% ten years later. 单击添加副标题 单击添加副标题 单击添加副标题 Even if the share of E-commerce just reaches 50%, I will admit defeat and give Ma Yun RMB 0.1 billion.

  4. Developmental Trend of Retail Industry Traditional Retail Industry Experiencing Consumption Digitalization The change is a reform for the traditional retailers, and a return to the original spirit of retailing industry.

  5. Wuhan Department Store Group Co., Ltd.

  6. Great River, Great Lake and Great Wuhan

  7. Great River, Great Lake and Great Wuhan Wuhan’s GDP was RMB 800.4 billion in 2012, and its gross sales volume of social consumables was RMB 343.2 billion.

  8. Great River, Great Lake and Great Wuhan Founded in 1959, Wuhan Department Store Group Co., Ltd. is the largest integrated commercial enterprise in Hubei Province and one of the 20 large-scale retail enterprises that were listed by Ministry of Commerce as the key cultivation objects. The company mainly conducts operations in shopping mall and retailing chain supermarkets.

  9. Great River, Great Lake and Great Wuhan In 2012, Wuhan Department Store Group Co., Ltd. had its sales volume increased by 30% on year-on-year basis, and its profit by 21%. Its total sales accounted for 8% of Wuhan’s total social retailing sales of commodities.

  10. Great River, Great Lake and Great Wuhan Analysis by experts in the industry: 1. The growth rate of Chinese macro-economy will slow down and the E-commerce industry will be further impacted; 2. Housing price will be unaffordable high and RMB will depreciate domestically. 3. China will intensify anticorruption and advocation of honesty and cleanness. 4. Rent, labor cost and other related expenses will rise rapidly. The development of retail industry will become tougher. So to speak, the traditional retail industry will have no choice but change itself.

  11. China’s E-commerce Year

  12. 2012-China’s E-commerce Year According to the report issued by CNNIC,in 2012, the transaction of China’s online shopping totaled RMB 1,259.4 billion with an increase by 67% compared with 2011. China’s online purchasers totaled about 200 million, and the proportion of online shopping increased to 43%. RMB 1259.4 billion RMB 756.4 billion

  13. 2012-China’s E-commerce Year November 11, 2012 The turnover on that day reaches RMB 19.1 billion yuan; The order volume on that day exceeds 1.5 million; the order volume in three days approaches 3 million; the sales volume increased by 20 times on year-on-year basis. In 2012, online sales had accounted for 6% of China’s total retailing volumes.

  14. Experiencing Commerce, the Ultimate Way

  15. Wuhan Department Store Group Co., Ltd. annotated its “experiencing commerce” by establishing MALL, which is an urban complex integrated with top-grade department store, catering, cinema, sports and leisure, etc. that will provide consumers with brand-new shopping experience.

  16. Entertainment Sports Catering Shopping Training Leisure Causes for Experiencing Commerce Emerging 1. The change of consumption concepts and behaviors promote the emerging of experiencing commerce.

  17. Causes for Experiencing Commerce Emerging 2. The popularity of urban complex brings opportunities for experiencing commerce; Shopping center is the mostly common platform for experiencing commerce for its architectural design, space quality and business pattern are more easily to be blended with “experience”.

  18. Causes for Experiencing Commerce Emerging 3. The prosperity of E-commerce has the commerce transited to experiencing commercial mode; E-commerce urges the transition of the physical stores. Basic physical form, corresponding commodity experiencing form and service experiencing form are indispensable for a commercial complex form.

  19. Causes for Experiencing Commerce Emerging

  20. Retailing Enters the Age of Consumer Sovereignty CEC(Chief Executive Customer) Though customers are not directly involved in the enterprise, they intangibly play a more important role in enterprise’s strategic direction and market path.

  21. Retailing Enters the Age of Consumer Sovereignty In CEC(Chief Executive Customer)era, enterprise should integrate consumers’ participation into its traditional value chain and search for, analyze and tap consumers’ data with technology as the core platform, so as to thoroughly understand each customer.

  22. Retailing Enters the Age of Consumer Sovereignty Customer = Democratic Party

  23. Retailing Enters the Age of Consumer Sovereignty How retail enterprises can grasp consumers’ heart in the age of consumer sovereignty? They should provide “one-to-one” marketing and service when customers really need them; conducting single-direction sales promotion to consumers, such as mass texting and mailing DM, is not service, but disturbance.

  24. Retailing Enters the Age of Consumer Sovereignty How to fulfill “one-to-one” accurate marketing? It’s essential to develop digitalized retail industry and digitalize each customer and employee. Through digitalizing the relationship with each customer, retail enterprise can establish all-around social relations with consumers via social network, thus gaining an insight into consumers’ demands.

  25. The Two Technical Trends Are Changing the Retailing Pattern

  26. It’s estimated by American Retail Federation that the gross retail volume in Chinese market will possibly reach RMB 50 trillion yuan in 10 years, of which 20% will be contributed by online retail. 10 years later, 80% of the consuming demands of young people who grow up with the Internet will be satisfied online.

  27. Online Sales Trend 1. Smart phone enables us to directly obtain almost all information about all retailing commodities, forces retailers to keep their price competitiveness and regularly update their website.

  28. Online Sales Trend 2. Physical shopping are changed by technology. (1) Interactive “magic mirror”: It can show what one looks like in the dress (without the need of putting on the dress), recommend proper ornaments, and point out the direction of similar products.

  29. Online Sales Trend (2) Virtual receptionist: It can deal with all relevant matters such as providing discounts via 2D barcodes. Reception (3) 3D printer: Consumers can use it to create their own products at site, such as towel, ware and clothes.

  30. Online Sales Trend Some analysts predicted that physical shopping experiencing will possibly become completely different from the previous ones. For example, Gap, Best Buy and other stores will turn into pure experiencing places and test centers for “touching and feeling” commodities.

  31. Change Commercial Pattern and Embrace the “All Channels”

  32. “All Channels” strategy “All Channels” strategy aims to establish a unified 360° “customer view”. It is a kind of shopping experience that will get consistency from physical store, online store, mobile store and social store at any time.

  33. “All Channels” strategy Domestic retailers need to integrate various independently-operated channels existing presently and highly coordinate them, thus providing consumers with optimal seamless shopping experience.

  34. How to embrace the “All Channels” Firstly, return to the retailing spirit, and get integrated with the internet spirit.Retailing spirit aims to recognize who are the customers, where they are, what they want to buy, and what they are talking about.

  35. How to embrace the “All Channels” Secondly, change the concepts of business district.Internet is like “avenues” full of consumers’ breaths and voices as a new popular retail circle. If we do not foster the idea of “Internet commercial circle”, we will be unable to establish real “All Channels” retail strategy.

  36. How to embrace the “All Channels” Thirdly, establish the consumer-demand-chain centered organization.Integrate resources and unify online and offline back-stage services by means of professionals’ retail experience and spirit.

  37. 18 days after his “retirement”, Ma Yun, Board Chairman of Alibaba Group, showed up and incorporated “Cainiao” Network Corporation, acting as the board chairman. “Cainiao” Network aims to establish platform for E-commerce, logistics and storage enterprises.

  38. Trend Forecast As for long-term development of retail industry, it’s necessary to make reference to foreign operating modes of retail industry, constantly intensify self-operation, launch self-own brands, customize commodities, organize direct purchase from sources, realize differential operation, and regain middlemen’s profits. Self-purchase and self-operation will be the radical solution for retail industry.

  39. Trend Forecast Urbanization will set free the great consuming potential. Consumption in third-tier and fourth-tier markets has become increasingly mature. The proportion of service industry in economy will be substantially raised. Urbanization will become the most powerful engine in the promotion of economic growth and will create new developmental opportunities for retail industry.

  40. Trend Forecast Forecast is prejudgment of matter’s developmental trend that is made via professional analysis on the matter’s previous and present developmental status, rather than a guessing “feast” joined by all citizens. The ability to master future trend will become a decisive factor in enterprise’s sustainable development.

  41. Thank you

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