New retail; what is it and will it create the need for new marketing?

Alibaba is China’s largest online commerce company. It controls about 80% of the Chinese online market with marketplaces in both C2C and B2C. Alibaba keeps inventing and has now recently introduced its new concept named ‘Freshippo’. (previously Hema) According to them, it is the first store with the new concept of ‘new retail’.

What is this ‘new retail’ about?

New retail is all about converging the online and offline channels. It is the comeback of the physical retail while implementing online retail on the spot. But they go further than this. Freshippo wants to convert shopping into a real experience. In their stores, you can buy food while first checking all the information about a specific product through an app. Think details, ratings, and reviews.

The supermarket also functions as a distribution center. In the shop, some employees are occupied with filling bags with grocery lists. These are orders made online. Once the bags are filled, they are loaded onto a belt, which transports them over the heads of customers, through the shop.

Freshippo’s promise is to deliver within 30 minutes if you live within 3km of a store. Apparently, this promise really hits the spot with Chinese customers. Strikingly, proximity to a Freshippo market is starting to be a decision-making factor in the real estate market. Talk about a powerful retailer.

In the Freshippo in Shanghai, you can find a restaurant, called Robot.HE with -what else?– robots as your waiter. Many QR codes, software and (redundant) tablets are included. One of the major points of attraction for the Chinese is the ultra-fresh buffet of seafood that can also be cooked on the spot. Oh, and you can also have this prepared food delivered to your doorstep. What a customer service!

All payments are executed with the Alipay application which is incorporated in the Freshippo application. You can also pay with facial recognition. Evidently, all your grocery shopping and even interest in specific products are tracked. Nonetheless, Chinese customers seem to be thrilled by the arrival of ‘new retail’. For them, the merits definitely outweigh the disadvantages.

Take a look at a review made by CNBC.

How would Belgian customers react? Are we ready for ‘new retail’?

Let me first say that I find it very difficult to imagine that Belgian customers would have absolutely no problem giving all their personal shopping and paying information to one enterprise. But what does live in the desires of Belgians, is the need for more and improved experiences. We want to be surprised, entertained and cherished by enterprises. And we might want to give up personal information for this. Belgians would have no problem adapting to ‘new retail’. But we would need some time, though.

Let’s take a look at another example of ‘blurring’. Ikea. This retailer got embedded in our culture quite easily. It’s almost the same concept; blurring between consuming and buying. They both happen at the same location and the shopper and consumer become the same person. And of course, like in the Freshippo concept, there is a big focus on offering experiences. This concept has big selling opportunities because you might take your kids along to grab something to eat. Which of course leads to selling more products those kids want and (maybe even) beg for. Sigh. Well done, Ikea.

Our hypermarkets can learn and benefit from this knowledge. They now take in an incredible amount of space, all solely for selling products. This model will become outdated and they will be forced to look at creating relevant experiences to attract customers. They can then give an entirely new destination to a part of their space. I am definitely curious to see how this will evolve in the future.

Another big retailer is already redefining its space. Take a look at Carrefour Zemst & Mons. They took digital to a new level with a digital information board at their wine aisle, information installations for DVD’s or ink cartridges and digital mirrors. They also embedded a pizzeria, chocolatier, and coffee roasting facility in the concept. Carrefour is paying attention to current trends and experiences are on top of their list.

But we still think things need to be taken a little further. Think disruptive and bolder, please. Why not do something with the big space laundry machines take to be displayed? Why not actually let people do their laundry? Clients will be enchanted and they will have the chance to really experience a product. Moreover, they will spend more time at your shop than ever. Tie clients to your establishment by pampering them with a drink or complimentary collecting or boxing customer service. Just thinking out loud. But why not?

A shift in marketing is on the rise

There will be big consequences for marketing. We used to talk about shopper marketing and consumer marketing. They formerly were completely different things. The first one is about getting the shopper to buy (more of) your product. The second, about how to get people to consume (more of) your product. Now these two profiles are converging.

Retail is adapting and so should marketing. As well as enterprises and people who work in marketing. It is no longer sufficient to stand out in one single specialization. All components are converging rapidly and responsibilities inside marketing departments are transforming at a fast pace as well. For example, when we look at the job descriptions of brand & category managers, these are adjusting towards each other. And so are many other positions. We increasingly need to be a jack of all trades. Or at least informed about all trades.

The way to face up to these challenges, is by working together with people who have experience in multiple positions. Learn from them and learn to implement more than one way of thinking. Before sending something into the world, it always has to be checked if this content will be relevant for both the shopper and the consumer -as they are now one.

Do you feel your organization needs support to evolve into the future? Do you feel the necessity to work together with profiles who have experience in multiple positions in an enterprise? People who can help you conquer or anticipate the changes in the future? BrainTower can help you. We can count upon more than 200 consultants with varying profiles and many of them have more than 10 years of experience in different positions and enterprises.



Written by Peggy Storme – Junior Marketing Consultant BrainTower