What the UK can learn from the merger of offline and online retail in China | True digital | Open mic


Successful retailers blur the lines between the online and offline worlds to create the new retail. In this article, true’s junior strategist Junjie Wei explores the lessons UK brands can learn from China’s more mature digital economy.

The new retail is an integrated retail delivery model where offline, online, logistics and data converge to improve the customer experience. The pandemic has amplified the role of new retail in delivering optimal experiences and China is taking the lead in executing thiswhile many UK brands are just starting to prioritize digitization.

Here I look at why it would be hugely beneficial for UK brands to understand this, and the difference in approach with their counterparts in China.

What is New Retail?

The future of retail won’t be about platform, it’s about experience. This is the idea behind the new retail strategy, which integrates offline and online touchpoints throughout the customer journey to deliver a seamless cross-channel retail experience.

The ability to reduce the boundaries between the online and offline world will be a critical success factor in the post-Covid era. New consumer trends have emerged as a result of the pandemic; a large portion of people started using online platforms for the first time and will continue to do so.

The immediacy, ease and speed that digital commerce offers have made it almost ubiquitous, and 63% buying journeys now start online. The same time, 46% of consumers still prefer to shop in person and believe the in-store experience will never be matched online. The new approach to retail is a way for marketers to meet these conflicting demands and help brands succeed in both online and offline worlds.

New UK retail

Due to lockdown restrictions, many brands in the UK have invested in new ways to market their products online. Ted Baker hosted live video shopping events on Bambuser where users could send likes, comments and ask questions about products and services in real time. Elsewhere, augmented reality (AR) has been adopted to replicate offline experiences (such as in-store browsing) using online technology. Ikeafor example, launched an AR tool that allows consumers to see how the items they have selected fit into a real environment.

In addition to integrating elements of offline shopping into online platforms, brands are beginning to incorporate the immediacy and convenience of online shopping into in-store experiences. Amazon fees, the one-stop grocery store that opened in west London in 2021, is a good example of this transition. Shoppers no longer need to queue to pay and instead are automatically billed through the app, as in-store sensors and cameras track the items customers pick up and add them to virtual shopping carts.

These measures focus on the development of a borderless channel between two kingdoms. Marks digitize either physical elements or physical physical elements. However, the goal of the new retail is to create a seamless experience where offline and online co-exist and grow together throughout the journey. This is where China takes the lead.

New retail in China

Brands in China have more experience in mixing physical and digital elements throughout the consumer journey. This advanced position in new retail is due to the country’s more mature digital landscape and the needs of more discerning consumers. Before the pandemic, China already had a deep digital consumer base, with global leadership in key digital metrics including number of internet users, mobile payment penetration and retail e-commerce spending. These digital consumers are increasingly combine in-store shopping experiences with their online purchase decisions.

This trend is pushing brands to start integrating the benefits of both worlds more effectively. For example, Burberry launched its social retail store in Shenzhen where consumers can interact with the brand and immerse themselves in the products in person and on smartphones. Through a lightweight program within WeChat, consumers explore the store through features such as store tours and product experience. Each interaction rewards consumers with social currency that can be redeemed for exclusive cafe menu items and outfits for their animal characters received in the program. The brand is building a circular ecosystem where online and offline complement each other.

After Burberry’s move, L’Oréal opened its concept store in Shanghai. Consumers can take a virtual bike tour of Paris while earning discount points along the way. They can also explore the product recommendations generated from their skin analysis report. These behaviors are linked to consumers’ WeChat accounts through L’Oréal’s mini program. The recommended products are added to the basket linked to his account. This way, the brand continues to deliver personalized content based on their in-store interactions after leaving the store.

What future for new retail?

These two Chinese examples reveal that the future of new retail develops virtuous circles where online and offline feed each other. The pandemic has accelerated the UK’s digital progression and demands for new retail businesses have emerged – both of which were already happening in China before the pandemic. Many UK brands have started investing in adding physical elements to online and digital store perks. Compared to the progress made in China, these actions are just the foundation of the new retail revolution. To stand out in the new era, British brands need to take the next step.

This integrated process is particularly useful in the future without cookies, which requires a lot of primary consumer data. In-store digitization enables data collection around every interaction, and more online engagement with consumers, which in turn generates more data. Brands will be able to identify real consumer needs from their own data pools without tracking cookies.

However, the precursor to this evolution is to put the consumer experience at the center of strategy development and to stop thinking in terms of online vs offline. Only with this mindset will it be possible to deliver the experiences consumers want in an integrated way.

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