Published in


‘New Retail’ Guide

What is ‘New Retail’ and why is it the future of Retail?

How can Digital Retailers and Direct-To-Consumer brands emulate Alibaba’s ‘New Retail’ strategy to increase sales by redefining retail stores?

Image Source: Alibaba New Retail

The traditional retail apocalypse

When the e-commerce wave hit, around 2013, experts predicted that traditional retail would die-out and that it is not an easy time to be a brick-and-mortar retailer.

From 2013 to 2020, the e-commerce industry has grown 10 times faster than in-store retail, with E-Retailers like Amazon, Alibaba, Flipkart, and eBay already having a huge footprint in the market. With the recent success of Direct-To-Consumers (DTC) and Digital Native Vertical brands (DNVBs), is e-commerce destroying traditional retail?

  • In June 2017, Amazon acquired Whole Food Supermarket and created experimental store Amazon Go in 2018 — an expansion into the retail markets.
  • In November 2017, Alibaba acquired Auchan and developed its intelligent network with Hema Stores — e-commerce partnered with a retail store for growth.
  • Myntra with its Online to Offline strategy has planned to open 100 stores with its private labelled fashion brands in the next 2 years. Manohar Kamath, Chief of Myntra Fashion says “technology will be a major driver in these stores” — online store opening more avenues for shopping, with the aid of technology

Opposing the view that e-commerce is destroying traditional retail, it is actually a stimulator for a shift into the traditional retail, although a new term is used to describe this concept — New Retail.

New Retail

Jack Ma, Former Executive Chairman of Alibaba, raised the concept “New Retail” in 2016 as a key strategic priority for e-commerce businesses.

After gaining some traction, the concept was coined by Jack Ma a year later, stating that,

New Retail is an integrated retail delivery model where offline, online, logistics, and data, converge to enhance customer experience.

New Retail Concept

Is it genuinely new?

The idea of new retail is not a territory that has never been explored. Brands have been continuously working on shifting from single channel to Multi-channel and Omni-channel business models to provide more avenues for transactions — app stores, web stores, marketplaces, and physical stores. The more the avenues, the more possibility for transactions and the higher the growth of a brand.

Traditional Omnichannel vs New Retail

Omnichannel approach provides customers with a fully integrated shopping experience by converging digital and offline experiences and everything in between. It is a retailer friendly option, enabling connection between all the company’s touchpoints namely website, social media, physical store, communication channels via the web and mobile, all to enable customers move seamlessly through their shopping experience.

Retailer’s Omnichannel Strategy

New Retail is a similar concept, but the way it sets itself apart is

the Innovation around experience & delivery; scale and speed of the implementation; and the harness of technology to which it is being applied.

Pure play Retailers and DTC (Direct to Consumer) companies that come from the new digital age have an undeniable head start when it comes to mastering the New Retail Strategy — it is E- Retailers and Digital Native Vertical Brands friendly.

New Retail Flywheel
New Retail Flywheel: Online (Attract), offline (Engage), and data (Delight)

Impact of New Retail with Amazon Go and Alibaba Hema

Formerly, Alibaba’s and Amazon’s earnings were mostly based on advertising and commissions gained within their marketplace.

With new retail changing the landscape, Alibaba’s income has exceeded its e-commerce commissions and is the second-largest source of their revenue.

“E-commerce is rapidly evolving into New Retail. The boundary between offline and online commerce disappears as we focus on fulfilling the personalized needs of each customer”, quotes Jack Ma on Alibaba’s case.

The Amazon Go new retail concept brings in about 50 percent more revenue on average than other typical convenience stores.

Does New Retail work for all online brands?

DTC and DNV brands continuously seek new avenues to leverage sales and following the success stories, more online brands are realizing the benefits of having a physical store and are making moves to head in that direction.

Some Indian companies which have successfully branched out into the offline space are:

  • Digital Native Vertical brands like Lenskart, Faballey, Voylla, and Pepperfry — already ventured into offline retail space to create brand experience with omnichannel strategy in mind.
  • Zivame, Nykaa, Urban Ladder, and Van Heusen are few examples of brands investing heavily in offering multiple touchpoints

The future of retail is to digitize the brick-and-motor. There is a strong need to understand the way digital can merge with retail to deliver unique shopping experiences.

How can New Retail be implemented by Online brands?

  • Engagement and Brand Experience
    - Drive engagement with pop-up fashion stores and co-retailing experimental stores.
    - Reinvent Physical store with Retail-as-a-service approach — 3-brands offers a speedy retail platform to set up physical retail stores on a monthly subscription basis and eliminating upfront investment.
  • Integrate Online and Offline Marketing
    Offer personalization for offline shopping experience, with online data
    - Associate offline promotions with an online call to action.
  • Digitize Supply Chain
    Buy online, pick-up in store; Buy Online, Return in Store; Exchange item in-store.
    - Order online and offer same day delivery from the store, where your store acts as a distribution centre.
  • Executional Excellence
    Upselling and cross selling in retail stores
    - Deploying customer tracking technology inside brick-and-mortar store to analyse the customer behaviour patterns i.e., shopper traffic to store, Scan QR code to show your product content, Self Service Kiosks, RFID tags to prevent loss of products, etc.

Takeaway: What Other E-Retailers, and Online brands can learn from Alibaba’s new retail strategy

Digital retail is considered as the competitor to the traditional retail. However, currently the two-business model are treated as complimentary.

  • E-Retailers and Digital Native brands are integrating online and offline channels to bring more revenue and focus on the brand experience aspect.
  • New Retail is consumer-centric and Data-driven retail powered by technology, online-offline integration, and intelligent supply.

The future of Retail will have technology and value-added service as a major driver in the New Retail concept stores and you will see a clear difference between these stores and regular brick-and-mortar stores.

New Retail is certainly work in progress, it requires brands to constantly refine and reinvent themselves to define the future of retail.

At 3-brands, we help E-Retailers and online brands expand into physical retail store with a low risk and cost-effective approach. Are you interested in getting more details about this through a free consultation with our experts?



where the future is written

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store

Hosting retail stores for growing digital-first brands. 3-brands retail platform enables growing brands to deploy brick-and-mortar by lowering risk and cost.