Liu Qiangdong: How To Treat Unbounded Retail

In the fourth retail revolution, I have shared my judgement on the future of retail: in the next 10 to 20 years, the retail industry will usher in the fourth retail revolution.

Like the three revolutions in history (department stores, chain stores, supermarkets), the fundamental driving force of the fourth retail revolution is changes in consumption and technological upgrading.

But unlike the previous three revolutions, consumers demand not only "low price" and "convenience", but rather the trend of demand individuation, scene diversification and value participation.

And the increasingly powerful perception, interconnection and intelligence level of the technology side responds to the new changes in due course.

The twisting of the two forces of consumption and technology brings about changes in the retail infrastructure, triggering the fourth retail revolution, which will lead us to the era of unbounded retail.

Unbounded retail is our ultimate judgement of retail sales.

According to the world clothing shoes and hats net,

It is not a particular form of business.

Just as the emergence of chain stores is not a replacement for department stores, nor the emergence of supermarkets or the replacement of chain stores, unbounded retail will never replace the most classic retail formats of today.

So the retail revolution has changed not just retail (format), but behind the retail infrastructure - infrastructure needs to be upgraded professionally.

Unbounded retail is not just offline and online, but the retail activity itself is integrated into life, and sneaked into every corner of life with a way of "moistening things silently".

It is not only a fragmentation of the trading scenario, but also a redefinition of the boundaries of the industry and a redefinition of the relationship between people and enterprises.

The reason why we put forward "unbounded retail" is not to create concepts and attract eyeballs, but to really see that in the near future, the business paradigm of the retail industry will be radically changed.

It is not a simple extension of past practice and thinking, but a redefinition of the way we create and acquire value.

The changes it brings is not only limited to individual enterprises, but will have a far-reaching impact on the role, boundary and pattern of the whole industry.

How do we view unbounded retail? I want to share with you from three aspects: the meaning and characteristics of unbounded retail, the commercial logic of unbounded retail, the value pition and ecological reconstruction behind unbounded retail.

Unbounded "meaning"

What does "unbounded retail" mean? In twelve words, it is summed up as "unlimited scene, boundless goods, and no enterprise".

Scene unlimited

Unlimited scene means that the future retail scene will gradually eliminate the boundaries of time and space.

In the past, there was a saying that "channel is king". Its essence is to emphasize the importance of passenger flow (passenger flow and traffic volume).

Online, the retail giant is the distribution center of passenger flow; on line,

The leader is the core platform of traffic.

For consumers, both online and offline consumption scenarios are relatively simple.

Consumers purchase their daily needs at fixed time and from fixed channels, resulting in "mismatch" in space and time.

The mismatch of space shows that the diversity of demand is not satisfied, and the limited channels and

It can not match the increasingly diversified needs of consumers.

The mismatch of time is that instant needs can not be satisfied. For example, people can buy food for a few days at weekends, but they usually have to put aside their "sudden whims" in their daily lives.

The "Scene infinity" first is to eliminate the boundary of the space, and the future retail scene is everywhere and unrelated.

The boundaries between retail scenes and life scenes become blurred. In the future, we do not have to go to specific stores or specific websites to shop.

The Internet of things will link everything together, and shopping can happen anywhere: business platform, online media, offline stores, community centers, unmanned cars, intelligent hardware, two-dimensional codes on roadside billboards, etc. retail scenes will become ubiquitous.

Millions of convenience stores, tinkling speakers and smart refrigerators have been launched in the future.

"Unlimited scene" also means eliminating the boundaries of time. Future retail scenes are seamless and seamless.

In the past, shopping was often a time-consuming and hard work. We had to reserve a special time to search, pick, bargain and so on.

But in the future, shopping does not need to mobilize people, but "everyday" everyday: Retail + content, retail +AR/VR, retail + entertainment, retail + smart consumer electronics...

Retail can be embedded in everyday life. A voice command, a picture taken by hand, or even a casual smile can trigger orders to meet people's needs.

We have worked together with Tencent, Baidu, today's headlines, Iqiyi and 360 through Beijing X program to enable consumers to complete shopping in the process of social entertainment and information retrieval, so that shopping can be seamless and seamless.

In the future, cooperation and exploration in this area will continue to deepen.

The infinite scene represents a trend of centralization.

The role of future passenger / traffic centers will be diluted and replaced by fragmented retail scenarios.

In the end, retail behavior is no longer rigid, but "infiltrate the night with the wind, moistening things silently" to integrate into every aspect of consumer life.

Goods without borders

The boundless goods mean that future commodities will not stick to their inherent form. Commodities, contents, data and services will permeate each other. Commodities are content, content, data, and service.

Correspondingly, the boundary of the industry will gradually be blurred.

"Goods boundless" first refers to eliminating the fixed boundary of products, and future products will go from single to commodity + service + data + content combination.

In the past, retailers mainly focused on the paction value of products. They thought more about how to sell things and sell a good price, and they did not participate much in the delivery of products.

In the future, more and more products will be endowed with multiple meanings.

For example, Ding Dong smart speaker is a tangible commodity, and is connected with rich music, radio, program and other content. Voice interaction records can be precipitated into data, and it also carries the functions of purchasing, placing orders and following a series of services.

In essence, it has become a complex of goods + services + data + content.

Jingdong's "accompany plan" provides products and services that include shopping, information, financial management and public welfare.

The "size assistant" measures and binds the user's foot type data, and binds many times intelligent matching at a time, which is a combination of goods and data.

The costume recommendation is a combination of products and content.

With the rich connotation of products, the center of value shifts from paction to interaction, which opens up a new space for retail services.

"Boundless goods" also means eliminating the boundary of the industry, and the future industry will go from independence to deep integration, thus forming a leap in value.

Behind the complex diversification of product forms is actually the mutual penetration of industries.

Retail, logistics, technology, Internet, content, finance, Internet of things...

In the future, the interaction between these fields will become more frequent and deeper.

This is not only a simple cooperation between division of labor, flow pmission and resource sharing, but will produce chemical reactions and form some new business models and value spaces.

In our cooperation with WAL-MART, by selling stock and SKU data, we can sell not only our own goods, but WAL-MART's products.

Owning goods becomes less important, and the efficiency of the entire supply chain is greatly improved by sending goods nearby.

This is not a shift in value, but a leap in value.

Our cooperation with WAL-MART is just the beginning.

In this field, different partners need to explore and verify together.

There is no difference between people and enterprises.

The relationship between people and enterprises is redefined.

In the past, there was a clear line between production and consumption: producers create value and consumers use value. The dialogue between them is very limited, and there is a great deal of information asymmetry.

In the era of unbounded retailing, there is no clear-cut role and interest separation between production and consumption, thus narrowing the distance and forming a more temperature and mutual trust relationship.

The first thing is to eliminate the separation of roles so as to form the relationship between supply and demand, and create synergy together.

With the help of the new platform and tools, the future consumers can participate in the activities of the production end in all directions from the previous research, design, production to later marketing, communication and service.

For example, through passive personal data authorization, consumers' behavioral preferences can be pmitted to the enterprise end, thus producing products that are more in line with demand. Through active comments, suggestions and interactions, consumers can participate in the design and development process of enterprises; and through direct time resources input, consumers can even provide products and services originally delivered by enterprises, and the boundary between production and consumption is completely broken.

This is not just a simple information synchronization, but a redefinition of supply and demand.

In this context, retail enterprises play an important role as a "connector".

Jingdong's Y division, founded in 2016, aims to integrate and analyze the data from the consumer side, optimizing product design, production planning and supply chain activities at the supplier side.

Through the integration of AI algorithm and big data, we upgrade the modules such as "Hui brand", "Hui Merchants" and "Hui supply" to suppliers, and support a series of activities such as user research, product selection, sales forecasting, intelligent replenishment and so on.

The second meaning of "enterprise and enterprise" is to eliminate the separation of the mind and pmit the temperature and trust through pparent information and precise service.

In the era of unbounded retailing, through the application of a series of technologies, such as the use of regional chains for quality traceability, the asymmetry of information is decreasing, which can greatly enhance consumers' trust in products and platforms.

At the same time, personalized recommendation and customization services based on data and algorithm will bring a warm feeling of "know you better than you", so as to establish a "dependable" relationship between enterprises and individuals.

In this process, temperature and trust are gradually strengthened.

For example, the fresh area chain traceability service shows the whole production process of quality products of high quality suppliers to consumers, and enhances the brand trust of consumers.

Therefore, "unbounded retail" represents the breadth (the scene is infinite, the goods are boundless), and it also represents the depth and temperature.

It is not only a change in the retail format, but also a shift in the value logic of the whole industry.

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Unbounded "boundary"

"Unbounded retail" is our ultimate judgement of the industry. It is a picture that the whole retail industry and related industry collaborate together after ten years.

In this spectrum of vision, we can easily see a borderless business ecosystem, where industries and industries have no distance at all, and numerous fields are emerging to be explored and explored.

This is only one aspect.

More important (and at the same time easier to be ignored) is that the other side of "unbounded form" must be "bounded".

The form of future retail can be ever-changing and interact with all things.

However, enterprises must follow certain rules and rules.

Otherwise, the business will lose focus, and business will lose connections, forming an isolated island, and it is difficult to continue alone.

The seemingly boundless retail activities are connected by three main lines.

To establish an enhanced relationship between different businesses under unbounded retail, we must constantly consider how to use these three lines to link up the original scattered businesses to form a resultant force.

This is what we call "doing the right way".

Scenario Unicom

The first line is "Scene linking".

"Scene Unicom" refers to enhancing the overall attractiveness by establishing connections between scenes to enhance the correlation between different scenes.

The scene of the era of unbounded retail is everywhere. Neither the brand nor the retailer is satisfied with being confined to a specific scene.

However, improving touch rate is only the simplest advantage of multi scenario operation.

More importantly, through the linkage between scenes, a huge magnetic field can be formed.

The first way to connect scenes is seamless handover.

Through geographic location, message push, two-dimensional code, photo taking, face recognition and so on, we establish the connection between different scenes, such as entity and virtual scene, mobile and fixed scenes.

The second way to connect scenes is "functional interaction".

For example, "online order, offline pick up"; "mobile terminal coupon, entity store consumption" and so on, so that different scenarios play complementary functions, forming a resultant force.

The third way to connect scenes is "common branding".

For example, different terminals use similar designs, connect the same content and the same virtual assistant, which brings familiarity and closeness to consumers.

For example, the cloud CRM project jointly developed by Tencent and us through the system, marketing, data and other platform tools help brands to achieve the linkage between online and offline users, and enhance the level of user digitalization and marketing scenario.

Thus, although different scenarios seem to be scattered, they form a linkage through invisible links, locking consumers into clusters of different scenarios.

Data connectivity

The second line is "data connectivity".

Data connectivity refers to aggregating, analyzing, and distributing further data to different needs.

Every retail scene contains rich data, not only the scene itself, but also the people (consumers) and goods (brand) involved by the scene. Therefore, by accumulating and interpreting the scene data, we can gradually realize "knowing people, knowing goods and knowing the field": we should understand each individual's preferences, understand the characteristics of each commodity, and understand the properties of different scenes, so as to make precise matching.

Here, "Jing" represents the granularity of market segmentation, and "quasi" represents the realization of user value.

As an intermediate link between the brand end and the consumer side, retailers have the responsibility to share data, reduce the efficiency loss caused by asymmetric information, and help the whole supply side to meet the changing needs of consumers in a more timely and timely manner.

For example, for brands, through data analysis, you can predict exactly when and how many pairs of sports shoes you need in a certain area of Beijing.

In addition to the front and rear ends of the industry chain, data connectivity between adjacent businesses, such as retail, finance, technology, content and other industries, can greatly enhance the richness and integrity of people, goods and sites.

In this way, the cost of the entire supply side system is reduced, and the efficiency of the supply chain is enhanced. Customers at the consumer side can also get goods and services that accord with their wishes immediately, and the experience is greatly improved.

For example, through the data accumulated over the years, we have used up to 15 prediction models to build a variety of business forecasting system architecture, which can predict how much goods each supplier should store in the Jingdong every day in the next 28 days.

During the "6 / 18" promotion and "double 11" period, the joint forecast with Nestle and Nestle avoided the situation of excessive supply, too little or uneven matching of various warehouses in the past.

After the project was launched, the order fulfillment rate increased from 60% to 87%, and the rate of delivery of platform products increased from 73% to 95%.

Among them, considering the spot rate alone, it can promote Nestle to raise more than 30 million yuan online sales every year.

With the continuous accumulation of data, the accuracy of prediction continues to improve, and a virtuous cycle between different scenes is formed, and it can be self strengthened along with the development of business.

The synergy between scenarios is also achieved.

Value exchange

The third line is "value exchange".

Value interoperability is the integration of user relationships and assets under different scenarios.

For example, through the integration of membership systems, users can enjoy similar status and interests in different scenarios.

The opening of the membership system is equivalent to binding the interests of different scenes, which can greatly enhance the loyalty of users to the whole value system.

For example, Amazon has joined a series of business through its Prime membership system, such as e-commerce, streaming media services, e-books, logistics, AWS, etc.

The more product services provided by Prime, the more willing users to renew it, and continue to be an Amazon member to buy more.

Our PLUS membership system also brings together the scenarios of self and business partners into the same ecosystem through a series of cooperation: PLUS and logistics services (freight vouchers), PLUS and financial services (financial members), PLUS and offline stores (such as Sam's member stores), PLUS and Visual Web sites (such as Iqiyi), PLUS and bicycle services (such as motorcycle).

Through the exchange of member values, different scenarios can be interdependent and mutually reinforcing.

Because the rights and interests of each new scene will increase the marginal revenue of other scenes in the system, and the synergistic effect of 1+1>2 will be formed between different scenes, and the viscosity of users will naturally increase.

(Fig. 1. connection logic for unbounded retail)

"Scenario connectivity", "data connectivity" and "value interoperability" are not mutually reinforcing but also mutually reinforcing (Figure 1).

The form of unbounded retail can be ever-changing and amorphous, but these three principles must be firmly grasped by every enterprise.

The future business and partners can be diversified, but behind the whole logic and thread can not be lost: what is the connection between business and cooperation? What is the "bounded" sector? The more comprehensive and thorough the three dimensions of "Scene connectivity", "data connectivity" and "value interoperability", the more solid foundation we have in the era of unbounded retailing.

This principle applies to all enterprises that are roaming in the era of unbounded retail.

Finally, we work together with partners to redefine cost, efficiency and experience on the basis of knowing people, knowing goods and knowing fields.

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Unbounded "territory"

Finally, I want to talk about the topic of "boundless territory", that is, in the era of unbounded retail, what kind of mind and realm should the enterprise have?

First of all, from the industry convergence of unbounded retail.

In the past, when the industry boundary was relatively fixed, the value space of the retail industry was relatively fixed.

Under such a background, the relationship between the upstream and downstream industries is often antagonistic - because the total amount remains unchanged, and the value can only be pferred between the upstream and downstream industries. The result is that "you are more than I am", and everyone is striving for a bigger share in a zero sum game.

(Fig. 2. "unbounded retail" and "value pition")

The biggest difference between unbounded retailing is that this is no longer a zero sum game.

As the product combines elements such as goods, services, data, content, and so on, the integration of industry and industry has produced additional value.

Through data addition at the back end, algorithm iteration and front end scene linkage and seamless connection, consumers can meet their needs at any time and anywhere.

For consumers, it saves a lot of cost of search and selection, and the product is more satisfactory. For suppliers, it saves a lot of marketing and trial and error costs, and the delivery of products is more efficient.

This is due to cross boundary value, from retail value to unbounded retail value.

It is not a shift in value, but a leap in value (Fig. 2).

Obviously, unbounded retail is not a zero sum game.

If we still hold the mentality of "you win and I lose", it is doubtless a betrayal of the future.

As for the future judgement, we see very clearly that "de centralization" is almost the general trend, and the Big Mac of passenger flow and traffic will no longer exist.

And the centralization of traffic is actually a step by step in the process of democratization of business. Enterprises must become more open and integrate into a larger business environment.

The opening here is not just about "opening the house, inviting other guests to visit", but "going out of the house voluntarily and helping the neighbors to have dinner together."

In other words, there are two choices in the trend of centralization of traffic: first, drainage, attracting new incoming traffic flow onto its own platform, serving its platform prosperity; two, empowering, opening up its own capabilities, and not making traffic flow the purpose of helping new traffic terminals to do a good job.

There is no doubt that the latter is the choice that is more in line with the trend of business development and contributes to the sustainable development of the entire retail industry.

In the past dozen odd years, Jingdong has built its B2C self catering business and established its own logistics system to maximize its service experience.

In this process, we have accumulated a large number of foundations for retail operations and services -- the most dynamic member operation system, the most extensive marketing touch network, the most complex SKU management system, the most efficient logistics service capability, the most complete, and the longest retail data in the value chain.

In the future, we will move from "integration" to "integration and openness".

These capabilities will be shared with external brands, retailers, information / content providers, professional service providers, and micro dealers to serve a wider range of unbounded retail partners.

In the era of unbounded retailing, respectable enterprises are not giants that import traffic and consolidate their status. Instead, they are leaning towards the road and contributing to the ubiquitous retail situation.

Jingdong is willing to become such an able person and create a win-win situation with its partners.

"Every beauty, its beauty, beauty, and beauty, is the world's Great Harmony".

This will be the main theme of business relationship in the next era of unbounded retail.

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