The global retail industry is going through a major upheaval. Brick-and-mortar stores are facing a crisis; around 3,600 stores are expected to shut down in the US1 in 2018. It is not only the small stores that are struggling to exist; even Walmart is facing the heat. In Feb 2018, Walmart registered its worst performance in the share market in 30 years. The reason being an unprecedented drop in profits and online sales growth during the 2017 holiday season2.
On the other end of the globe, Alibaba, the e-commerce giant, acquired Intime, an established brick-and-mortar retail chain in China. Alibaba is driving an entirely new and futuristic model for retail. According to this New Retail model, online and offline commerce will coexist and grow together in the future. Technology underpins this model and plays a crucial role in improving the operational efficiency and bringing consumer centricity to the retail business.
We don’t divide the world into real or virtual economies, only the old and the new. Those who cling on to the old ways of retailing will be disrupted, and brick-and-mortar businesses will be able to create value for consumers if they are integrated with the power of mobile reach, real-time consumer insights, and technology capability to improve operating efficiency.
-Daniel Zhang, CEO, Alibaba Group
