How data is driving ‘new retail’ in China

Text: Cindy Yan Chan, chief strategy officer & chief information officer, Focus Media Group

China’s retail marketing landscape has gone through huge transformations in the last decade. From the pre- to post-Internet shopping eras, from time when there are ‘high’ and ‘low’ shopping seasons to the explosion of one-day shopping festivals, marketers have had to adapt to rapid changes in consumer behaviors. In the era of mobile Internet, a new kind of retail market has emerged: new retail. The rise of new retail can be attributed to the development of digital technology.

New retail is helping outdoor media companies better target desired demographics

20 years ago, when the Internet was still unheard of, data existed in siloed states. It was impossible to gain a comprehensive view of the data landscape. All analyses and predictions had to be based on belated sampling and survey. And yet, market objectives might have shifted by the time the study is done. The lack of data was the number one crippling factor for advertisers and brands in the pre-Internet era.

With the rise of the Internet, and increasingly popularity of private computers, real-time data sharing suddenly became possible for online media and vendors. This rings especially true for leading tech companies including Baidu, Alibaba and Tencent, collectively known as BAT. Armed with the vast amount of data they’ve accumulated, these companies broke away from old data analysis models in exchange for real-time analysis and deployment that are not only faster, but more accurate. As a result, online retail is on the up and up.

In a mobile-led era, data is being shared across platforms, the barrier between online and offline data dissipates, streamlining consumers’ experience as they juggle between different platforms. Alibaba is a case in point. The tech giant possesses data from electronic vendors, Weibo, and escalator media owner Focus Media. It gathers together data of a scale worthy of the name Big Data which enables precision deployment and new forms of retail.

New retail emphasises first and foremost user experience. User experience has always been a key driving force behind many decisions in retail—the closing of brick-and-mortar stores in the computer age, the rise of experience stores such as Mi Home, and the recent revival of physical shopping malls. How does one know what its users—or consumers—want? Aside from coming up with more precise algorithms to process Big Data, having the right infrastructure in place is another key to gain insights into users’ experience. With higher speeds, greater bandwidth and reduced latency, 5G could more readily process and transmit massive amounts of data. 5G allows marketers to gain a better but more importantly, quicker and more accurate understanding of their target audience, allowing for ever more personalised communication.

By reshaping the value chain, new retail raises operational efficiency. At the consumer’s end, precise user profiling becomes possible. On the brand’s end, big data analytics can help predict production demands, which can in turn optimize manufacturing and logistical efficiency.

New retail also brings about a revolution in retail marketing. With the massive amount of data at their fingertips, brands can now better execute customer-centric experiential marketing. As such, media platforms with both online and offline presence play a key role in helping brands reach consumers, and will become key marketing channels for brands and advertisers. The importance of integrating up and downstream marketing is also manifested in Alibaba's minority acquisition of Focus Media, China’s largest digital OHH media company in July last year. The partnership shorted the customer feedback loop, allowing for agile product development--and in the long-run--brands to serve their customers better.

In the era of new retail, those who win are the ones using data and tech to come up with business strategies that put the customer first.

Cindy Yan Chan, chief strategy officer & chief information officer, Focus Media Group