11 Nov 2019
New Tech, Value and Ecosystem: IDC Cites Emerging Trends in Retail as China Celebrates Singles Day Shopping Festival
BEIJING, November 11th, 2019 - New technology, new value and new ecosystem are three key concepts expected to shape the digital transformation of the retail industry, according to IDC.
China is celebrating its 11th “Singles Day” Shopping Festival today, which has grown to become the world’s biggest online sales event, far outpacing the sales of Black Friday and Cyber Monday.
The first-ever “Singles Day’ sales event was launched in 2009 by Taobao, Alibaba’s marketplace. The Chinese event has since grown into a month-long annual online shopping festival that peaks with a 24-hour sale on November 11. The event is also gradually becoming a global festival with more than180,000 brands across over 200 countries participating last year. IDC believes that digital transformation in the retail industry is likely to centre around three key features, as outlined below.
New Retail and traditional retail are a pair of relative terms. In the course of the development of the retail industry, the emergence of new technologies has always given rise to new forms of retails, or new retail at the time of its rise. In other words, the New Retail of today will become the traditional retail of tomorrow until the next new paradigm comes along.
Technology is a key driver of continuous innovation in the retail industry. As a result, New Retail is evolving in lockstep with the advancement and adoption of new technologies. Among the emerging ICT technologies, 5G, Internet of Things (IoT), augmented reality (AR), virtual reality (VR), AI, robotics and blockchain are the key technologies driving the development of New Retail. The typical use cases of these technologies are listed in the table below.
The digital transformation of the retail industry is a long and continuous process. The new wave of technology evolution will generate emerging New Retail hot spots throughout the value chain. Over the past decade, the impact of digital transformation has been mainly concentrated on the front end of the retail value chain, namely marketing and sales; while the impact on the back end, such as product development, procurement, production, transportation has been comparatively low. In the future, we predict that digital transformation will have a greater impact on the back end of the retail value chain. Intelligent connectivity will enable retailers to achieve end-to-end digitization and bring new value to every link of the chain.
A New Ecosystem
Emerging technologies such as cloud computing, 5G and AI are disrupting the traditional retail industry, giving rise to a new ecosystem. The boundaries between new and old business models as well as the real and virtual worlds are blurring as operational processes become connected and offline and online shopping are merged. Intelligent connectivity can effectively help retailers build a New Retail business platform, giving digital access to retailers, users and partners regardless of the time or location. The platform can help enable organic interconnections between retailers, consumers and products. This can lead to more efficient information flows (data exchange) for logistics (supply chain integration), capital (transaction settlement) and consumers (customer profiling), delivering new shopping experiences to consumers while allowing retailers to realize their business value.
IDC sees changing consumer demand as the most important factor among the many that are driving the evolution of New Retail. As digital natives gradually become dominant in the market, they are changing the primary mode of consumption. Consumers' pace of life is accelerating, and their time is becoming more fragmented. In parallel to this, they are becoming more demanding and they are seeking more personalized experiences. Retailers must rely on digital thinking and continuous technological investment so that they can better deliver a frictionless, uninterrupted consumer experience. By prioritizing their digital transformations, retailers can ensure that they are well-equipped to not only cope with changes in the short term but also help guarantee their success in the long term.
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC
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