Offline Retails Facing Challenge in China

Recently， Roland Berger has released \"How offline retailers can win customer traffic?\" According to the report， omnichannel retail strategies for brands and retailers showed offline retailers ways to attract more customers. It explained how offline retailers win the favor of consumers in the constantly evolving retail industry and macro-economic-environment.

In 2013， China became the world's second largest retail market after the US; and in 2014， nationwide spending on consumer goods continued its upward trajectory， rising by 12% to reach RMB 26.2 trillion.

Although， retail in China still hold great promise for further growth， but it faces disparities between the online and offline arenas.

According to the report， the key to winning over customers lies in adopting consumer-centricity as a guiding principle and finding ways to meet the needs of a new era of consumers. In recent years， consumers in China have shown their willingness to try new products and new brands; however， they are also becoming increasingly shrewd and informed about pricing and product information and care more about in-store retail experiences and convenience. Therefore， offline brand operators should abandon the traditional \"product-based\" approach to marketing and consider adopting the six tactics defined below， which center around \"lifestyle\" and the \"pursuit of perfection\".

According to George Ren， Senior Partner at Roland Berger， \"E-commerce is booming in China， and online sales continue to record excellent performances. By comparison， offline performances by retailers have been relatively weak， and last year we even witnessed a wave of store closings as a result. Revenue growth is slowing for offline retailers， and this is further exacerbated by rising operating expenses， such as labor costs and rental prices， which exert increasing pressure on profit margins. However， the offline component of retail will not be replaced anytime soon， and so companies should seek out innovations and strategies to integrate online and offline retail models.\"

Success factor 1: \"Lifestyle\"

A \"lifestyle\" approach to marketing advocates creating spiritual or cultural value for consumers. Under this upgraded model of consumption， Chinese consumers attempt to align their shopping habits to better match their personal lifestyles， attaching greater importance to \"aesthetic value\" and \"individualization\" when making purchasing decisions. Consumers are willing to spend more on higher-quality and more culturally enriched products and services; they are also more likely to choose products that reflect their personality and identity. To take advantage of these trends， offline brands can refocus efforts on two areas: \"aesthetic culture\" and \"personalized products\".

Tactic 1: Aesthetic culture-for consu-mers seeking \"more thanjust shopping\"

Companies can define their own brand culture and lifestyle attitude， which can then be built into consumer experiences through cultural showcases or delivered through speeches， food and entertainment at events. This can enrich consumers experiences with beauty and artistic elements， build emotional connections throughout the sales process and help to achieve alignment with their lifestyles.

Tactic 2: Individualization-for consu-mers who \"buy products to stand out from the crowd\"

A professional buyer can be added into the traditional Chinese retail model as an intermediary between brand and consumer. In this way， different target customer groups can be presented with a selection of different brands and products based on their preferences and fashion concepts they follow， which helps retailers individualize consumer experiences and easily adapt to popular trends. The end result is that consumers can enjoy unique shopping experiences tailored to their preferences.

Success factor 2: Pursuit of perfection

In addition to product positioning and creating cultural experiences， companies must ultimately focus on enhancing product and service quality. Offline retailers and brands must strive for perfection in four main areas: product， convenience， pricing and consumer experience.

Tactic 3: Perfect products-for consu-mers who want to find \"just what they were looking for\"

In horizontal expansion， companies can offer a full range of products or value-added services to meet even more consumer needs; in expansion into niche markets， companies can provide a broad selection of products in certain product categories as well as professional services to differentiate themselves from competitors.

Tactic 4: Perfect convenience-for consumers who want to find \"all the services they need in one place\"

The potential for further development of business formats for convenience stores in China is enormous. Convenient geographic location is the primary advantage convenience stores in meeting consumer demands， but the key to real success lies in selecting products suited to the surrounding environment and enriching services in order to provide perfect convenience to consumers.

Tactic 5: Perfect pricing-for consumers who want \"low prices\"

In classic examples of \"perfect pricing，\" discount department stores and discount supermarkets use wholesale purchasing and in-depth joint operations to provide consumers with low-priced goods. However， if offline retailers and brands can meet consumers' demands for low-priced goods while still protecting their brand names， they will win over even more customers.

Tactic 6: Perfect consumer experience- for consumers who want to \"scan a QR code and have the order delivered\"

The retailindustryis undergoing a transition from single-channel marketing to cross-channel 020 and omnichannel retail models. Brands need to closely align themselves with consumers across each channel and platform， delivering content and convenience that precisely meet the needs of target consumers. They must blur the boundaries of online and offline marketing to unify consumer interactions across communication， product display， transactions and delivery， thereby providing brand experiences that are both consumer-centric and perfectly integrated.

\"As the omnichannel model develops， online and offline channels may become inseparable and completely integrated concepts in the future，\" said Mr. Ren， \"The retail landscape for Chinese consumers of the future may be defined by 'integrated experiences between online and offline channels'， 'community-based sources of essential daily products and services' and 'subdivided lifestyle shopping experiences'.\"