What is the ultimate model for retailers? The revenue model and profit model of retailers have not changed since the Industrial Revolution. If physical stores are to survive, they will have to be redefined and the ultimate purpose of physical stores will be different.

1）The purpose of physical retailers has changed；

If wholesalers no longer exist and want to buy the same bulk of goods, how do they wholesale, transport, manage or sell them? If consumers have countless choices, how can channels and brands sell the same products? How many real retailers are sitting on the growing fragmentation of the retail market? The manufacturer sets up the distribution channel directly in the network, so what should retail do? Given these problems, retailers must create a new sales model, one that is better suited to this fragmented market.

2）The store will serve as a media channel；

Despite the strong impact, this does not mean the end of physical stores, but give physical stores a new purpose. As a media channel is their inherent function, consumers have perception and can truly feel when shopping in physical stores. Physical stores have the potential to become the most influential media channel to spread their brand stories and their products. It has more vitality and impact than any other medium, and it excites consumers more. Physical stores will become a channel that cannot be replicated by online retail.

In the near future, the relationship between physical retail and consumers is by no means a simple transaction purchase, but a kind of information dissemination and output, as well as product experience and perception.

So the physical stores will eventually have part of the function of media and part of the function of sales. A new retail model will use physical stores to satisfy consumers’ shopping experience and product experience, redefine the ideal shopping experience journey, employ product experts to explain to customers, and use technical means to enable consumers to achieve excellent experience and memorable shopping experience. If every purchase is worth recalling, every touch is an effective interaction. The goal of the new age of retailers is to drive sales through different channels, not just physical stores as the only channel. The current store takes sales as the first priority, but the future store will position itself as a multi-channel service to meet the different needs of customers. It will establish the brand image through good service. It doesn’t matter where the final deal is made and who serves this consumer.

Based on such functions, the future shelf and product shelf design will be more concise, so that stores will have more space for brands and products to interact with consumers. Social media will be integrated into the shopping experience, such as product price comparison, product sharing and other functions. Therefore, the final function of each physical store gives way to brand and product advertising, presenting products and becoming a publicity channel.

3）A whole new revenue model；

When it comes to revenue, retailers can design and implement a new model that charges their distributors a certain amount of store service based on product exposure, customer experience and so on. If that doesn’t seem feasible, retailers can build more physical stores and let consumers experience their products, thereby increasing sales and margins.

4）New technologies drive new models；

New models require retailers to measure the experience they can give consumers, and the positive and negative effects that can result. The application of the new technology can help retailers to implementation of the new model, faster through anonymous face recognition, video analysis, the ids tracking and positioning technology, audio track, etc., understanding of customers in the store feel, understand different customers’ characteristics and behavior in stores, and new conclusions: what made an impact on sales? In other words, retailers have a better understanding of which customers come in, which repeat customers, which first-time customers, where they enter the store, who they are with, and what they end up buying?

Keep in mind that the redefinition of physical stores as a new function is a historic change. Therefore, physical stores will not be replaced by e-commerce, on the contrary, there will be more room for development.