April 21, 2020

Michael Zakkour Part 2 | Amazon Laid Bare, How Integrated Systems Helped Chinese eCommerce Rebound, and Thriving by Focusing on the Three "C's"

34 minutes

Today on The Negotiation, Michael Zakkour returns to discuss the impact of COVID-19 on the state of retail in China and the rest of the world.

Setting the context for the discussion, Michael says that it is not a question of which retailers are doing well, but which integrated systems are. One of the factors that held China together during the worst of the crisis was the “ecosystems for retail, commerce, and communication that Alibaba, JD, Tencent, Pinduoduo, and Kaola had built.” These ecosystems reliably put products into the hands of consumers regardless of distance and are made even more seamless via technologies such as contactless delivery.

Michael warns that the tail end of the COVID-19 crisis will only hasten the demise of those companies who are “just hanging on”, along with physical retail in general. Specifically, malls and department stores were already in decline before the outbreak—their future does not look any better.

The eCommerce landscape, on the other hand, will experience both positive and negative developments. “The difference between eCommerce, digital commerce, and the New Retail,” says Michael, “is that, in the New Retail, physical retail actually matters.” The clicks will not spell the demise of the bricks. Rather, the key is in how a brand will integrate their physical and digital presence. To stay in the race, digital should directly influence physical.

Some consumer behaviors in China have been permanently altered. Ecommerce solutions will obviously be on the rise. A “stay-at-home culture” will also emerge as more people realize how efficiently they can continue to live and work in the comfort of their own living spaces, solely using the power of the internet.

Even as lockdowns around the world are lifted, the way we do business will be completely different in the new normal. In order to thrive in this upcoming reality, brands will be wise to “rethink how they make, move, sell, and buy” by reevaluating their business model from the perspective of four different Cs: consumer-centricity, customization, convenience, and contribution.

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