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Li Yanchuan: Focus on Familiar and Skilled Areas

Since retiring from the position of chairman of Beijing CHINASHOP and being re-elected as the president of the Beijing Chain Operation Association last year, Li Yanchuan has devoted more of his energy to studying the retail industry and looking at the development of traditional retail from a new perspective.

With the gradual recovery of the economy and consumption as the epidemic is ended, Li Yanchuan believes that although current consumption power has not yet returned to the level of the same period in 2019, and many retail companies not only have many management and operational problems such as second-generation succession, but also have had their passion and confidence eroded. However, as a retail industry that is a basic necessity of people's livelihood, it still has great potential and is a perennial industry that will continue to evolve and develop.

However, during the recovery and adjustment period shortly after the epidemic was released, he said that retail companies, especially traditional retail companies, should pay attention to the degree of adjustment while maintaining a positive and enterprising attitude and continuously adjusting store operations. They should avoid making large-scale adjustments that consume money and manpower and should make small changes within the company's capabilities.

"Before, in retail, it was better to be wrong than to miss out. There were too many opportunities before. Now, it is better to miss out than to be wrong. It is completely different from before. Heavy assets need to be careful handled. Therefore, some attempts should be made within the company's capabilities, and the company's strategy and future direction should be considered." Li Yanchuan further explained.

“Another point is not to think about creating many new and unknown things. This is very difficult. Instead, we should adhere to what traditional retail companies are most familiar and skilled at, such as products, displays, and marketing. Only by truly doing a good job of the store and presenting it to customers can we attract them to come in and consume.”

01 Retail Industry Still Has Great Potential

With the gradual release of the epidemic, looking back at the three-year epidemic, have retail companies grown or regressed?

Li Yanchuan believes that there are two situations. Most companies have varying degrees of "lying flat" phenomenon, attributing all the difficulties to the epidemic, as if "the epidemic is a basket, everything is put in it," and the awareness and action of positive change are insufficient.

There is another situation,  a part of the enterprise actively adjusted and responded during the epidemic, and even sought development opportunities. Through the "stable price and supply" during the epidemic, it not only won the hearts of customers but also gained recognition and trust from the competent authorities. This is undoubtedly a rare intangible asset for the brand reputation in the post-epidemic period.

Although the development situation of the industry is not optimistic, Li Yanchuan still has confidence in the traditional retail industry, believing that it is a perennial industry that will definitely exist in the long term, but survival will become increasingly difficult because consumers and channels have changed. The younger generation of consumers tends to consume online and has higher requirements for product quality, cost-effectiveness, appearance, etc. Online consumption is constantly expanding, diverting offline market share, and reducing the flow of customers in offline physical stores.

02 Focus on Familiar and Skilled Areas
By turning passive into active and actively adjusting and changing around store, product, and customer dimensions, the company's operations will keep running good.

"Physical stores need to provide living solutions and scene-based experiences. This is not a new thing but something we have been doing within our cognitive range. Don't think about creating many new and unknown things. This is too difficult. Instead, we should adhere to what we are most familiar with, such as products, displays, and marketing. Only by truly presenting the store to customers can we attract them to come and to consume." Li Yanchuan said.

"Currently, we are still in gradual economic and consumption recovery, and it is difficult to make major adjustments and changes. However, companies can actively try small changes within their capabilities." Li Yanchuan said.

In addition, companies can continue to consolidate their advantages in fresh food business and strengthen the kitchen and dining category. Even if the drainage capacity of fresh products has weakened compared to before, it cannot be denied that it is still the most effective customer aggregation category at present.