In China, 53 percent of young Chinese aged 20 to 35 earned more than 8,500 yuan ($1,261) a month and thus became the major consumption force in 2016, according to a report jointly released in January by Shenzhen-based Suishou Technology and Beijing-based marketing consultancy Analysys International.
Nevertheless, the old State-owned department stores still hold the advantage of attracting more middle-aged and senior consumers because these generations are immersed in their childhood shopping memories there, Wang told the Global Times.
In order to continue attracting older generations, the new No.1 Department Store will adopt classic Shanghai interior design, echoing that seen in the Grand Theater and shikumen, a traditional Shanghainese architectural style, according to a statement Bailian sent to the Global Times on Wednesday.
We hope to keep a sense of nostalgia for older consumers, but hope to introduce futuristic features to also attract younger consumers, said Zhao, the board secretary of Bailian.
Offline, traditional strengths
Offline stores can provide experiential, in-person and more direct services for customers which online retailers cannot, Wang said.
For instance, offline stores are able to provide more personal, tailor-made promotions with different themes to attract specific groups of consumers, he noted.
Bailian's recent move reflected the trend. On Friday, the group introduced summer promotions with different themes such as "beer festivals" to attract male consumers and in-store educational promotions to attract students.
Also, traditional departments have the advantage of good geographic locations because they were built decades before modern malls and are also relatively easy to transform into specialist stores, for example, high-end stores for women or men or clothing stores for children, said Wang.
"For those departments with large spaces and strong financial backgrounds, they can relatively easily remodel themselves into modern shopping malls," Wang noted.
Modern shopping malls with customized elements and one-stop services including restaurants and movie theaters are becoming popular among the everyday consumer, so older stores need to catch up with contemporary trends.
It has also become a trend that online and offline businesses are integrating in the aftermath of the emergence of big data and Internet technology.
In October 2016, Internet giant Alibaba Group Holding's founder Jack Ma Yun used the term "New Retail", which refers not only to the integration of online and offline retail, but also takes advantage of technologies such as logistics, artificial intelligence and big data.
In February, Bailian agreed on a strategic partnership with Alibaba in order to expand market share through joining the online and offline retail worlds, a move taken to update, streamline and better optimize consumer experiences.
Overseas competition looming
Amid China's pursuit of a consumption-driven economy, domestic passion for shopping is expected to continue growing steadily, with roughly 30 shopping malls opening in the first half in Shanghai alone, according to media reports.
However, against the backdrop, some of malls are from the overseas markets. For instance, HKRI Taikoo Hui, a joint venture under Hong Kong-based Swire Properties and HKR International, has been welcoming guests to its shopping complex since May, posing international rivalry.
Overseas stores could provide consumers with fresh foreign goods and Western-style shopping experiences, said Wang. But he noted that they have to devote more efforts in meeting local consumers' needs than their Chinese counterparts do.
Some foreign department stores have suffered failure in the Chinese market, however. UK retailer Marks & Spencer, for instance, announced in November 2016 that it would close all its 10 stores in the Chinese mainland amid shrinking profits. Its flagship store on West Nanjing Road of Shanghai was shut down on April 1.
Wang warned that no shopping mall should ever be overdeveloped. A business region has its capacity to maintain certain consumers. "If a business region is saturated, retailers should be cautious about opening up more stores there," Wang said.
