Digital retail is undergoing transformation.

When AI begins to unleash increasing power in the retail industry, especially by achieving a new supply-demand balance, the evolution of digital retail has also entered a transformative new stage. Previously, when discussing digital retail, we often applied digital tools to the internal processes and workflows of the retail industry to reduce costs and improve efficiency. Digital retail players represented by Youzan and Weimob have all focused their attention on this.

Undeniably, digital tools can indeed bring positive impacts to the development of the retail industry. However, if these efforts remain confined to the existing framework of the retail industry without addressing its foundational and underlying aspects, digital retail can only provide short-term benefits and fail to bring about profound, transformative changes. As "digitalization" shifts toward "intelligentization," especially when AI begins to catalyze reactions across all retail-related sectors, the development of digital retail truly enters a phase of metamorphosis.

Recognizing this profound transformation in digital retail and identifying new directions for the industry's evolution will allow us to find new breakthroughs amid this major trend. So, in which direction is digital retail transforming? Through this metamorphosis, what new opportunities can we uncover?

The Intrinsic Drivers of Retail Are Undergoing Transformation

When it comes to identifying the current intrinsic drivers of the retail industry, AI stands out. Any retail player seeking new growth opportunities must consider integrating with AI—an unavoidable imperative. Looking back at the industry's development, we see that during the internet era, the intrinsic driver was internet-based. With the advent of digitalization, the driver became digital. Now, as the AI era dawns, the retail industry's intrinsic driver is undergoing a deep shift from "digitalization" to "intelligentization."

This transformation in retail's intrinsic drivers unleashes immense potential. The reason lies in AI's ability to go beyond the superficial changes of the internet and digital eras, reshaping not just the surface but the very core of retail, enabling comprehensive integration.

With AI as the intrinsic driver, retail undergoes a fundamental overhaul. Under AI's mechanisms, the industry's internet-based and digital elements evolve into AI-driven ones. This catalyzes significant improvements in retail's internal components, processes, and workflows, leading not only to self-upgrading but also to a complete redefinition of relationships across the supply chain.

The External Forms of Retail Are Evolving

For retail to achieve its goals, its external forms must undergo profound and comprehensive changes. Traditionally, retail's forms were either conventional or internet-based. With the AI era, these forms are now experiencing a radical transformation, establishing entirely new connections.

By integrating AI into retail, user experiences are revolutionized, enabling immersive interactions that make the consumption process more tangible. For consumers, this new model significantly enhances their experience. Beyond this, the mediums through which retail engages with users have also transformed. We now see applications of smart robots, smart glasses, and AI-driven styling recommendations—all signaling a profound shift in how retail connects with consumers.

As retail's external forms evolve, new supply-demand equilibriums emerge. For the industry, transactions and interactions based on these new forms will unlock fresh energy and momentum, achieving a unified transformation from within.

The Role of Retail Is Being Redefined

Historically, retail was merely about selling products. Whether in the traditional or internet era, this role remained largely unchanged. With digitalization, this traditional role was pushed to its limits, risking stagnation.

As the AI era arrives, blending the digital and physical worlds, retail's role is undergoing a comprehensive metamorphosis. No longer just a seller, retail now fulfills new roles: meeting the digital needs of upstream industries to enhance production efficiency, while also addressing evolving consumer demands downstream, sparking new possibilities.

In this process, retail transcends its intermediary role, deeply integrating with the entire supply chain and becoming an intrinsic part of the industry. This redefinition unlocks new growth opportunities and serves as a gateway for digital-physical convergence.

Final Thoughts

As AI matures and permeates retail, the industry transitions from "digitalization" to "intelligentization," undergoing profound changes in its intrinsic drivers, external forms, and functional roles. This metamorphosis will activate and unleash new dividends for the retail sector.