Breaking Through the Transformation Bottleneck: CR Vanguard Begins Evolution with Full-Link Innovation

China’s retail industry stands at a crossroads between “breaking and rebuilding.”Currently, the retail sector is undergoing profound structural changes. The traditional “people find products” model in hypermarkets is gradually losing its effectiveness. The industry urgently needs precise strategic transformations and innovative business models to systematically reshape the essence of retail—”people, products, and places.” This transformation has become the key to achieving reverse growth in an intensely competitive market. Against this backdrop, the recent National Retail Innovation Development Conference in Beijing focused on planning for high-quality industry development in line with the spirit of the 20th Party Congress, aiming to foster synergy in building a modern retail system. In this context, CR Vanguard’s upgrading practice provides a reference model for the transformation and high-quality development of physical retail.Reinventing Physical Spaces.Under the dual pressure of e-commerce disruption and consumption upgrades, the traditional “people find products” model in physical retail has long been ineffective. Stores, as the first point of contact between retailers and consumers, must redefine their value. CR Vanguard has recognized that the core competitiveness of offline stores has shifted from product availability to the attraction of the shopping experience. In late 2024, they will launch a plan to refresh 50 stores, focusing on three key dimensions:Optimizing the Offline Experience: Improving convenience and comfort for daily consumers.

CR Vanguard plans to redesign store layouts, emphasizing the “shopping” experience and making it more personalized. They will adjust product assortments, increasing the share of fresh and ready-to-eat products to meet consumer demands for freshness and quality. Additionally, they will offer services like free packaging, ice collection, and charging stations to enhance customer satisfaction. These seemingly basic actions directly address the pain points of low efficiency and poor in-store experience, laying the foundation for future value enhancement.Injecting Emotion and Cultural Connections to Create Differentiation: CR Vanguard’s refreshed stores have introduced local specialty products, not only enriching the product selection but also deeply connecting national chains with local consumption cultures. This turns stores into community spaces that carry local memories. For example, at the CR Vanguard Xilin Gol Minsheng Shopping Center in Xilin Hot, new local products like Inner Mongolian dairy items and beef and mutton products have been introduced to meet local preferences. This strategy fosters a sense of belonging and identity among consumers, transforming stores from mere places to buy products into warm community spaces, creating emotional barriers that are hard to replicate online.Exploring Future Formats to Define Retail’s Potential: With concepts like the Olé Inspiration Station, CR Vanguard is breaking traditional category boundaries by using open-space designs and creating scenes around themes like food, coffee, and health.

Essentially, these stores are restructured into offline gathering spots for various interest-based communities, shifting the value of retail from “transactions” to “experience and social interaction,” attracting quality-seeking and exploratory customers. The effectiveness of this three-dimensional transformation has been fully validated in the market: after the renovation of the Xilin Hot Minsheng Shopping Center store, foot traffic exceeded 10,000 within two hours on opening day, with customer traffic growing more than 150% year-on-year. Average spending and customer repurchase rates at renovated stores have steadily increased, and overall customer satisfaction is up by 7% compared to before the renovation. This model is now expanding from pilot stores to a larger scale, with new stores in North and West China about to open, and Olé Supermarket in South China preparing for its refreshed debut. This marks the beginning of a comprehensive promotion of CR Vanguard’s store upgrading strategy, solidifying the foundation for its broad growth by strengthening both traffic and customer mindshare.The Rise of Private Labels.The traditional profit model of hypermarkets is essentially based on “shelf leasing,” where retailers earn profits by introducing third-party brands and earning price differences and channel fees. However, this model has three main issues:Severe product homogeneity leads to competition based solely on price.Limited gross margin space.Lack of control over product development, meaning retailers are removed from actual consumer needs and can only passively adapt to market changes.In today’s retail environment, where product and channel options are abundant, the competitive core for retail businesses inevitably returns to the product itself.

Therefore, developing private labels has become key to breaking through these challenges. CR Vanguard has focused on the private label field and is now accelerating the development of its private brand system, adopting a unique methodology.Matrix Layout for Comprehensive User Coverage: Based on its three business brand positions, CR Vanguard has developed six private brand lines: Jiaxuan, Runjia, Simple Combination, Olé Every Day, Olé Original, and Olé Leading, targeting various lifestyles such as basic family consumption, quality upgrades, and health-conscious choices. This matrix layout avoids internal competition and creates a comprehensive user binding system. Since 2025, sales from these private brands have increased by over 40% year-on-year, becoming a major growth engine for CR Vanguard.Big-Selling Product Strategy to Build Consumer Trust: CR Vanguard has successfully developed several high-frequency and high-recognition essential products, such as paper towels, cooking oil, and beer, with national influence. These products leverage competitive advantages in both price and quality to reinforce consumer trust in CR Vanguard, turning private label products from “optional items” into “trusted items.” This trust extends beyond individual product sales and creates a foundation for expanding product offerings.Building Long-Term Innovation Capabilities: By establishing buying teams and strategic partnerships with factories for core categories like Olé, CR Vanguard is no longer just a passive retailer but an active participant in product research, design, and standard setting.

This control over product definition and pricing allows them to respond quickly to changing consumer needs, offering flexibility in product attributes and creating unique capabilities that competitors cannot easily replicate. For the upcoming Chinese New Year shopping season, CR Vanguard plans to introduce nearly 100 new SKUs, focusing on healthy drinks, origin-based dried goods, and festive gift boxes.Through its systematic development of private labels, CR Vanguard has not only enhanced the customer experience but also provided a clear demand-driven foundation for supply chain upgrades.Supply Chain DeepeningAll front-end experience and product innovation must rely on a powerful and flexible supply chain. CR Vanguard’s supply chain upgrades are evolving toward “deep participation, full control, and global responsiveness.” On the local supply chain side, CR Vanguard extends its supply chain to the field through the “order agriculture + hundreds of bases” model, ensuring full control from source production to terminal sales. For farmers, stable orders secure income expectations, while CR Vanguard’s standards and technical guidance help improve planting quality and product standards, driving income growth. The tomato base established in Dali in March this year, for instance, has ensured that the tomatoes meet high-end market standards for sugar-acid ratio and zero pesticide residues.On the global supply chain side, CR Vanguard meets the demand for quality and rarity in the context of consumption upgrades. Its eight-year participation in the China International Import Expo has enriched its direct sourcing experience. In the eighth CIIE, direct-sourced products worth over 300 million RMB were purchased. With its strong global logistics and supply chain capabilities, CR Vanguard can quickly deliver fresh durians from Malaysia within 36 hours, ensuring their fresh flavor. This ability to integrate global resources not only provides diverse product choices but also introduces global food trends and lifestyles, continuously refreshing consumers’ expectations.