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Chapter 408 A Retail Alliance Covering the Entire United States

The three-day North American Retailers Conference concluded amidst noise and controversy.

This grand event, which brought together players from the American retail industry, saw Ernst and Affili meet with many retailers, but the result was a defeat that Affili found hard to let go of.

On the last day of the conference, the short journey of just a few kilometers from the venue to the five-star hotel where Ernst was staying could not dispel the dejection on Affiliate's face.

When he stepped into Ernst's hotel suite and looked at the city sunset through the floor-to-ceiling windows, the emotions that had been building up for three days finally burst forth.

"I really didn't expect these retail giants to be so short-sighted." Afei's voice was tinged with excitement, and he waved his hands unconsciously. "Walmart, Kroger, Best Buy, Home Depot—not one of these giants in the North American retail market was willing to cooperate with our flash sale project."

Over three days, the Flashbuy team engaged in in-depth discussions with companies ranging from Walmart in the supermarket sector to Kroger in the grocery industry, Home Depot in furniture retail, and Best Buy in the electronics sector. These were all companies that ranked among the top three in their respective retail market segments in North America.

Without exception, the responses I received were all polite rejections. This comprehensive rejection dealt a heavy blow to Afei's high expectations, which was clearly inconsistent with my original goals.

In stark contrast to Afei's anxiety, Ernst remained calm and composed throughout, taking the outcome for granted.

He sat on the sofa, put down a report in his hand, and listened to Affili's complaints. He reassured her, "Affili, you're wrong. These retail giants aren't lacking in vision; they're simply unwilling to let flash sales take a slice of their existing profit pie."

"Isn't this a win-win situation?" In his view, the flash sale model can clearly bring new growth points to these giants, broaden sales channels, and enhance market competitiveness. They have no reason to refuse such a cooperation opportunity.

Ernst's lips curled up slightly, revealing a meaningful smile. "Believe it or not, within three months, these e-commerce giants, who are currently avoiding online retail like the plague, will all launch their own online shopping malls."

After speaking, Ernst's smile gradually faded, replaced by a hint of sarcasm. "A bunch of hypocrites who act like gentlemen in public but are all scheming people behind closed doors. At this three-day conference, everyone was talking at length about the importance and irreplaceability of traditional retail, treating online retail as a monstrous threat and trying their best to belittle its development prospects."

"But I'm sure that quite a few companies are already secretly working on developing their own online shopping websites."

Ernst picked up the decanted red wine from the table, leaned back slightly, and spoke with even greater conviction, "They've been loudly proclaiming that West Mall's online website is a trap, claiming that Amazon's business model won't survive the next winter. But they can't possibly be unaware that West Mall's stock price has risen 10% in a short period due to the successful operation of its online website."

"It's impossible not to know that the reason Amazon keeps increasing its losses is to seize market share, rather than that there is a problem with the business model itself."

At this point, a smug glint flashed in Ernst's eyes. "Besides," he continued, "now that I've also entered the e-commerce field, do you think they won't take it seriously? Do you think they won't re-evaluate the prospects of e-commerce?"

Affili began to understand something; a crucial factor was Ernst.

This guy is known as someone who's practically showered with money by God; the projects he approves of have never failed.

The fact that such a legendary figure has chosen to enter the retail industry, aiming to revolutionize it through flash sales, is enough to shake the entire industry.

For those retail giants, whether or not they are truly optimistic about the future of e-commerce, they must respond to Ernst's entry into the market.

Developing an online shopping website, purchasing servers, and hiring relevant technical personnel are all investments that are just a drop in the ocean for a large retail giant.

Even if the online business ultimately fails to achieve the expected results, it will not have a significant impact on their core business; at most, it will just be a negligible trial cost.

However, once the online retail sector led by Ernst truly takes off, and they miss the opportunity to establish a presence due to their initial hesitation, they will completely lose the initiative in future retail market competition and will be unable to share in the huge dividends brought about by this online revolution.

Having figured this out, Afei's doubts hadn't completely dissipated: "If that's the case, then why do they keep publicly claiming that e-commerce is a trap and vehemently denying the development prospects of online retail?"

Ernst picked up the cigar on the table, lit it with a lighter, took a deep drag, and exhaled a thick cloud of smoke.

His expression was full of disdain, and his tone carried a hint of contempt. "Why can't you explain that? The American retail market is only so big, and its total capacity is relatively fixed. No matter which company rises to prominence through innovative models and seizes more market share, it will inevitably lead to losses for other companies."

"These giants have a simple idea: either everyone sticks to the status quo and makes a steady profit in the existing market structure, and no one tries to break the balance. They absolutely do not want to see any company become more innovative and thus threaten their existing market position."

Ernst placed his cigar on the ashtray, picked up the thick stack of documents he had just placed on the table, and lightly tapped the documents with his other hand, making a crisp sound.

"That's just how the world is. The weak are naturally inclined to band together for warmth, in order to resist the impact of the strong and protect their own meager interests."

The retail giants rejected the flash sale's offer to collaborate, and their rejection was particularly high-profile.

Almost daily, news broke that Ernst's flash sale project had been rejected by a retail giant again. This news continued to circulate at the conference and even became a hot topic at the retail industry conference.

The reason these giants are so publicly refusing to cooperate is that they genuinely don't want to partner with Flashbuy, and they don't want to invest real money to help Flashbuy expand its market and accumulate customers, thereby cultivating a powerful competitor that would ultimately threaten their own interests.

On the other hand, they are also doing this to show non-leading retail companies that they remain optimistic about traditional retail and that e-commerce has no future. This is to stabilize market sentiment and prevent small and medium-sized retail companies from turning to online platforms and disrupting the existing market order.

However, these retail giants' wishful thinking is likely to fall through, just as Ernst said, the weak are naturally inclined to band together.

For local retail businesses that are at a disadvantage in market competition, they also need to find new development opportunities, and flash sales provide just such an opportunity.

"For these local retail businesses to achieve further development and expand their business scale, the biggest bottleneck is often not funding, but market expansion."

"Take Meijer for example. Walmart and Costco, the two retail giants, have been deeply rooted in Michigan for many years and have invested a lot of resources, but they have never been able to surpass Meijer's position in the local market. This is the advantage of local retail enterprises. They have built a solid brand awareness in the minds of local consumers by relying on their long-term accumulated local reputation and perfect service system."

"The reverse is also true; if Meijer wants to expand his business empire and broaden his operations, he also has to face this..."

The predicament.

"But the emergence of online shopping has completely broken down this regional protectionism." Ernst's tone became more impassioned. "For online consumers, they don't pay too much attention to the regional attributes of merchants, but rather value whether they can buy the products they need and whether the prices of the products are competitive."

"If these businesses can leverage our flash sale platform to reach more consumers as they expand their reach, these online orders will translate into actual offline sales, bringing foot traffic to their physical stores."

Ernst's gaze fell on Affili. "And our flash sale just happened to give them hope of breaking through this bottleneck."

What he held in his hands weren't documents, but rather letters of intent for cooperation signed by local retail businesses.

Following Ernst's train of thought, Affili continued, "Although our flash sale delivery subsidy policy will affect the profit per order of our partner merchants to some extent, if we can attract more consumers and significantly increase the number of orders, then the overall profit will not only not decrease, but may even increase."

"More importantly, this method can effectively reduce the average order value of competitors, which in a sense helps them unify the local market."

Ernst smiled and nodded. "So I never consider our participation in this retailer conference a failure. On the contrary, through this conference, I see that a Walmart alliance has been successfully formed."

"No," Ernst shook his head, denying his own statement. "It shouldn't be the Walmart alliance, but rather a comprehensive retail sector covering home improvement, electronics, fresh produce, books, audio-visual products, and pharmaceuticals, etc. We've basically integrated all of them."

Of the fifty states in the U.S., apart from Alaska and Hawaii, which have unique geographical locations and relatively small populations, the remaining forty...

Flash sales have already partnered with major cities in all eight states.

In certain niche markets, such as electronics and books/audio-visual products, there may still be some weaknesses in the flash sale strategy.

However, Ernst believes that the current layout is sufficient to meet the needs of the early development of flash sales, and further optimization and adjustments are needed.

In the electronics sector, for example, although Best Buy, an industry giant, refused to cooperate with Flash Sale, Aron, one of Best Buy's main competitors, has officially become a partner of Flash Sale.

Aaron has nearly a thousand stores in North America, with some stores in Canada and more than eight hundred stores in forty states in the United States alone.

In addition to partnerships with small electronics chains, Flash Sale now covers more than 90% of major cities across the United States in the field of e-retail.

The remaining uncovered areas can be filled by placing orders in advance to fill market gaps.

The secondary distributors are instructed to store goods in advance in pre-sale warehouses. Once a consumer places an order on the flash sale platform, the platform will settle the payment with them as soon as the goods are sold and the payment is received.

As for the fields of books and audio-visual products, the situation is similar to that of the electronics field.

While Barnes & Noble, the largest brick-and-mortar bookstore chain in the United States, dismissed flash sales, another large brick-and-mortar bookstore chain, Borders, successfully signed a cooperation agreement.

Moreover, Ernst held a trump card: Bertelsmann Group.

Bertelsmann is considering a restructuring with Ingram Books, which controls 40% of book distribution in the United States. After the restructuring, one out of every four books sold globally would come from this newly formed book publishing giant.

Given his relationship with Bertelsmann Group, Bertelsmann would likely not refuse to cooperate with Flashbuy if he asked.

The two sides had a very pleasant collaboration with MGM, and given his reputation, Betsysman was confident that flash sales could bring him huge profits.

This is not only a strategic move in the book industry, but also a way to encircle and suppress Amazon's business.

When my books are cheaper than yours, my delivery is faster than yours, and my selection is more extensive than yours, how will you, Amazon, respond?

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