How the ‘new retailer’ of Alibaba is changing the future of retail in China and the world
Editor’s note: This was contributed by Ashley Galina Dudarenok, an entrepreneur, professional speaker and vlogger. She is the founder of several new companies, including the social media agency Alarice and the ChoZan resource platform. He runs the world’s biggest vlog about the Chinese market, consumers and social networks on his Ashley Talks YouTube channel. His latest sales success, Unlock the world’s largest electronic market: a guide to sell on Chinese social networks, is available on Amazon.
At the 2016 Alibaba Computer Conference, Jack Ma focused his speech on five areas that are being transformed by technology. The list included new finances, new manufactures, new technologies and new energies with new retail sales at the center.
Alibaba wants to use data and technology to transform retail, including offline retail, which accounts for 82% of the total.
The new retail trade is Alibaba’s strategy to redefine trade by allowing seamless engagement between the online and offline world. It is not about converting online users to offline customers or vice versa. It is about creating a retail ecosystem that combines online and offline channels in a unified way that shows the consumer at the center, often in new and unexpected ways.
The company took advantage of the occasion of the Double 11 Shopping Festival, which in turn has been transformed to be 18 times larger than Amazon Prime Day and 2.5 times larger than Black Friday and Cyber Monday combined, to show their vision.
With examples from the Double 11 Shopping Festival and other examples of test cases in China, this is what the future of retailing looks like:
New retail stores can curate consumer experiences specific to brands and products.
1. Smart emerging stores
The main features of these stores include:
A connection to an online payment system is established to enter the store. In the case of Alibaba, Alipay must be scanned to enter its smart stores.
Price tags are electronic and prices vary in real time based on certain factors.
Facial recognition technology is used to track clients. Discounts are offered on the smiling items that you have searched online.
Items can be purchased for later delivery. It is not necessary to provide the details of home delivery, since the system already has registered the buyer’s home address. The delivery in the main cities of China is already very fast, from 15 minutes to 3 hours.
Customers can receive store reports and location-based discounts through their Taobao or Tmall application on their mobile devices, which generates traffic to offline stores.
Customers can “test” clothing and makeup items virtually, with the help of RFID (radio frequency identification) and AR (augmented reality) technology.
Customers can scan images using AR technology to visit the product listing page and collect coupons.
Consumers can buy items using vending machines by scanning a QR code and can also get products sent home with a few clicks.
There are also innovative technologies such as “Cloud Shelf” that stores purchasing behavior data, facial recognition information, mobile gamification, etc.
2. Tmall Neighborhood Convenience Stores / LST Corner Stores
The initiative is different from Amazon’s physical store, since it can be used in millions of convenience stores and family stores to digitize their businesses, instead of using it only in the stores owned by Alibaba.
For example, the LST system can help the owner of a brick and mortar store to measure the demographics and buying behavior of customers and then predict and recommend the most demanded products for sales in that store. Its technology can be used for marketing, inventory management and logistics to improve its business operations.
Last August, Weijun Grocery, a community supermarket in addition to the Zhejiang University in Hangzhou, joined Alibaba’s LST system and was later chosen as the first test target for its “Tmall Corner Store” franchise. According to an interview with the owner of the store in August this year, the sales volume experienced a strong increase of 45% compared to the previous quarter, while customer traffic grew by 26%.
3. Retail as entertainment
Modern Chinese e-commerce consumers are predominantly young and knowledgeable about mobile devices, so purchases are not limited to passively adding