Where is Alibaba’s “New Retail” vision headed? [5 Reading Tips]
Shopping behaviour is slowly changing with the application of new technologies and the growth of the internet. Products and services are always available, wherever the potential customers are, while the online and offline worlds are merging. This proves that today’s consumers are »omnichannel«. They surf the Internet on their cellphone, tablet, or laptop, on the road and at home. The final purchase (or click) then takes place in the store or on the go through mobile devices. The choice depends on the convenience.
This reality is recognised by online giants and pure players. Lately, numerous pop-up stores, smart stores, and flagship stores equipped with the newest technologies have opened up. Some good examples of this are shops from Mymuesli, Mister Spex, Amazon, and Zalando. Traditional brands such as Adidas and Ikea are also reinforcing their physical presence as a strategy to provide customers with a comprehensive and enhanced shopping experience, while also expanding their digital business.
Alibaba’s “New Retail” vision
On the other side of the world in the last few years, Alibaba has developed a new retail concept called “New Retail”. It’s goal is to bring together the best of the online and physical worlds. Alibaba is using the last two “Singles’ Days” to present the latest advances in this matter.
Last year, Alibaba was very euphoric with implementing VR and AR in the shopping experience. This year they have more time and resources to show their new vision to retailers. It involves the use of big data to seamlessly link online and offline activities.
For Alibaba, Singles’ Day is not just a shopping festival, but also the best chance to test its innovations in retail. In addition to the “see-now-buy-now” fashion show and the mobile AR game “Catch the cat”, the Chinese online giant has tested 60 stationary pop-up stores throughout China for the first time. It’s rumored that Alibaba has joined more than 100 different brands for this experiment. For example, L’Oreal has set up a vending machine full of Clarisonic facial brushes so that customers can purchase quickly without having to stand in long queues.
As part of the 11.11. Alibaba has also developed 100,000 “smart stores” that have benefited brands such as Casio and Bose. One interesting feature of these stores was the so-called “Cloud Shelf,” a digital, RFID-based screen that automatically tracks and recognises product labels. So, when a buyer places an item in front of the screen, it automatically displays the availability of the product, customer reviews, and more on Tmall. The buyer can then scan the QR code of the product to buy it from Tmall.
The Alibaba supermarket »Hema« as a pioneer
A key part of New Retail is our Hema supermarket, the grocery store of the future. Watch how we integrate tech into grocery shopping! pic.twitter.com/Bwa1joGWn1
— Alibaba Group (@AlibabaGroup) 11 November 2017
The idea behind it is that consumers can complete the purchase without in an automated way and without human assistance. The Alibaba supermarket »Hema« once again reflects where the trend is heading. The user experience is improved by large amounts of data. As customers shop via the Hema Mobile App, every purchase is tracked and preferences are saved.
On the customer side, it offers a personalised product page, on the delivery side, machine algorithms plan delivery routes. The barcodes not only enable customers to track product origins and delivery, but also provide Hema with the power to use an intelligent supply chain management system. This allows local food deliveries to be completed in about 30 minutes.
According to Alibaba, every Hema customer makes a purchase with them an average of 4.5 times a month and the conversion rate on the Hema app is up to 35 percent for a purchase.
Moving away from Alibaba
As a result of the influence of this new paradigm, the rolling mini-supermarket “Moby Mart” was launched on the streets of Shanghai. The mobile supermarket uses geolocation to arrive right at the door and has no cashier. The purchasing process is seamless, mobile, and intelligent. Afterwards, the purchase is automatically billed via the Moby app.
In the West, Amazon offers maximum convenience through automated and high quality digital services. But there is more than just the Amazon universe. It looks like Alibaba is leading by some distance. The company has the advantage that Chinese society is completely mobile and with the large population comes a large amount of orders and demand.