More than 1500 practitioners in the New Retail industry attended the Alibaba New Retail Summit in Hangzhou last week to discuss the industry’s future.
2017 is considered to be ‘the first year of New Retail’. The concept of New Retail itself was raised by Jack Ma during last year’s Computing Conference. Over the past year, Alibaba has collaborated with various Chinese retail giants, including Bailian Group, SanJiang, and others to establish a New Retail model known as the Hema Store. Meanwhile, Alibaba has spread New Retail concepts across its Tmall online supermarket, introducing big data and other new technologies that facilitate and innovate its retail business. Let’s take a look at the new nationwide retail ecosystem built by Alibaba.
According to Yan Xuekun, the CTO of Chinese online department store YINTAI, the Internet is not only a channel for selling but also a platform for data-driven, productivity-enhancing services. The New Retail concept has contributed immensely to YINTAI with its digital membership system and big-data-based online marketing. For example, during last National Holiday, over 778,000 consumers came to YINTAI’s shopping mall in Wenlin. The area has a permanent resident population of only 240,000, meaning each person effectively visited YINTAI approximately three times on average during the week-long holiday. YINTAI’s growing success clearly bodes well for the future of New Retail.
Additional Alibaba partners, such as Chinese discount supermarket chain Sanjiang, have integrated retail business with Alibaba’s big data and digital support, opening the door to countless upgrades and improvements to their retail businesses. For example, Alibaba’s Tmall online store has introduced a new shopping experience in its offline stores that allows users to virtually try on clothes. When customers stand in front of a digital dressing mirror, the system recognizes a user’s physical characteristics, allowing for manual modification if necessary, and lets user select gender, skin color, and other customizations. Shoppers can try on different clothes and witness the results in real time. If customers like what they’ve tried, they can place an order directly through the digital dressing mirror. This type of retail technology also applies to cosmetics, allowing users to try on different colors of lipstick, mascara, and so on.
Tmall’s new retail platform also integrates with AR tracking, image recognition, voiceprint and facial recognition, among other technologies to enrich the offline retail experience. Similarly, users can demo different furniture options via smartphones AR-based technology then place orders by scanning a QR code. These processes and others have greatly enhanced the usability and precision of the retail industry, and as a result, Alibaba and its partners can offer customers a better shopping experience than traditional stores or online markets.
Alibaba Hema Stores also retails fresh food and other instant food using New Retail technology support. At Alibaba’s summit, CEO Hou Yi offered some insights about this aspect of Hema:
“The essence of retail will not change for a long time. What we have done for this industry is about upgrading and integrating it with new technologies, as we did with fintech, new supply chain, and so on, ” Hou Yi commented. When asked why Hema launched offline stores in response to the New Retail trend, he said offline stores can better meet customers’ need for fresh and instant food.
The three core components of Hema are as follows: Firstly, Hema’s users can shop anywhere, smartphone in-hand, via the Internet and offline stores. Secondly, Hema can respond to customers’ orders quickly thanks to a range of stores located within a 3-kilometer radius that can ensure shorter delivery times. Thirdly, Hema can easily maintain and attract customers, as its online and offline stores cover communities entirely. Thus, Hema can nimbly and precisely communicate with customers using its offline stores and online technology support. All of this helps to provide customers with a better shopping experience than the traditional supermarket or O2O platforms.
(Top photo from from iwangshang.com.)