In the past ten years, driven by the development of digital technologies, the business operation models in the Chinese retail industry have undergone substantial changes. For retail industries, this shift implies more than a mere transition in operational procedures, but in fact a full digitization of the value chain. Therefore, a comprehensive grasp of the digitalization of users, products, supply chains, and brick-and-mortar stores is the underpinning for companies to achieve digital upgrades. The future success of retail businesses largely depends on the depth and breadth of their digital capabilities, and development in such foundations should be given a strategic priority.
Speaking from the perspectives of store operators, the following examples include smart retail practices carried out by some Chinese retailers:
Smart Retail + Convenient Supermarkets
Bianlifeng: Building a Smart and Fully Interconnected Management System
Bianlifeng has opened more than 1500 convenience stores in China that operate 24-hour a day, covering Beijing, Shanghai, Shenzhen, etc. Stores utilize digital operational procedures, including automatic reordering, smart display, self-generated promotion, and other highly technological and efficient operational systems.
Source: http://zh uanlan.zhihu.com/p/47723645
At the same time, Bianlifeng is continually developing the smart store, by piloting face recognition to accurately identify each customer, using item recognition to intelligently judge products, product recognition to distinguish different products, and using internet of things to monitor the store environment and product turnover. In the future, Bianlifeng is planning on using electronic price tags to fully realize a smart convenient store with no staff so that customers can come and go at anytime.
Wumart: Smart Shopping Carts Enhance Consumer Experience
With the empowerment of Dmall, the digital platform of Wumart, the digitalization of Wumart has covered most aspects of the value chain. One of the technological innovations include smart shopping cart. As customers enter the store, they are guided to multiple rows of neatly arranged shopping carts interconnected by a smart lock.
Customers can unlock the carts by scanning a QR code or ask for staff assistance.
With the smart shopping carts, customers can scan each item in real-time through the scanner built into the cart. After the scan is completed, the product is placed in the shopping cart and the gravity sensor in the cart confirms whether the product is successfully put in. Lastly, smart shopping carts allow customers to directly make a payment without the need for a cashier or waiting on queues. The payment can be made through WeChat Pay or Duodian App.
Carrefour: Enhancement on Transaction Efficiency Made Possible by the Integration of High-tech Systems
Carrefour Le Marche, the first new concept store Carrefour developed, is located in Tianshan, Shanghai. The new concept is revolving around the idea of smart life store with a French touch, focusing on diversified shopping experience, fresh food, and imported products, with many digital innovations applied with the support of Tencent.
The store uses electronic tags, and the central system could automatically adjust the prices, avoiding the inconveniences of a blurred or torn tag that has to be removed manually. In addition, to address the problem of long queues during check out, the store implemented a system where customers could scan barcodes while they shop, and make a one-click-payment at the end with WeChat Pay. Moreover, the face recognition technology developed by WeChat Pay and Tencent Youtu is also available at the store to facilitate the integration of membership registration, authentication, and password-free payment. This high-tech system with confidential procedures simultaneously guarantees efficiency and security.
Smart Retail + Fashion Business
Anta: Capturing Customer Preferences and Insights through Big Data.
At the front of Anta’s digital industry chain, Anta Smart Store has made great efforts to understand consumer preferences. Through AI image recognition technology, customers’ browsing, try-on, and purchasing behaviors in the store will be recorded and analyzed. This accurate and timely data allows Anta to understand consumers better and thus serve them more precisely.
To illustrate, the two high-resolution cameras of the Anta You Mall system at the door monitor the gender and age range of customers entering the store at any given time. Within the store, there are cameras constantly capturing the shopping route and trajectory of each consumer, and diagnose the cold and hot areas in the store through heat and pressure sensors. Moreover, all consumer actions will be recorded by the RFID chip under the shoes and the equipment in the shoe measuring area. The try-on rate and purchase rate acquired through these records will be analyzed holistically to measure the attractiveness of these products. The purchase record at the time of check out will also enter the CRM system and provide consumer portraits and precise marketing support.
As of right now, Anta’s newly upgraded smart stores account for nearly 50% of all stores, an increase of more than 22% compared to its competitors. The scene-based consumer experience in these smart stores effectively doubled the purchase rate of consumers.
Innisfree: Providing Customer-centric Services through Digital Technologies.
Innisfree recently launched the first self-designed retail store in Hangzhou, China. The Yuexing Smart Store combines consumer product experience, data-driven preferences, and increased variety of beauty products. To provide a better customer experience, the store provides three digital services: the smart beauty consultation, the make-up customization, and the digital interactive experience.
Consumers can experience the four steps of smart beauty experience, namely “virtual make-up trials”, “smart skin test”, “product recommendation”, and “quick payment through face recognition”. These digital and interactive experiences allow customers to preview the make-up effects to find the most suitable style and also understand their skin conditions and needs. The system will generate detailed product recommendations and the product shelves will be lit up to guide the customers to their products. Lastly, customers can make a fast and secured payment, making the entire shopping process smart and convenient.
Smart Retail + Food Catering
F5 Future Store: A Model of Self-Serving Dining Experience
F5 Future Store is a smart restaurant chain in the Pearl River Delta region, operating 24 hours a day and selling more than 50 kinds of dishes. The efficiency and low-cost place the store at a strategic advantage against food delivery and convenience stores, allowing them to open more than 60 stores in 5 years. To illustrate, if multiple customers place an order at the same time, their food can all be delivered within a minute, and the cost is driven down to as low as 15 RMB per person.
Inside the F5 store, customers place orders through digital screens on the wall, and they can also order online in advance and pick them up later. When the payment is made successfully, the robots in the kitchen will automatically prepare meals from the cold storage. All rice and noodle dishes are boiled or steamed, and customers can track the progress of their meal through the large screen in the store or mini programs on their phone. Lastly, if the customer chooses to dine-in, by pressing the button after the meal, the table will be automatically cleaned without the need for cleaning or manual disposal of garbage.
Haidilao Smart Store: Digitalizing Customer Dining Experience
In 2018, Haidilao opened its first smart store in Beijing. The store occupies an area of more than 1,600 square meters, with 93 dining tables and 2 private rooms. It has digitalized every step of the customer experience.
At the entrance of the store, a large rectangular screen is installed and customers waiting in this area could download the Haidilao App and scan the QR code on the screen to play online games with other customers who are waiting as well. The screen will also display the estimated waiting time and progress in the kitchen.
After the customers are seated, they can order food through the iPad. The digital kitchen will process orders and the robotic arms of the smart dish warehouse will grab the corresponding food to the plate enabled by the RFID chip. Then, each dish enters the “automatic dispenser” on the conveyor belt, and the “meal delivery robot” will send the dishes to the customers. To cater for personalized ingredients and dietary preferences, the robot can prepare for food precisely as the customer wanted with an error margin of 0.5 grams. At the same time, the details of the order will be recorded in the membership information, and could be retrieved when the customer decides to come again. During the entire dining process, the store uses digital light and projectors to create various themes to enhance the dining experience.
From the customers’ perspective, the digitalization of all value chains in new retail businesses brings about the upgrade of customer experience. Customers’ entire shopping journey in a retail store are recorded and analyzed through digital interactive devices. These real-time data can effectively guide businesses to understand customer preferences, to optimize products and services, and to make accurate marketing efforts. Therefore, distinct from the traditional retail business, smart retail not only requires the precise grasp of customer demand, but also the optimization of retail services and experience to further capture customer lifetime value – especially in China today where retail digitalization is advancing at amazing pace.