With over 1 trillion USD spent online  which is about half of the global commerce sales, China is at the forefront of commerce and with about 60% market share, Who can be in better position than Alibaba to forge a strategy for the future of retail, which is aptly christened as NEW RETAIL by Jack Ma.

Now we shall discuss New Retail is two parts.  In this episode, we shall discuss the O2O (online to offline) and in the next episode, we shall discuss how Data is central to the New Retail Strategy.

So, Future of retail is not a question of online or offline, it will be a matter of integrating consumer touch points for seamless experience in the most efficient way.  And that is what ALIBABA is attempting in its new endeavour of the New Retail.  Through New Retail, Alibaba is trying to revolutionise 4 areas of retail as of now:

  1. The supermarket
  2. The Malls
  3. Mom and Pop Stores  and
  4. Auto Retail

Before we begin let’s understand that Alibaba group has 3 major pillars from a retail perspective-  Taobao- a mass retail marketplace (more like a micro business to consumers or c2c), Alibaba- connecting Chinese exporters with the world (b2b)  and TMall -a  curated trusted brands marketplace (more b2c)

So, let’s come back and talk about the 1 area of retail to be transformed and that is the supermarket-

The supermarket transformation is christened as HEMA stores.  Shopping at Hema is a smartphone-powered experience—you can do it from home or in the store. When you’re in the store, you’re able to scan a barcode with your phone to get product information. Payment is also cashless, done through the Alipay platform embedded in the Hema app.

The fast 30 minute delivery for those who live within three kilometres of the market,  is Hema’s key USP. Each store serves as its own warehouse and logistics centre that collects, fulfils, and delivers customer orders as fast as they come in, online or offline.

2.  The Car Retail: 

china is the world’s largest Car market, and the retail part of it can really become more convenient and effective. Alibaba is creating auto vending machines across the country.  It’s a model that lets customers browse makes and models inside their app, choose a car they want to test drive, pick it up from an unmanned vending machine, and drive it for up to three days. After experiencing the car in a no-pressure situation, they can make an appointment to visit a dealer when they’re ready to buy.

3.  Mom and Pop Convenience Stores- The local kirana shops, as we call them in India are generally plagued with inventory related insights.  There is absolutely no insight into demand prediction, loyalty, up-marketing and inventory management, and RoI. Alibaba launched a program that is called Ling Shou Tong or LST,  which digitises the inventory management of each store and integrates these businesses into a central warehousing and logistics system. It also provided them with an analytics platform that anticipates customer preferences and lets proprietors know what they need to order, how much, and when. Ling Shou Tong also modernized the insides and signage of the stores. Early results point to more efficient operations.

4.  The Malls-  These are the giants that attract a huge volume of footfalls and window-shoppers, but in recent times are witnessing lower volume of shoppers.  Alibaba has invested in Malls and the stores in these malls are equipped with “Virtual Shelves,”

As per Google 43% of consumers exit a store without buying in frustration because they did not find what they needed, or lack of information about what they needed.

So with virtual shelves, if you don’t find your size or colour in stock, you can still select the product you want on a screen, punch in your size, colour, and other specs, scan with your app, and have exactly what you want to be delivered directly to your home.

Even the changing room or washrooms of malls can be a New Retail experience. Step into the ladies’ room, and while you’re waiting, check out the “Magic Mirror” on the wall to experiment, virtually, with new makeup colours. And if you Like what you see? You can buy it from the nearest vending machine

So in the next episode let’s look at the DATA part of the New Retail strategy of Alibaba. Thank you and see you soon.

At the recent Broadcast India exhibition in Mumbai, we witnessed various brands installing ipads at their stalls, so that users could browse and get the information they seek.
We saw this FAILING at least in 3 ways:
1.   The ipads got automatically got locked, hence even if a user wanted to use it , he/she was not able to do so
2.  At some places we saw that the installed ipads,  belonged to a company employee- and the emails and other data were publically accessible, and apart from posing a security risk it also lends an unprofessional imagery of the brand.
3.  Somewhere, a printed brochure was scanned and put up in digital format. This is a big blunder because online navigation and information search are different than print consumption of content.  If a random user browsed a few pages on ipad and left,  the subsequent user would find it immensely difficult to find his/her way back to home page or to any other desired page.
All these FAIL the purpose of digital integration and then as professionals, we lose motivation to invest our time and money in further such integrations.
So, digital integration with events or retail should be:
1.  Conspicuous & Inviting-   It could be the design, it could be the size, it could the position in the store. The Digital device should attract and motivate people for usage. Due to this, Your brand can get an upper hand in terms of noticeability at the retail level
2. Engaging: a multitude of information in various formats (videos, images, shop) and various ways to interact- chat-up. share, send to email, zoom-in etc. The more people are engaged, the more are the chances of a sale.
3. Accessible–  think, how can an old person access your information, how can one access it in low light, what’s the screen size, what’s the height of podium, language, voice interaction etc.
4. User-Friendly– easy to navigate and, easy to operate, use of icons and images,.for faster and efficient use.

At dotConverse, we believe that It’s not a fight between digital & brick & mortar.  Future of retail is multifaceted. The marketers need to understand and leverage the power of each medium intersected with consumer lifecycle. Talk to our retail commerce experts to design a digital integration and growth story for your brand.
Featured image source: reflectsystems.com

Thus far, the marketing function was responsible for delivering consumer experience. This was justified because there were limited consumer interaction opportunities available, and of them, most were controlled by marketing (retail, e-commerce, events & exhibitions, some part of customer support etc.).
However, given that today, the consumer experience depends upon not just the interaction or touch points but also from the volume and analysis of data that gets generated out of business to consumer interaction and consumer to consumer interactions.
Due to this, digital technology should be used to integrate various functions and units of an organization so that the organization gets a better view of the consumers, their own processes as well as behavior insights so that a consistent experience and value can be delivered to the consumer
So, digital transformation, transforms your people, business processes, business models, the culture and focuses on, more innovation- all by integrating digital technologies across the board
WHY IS DIGITAL TRANSFORMATION NEEDED?
Hilton took about 100 years to become what it is now, one of the largest valued chains of hotels in the world. How much time did AirBnB take to create a similar value? Less than a decade!
An average S&P 500 company would stay there for about 60 years in 1958.  This came down to just 11 years in 2011. And Today? Perhaps every 15 days the S&P 500 companies are being replaced
According to a report by Forrester, 50% of the revenue of surveyed companies, will come from digital BY 2020.
So, once again, digital transformation IS NOT just using AI, chatbots, and IoT, it goes beyond this to focus on new ways to do business and create value.
For e.g. General Electric’ transformed it’s heavy manufacturing products- Locomotives and Jet turbines into a software services business through its ‘Digital; Twins’ initiative.
Today GE builds a digital twin of each physical asset that is installed anywhere in the world, and constantly monitors variables like location, temperature, service records, functioning etc. and integrates with machine learning and algorithms to receive predictions and alerts faster and hence proactively respond better.
Understand the concept of Digital Twin in another way from the perspective of Philips Healthcare:

This information becomes richer by getting information from cohorts ( such as a fleet of jet engines) and hence the organization and GE can get various insights based on a collection of data from various assets.
THE DOTCONVERSE 3 Cs OF DIGITAL TRANSFORMATION

  1. Culture- Includes People, Change and Innovation attitude with digital
  2. Continuum– Includes business processes and transformation through digital technology
  3. Consumer- includes new business models and a unified view of customers across the organization leveraging digital

So, we can start by asking a simple question: – What are we going to do to exceed customer expectation at each level of its journey?