The evolution currently taking place in retail environments across the globe is nothing short of phenomenal. Shoppers of 10 years ago would never have imagined things like holographic advertisements, shopping trolleys that direct you around your local grocery store, or interactive product information screens. Remember when those scanning stations were installed inside our supermarkets? How excited we were at the prospect of being able to scan our products and see their prices on a little screen.
With the smart retail revolution upon us, things like product price scanning stations will become as outdated as mobile phones with physical keypads. So, what is ‘smart retail’, who is leading the world towards this smarter retail future, and what are a few technologies about to take the retail world by storm? Get ready, we’re about to blow your mind.
Smart retail defined
Chinese online retail giant, Alibaba, has firmly taken the reigns in the field of enhanced retail experiences. The multi-national’s CEO, Jack Ma, coined the term ‘New Retail’ back in 2016, with a vision of digitalising retail experiences across the planet. New Retail, often called ‘Smart Retail’ or ‘Boundaryless Retail’, is characterised by the merging of online and offline commerce, using technology.
This revolution in retail combines the physicality of offline shopping with the speed and convenience of e-commerce. It is said to be breathing new life into brick-and-mortar retail. Venturing out of their homes for, say, groceries has become a pain for most consumers (especially when you can get your fruits and veggies delivered). Smart Retail aims to rejuvenate the in-store experience and give consumers new reasons for popping around to the shops.
There can be no argument that, when it comes to advances in the retail arena, China is setting the pace for the rest of the world. Across the country, grocery stores, supermarkets, shopping malls, and all other retail establishments are receiving digital upgrades to ensure they are ready for the next generation shopping experience.
7Fresh, a Chinese grocery store chain owned by retail giant JD.com, has started implementing ‘smart shopping carts’ in their more spacious outlets. These trolleys are able to guide shoppers around the store, to the isles where their desired products are stocked. Another innovative in-store addition to the 7Fresh branches is a unique product RFID reader. Each item, from fresh produce to boxed goods, can be placed on the reader which then displays product information on an interactive screen. Everything from pricing and nutritional information, to where the product was sourced or manufactured, can be presented to the shopper in detail before they make their purchase decision.
7Fresh’s parent company, JD.com, is taking the Smart Retail revolution so seriously, they have decided to partner with Intel, the world’s leading computer processor manufacturer, in an effort to push the limits of retail technological integration even further. Yet it isn’t just the in-store technologies that are attracting curious shoppers back to the grocery store. A digitalised retail environment enables the collecting of data, that can then be used by store owners to make informed decisions around stockholding and promotions. The rise of ‘retailtainment’
Elsewhere in China, the world’s first smart shopping mall has been developed by Wanda Commercial Management Group (China’s largest owner and operator of shopping centres) and tech giant Tencent. Opened in May 2019, the ultra-modern mall features holographic advertisements, advanced payment technologies like facial recognition, and a virtual reality (VR) gaming zone. Wanda believes that by turning shopping malls and other retail centres into leisure destinations, brick-and-mortar retail can remain a thriving component of the global retail landscape.
Yonghui Superstores, a Chinese fresh produce chain, recently launched a concept that targets shoppers who like to combine shopping and dining. Like many Woolworths stores in South Africa, Yonghui branches feature a separate restaurant-styled area for dining. While shopping, patrons can choose the fresh foods they would like to eat, and then deliver these to the restaurant to be cooked immediately. Not exactly technologically ground-breaking, but definitely a unique experience that is attracting people back to brick-and-mortar retail.
The death of cash
Another element of the Smart Retail revolution is the complete abandonment of cash. In China, many retailers are now launching their own financing apps that link to a shopper’s banking account. Even the smallest of Chinese corner convenience stores have been upgraded to accept mobile payments through apps like WeChat, Alipay, and others. A shopper can link their bank account to the app of their choosing, and top up their ‘wallet’ while they’re in the supermarket. When it’s time to pay, they bring up a barcode on their smartphone that is scanned by the cashier and the transaction is processed.
Luckin Coffee, a beverage franchise considered the main rival to Starbucks in China, has embraced the cashless future of retail. Most branches are cashierless, and insist that customers should use their app (which is also linked to the customer’s bank account) to place coffee orders. Some might consider the non-acceptance of cash in a retail outlet self-sabotage, but Luckin Coffee’s figures say otherwise. The franchise sold over five million cups of coffee in the first four months of operation, and has opened more stores in China since 2018 than Starbucks has managed in the past 20 years.
In a bid to curb greenhouse gas emissions rapidly, Chinese vehicle manufacturers have embraced electric technology. Today, one can purchase an e-bike, or electric scooter, for as little as ¥2 300 (around R4 700). With super low electricity costs across China, and electric scooters able to travel up to 70 kilometres on a full charge, the rapid dissemination of e-bikes has caused an explosion in the country’s delivery sector. Thanks to e-bikes (and the fact that delivery drivers do not need licenses to operate them), retailers are now offering ‘rapid-fire delivery’. They can guarantee delivery of goods – be it groceries or electronics – in 30 minutes within a five to seven kilometre radius. Since electricity is miles cheaper than petrol, delivery fees on smaller items like groceries and fast food are next to nothing.
However, for some Chinese retailers, e-bike delivery is already old news. Yonghui Superstores have reportedly partnered with tech giant Tencent and drone manufacturer Ehang Smart Technology to launch driverless aerial drone deliveries from their stores. Currently, drones can only carry up to 500 grams of goods up to five kilometres from a store. But the superstore chain plans to increase the weight limit to five kilograms and radius of deliveries to over seven kilometres in the near future.
There is no denying that the retail arena is evolving faster than most industry players could ever have dreamed, and this could not have come at a better time. With e-commerce posing a real threat to brick-and-mortar retail experiences, it is good to know that the New Retail revolution will make us actually want to go on those dreaded monthly grocery shopping trips.