Digitized aisles, farm-to-store food tracking, service robots, and cashless check-outs, Alibaba’s plans to re-invent offline retail are already well underway. Over the last 12 months, Alibaba has placed more importance on its New Retail strategy. New Retail in layman’s terms is the merging of the online and offline in a manner that provides customers with a better experience in retail locations.
Globally, grocery shopping is one of the final frontiers of e-commerce. The vast majority of it is done offline. Consumers like to choose their own fresh foods; shipping heavy, bulky items is expensive; and delivery windows are tricky for food that spoils. Yet, going to the grocery store is not at the top of most consumers’ list of favourite activities either. Hema has managed to overcome all the traditional challenges of both online and offline shopping to create a new experience that does not exist elsewhere. Hema launched its first store in January 2016 in Shanghai and so far, has owned over 100 stores across China. It was defined as a “Pathfinder of Alibaba’s New Retail” through technology and data in a bid to merge online and offline retail, according to public corporate information.
To resolve the problem, Hema resorted to an algorithm in machine learning, a subfield of AI, which identifies patterns in observed data, builds models that explain relevant phenomena and makes predictions. They could learn each product’s demand patterns through customers’ consumption so that they would be able to order the product more precisely. This is how it works.
DIGITIZED AISLES AND BARCODES
Every product in the store is equipped with a price tag and a corresponding barcode and QR code. These price tags are actually internet connected “e-ink” tags that allow pricing to change dynamically depending on supply and demand. This comes into use for fresh goods (particularly seafood) and for popular goods that are also available on the Hema app. Most aisles are also equipped with large touchscreens. These touchscreens give an overview of the products in that aisle. They also give recommendation according to age group.
SCAN FOR INFORMATION
Scanning the code on the price tag with the Hema app takes the customer to an individual product page that contains all the information recorded for that product. These SKU level product pages equip customers with the ability to see everything from basic information such as ingredients and flavour profiles, all the way to personalized recommendations, recipes and buyer reviews. Home delivery options are also available and often sweetened with real-time discounts or bundled deals.
As you can observe above, for items like fresh meat, vegetables, seafood, you as a customer will be able to scan every product barcode and see – the product origin, the producer/company name and background; for meat, the life of that animal (what date and the time it arrived at the farm or when it was born, what date and time it was slaughtered, when and where it was transported to and from). The timestamps for some products are accurate to the second, transport information such as the license plate of the truck or the temperature inside the truck for items that need to travel under cold storage, official scanned copies of food safety certificates and business licenses complete with an official government seal and arrival date in-store so customers can assess freshness.
COOK YOUR GROCERIES
One of the standout attractions at any Hema is the fresh seafood section. Built across a large open area, customers can openly browse, research and inspect their seafood up close. Produce from the seafood area can be purchased normally or even delivered to your home. However, you also have the option to have it prepared and cooked on the spot according to your liking by one of the various restaurants in the store and enjoy it there.
RESTAURANT (WITH ROBOTS)
Every Hema store comes equipped with customer dining areas, however, this Hema, in particular, is the first one to launch its very own robot restaurant. You can place the order by scanning the QR code of the item you want from the table. When ready, food is placed on robots that resemble Roombas by chefs, and make their way directly to your table. With the automation of the front end of restaurant service already in motion, one wonders how long before this will start encroach into the back-end of food preparation.
every Hema store also serves as a distribution centre that collects, fulfils and delivers customers online orders. For customers that live within a 3km radius to a store, Hema enables delivery to the customer within 30 minutes.
Alibaba’s offline Hema supermarket was on display in New York City during the 2019 Retail’s Big Show on Jan 13-15, featuring artificial intelligence (AI) and the e-commerce giant’s concept on the future of retail. The AI technologies applied in Hema focus on improving consumers’ experience and retailers’ operation efficiency, blurring the line between online and offline shopping. “We believe the future of New Retail will be a harmonious integration of online and offline, and Hema is a prime example of this evolution that’s taking place,” said Daniel Zhang, CEO of Alibaba Group.
This is the only company whose New Retail strategy which got a boost after Amazon GO. The future is already here, now the question is, what next?
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