Retail Trends

Alibaba leading the way in merging online and offline shopping

Retail is undergoing rapid transformation. This is most clear in the tension between offline and online shopping. At opposite ends, traditional retail stands for the physical experience of a product, personal service and trust, while digital shopping is about convenience, easy payment solutions and a widening range of options at a customer’s fingertips. With giant e-commerce businesses such as eBay, Amazon and Alibaba becoming increasingly popular, many have come to question the future of traditional retail.

However, as any entrepreneur will know, whether engaged in a start-up or managing an established brand: with change comes opportunity. It calls for creativity. Offline and online shopping come with a different set of perks which can be enhanced by combining both avenues through smart innovation.

  • Alibaba’s New Retail

One company, who seems to be well aware of this and is leading the way, is e-commerce giant Alibaba. Far from seeking to replace traditional retail, in coining the term “New Retail”, it aims to transform the retail industry by infusing physical shopping with digital solutions. (see the video below).

Alibaba’s Hema, a cashless fine-dining supermarket chain, is sweeping across China and serves as a great example. Combining e-commerce, restaurant, supermarket and distribution center, customers can stroll around the store, smartphone in hand, select products of choice and have them conveniently delivered in half an hour within a 3-mile radius. People love it. So much so, that consumers are moving closer to Hema stores just to fully benefit from its services. In addition, Alibaba has announced its goal to expand Hema from 22 stores in China to no less than 2000 in the coming three to five years.

Another idea that is under development is Ali Baba’s ‘auto vending machine’, a giant automated structure where consumers can select a car on their phone, which is then presented to them, so they can take it for a test drive, prior to meeting a traditional salesman.

Utilizing mobile technology is not just beneficial to the consumer, it likewise provides retailers with instant data on consumer behavior which can optimize response, improve a store’s catalogue and help shape better promotional activities.

  • Utilizing the pop-up space

For any brand interested in such endeavors, the pop-up store, which by nature opens the door to experimentation, provides a perfect space to develop creative solutions in this direction. Whether from the standpoint of a traditional retailer seeking to enhance the storefront or an e-commerce based business wishing to venture into the physical world, the knowledge that more than half of consumers use multiple channels in search of their products should be reason enough to try out new models.

Once again, Alibaba serves as a case in point. Following the finding that 82% of all sales in China still take place offline, on the 31st of October 2017, building up towards the 11th of November which marks Alibaba’s Singles Day shopping extravaganza in China, Alibaba opened 60 pop-up stores around the country and a 100.000 smart stores for established brands like Gap, Bose and Casio. In each of these spaces, which together served as a massive New Retail experiment, consumers were able to try out clothes, watches, cosmetic and other popular products, interact with state-of-the-art technology for customization and payment and have them delivered to their doorstep at their convenience.

  • Building towards a new experience

Developments such as these, and their success driven by forward looking companies such as Alibaba, 5Lux.com, TenCent and Amazon among others, indicate the emergence of a new type of consumer. The traditional storefront, as a familiar space associated with trust, physical experience and personalized service, is clearly holding its ground. However, the habits of browsing, convenient delivery, quick customization and easy payment methods are changing consumer demands.

Both start-ups and well-established brands need to abandon the false choice between offline and online shopping, go beyond mere omnichannel commerce, and question creatively as to how to tend to both the digital and brick-and-mortar aspects of retail in an integrated, holistic and innovative way.

It’s time for new collaborations between different fields of expertise. A time of great economic shifts and innovation. If anything, it’s a daunting yet exciting time for any brand seeking to secure its place in this fast-changing age.

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About the author

Benoît Clément-Bollée

Benoît Clément-Bollée is the CEO of Storefront Asia and brings a diverse background of military, humanitarian, and corporate experience to the startup world. Prior to expanding Storefront’s presence in Asia, he served 8 years in the French Navy, and worked 5 years in the United Nations and with several NGOs in the Middle East, Africa, and various parts of Asia. Upon his arrival in Hong Kong 4 years ago, he established a subsidiary of a French SME specialized in retail shop fitting (+100 retail stores opened in Hong Kong, Macau, Singapore and China, especially French affordable luxury brands).