The Store WPP

The WPP Global Retail Practice

NRF 2018

1/17/2018

by Gwen Morrison

One of the major sessions at the NRF “Big Show” this year was delivered by Lee McCabe, GM of Alibaba's North America group. I had the opportunity to join Lee for coffee in advance of the show and was pretty impressed with the capabilities vision. In contrast to Amazon, Lee shared a view of a retail services that level the playing field, rather than simply disrupting traditional retail. For example, their “Ling Shou Tong” platform is enabling China’s 6 million mom-and-pop convenience stores with cloud-based computing, a POS system, mobile payments and digital ordering. It’s a comprehensive tool that helps store owners optimize just about every aspect of their business.

Tmall has been a higher profile ecommerce platform with tremendous success in the fashion industry. While a sophisticated blend of technology, entertainment and operational capabilities, the success speaks to the fundamentals of customer experience today. It offers shoppers the stages of experience and ease of purchase they look for anywhere today. The sense of discovery, entertainment and engagement are at the front-end. It offers access to validation with peers via social media. And finally, the simple transaction appeals to the shopper, Chinese or otherwise. It’s no wonder that global apparel brands such as Gap and Uniqlo have incorporated a Tmall play into their Asia expansion strategies.

In addition to Tmall and the many other verticals Alibaba plays in, there is much industry buzz around their HEMA grocery concept. HEMA’s highly experiential format merges in-store theatre with convenience both in the form of delivery from store and on-line ordering. It all starts with the app, which the Chinese consumer gladly downloads. With an emphasis on fresh and shoppers access rich information about the provenance of products, recipes, and similar foods to try.

A highlight is an amazing seafood department where staff engages customers with sensory, interactive showmanship (think Seattle’s Pikes Market on steroids.) Shoppers choose the fish they want and can have it prepared by chefs on the spot. The social aspect where so many customers linger for the culinary experience is impressive. Any food items saved for later are delivered to the customer’s homes within 30 minutes.

While Alibaba plans to open 30 new HEMA stores in Beijing by end of 2018, the real play is for more on-line purchasing. With over 50,000 SKUs on its app (compared to about 3,000 SKU’s in-store), they aim to reach on-line orders that make up 80 to 90 percent of sales. This is truly a data-driven model that connects and over the top experience with powerful data analytics. Look for Alibaba to retailers and global brands tap opportunities beyond China.

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