In a previous article, we explained that China’s New Retail is a way to increase revenue and decrease cost in offline retail locations. This is to stave off the type of malaise physical retail has experienced in other markets.
Due to popular demand, we’ve prepared a list of New Retail propositions you can visit in Shanghai.
Alibaba’s omnichannel supermarket proposition, Hema, brought Jack Ma’s vision for New Retail to life.
Hema integrates the online and offline shopping experience by combining multiple venues: supermarket, warehouse, and food court. Online deliveries are picked, packed and delivered from the supermarket.
Hema’s omnichannel model, where it services online and offline orders from the same location, has allowed it to generate three to five as much revenue as its competitors for each square meter of floor space.
Starbucks Reserve Roastery
Starbucks Reserve Roastery features one of the strongest demonstrations of Augmented Reality (AR) in a retail context. The AR experience, accessed through Alibaba’s Taobao or Alipay apps, acts as a virtual tour guide for customers.
Consumers can point their phone at different pieces of machinery or exhibits for an augmented reality experience. For instance, consumers can be educated on the origin of different coffee beans or learn the difference between brewing techniques. This feature allows novice coffee drinkers to quickly immerse themselves, and walk away with a visceral understanding of coffee.
MAC Experience Center
MAC’s first experience center in China is a great example of how online and offline come together to form, shape and direct the consumer journey, ultimately leading to a successful New Retail concept.
Digital screens at the store’s entrance invite customers to scan their phones and check into MAC’s WeChat Mini-Program. When loyalty program members check into the store, they are recommended a pathway through the store based on their previous purchases.
In addition, smart mirrors in the lipstick section enable customers to try on 18 different shades virtually through augmented reality. Similar installations can scan a consumers face and recommend a foundation shade.
Dr Ci:Labo Spa
Dr Ci:Labo, a Japanese high-end skin care brand, opened a spa treatment facility in Shanghai. Interestingly, the spa features a space for live streamers to broadcast product trials. This means that even if the spa treatment facility is having a slow day, the space is being utilized to produce revenue for the company. A very clever form of New Retail. It’s also a smart move considering the degree to which livestreaming is influencing how consumers discover and shop for products online.
Continuing this theme, some staff double as “Live Beauty Assistants” who undertake their own livestreaming activities or consult with consumers in 1:1 setting via video call.
Luckin Coffee is a New Retail proposition of a different kind. Luckin stayed away from opening traditional cafés, instead opting for grab-and-go coffee kiosks. This strips out overheads (namely rent) which Luckin reinvests in subsidies and special offers for its growing customer base.
Orders can only be made through the Luckin Coffee app, which gives rich data on a consumer and store level. This can then be transformed into dynamic special offers and more efficient store operations.
AgencyChina are leading observers and practitioners of New Retail. You can download our New Retail slide deck here. Next time you’re in town, get in touch and meet us for a free consult!