Your stores are going automatic

In 2016, China became the world’s biggest retail market — surpassing the United States. And e-commerce in China is booming more than anywhere else in the world as the boundary between online and offline retail becomes ever more blurred.

Hangzhou’s long-established Century Mart supermarket chain launched a new brand — Century Mart Choice Membership Store — last month, offering a new experience in shopping.

The 20,000-square-meter store is divided into sections: one quarter is allocated to dining, including one diner where you can eat with freshly bought seafood over the counter, with a small fee for cooking.

Another social media buzz is an automated cooking area. Three vending machines offer packaged, unprocessed dishes.

They are ready to be taken home after being prepared in an automated cooker available to use for free. The cooker can also be bought for 1,198 yuan (US$180).

The try-and-buy store is operated by a Suzhou-based company specializing in community catering services. A staffer and a store manager are assigned to help customers and maintain the equipment.

Imaginechina

This is just one of the many specialty stores that the new Century Mart accommodates. Leveraging support from other specialty retailers and e-retailers, it has developed its own cosmetics store and a section selling imported goods.

It also introduces other independent (e-)retailers, making it more of a mall than a single store.

Century Mart Choice has also transformed its checkout system. The traditional cashiers have been decreased to only three, with a very small queue area.

Thirteen self-service cashier machines have been installed and they only accept bank cards, CenturyMart membership card and mobile payment.

Signboards promoting the Century Mart Choice app are everywhere. It is a scan and go check-out system similar to the one that WalMart initiated in 2012. It allows you to scan an item with the app and pay without waiting in line.

But Century Mart takes a more radical step by turning the app into an online retailer. Customers are able to check out without carrying any goods and have them delivered to their home, or they can also buy them directly from home. They can even order takeaways from the diners.

The app is developed by a local company “Flash Purchase” known for getting convenience stores “online” through a smart system combining e-retailing and inventory management based on big data.

A customer surnamed Xu said she has come here several times after the revamp. She says the self checkout terminal is easy to use, but she was not aware of the app and did not know about the home delivery option.

Century Mart is certainly not the only outfit to move in this direction.

Retailer WuMart is partnering with another app, Dmall, to extend its businesses online.

“To establish a self-owned online store often requires hefty investment,” said Mao Hao, an independent tech observer.

“What Century Mart has done is more cost-effective, which is an integration of online and offline purchasing experiences.”

The same worry is also besetting smaller grocery stores, such as mom-and-pop operations. Huang Haijun’s Weijun grocery store is one of them.

On August 28, the neighborhood store reopened after a makeover.

Tmall, the leading B2C e-commerce platform and part of the Alibaba group, supported the store, making it the first franchised “physical” Tmall grocery store.

The 140-square-meter space is full of curious customers, competitors taking photos here and there, and representatives of suppliers seeking possible partnerships.

A shelve with the Tmall sign is prominent, stuffed with best-selling snacks from Tmall.

“Tmall helped us optimize the space, and now the store looks tidier and more spacious,” Huang told Shanghai Daily.

“We also introduced an ice cream machine, gashapon machines, and an area serving hot and prepared food.”

But there isn’t the typical convenience store area for sandwiches and ready-to-heat TV dinners. Instead, it offers duvets, sheets and cookers.

The store is opposite the Yuquan campus of Zhejiang University, which has many foreign students living in.

A bigger change is in the back-end. Tmall has equipped the store with its self developed andoid-based checkout system, where all purchase data is stored on Alibaba’s cloud server.

Alibaba has also developed a purchasing system called LST, where shop owners get personalized purchasing advice based on their online activities. They can also benefit from Alibaba’s powerful logistics arm, Cainiao, for stock replenishing.

“Presently about 30 percent of our goods are purchased via LST. Not all categories are open to access,” said Weijun Supermarket owner Huang. He also told Shanghai Daily the store covered 5,000 to 6,000 types of goods, more than regular community stores.

LST was launched at the beginning of 2016. On its website, LST aims to cover 2,000 cities and 2 million grocery stores like Weijun within three years.

Back in April, Liu Qiangdong, CEO of JD.com, another leading e-commerce platform, announced that the company would open 1 million brick-and-mortar stores in five years.

“At this stage, attracting new customers online is more costly for e-commerce companies. They have strong incentives to dip into offline retails,” said tech observer Mao.

On the other hand, traditional retailers such as Century Mart are catching up. The parent company said in an interview they will upgrade 20 more stores this year, and more Choice Membership stores will be seen in Hangzhou.

On the same day the Tmall store started business, an unmanned BingoBox outlet — the first of its kind in Zhejiang — opened for trial service at the Hangzhou International Expo Center. The outlet however, has reportedly encountered problems of shoplifting and some items melting in the recent heat wave.