(Source: Inside Retail Asia | July 21, 2017)
An Alibaba cafe without a cashier attracted a queue of shoppers for its opening in Hangzhou.
Entry into Tao Cafe is via smartphone scan through ticket gates similar to those at subway stations.
Offering drinks, fast food and snacks, the 200 sqm store can accommodate 50 customers. To enter and make a purchase, shoppers need only a smartphone with Alibaba’s Taobao e-commerce app. The store’s e-shopping system developer, Alibaba subsidiary Ant Finance, has assigned a team to help customers.
A woman shopper says she enjoyed the experience of buying a cup of coffee in the store. “Your profile picture is shown on the screen after you place an order. It also shows the wait time. There is no hassle of waiting for your name to be called like in ordinary cafes.”
A tourist from Shenzhen says helpers told him to pick up goods slowly from the shelf so the system has time to confirm his selection. “We need to learn – it is a whole new shopping experience.” As he walked out of the cafe, his bill was automatically paid via the e-payment account on his smartphone.
Ant Finance senior technical adviser Zeng Xiaodong says the cafe combines automated visual sensors and facial recognition to reduce error rates.
All goods in the cafe are digitalized, he says. Each commodity, its placement on the shelf and its purchase are subject to digital recognition.
“This store is our endeavor to explore new modes of brick-and-mortar retail combined with e-commerce,” says Alibaba CEO Zhang Yong.
The system has been tested by technicians pretending to steal items, but the checkout machines recognized their selections and processed the charge.
“It’s not about Alibaba wanting to open cafes, it’s about digitalizing the footprints of visitors to an offline store,” says Alibaba Group chief marketing officer Chris Tung.
He says offline retailers can improve by adopting online data capabilities to link the identity of the customers and optimize their shopping experience. “The more a user browses, the better the system understands their interests, and the better it can provide more relevant and personalized messages for them – it’s a healthy cycle.”
Once retailers understand what their customers need online, the products can be allocated to the physical store.
“The cafe is just a demonstration of what can be done for retail,” says Tung.
Smart shopping has attracted attention after an unmanned 24-hour BingoBox convenience store opened in Shanghai last month. Customers must register in advance using social-media app WeChat or Alibaba’s mobile wallet app Alipay, then scan a QR code to enter the 10 sqm store, where goods are about 20 to 30 percent cheaper than those in other convenience stores.
Once customers have completed their purchase they scan another QR code to exit the store.
BingoBox has raised US$15 million in funding to expand its business, and says only four staff members are needed to run about 40 stores.