The annual Singles’ Day festivities often have a showcase feel to them. November 11 does not only ensure a frantic scramble of ravenous deal-seekers and brands beckoning consumers, but a chance for Alibaba to flex its technological muscle. 2016 seemed to demonstrate the pinnacle of Alibaba’s capabilities; $17.8b spent over 657m orders, handled by the Alibaba Cloud which processed up to 175,000 orders a second at peak times. So those with an eye on the China market have waited to see what Alibaba would do to maintain the buzz and fresh excitement that keeps Chinese shoppers willfully emptying their wallets each 11/11.
This year Alibaba is capitalizing on trends which China Skinny has been noting for some time. With ecommerce evermore cluttered, China has seen a resurgence in the power of bricks & mortar, and this will be at the heart of this year’s Singles’ day. Ecommerce makes up around 18% of China’s total retail. Instead of growing that number, Alibaba is motivated to digitalize the other 82%.
This weekend will offer a glimpse into how this will come about. Over 1 million merchants will be using O2O initiatives – namely in the form of in-store games and special online discounts and giveaways that can only be fetched from offline events. Hype has been building with the AR “catch the cat” in-app game dotted throughout major shopping malls giving juicy discounts for the big day.
The highlight will come in the “smart stores”; over 100,000 physical stores driven by over 1000 brands have converted their premises to connect completely with Alibaba. Full details were withheld at last week’s press conference, but promised a truly “special experience” for those who shopped in-store. We do know that these stores will incorporate RFID tech, a “cloud shelf”, facial recognition, mobile gamification, AR product info displays, cashier-less purchasing, virtually trying on make-up/clothes and location-based discounts and recommendations.
Location-based retail is an area which Alibaba is pushing to integrate with its wealth of big data. Trial convenience and grocery stores have been running in Ningbo that analyse the preferences of consumers living in the nearby apartment blocks. This tailors the stores’ offering to best suit its customer. The Hema stores finding success in Shanghai are another extension of Alibaba’s retail dream. Using consumer purchasing history and their own digital tools it promotes a personal and fully integrated experience for consumers, from scan-able product details to membership benefits.
Of course, all this comes on the back of the heaving activity the day brings to China’s online channels. It will fuel the spending which Alibaba hopes can eclipse last year’s growth of 32%. Seeing the reception and relative success of these offline experiences will speak volumes about how the Chinese consumer is tracking and give a look into the future of retail in China.