For the last 2 years, with its 40 Hema stores, Alibaba has learned a lot about physical retail. It was a good warm up. No offense to Hema stores, but we need a dozen of them to match the sales of a large hypermarket.
So, Alibaba, for the last 4 months has changed gear and the league by entering the serious business of brick and mortar “old style” hypermarkets. In couple of weeks Alibaba’s influence has become really obvious in RT-Mart’s daily operations.
RT-Mart has become a large Hema store. Off-line and Online are one.
Since end of 2017 in RT-Mart stores (Sun Art group which includes Auchan China), the famous basket conveyors hanging on the ceilings of the Hema stores, (40 opened so far in China and plan to open up to 1000 by 2020) are operating now in RT-Mart stores and it is clearly not a gimmick.
Pickers in the store are preparing orders that they received on their PDA the same way as in Hema stores. They take baskets that are piled up in various strategic locations of the store (mainly fresh and FMCG) then put the basket on one of the load stations and the basket is conveyed above our heads, making some noise until it reaches the back (storage) of the store where delivery men will have the deliver to client’s doorstep within 1 hour.
Same show, same technique as in Hema stores. Less busy than in a Hema store. I nevertheless found them quite actively used when I visited the store.
RT-Mart has also become a Tmall store
Alibaba and Tmall bannes are everywhere in the store.
We find dedicated Tmall shop in shop, gondola heads, displays, sticker on the floor, special prices tag which are AR (augmented reality) ready.
Banners, displays prompting clients to download the App for home delivery are everywhere.
The store plays it part in making sure that every client knows that the store delivers 5000 items in a radius of 3 km like Hema in 1 hour (instead of 30 min for Hema).
They are still in the acquisition phase and do not hesitate to give away coupon of $8 for any first time user.
Digital screens with content from TMall or Youko programs are in alleys and at cashier desks.
When it comes to payment the store does not advertise for #WeChat pay of course and push the Alipay but you still (up to now) pay with WeChat.
I did not think Alibaba would have moved so fast. They are a minority stakeholder of the SunArt Group but they clearly do no intent do be sleeping partner and their influence is really visible in the store. For the better.
Auchan will probably follow a similar trend and install the same kind of basket picking system in store which is quite efficient on top of being visible, reassuring if not entertaining. And soon we might see Tmall corners in Auchan stores as well.
What is striking is that the store is really doing its job. RT-Mart’s management is clearly not afraid to potentially see some of its customers leaving the stores because they would have chosen ordering their goods on the App. The store is a wonderful and powerful media to push online sales and that’s the right thing to do.
Because at the end of the day, sales whether online or offline, will still be accounted under the same banner. So who cares ? if it is what the client wants…
By Stéphane Joly, Executive vice-president, Altavia Asia