E-commerce & retail: prepare yourself for the age of assistance (part III)
In e-commerce every microsecond counts. If an online consumer needs to wait, they’re gone. Cloud technology can help accelerate and improve the customer experience, thus increasing the conversion. But a lot more is required to service a relentless customer.
This is the third part of a report about a fascinating meeting on how technology can bring e-commerce to the next phase: what can we learn from China?
‘Go East, young man’
In order to understand how technology drives consumer behavior, and how e-commerce and retail profit off of this, it is crucial to take a closer look at China. “Here in the Netherlands, we traditionally tend to look at the US and Silicon Valley, but China is where things are happening. And at a much quicker pace.” This is what René Repko says, as a trendwatcher and trendsetter for the fields of retail and e-commerce. He travels to China every now and then, to keep his finger on the pulse, and to learn more. “Of course you have a lot of traditional mom and pop shops in China, but particularly in the larger cities you stare in wonder at beautiful stores and malls. All of them are hypermodern, well-maintained and clean. They offer big luxury labels, as well as their own contemporary brands.” When taking a look at the growth of the economy and the level of prosperity of the population, it becomes clear that China has, at last, made the Great Leap Forward, which at the time had failed under Mao. The start of the leap came in 1992, under the the party chairman Deng. And they still haven’t landed. Another concept from Mao’s time, the “Hundred Flowers Movement”, is alive and well in the technological landscape. The ecosystems of the three biggest tech giants, Baidou, Alibaba and Tencent (BAT) – broadly speaking the equivalents of Google, Amazon and Facebook, respectively – are extensive and versatile. American equivalents stand in bleak contrast when compared to them.
Repko: “The Chinese and American tech worlds are completely separate. In all ways. As a westerner, you’re immediately off the grid upon arriving in China. Nothing works over there. No Facebook, Whatsapp, Google, Twitter,… Everything is blocked the second you go online.” Jeroen Hovinga, Business Development Director at g-company, and moderator for the meeting, nuances: “Thankfully, it’s possible to circumvent this issue via smart routing, but that’s something you have to organize for. We’ve solved this issue for a couple of clients”.
To quickly give an idea of the dimensions: Baidu, Alibaba and Tencent (BAT) combined are worth more than 1 trillion dollars. Can you remember the excitement when Apple’s stock market value went over 1 trillion? In 2018 alone, more than 100 new, Chinese unicorns entered the market (companies with a total worth over 1 billion dollars). The tech giants invest world-wide, and in diverse companies, ranging from AI, biotech, self-driving cars, smart cities, facial recognition, and AI-driven healthcare.
“BAT companies go at a faster pace and are more diverse than Americans, with more capital. They help drive more advanced technology. They’re now coming to Europe, with mobile pay and cloud services. retailers and e-commerce companies should prepare for the arrival of expats and many more tourists who want to complete transactions and services with their app of choice. For Asians, those apps are WeChat and AliPay. Keep that in mind,” says Repko.
Ease and convenience are key to pleasing the Chinese consumer. Technology makes this possible.There is a lot of experimentation with new concepts and clever ideas for paying, ordering, and delivering. Facial recognition is highly topical, for instance for paying. Repko uses the term Experiential Retail. “The thing that stands out the most, is that physical stores are central to the entire customer experience. Chinese companies experiment with new ways to attract customers to the physical store space, and to entertain them once they’re there. Retail in China is more than just shopping: it’s also entertainment, experience, ease and discovery. The shop is no longer the end point, but has become a marketing tool. Offline and online are completely intertwined. This differs entirely from the Western experience, where we can witness a decrease in retail diversity. Due to an increased cut in costs ,and further rationalization, many of our stores have become boring and uninspired. Retailers should really further utilize all the possibilities the physical domain has to offer.”
Repko views larger Chinese tech companies, such as Alibaba or Tencent, to be at the forefront of innovation in retail: they invest in physical retail-formats (for food and non-food), and in shopping malls. Furthermore, they own the whole infrastructure (digital and physical). With facial recognition and app-based shopping, for instance, they add new experiences to the customer journey. Client data plays a central role. “They put the ultimate idea of customer orientation and relevance into practice. Customers are always offered a quick and seamless solution, regardless of location, time or orientation. Without fuss. Meanwhile, product quality is guaranteed.” Social media play an important role in retail in China, same as here. To look, to buy, or to complain. WeChat is the spider at the centre of the web. Mini-programs on the WeChat-platform make it possible to do various things, without requiring multiple apps or logins. “You can see all kinds of novelties, such as shopping together with your contacts. Or checking out what your contacts are purchasing, and then buying the same thing. This, in turn, is connected to various rewards and incentives.”