Alibaba’s Hema grocery stores are changing retail | CNBC Reports

Updated : Oct 12, 2019 in Articles

Alibaba’s Hema grocery stores are changing retail | CNBC Reports


I’m in Shanghai visiting Alibaba’s new
retail concept store. The name? Hema. Not only is the tech titan
expanding into offline retail, but this location is the first with
its own robot restaurant too. Robots are actually delivering,
pretty much, all the food. That’s where I’ll end up at after
the shopping experience. The Hema store is growing rapidly in
China, opening 65 locations in one year. There’s three pillars to its strategy:
serving as a place to shop in person, a distribution center for online
orders and the restaurant. It’s hoping to define what the
future of retail will look like. While I’m checking this out,
I might as well grab a basket. Let’s see what interests me. The first thing I notice is the pricing system. Every price
tag has a barcode, in which you can use the Hema app to scan the barcode and see the price of the item
online. You can also see reviews of that product. What’s also fascinating is that even though
these price tags look like they were printouts, it’s a special technology that can
change the price in real-time. And that’s not all. It even tells you when it was delivered
to the store and where it came from. You can even see a scan of a government
certificate proving, for instance, if it was organic. It also shows delivery options if
you decide not to buy it in store. I just saw a lady who works for the store
and she was fulfilling an online order. So using her scanner, she had a
bag, she would pick the products. And then what was really crazy, is instead of walking
across the store to get it where it needs to go, she put it on a conveyer belt, which then took it to the
ceiling, to the back area, where it will go out for delivery. So essentially now you’re talking about not only
a retail store, but also a distribution center. And if you live within three
kilometers of a Hema store, you can have delivery of your
groceries within 30 minutes. You see a lot of employees walking
around the store, fulfilling orders. I understand how it can maximize
efficiency of sourcing, but it creates a somewhat chaotic experience too,
when you have a lot of people running around. A lot of sample stations
throughout the store. It’s like a Costco. Sample
stations everywhere. At one point you ask yourself,
why even come to the store then? If everything is online and it’s such an easy
experience to just order from an app. Well one reason Chinese consumers
prefer to come in store is for seafood. It’s very important for the Chinese consumer to see
firsthand their seafood, to make sure it’s fresh. Alright, so I picked two items
that I’m going to check out with. One of them is bananas, and the other one is
these Lays potato chips, Italian red meat flavor. Why not try something new? There’s literally no traditional
cashier at this grocery store. It’s not like you have an option between
a cashier and self-checkout. So if you’re looking for that human
interaction, go somewhere else. Using the Hema app, which
is connected to Alipay, consumers swipe their phone in front of
this scanner, and that’s pretty much it. There’s also the option to
pay using your face, too. And now, let me try those chips. It’s actually a very subtle taste.
It’s not too strong, surprisingly. Now, it’s time to try the robot restaurant. To get a table here, you can check in at
a kiosk, you guessed it, using the app. It’s connected to your identity, your name, everything
you’ve bought in the past, and of course, your wallet. From there, you get assigned a table. Once you’re
assigned a table, you scan the barcode at the table. And then from there, you can just start
placing your order on the Hema app. So you’re not waiting for anyone to come take
your order. There’s no pen or paper, any of that. In fact, you really have no
interaction with a staff member. And then from there, the
robots deliver your food. And you’ve already paid,
all within the same app. Alibaba leveraged its existing technology
from the e-commerce automated warehouses to power these new robot restaurants. It’s really an entire ecosystem of robots that are working
together pretty well. I have yet to see a collision. Even the tablet at the
table, in a way, is obsolete. The only thing the tablet can really do is entertain you.
There’s games, which your phone probably has. You can call for a server if you
need, you can use the tablet for that. And then there’s also a demo of
how the robots work as well. The robots can’t handle
everything though. For complicated dishes, like soups,
that’ll require a human server.

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