There are many who would say that COVID-19 has brought about unprecedented innovation to the retail sector, and while it is true that pandemic has rapidly accelerated many burgeoning trends this is not the first time a coronavirus has done so. In 2003, China was hit with a SARS outbreak that sent much of the country to a grinding halt, as lockdowns and fear saw people stay in their homes and restaurants, bars and shops were closed as result. Sound familiar? Just as we have seen over the past two years with COVID-19, the SARS epidemic forced businesses and their owners to make quick decisions in order to adapt to the rapid changes and uncertainty that was happening around them.
One such person was Richard Liu, who had just spent the last five years turning his business from a small booth in a tech bazaar into a successful chain of electronic stores. Faced with the forced temporary closure of all twelve of his brick-and-mortar locations, Liu quickly pivoted to listing his merchandise on online bulletin boards and found that rather than simply keep his business afloat, he had discovered an entirely new way to connect with his customers. Although the epidemic was brought under control within a few months Liu continued listing his products online, and by the next year had made the decision to close all of his company’s retail locations and move business onto a newly built website: JD.com.
Today, JD.com has become China’s largest retailer both on and offline, offering everything from the electronics it was originally known for to luxury goods, fresh food and everything in between. Thanks to an extensively developed in-house logistical network that relies heavily on information technologies such as artificial intelligence, big data and autonomous robots JD.com has been able to continually adapt to meet its customers’ needs, even as those needs have become increasingly complex thanks to the pandemic’s disruption of daily lives and routines. While it is clear from the success JD has experienced that Liu’s decision to take his company completely online was the right call, in recent years the company has sought to create an omnichannel experience, seamlessly blending the online and offline world for its customers.
More than just selling across multiple channels, omnichannel retail is about delivering a cohesive and comprehensive experience. Today’s consumers no longer rely on a single source of information to guide their shopping decisions such as an advertisement or encountering a product in a store. Instead, they will often use different channels to gather information on products and to make a purchase, with social media and chat features rapidly becoming a larger share. Within a true omnichannel approach physical and digital retail spaces are fully integrated with each other, and indeed there is a consistent brand experience no matter where a customer is being met, allowing strong relationships to be built. Even as it may seem that we as a society are increasingly moving into a more digital space, the pandemic has also served to highlight that a truly immersive customer experience still involves the seamless integration of online and offline channels.
In one of its most ambitious and groundbreaking omnichannel endeavors yet, JD.com recently opened two robotic shops in the Netherlands under the brand name “ochama.” Located in Leiden and Rotterdam, the new model of shops merge online ordering with pick-up locations and home delivery service, with the parcels prepared entirely through robotics. With two more set to open in Diemen, a suburb of Amsterdam, and Utrecht, these mark the first physical retail stores that JD.com has opened in Europe as well as the first omnichannel retailer in the Netherlands that offers both food and non-food shopping in one app. Combining the words “omnichannel” and “amazing,” Ochama pulls from JD’s already well developed retail experience and logistics technologies to create an innovative shopping format for its new European customers.
The ochama app offers a broad range of products, including fresh and packaged food, household appliances, beauty, motherhood and childcare products, fashion and even home furnishings. Using the app, customers can place an order online for pickup which will then be sent to an automated warehouse where a fleet of robots including automated ground vehicles and robotic arms are used to pick, sort and package it. At the ochama pick-up shop, the customer simply scans the QR code provided on their app to have their order carried to them by conveyer belt, or they can alternatively choose the next-day home delivery service to skip leaving the house entirely. These logistical and supply chain innovations in technology not only help to provide a seamless omnichannel shopping experience, but also help to reduce product prices by an extra 10 percent. Additionally, the pick-up shops feature showrooms which will display a rotating assortment of available products, allowing customers to still have tangible shopping experiences. As one of the most urbanized countries in Europe, the Netherlands was a natural fit for JD to provide their supply chain-based technology, aiding in reducing grocery store queues and traffic jams for residents of the four cities that ochama will be based in.
Although ochama is the first physical retail store JD.com has opened in Europe, they also have a number of omnichannel experiences across China. The first “JD MALL,” the upgraded version of its E-space omnichannel retail experience store, opened in Xi’an, China with an area of 42,000 square meters across five floors – a far cry from the four square meter booth that Richard Liu started out in. Offering 200,000 items from over 150 domestic and international brands, JD Mall provides an immersive omnichannel shopping experience to its customers, who are able to place orders through the official WeChat Mini Program by scanning QR codes on each of the items, and the space also features tech devices and experiences such as holographic projection, virtual reality equipment, intelligent robots, a virtual livestream room and a transparent computer room. Plans for another JD Mall in Nanjing are currently underway, and more will very likely follow in the coming year.
“SEVEN FRESH,” JD.com’s omnichannel fresh food store saw year-over-year GMV growth of 95 percent, and plans to further accelerate expansion by opening 27 more stores in northern and southern China in 2022. With 48 stores in 13 cities across nine Chinese provinces plus Beijing, JD.com has been working to implement the omnichannel approach further into the SEVEN FRESH model, combining online and offline services and allowing customers to receive their on-demand delivery orders from nearby stores within a radius of three kilometers within 30 minutes.
For JD.com, an omnichannel strategy is an opportunity to facilitate further integration and digital transformation in the offline retail sector. As a leading supply chain-based technology and service provider that has already survived one coronavirus outbreak, JD.com has the experience behind it to pivot quickly and use the rapidly shifting consumer habits to its advantage and to the advantage of the world as a whole. This move isn’t as simple as moving from offline to online or vice versa – it’s about recognizing the importance of both in a comprehensive customer experience, and ensuring their increasingly complex needs are being met.
Dil Bole Oberoi
