Smart + Physical Retail: What was taken away by the Internet, recaptured with AI!

The recently concluded China High-Tech Fair, as the "China's No. 1 Science and Technology Exhibition", displayed tens of thousands of high-tech products and products in 5 days, and artificial intelligence technology can be regarded as affecting government agencies, universities, One of the focus of attention of scientific research institutions, developers and domestic and foreign enterprises. The reason is of course optimistic about the huge potential that artificial intelligence and various scenarios and business formats can play. In the future, this technology will penetrate into all aspects of our lives: fine dining customized according to our preferences, unattended can be realized. A safer community, teaching students in accordance with their aptitude, and intelligent education that is more in line with the qualifications of students... And among them, a forum with the theme of the Global Smart Product Summit gives people a glimpse of the potential of the combination of artificial intelligence technology and brick-and-mortar retail.

In terms of deepening the understanding of customers, artificial intelligence has helped online shopping achieve a huge leap, and with innovation and efficiency, it has greatly widened the distance from brick-and-mortar retail . For example, when you browse the web, you pause for a while on the page of a certain product, or hesitate for a few tenths of a second when you move your mouse over a beautiful picture, you may not even notice it yourself, but artificial intelligence analyzes your truth from it. If you are interested, we will push you relevant product advertisements or preferential information. Moreover, online shopping once robbed a large amount of sales of offline brick-and-mortar retail by virtue of its convenience, convenience, and cheapness.

However, e-commerce, which has been advancing by leaps and bounds for many years, is now no less expensive than physical stores: labor 11%, Tmall discount 5.5%, promotion cost 15%, express delivery 12%, after-sales 2%, financial The cost is 2%, the rent for utilities is 2%, plus tax, if there is no gross profit margin of more than 50%, there is no way for e-commerce to continue to operate. In turn, due to the closure or closure of a large number of brick-and-mortar stores, business continued to slump, which indirectly led to lower rents in brick-and-mortar stores. The cost of online and brick-and-mortar stores eventually reached the same level.

Based on experience, brick-and-mortar retail turned to AI technology

In this case, many people began to think about how to use AI technology to enhance the offline experience of brick-and-mortar stores. Service to regain a city from the online store.

One of the keynote speakers of the forum, Lu Xiaoming, CMO of Beijing Horizon Information Technology Co., Ltd., pointed out that in the future, business will compete for consumers born in the 1980s and 1990s. A purse" to support, there is no shortage of material. Their consumption power is stronger, but at the same time they have higher requirements for the quality of service. According to his understanding, the core advantage of retail in the future will change from "price" to "service", and consumers need to show their "care" to them through face-to-face communication. And this is precisely the biggest opportunity for brick-and-mortar stores!

Another guest speaker, Hu Jun, president of Youwei Technology Holdings, asserted that although offline is now free, because everyone first goes to the store to see it, and then goes online to consume ; But in the future, everything online will be free, and you will have to pay for offline experience stores. Because consumers have had an experience at home after buying online, they want to go to the store to get further and more practical services.

Currently, there are three main ways to use artificial intelligence technology to enhance the physical store experience: mobile applications, Internet of Things and computer vision algorithms. Mobile applications are mainly used to collect more information about the interaction between customers and merchants, and provide opportunities for merchants to provide personalized experiences; IoT technology is mainly used to observe in-store traffic, collect customer behavior data, and grasp inventory status; and computer vision algorithm applications It has the widest range and can master the real-time dynamics in the store through face recognition for later analysis.

Beijing Horizon's CMO Lu Xiaoming said that their company's artificial intelligence vision chips and algorithm software can well optimize the human factor in the "people-goods-field" sales. For example, cameras installed with its vision chips can capture in-store sales behavior, analyze their habits, understand how customers react after interactions, and help store associates improve sales.

Ding Xiaogang, the founder of Xiaozhou Technology, subdivided the help of smart technology for merchants into three aspects: identifying customers, managing people, and controlling stores. Through artificial intelligence visual recognition technology, customer characteristics can be analyzed, divided into different groups, and even individual customers can be labeled with different virtual labels. This set of characteristic labels can be used by different store employees, even if they have never seen a customer employees can also understand customer preferences, which greatly facilitates merchants to provide customers with a personalized experience.

The retail format needs to evolve, and simple imitation is no way out

However, Ding Xiaogang also pointed out that although artificial intelligence technology is powerful, it needs to be used properly to be effective. It is true that artificial intelligence technology can help store owners find problems, but the ultimate improvement effect depends on the willingness and method of merchants to act. Mr. Lu of Beijing Horizon gave such an example. A customer wants to use their products to increase sales, and even considers going to WeChat and Taobao to pull traffic. After analyzing the customer's in-store data, Lu Xiaoming found that for every 100 people entering the store, only 5 people consume it, that is, only 5% of the conversion rate. He therefore recommends that customers first use the insights of artificial intelligence analysis to improve in-store sales and increase conversion rates. Even if the conversion rate is increased from 5% to 10%, sales can be doubled.

The concept of "new retail" proposed by Jack Ma at the time defined new retail as "offline + online + modern logistics". This statement is in line with the appearance of new retail in the Internet economy, but the connotation of new retail is more than that. If companies only aim at this minimum standard to develop new retail, I am afraid they will go astray. For example, Shenliang Group, which attended the forum on the same day, as a sample different from traditional retail enterprises, let us see the attempts of traditional enterprises to move closer to the new retail model. In order to make the vending machines selling traditional products applicable to grain and oil products, Shenliang Duoximi Business Co., Ltd., founded by Shenliang, has specially transformed the vending machines, and successively iterated three vending machines for grain and oil products. They even developed the Duoximi.com app, which supports online purchases and direct delivery to your home. It is a pity that under the consumption model they envisaged, consumers still make simple purchases repeatedly, without interaction with merchants, and there is no experience to speak of. It remains to be seen whether the advantages of new retail can be brought into play.

Several speakers at this forum mentioned retail in Japan. Indeed, some people believe that Japan's retail industry has been ahead of China for 30 years, and observing the current state of Japan's retail industry can provide some inspiration for the development of China's retail industry. At present, Japan's hypermarkets and department stores have already declined, and even the convenience store format known as the world's leading convenience store is facing the problem of declining passenger traffic. On the contrary, Muji, a lifestyle-oriented business format, has become a new growth point. Therefore, combining artificial intelligence technology to improve the physical store experience may be a way out for the domestic retail industry.

However, although smart retail combined with offline brick-and-mortar stores is designed to adapt to a new generation of consumers with a faster pace of change, it will definitely not be the ultimate form of retail, and the retail business model will inevitably remain will continue to change. Whether it is an online online store, micro store, mini program, or offline hypermarket, experience store, boutique store and community store, it is the merchants who release new business charm through the organic combination and superposition of different retail forms. ultimate goal.