On 30 December, online retailer JD.com unveiled its first unmanned convenience store, in Yantai, Shandong Province, which enables consumers to walk in, pick up items, and pay for them using their smartphones, with no need for queuing at the checkout.
While other online giants, such as Alibaba and Amazon, have also launched unmanned stores in recent years, albeit in beta mode – Amazon's Amazon Go concept in Seattle is arguably the best documented – JD's effort is the first such outlet to be made available to the general public – quite a coup for the Beijing-headquartered company – and it's only getting started.
In December, JD.com, alongside real-estate developer China Overseas Land & Investment Ltd (COLI), announced plans to open as many as 'hundreds' of unmanned stores and, notably, develop off-the-shelf 'unmanned store' technology that could be licensed to third-party retailers, putting the cat amongst the pigeons, as far as Amazon is concerned.
Using a combination of ceiling cameras that use facial-recognition technology, heat-mapping, image recognition and RFID, JD.com is confident that its unmanned store model will put it firmly ahead of its rivals in this emerging industry sector.
As well as unmanned grocery stores, JD.com also recently announced the roll-out of the 7Fresh chain of stores in Beijing, arguably its biggest venture in physical retail to date, incorporating the group's findings from the technology and logistics arenas. The stores feature in-store screens to display product and promotional information, and 'robot carts' to assist consumers as they navigate through the aisles.
7Fresh has also been developed with one eye on Alibaba's Hema chain, which is set to be expanded over the course of the coming year.
Master Of Automation
JD.com has already proven itself to be a master of automation when it comes to logistics – knowledge that it will find useful as it embraces the retail space.
In November, ESM had the opportunity to speak to Dr Hui Cheng, head of JDX Silicon Valley Research Center, JD.com, about the huge achievements that the business has already made when it comes to logistics, warehouse automation and delivery efficiency.
China's largely scattered population has given JD.com the impetus to develop arguably the most advanced drone programme in the world (including a drone capable of carrying up to one tonne), which can reach the most far-flung locations across the often rugged Chinese landscape.
It's also proven itself to be a maestro when it comes to order fulfilment. During its anniversary sales event last June, it sold around 700 million products in one week, requiring an advanced level of warehouse and delivery automation. Not every company has the ability to cover around one billion consumers with same- or second-day delivery!
Once it works out how to build some of these highly optimised processes into the physical store environment – and there are those who suggest that it already has – JD.com's impressive growth rate could be set to go stratospheric. On the back of the first unmanned convenience store, how long will it be before we witness the rise of the first automated hypermarket?
Move over, Amazon and Alibaba – there's a new general in town.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
