Alibaba founder, Jack Ma, used the term ‘new retail’ in 2016 to describe a future that would blend online, offline, logistics and data across a single value chain. The strategy aims to establish the business as a consumption solution provider, leveraging big data to enhance consumers’ shopping experiences.

And we haven’t had to wait long to see these plans begin to unfold.

Alibaba recently announced that they have set out plans to open 30 Hema supermarkets in Beijing this year as the e-commerce giant continues to develop and expand its ‘new retail’ strategy. The expansion will bring Beijing’s total stores to 35; providing consumers with greater access to its merged online and offline shopping experience.

The concept, which is a joint collaboration between Alibaba affiliates Hema, Tmall, bike-sharing platform Ofo and mapping and navigation services provider Autonavi, aims to create communities that are empowered by convenient, online-offline services driven by Alibaba.

There’s more – with Alibaba’s examples from the Double 11 Shopping Festival and other test case examples in China, here’s what the future of retail looks like:

  • A connection to an online payment system is established to enter the store. In Alibaba’s case, Alipay must be scanned to enter their smart stores.
  • Price tags are electronic and prices vary in real time based on certain factors.
  • Facial recognition technology is used to track customers. Discounts are offered on items they smile at or that they have searched for online.
  • Items can be purchased for later delivery. Home delivery details don’t need to be given as the system already has the purchaser’s home address on record. Delivery in major cities in China is already very fast taking from 15 minutes to 3 hours.
  • Customers can receive location-based store recommendations and discount notifications through their Taobao or Tmall app on their mobile devices, driving traffic to offline stores.
  • Customers can “try on” apparel and makeup items virtually, with the help of RFID (radio-frequency identification) and AR (augmented reality) technology.
  • Customers can scan images using AR technology to visit product listing page and collect coupons.
  • Consumers can purchase items using vending machines by scanning a QR code and they can also have the products delivered home with a few clicks.
  • There are also innovative technologies like a “Cloud Shelf” that stores purchasing behaviour data, facial recognition information, mobile gamification, etc.

It’s not just Alibaba transforming the retail industry. Last year, Amazon acquired Whole Foods for $13.7 billion with a vision to revolutionize the customer experience through delivering faster, more convenient in-store shopping.

Full details are yet to be confirmed but features could include a faster, tech-based checkout process, using Amazon’s ‘Just Walk Out’ technology that launched last year in Amazon’s pilot Amazon Go store. High-tech sensors throughout the store completely eliminate the checkout process; a pain point for many shoppers.

Amazon’s prowess of data means even more tracking of how customers shop – including offline, if Amazon deploys the Amazon Go high-tech sensor technology to Whole Food stores. Customers’ mobiles would enable monitoring of how they move around the store, as well as when they check-in and out. Just as with online shopping, Amazon could track what items a customer has looked at, for how long, and which ones they decided to put in their basket. That is valuable data, not just for re-targeting and linking to Amazon Prime membership and Whole Foods’ customer rewards data, but it could also give Amazon great leverage with grocery suppliers.

Just recently, Amazon announced a new cash-back scheme; enticing Prime members to shop at Whole Foods. Prime members using the company’s Rewards Visa card will get 5 percent back on Whole Foods purchases. It is worth noting that this is the first time Amazon has extended its 5 percent back perk to a retailer.

These leading brands are gaining an edge through using the emergence of ‘new retail’ as an opportunity to build new consumer-focused models while at the same time improving the efficiency of their business operations.

To stay in the game, businesses must put customers at the center of their operations, with full consideration of the end-to-end customer experience; from awareness through to purchase and referrals. Businesses need to commit to embedding data and smart technology into their operations, because in order to place customers in the center, they need to know exactly who their customers are and understand their buying requirements.

Gavin Wheeldon, CEO of Purple said: “The importance of capturing customer data in the physical world should not be underestimated; businesses that fail to do this will soon be left behind. Collecting key customer demographics and data around buying trends in a physical space enables businesses to personalize their marketing communications; engaging with consumers on a very relevant level. This type of engagement will be the difference between businesses that embrace these new technologies and businesses that don’t.”