Alibaba unveils staff-less Tao Cafe and smart speaker to revolutionise offline retail

Alibaba featured two new technologies to disrupt the offline retail space at its second annual Taobao Maker Festival taking place from 8-12 July.

Embracing the “new retail” strategy where big data technology connects and optimises offline outlets and online stores to enhance customer experiences, Alibaba has launched an experimental cashier-less store called “Tao Cafe” (淘咖啡) and smart speaker “Tmall Genie”.

Alibaba demonstrated the cashier-free coffee shop Tao Cafe at its five-day event:

By scanning a QR code on Taobao app at the entrance of the store, patrons are tracked with cameras for facial recognition. After going through the checkout doors, customers will automatically make a purchase through their smartphones without needing to head to a register and be able to leave the store with their items in hand.

The company said its AI and data technologies have made it possible for customers to shop at this offline store without queuing to pay.

If you think the e-commerce giant plans to get a slice of the brick-and-mortar pie, then you might get it wrong: “It’s not about Alibaba wanting to open more cafes, we are not in the restaurant business… it’s about digitalising the footprints of the visitors to an offline store,” said Chris Tung, chief marketing officer of Alibaba Group.

He said, for instance, in the online world, Alibaba can always personalise every web page based on user’s interest and preference thanks to big data, “When you open our app, every moment is different.”

But on the other hand, “offline is becoming not so exciting anymore”, because many physical stores are always found to be very similar with no variation.

Tung said offline retailers could improve by adopting online data capabilities to link the identity of the customers, and optimise their in-store shopping experience: “The more a user browses, the better the system understands their interests, and the better it can provide more relevant and personalised messages for them – it’s a healthy cycle.”

So in this sense, after you have an understanding of what your customers need online, then you can allocate the products they want in the physical offline store accordingly.

He explained the pop-up Tao Cafe is one of the ways to showcase this “new retail” notion, “the cafe is just a demonstration of what can be done (for retail business), and opens up people’s thinking and calls for more collaboration.”

Another innovation of the event is that the company has jumped into the smart home speaker space with the launch of a voice assistant speaker Tmall Genie X1 at 499 Yuan.

Meanwhile, Taobao is taking its online marketplace to an offline carnival in Hangzhou from 8-12 July, as parent company Alibaba looks to spotlight the millennial entrepreneurs at its second edition of Taobao Maker Festival.

The fair brings together 108 of Taobao store owners, who sell everything from fashion items to oil paper umbrellas to novelty souvenirs. The number of merchant participants increased by 50% this year.

The event comprises four themed zones that represent current trends, subculture, little things in life and individual designs. In amongst these zones, buyers can find celebrity merchants as well as merchandise stores originating from popular online shows and characters.

Visitors can touch and feel the products that the shop owners display, however, no physical transaction will be made as it is not meant to be a sales-driven event. Rather, the carnival-like offline event is more about consumer engagement. Chris Tung described the festival as “so refreshing” and stated that “nowhere in the world, can you find a festival like this”.

He said Taobao is now a paradise for young people who are passionate about creating unique things and exchanging ideas. “If you want to do something creative, come to Taobao.”

This year’s Taobao Maker Festival for the first time is held in the same week at the Taipei 101 Tower in Taiwan. The concurrent event hosts Taobao merchants from both Taiwan and mainland China, providing a platform for participants from both locations to exchange ideas and explore collaboration opportunities.

The CMO said he hopes to see the festival would go global, like the Singles Day shopping bonanza, in the future.

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