Shopping Centers Today

DEC 2018

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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40 S C T / D E C E M B E R 2 0 1 8 S T O R E F R O N T S grated retail program" as the means to modernize their own operations. e Alibaba program package includes inventory-management soware, heat maps that show where customers spend the most time in the store, and digital tools to help access that infor- mation on authorized desktop comput- ers and smartphones. is technol- ogy removes much of the guesswork from day-to-day business decisions, helping to transform mom-and-pop stores into enterprises that resemble Hema. Program membership costs the business operators about $620 per year, along with a required commitment to purchase a set amount of goods from one of Alibaba's e-commerce platforms. Already, about 1 million mom-and-pop stores and roughly 100 supermarket-chain stores have joined the program, with some of them citing an almost immediate 45 percent boost in sales volume. us, the Alibaba new-retail concept, as exempli†ed by Hema's AI-infused, online-to-oˆine strategy, is taking o‰ in China. Even JD.com (also called Jingdong, and formerly called 360buy.com), China's second-largest e-commerce company and Alibaba's main rival, has emulated the Hema business model — keeping transactions online, but reintroducing a physical-shopping ex- perience in retail. JD launched its own 4,000-square-meter (roughly 43,000 square feet) new-retail supermarket, called 7Fresh, near its Beijing head- quarters at the beginning of this year. e store o‰ers free delivery within 30 minutes to customers in a †ve-kilo- meter radius. During its trial period, 7Fresh processed upwards of 10,000 transactions per day. e impact of a Hema store is pal- pable. Typically, big-box grocery stores make little sense in such sprawling and dense cities as Beijing, Guangzhou, Shanghai and Shenzhen. Hema cus- tomer purchases tend to be small but frequent, as shoppers take advantage of the freshness guaranteed in the food for sale. e chain o‰ers one conve- nience that is notably lacking in most Chinese grocery stores: e waits at checkout are short. By contrast, before Tesco withdrew from China, it was common to see shoppers queue up for 30 minutes or longer, with customer service nearly nonexistent. At Hema, the shopping process is centered around a user's smartphone and cash- less payments, with œeets of personnel handling delivery, cooking up food and guiding new users as needed. Hema's success demonstrates that Chinese conglomerates, though perhaps unwieldy and rigid in many cases, can still innovate. And when they do, a familiar industry can be revamped completely. Q VISIT US AT ICSC'S NEW YORK DEALMAKING SHOW Booth 400 Schedule an appointment today! appointment@castoinfo.com E-MAIL Inspired ideas. Integrated real estate solutions. Exciting opportunities at our projects in development and throughout our existing portfolio. EXPERTS IN REAL ESTATE SINCE 1926. MIDTOWN | Tampa, FL Serving our markets from these regional oƒces: Columbus, Ohio Sarasota, Florida Cary, North Carolina www.castoinfo.com

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