Traditional malls in China accelerate digital transformation

By Wang Ke, People’s Daily

As dusk fell, Sanlitun, a popular destination for shopping, dining, and entertainment in Beijing’s Chaoyang district, was teeming with visitors. There, the crowds encountered various types of “intelligent” elements.

It was the peak time for dining. Robots were seen guiding diners to queue and leading the way in many restaurants.

In parking lots, there was no line waiting at the exit. With WeChat mini-programs on their mobile phones, consumers could park intelligently, inquire about free parking length and pay parking fees. They could even order valet parking and other services on these mini-programs.

In a beauty store in the TaiKoo Li Sanlitun complex, customers were trying makeup in front of augmented reality-enabled “magic mirrors,” which were able to show before-and-after images. These “magic mirrors” clearly displayed makeup effects, providing customers with better references in selecting and buying suitable cosmetics.

Shopping malls and districts are important parts of a city’s business infrastructure, serving as carriers to promote circulation innovation and nurture emerging consumption.

At present, many brick-and-mortar stores in China are adapting to new changes in demands for consumption upgrades by employing new technologies like 5G, internet of things, big data, cloud computing, artificial intelligence, and virtual reality, in an attempt to construct smart stores, innovate consumption scenarios, and improve consumer experiences.

At the audio-video experience section of a flagship store under leading Chinese retail company Suning in Xinjiekou, Nanjing, east China’s Jiangsu province, various products manufactured by different brands were displayed together, bringing an immersive shopping experience.

In addition, the store also introduced home furnishing and decoration services so as to provide consumers with a complete set of home audio-video solutions.

Such new and smart experiences significantly drove consumption. According to statistics, passenger flow at the flagship store jumped 56 percent from a year ago between July 28 and Aug. 18.

Green and intelligent home appliances were favored by customers. During the period, the sales of smart sweeping robots, intelligent all-in-one washer dryers and energy-saving refrigerators surged 165 percent, 118 percent and 73 percent year-on-year, respectively.

“I came here with my child to experience the naked-eye 3D display in the mall. It feels like we were in a science fiction world,” said consumer Li Li at the JD Mall in Xi’an, northwest China’s Shaanxi province, a complex run by Chinese e-commerce giant JD.com focusing on providing an immersive omnichannel shopping experience to customers.

This 40,000-square-meter shopping center is filled with trendy and technological elements, from its overall design to interactive experiences, making it a well-known destination in the local consumer market.

The exterior wall of the mall features a giant naked-eye 3D screen, providing an immersive, realistic 3D experience. Inside the stores, holographic projections, VR equipment, intelligent robots, virtual live streaming rooms, transparent circuit rooms, and other high-tech installations and facilities were equipped, bringing a refreshing experience.

To improve efficiency and reduce costs through digital transformation is also an important consideration for smart mall construction.

At Raffles City, a shopping mall in southwest China’s Chongqing municipality, the implementation of intelligent operation and maintenance systems such as intelligent power control, environmental monitoring, and energy management monitoring has greatly reduced the mall’s management costs and improved efficiency.

“The intelligent control of air conditioning and lighting saves about 30 percent of energy consumption,” said an executive of the mall.

The mall has also built passenger flow analysis and membership management systems. By profiling and categorizing consumer behaviors, it has achieved digitalized management and services for hundreds of thousands of members.

The essence of smart mall construction is elevating consumer experiences through service optimization. Surveys show that many malls have provided consumers with various digital services by utilizing marketing tools like mini-programs and apps.

For instance, the Yu Garden in east China’s Shanghai has launched a mini-program, which allows one-click access to comprehensive services including navigation, information, interaction, and marketing. Since the mini-program was launched, it has integrated dozens of cultural and tourism sites and consumption scenarios, giving citizens and tourists better experiences.

Zhang Jihang, deputy director of the market research department of the Academy of China Council for the Promotion of International Trade, told People’s Daily that the development of brick-and-mortar retail is impacted by various factors such as rising operating costs, structural adjustment of consumer demand, and the rapid growth of online retail.

However, backed by the huge Chinese market, the future of physical stores is still full of hope, he said. He explained that, unlike online shopping, offline shopping at physical stores can satisfy the social demand for shopping, entertainment, leisure, dining and tourism, and the consumers’ instant demand for face-to-face shopping and use of goods.

He believes that by focusing on the increasingly diverse and personalized needs of consumption, shopping malls are sure to inspire new vitality.

“Digital transformation is the primary focus for the evolution of shopping malls,” said Hong Yong, associate researcher with the e-commerce research institute of the Chinese Academy of International Trade and Economic Cooperation.

He further emphasized the need to strengthen the application of new-gen information technologies such as the internet and big data, improve circulation efficiency and service capabilities, and provide consumers with more new supplies.