Brick-and-Mortar retailers are searching for their way on the road to digital transformation.
As the first supermarket to work with Dmall on all fronts, Beijing Wumart can be described as a benchmark in the retail digitalization drive in China, becoming a model store of digital transformation in the whole retail.
On the doorplate of the Wumart store in Lianxiangqiao, the logo of Wumart stands side by side with the that of Dmall, seemingly indicating that Dmall has a strong presence in this Store.
In fact, before the digital transformation, the Wumart store in Lianxiangqiao experienced a sales drop like other supermarkets, with a monthly net loss of more than 1 million Yuan. Located at Zhongguancun East Road, Haidian District, Beijing, the store was challenged by strong competitors in the surrounding area, including Wal-Mart in the north, Carrefour in the south and Chaoshifa in the west, which drove the Store to seek innovation and transformation.
Based on the above reasons the operating area of the store was reduced from 12,000 sqm to 6,000 sqm and then to 3,500 sqm at present within one year, while the quantity of commodities it offered decreased from 17,000 to 9,500. Meanwhile, the proportion of its fresh foods increased from 30% to 50%, as part of its effort to restructure its assortment and optimize commodity selection.
Creating a Smart Store
The reconstruction of the store actually reflects the idea of digital construction in a most direct way, which combines brick-and-mortar and digital stores. By establishing a digital store on top of the physical store, customer spending is recorded one by one in correspondence with information on commodities sold. Doing so can better reflect the real operating status of the whole store. Using a digital workflow to guide and require the store to change its work process in order to solve the problem of invisible, non-analyzable and unavailable consumer behavior data with the traditional stores is the overall approach of Dmall to digital transformation of the store.
The effect of the transformation is very significant. By the end of October 2018, the year-over year profit growth of the store reached 113% and overall sales increased by 49%. In terms of commodity digitalization, Dmall spares no effort to promote the idea of commodity standardization and its digital tool Gaia system has realized intelligent phasing-out of 90% of the commodities it offers.
Recently, Dmall introduced “Panther the Assistant”, China’s first supermarket AI robot to the store as a way to receive and guide customers and to connect to Dmall’s membership, commodity and marketing digitalization system. It is reported that this robot reflects Dmall’s efforts to upgrade the retail industry by using its retail digitalization background supported by AI. In the next phase, Dmall will train the robot with its big data to help supermarkets to improve efficiency and bring better consumer experiences while merging the online and the offline world further.
In terms of payment method reengineering the store applies both cashier checkout and self-service, allowing consumers to shop around using a Smart Shopping Cart, Code Scanning, Self-service Shopping and other convenient ways of shopping, which is well received by consumers for dramatically reducing checkout workload during peak hours and remarkably improving the shopping experience.
Like all other Wumart stores, the Store also uses Hanshow ESL for all categories of commodities to synchronize the price, place of origin, inventory and other information on the commodities in the physical store with that on Dmall.com. Store clerks check commodity inventories using the ESL daily for rapid replenishment. In addition the store also makes use of the ESL for limited-time promotion, display management and other functions. (For the record, Wumart has used almost 4 million Hanshow ESLs in more than 230 stores across China by now).
Efficient Inventory Turnover
In terms of digitalization of inventory and supply chain, Dmall also helps Wumart improve. At present the turnover warehouse of the store maintains inventories for both online and offline marketing activities. Oriented towards commodity turnover, the inventories are not placed in fixed positions but instead, the promotional items and best sellers of each day are placed in the position easily accessible for sorting, allowing the clerks to work easily by checking the mobile worktable. While increasing the sorting efficiency, both the front operation area and warehouse space are saved and become available for selling thousands of commodity categories to consumers, far more than that in other segmented e-commerce inventory models.
So far, inventory turnover of the store has been shortened to 13 days, compared with the industry average of about 40 days. Based on such a high inventory turnover, the average daily traffic of the Store is 7,000-8,000 persons, with daily sales of around 500,000 Yuan.
As a service provider providing digital transformation services to traditional supermarkets, Dmall now has more than 40 partners nationwide, covering more than 5,000 stores. Based on the fully commercialized and digitalized underlying system of Dmall OS, more technologies will be leveraged on Dmall OS platform in the future. It is said that the Dmall’s lines of business will be split into independent modules next year, such as membership system, commodity system and supply chain system etc., Meantime, Dmall plans to cooperate with over 100 retailers.