Intersport, Tmall redefine New Retail

Intersport Co Ltd, one of the world's biggest sporting goods retailers, and Tmall, Alibaba Group's online marketplace for established brands and retailers, forged a partnership in May to integrate e-commerce and physical sportswear stores in China through digital technologies.

Their partnership will apply the idea of Snow White's magic mirror to real-life shopping scenarios.

A sensor-rich intelligent wall at the store functions as a private fashion consultant－it can detect the clothes and other products customers pick, offer product information and buyer reviews. And an interactive window display can detect gender and age of customers, and intuitively recommend appropriate products.

While the magic mirror stands out at the physical store, smart shelves and virtual shopping bags will help online consumers. All these innovations are helping the Intersport-Tmall "megastore" to create a fun and interactive shopping experience for its customers.

That's not all. Big data algorithms will guide merchants in precision marketing.

Sun Ying, general manager of Intersport (Shanghai) Co Ltd, the Chinese branch of the company, and chairman of Tianma Network Technology Group Co Ltd, said that once a consumer steps into an Intersport store, every move will be monitored－what kind of shoes or garments are being tried on, what are being selected or ignored, so on.

"Consumers' purchase records will be stored in the background. Based on that information, consumers' shopping preferences can be collected and analyzed by our system. Using big data, both Intersport's online and offline stores will push advertisements to match each consumer's preferences, recommending their favorites in our store. This is called 'second reach'," said Sun.

Agreed Jessica Liu, president of Tmall Fashion and Luxury. "Using big data, customer-related information is digitalized and depicted through Tmall's data bank.

"Based on user preferences, we can offer suggestions on goods and services to retailers as well, like which brands and categories are preferred by which groups of consumers, in which specific regions, to address the pain points of retailers. Previously, they merely relied on their stores' sales history. However, data relate to one store may not necessarily serve as a guide to another, considering geographical factors and consumer diversity."

Another benefit of digitization is it facilitates delivery of goods. Currently, the megastore offers quick-delivery service within a 5-kilometer radius of the store, with minimum time required being two hours. With big data, the store may adjust its stocks according to sales. In addition, goods distribution and adjustment with other store branches becomes easier.

Zhao Yue, an e-commerce analyst from Beijing-based market research firm Analysys, said this function virtually makes a store a warehouse, greatly increasing the delivery speed and enhancing consumer experiences.

"With big data, stores are informed of the optimized shipments and stocks. Statistics can also guide manufacturers, the upstream of the supply chain, on how they can produce the commodities better, lowering production costs. All enterprises along the supply chain will become more flexible," she said.

Besides making marketing and delivery precise, AI-based technology also offers the megastore with "cloud shelf", an interactive digital wall that stores information on a large amount of goods for consumers to select from.

"Originally, the 1,300-square-meter, two-story megastore can only display 2,000 stock keeping units (SKUs) of products. With the cloud shelf, over 10,000 SKUs are presented to consumers at once, greatly extending the effective display space," said Sun.

"The core of New Retail is embedded in the digitalization of retail elements and the intellectualization of the operating process. The former involves the digitalized information on consumer, commodity and factory, while the latter means using big data to analyze and predict consumer needs, in order to enhance consumer experience and to increase merchants' sales revenues," Zhao said.

Victor Duran, CEO of Intersport, said: "Physical retail has to find a new reason to be." He also said the essence of a physical store is that it allows consumers to touch and feel products, to benefit from the expertise of in-store sales assistants who can pick things up, recommend things.

But there are some limitations, too. "So, if you combine online and offline, you can get the best for all and get rid of those inefficiencies. This is the future," Duran said.

"In terms of New Retail, China is the cutting edge, the United States is far behind, and Europe is even more behind. Intersport has 3,500 stores worldwide, among which 24 stores are in China. With the partnership with Tmall, we hope to copy this New Retail model in the rest of China, also Europe, and finally around the globe."

According to Sun from Intersport, the company plans to open nine New Retail megastores in China this year, and increase the figure to 50 by 2022.

"With the help of big data, I'm confident that our operations will be better," said Sun.