'New Retail' becomes reality as Sun Art outlets go smart

Sun Art Retail, which operates leading supermarket chain RT-Mart and Auchan in China, is on course to digitalize its offerings and services, five months after being acquired by Alibaba Group Holding Ltd, an example of the push into New Retail.

The retail conglomerate said last month that it aimed to go to the extra mile by combining its supply chain with Alibaba's technology and online traffic, in a country where pure physical presence has failed to sustain growth.

Core strategies for its new retail transformation－for example, the merger of online and offline sales using technologies－include a digital transformation of the company's storefronts, development of a variety of retail formats and distribution channels, and redefining the hypermarket model, said Daniel Zhang, chairman of Sun Art and chief executive officer of Alibaba.

"We will use internet-driven technology, data and mindset to create better and more streamlined processes in managing purchasing, operations, marketing, customer service and supply chain," he said in a statement to shareholders.

The revamp of Sun Art's assets took early shape when a stand-alone RT-Mart Fresh app was rolled out soon after the takeover in November 2017. Consumers can order commodities of 7,500 stock keeping units via an app, which banks on Alibaba's technologies, and can have the products delivered to their doorsteps within an hour.

This mimicked the model of Alibaba's homegrown Hema Supermarket, through which shoppers can either buy in-store or enjoy the perks of free delivery through an in-app purchase, as long as they live within a radius of three kilometers to the store.

Meanwhile, shelf-placement across its 461 stores will be transformed from intuition-driven to data-driven. For instance, the supermarket introduced a special rack filled with skin care and cosmetics that were the most sought-after items on Tmall, Alibaba's business-to-customer site.

By leveraging digital technologies, the consumer retail companies could build up a demand-driven supply chain system and optimize overall operation, said Jessie Qian, head of consumer & retail at KPMG China.

"The deep integration between online and offline business, together with the better deployment of data ... enable enterprises to stimulate deeper cooperation between distribution and sales, inventory management and customer information sharing," she said.