Chinese Retail Grocery Innovation with T11: The Smart Supermarket in Beijing

I had the great honor of visiting the newly opened, T11 Supermarket located at B201, 10, South Chaoyang Park Avenue, Chaoyang District in Beijing.  Mr. Du Yong, who is a brilliant visionary, the CEO and Founder provided a personal behind-the-scenes tour.  The visit to T11 was arranged by Kevin Peng Secretary-General and Philip Cheng, Manager, China Chain Store & Franchise Association (http://www.ccfa.org.cn/portal/cn). The China Chain Store & Franchise Association (CCFA) is the national representative for franchise chains in China. Founded in 1997, it is the leading resource for existing and potential franchisors and franchisees. I was joined by Sharon Shi who is strategic partner for Retail Store Tours in China.

The executive team at T11 Food Market in Beijing hosted Retail Store Tours and China Chain Store & Franchise Association for a VIP experience

 

T11 is on the front line of global grocery revolution in China

T11 Food Market opened in June 2019 and is a work of beauty and function. The attention to the smallest detail is flawless. Retail Store Tours gave T11 our highest rating which is five stars (our criteria are provided). Here is some context to the rating. Retail Store Tours evaluates thousands of stores and retail concepts each year and we maintain a large database of stores across all of the retail categories. We evaluate stores based six criteria which are; the human touch, store design, use of technology, business model, customer management, and unique value proposition. Here is an overview of T11 based on these factors.

The Human Touch: from the moment you enter the store, you are greeted by a friendly and knowledgeable store team member. In every part of the customer journey throughout the entire store experience, you are assisted by knowledgeable and friendly store team.

Store Design: The store design leaves no detail untouched. The store uses LED lighting throughout the entire store which beautifully illuminates the products and departments in T11. A study by Philips Lighting shows that when used properly, lighting in retail store extends the customer time in the store by 17%. The product merchandising was outstanding with each product illuminated by its own focus LED light and the packaging was organized by color which made it easy to identify.

Bread & Bakery Section: Shoppers experience fine fresh French breads cooked behind transparent glass windows. The pastries are good to look and an even better to eat. 

The Wine selection: T11 offers a comprehensive assortment of the best wines in the world with suggested pairing and wine ratings. The staff is very knowledgeable and helpful.

The Spirits Locker contains a broad range of spirts from very affordable to rare.

The Bar is a beautifully designed and immersive and private setting for shopper who want to get away from it all.

The T11 Market Bar overview – shown in photo - Philip Cheng, Manager (CCFA), Mr. Du Yong, CEO, T11, Kevin Peng Secretary-General and China Chain Store & Franchise Association, Dan Hodges, CEO, Retail Store Tours

The restaurant has multiple dining options and shoppers can pick the fish from the fish department and the chefs will cook to order.

Fresh fruit and vegetables section contains only the freshest food which is critical for discriminating Chinese consumers.

Use of Technology: The fascinating fact about T11 is that it was created by technologist and developers. The software to run the supermarket was created by the T11 teak from supply chain, for stock replenishment, employee scheduling and much more. T11 plans to offer software as a service to supermarket chains around the world.

Employee Training: All T11 team members are highly courteous and trained to service the needs of the customers.

Business Model: One of the most interesting aspects of T11 is that it was built by software engineers and designed with today’s and tomorrow’s technologies in mind.

Customer Management: T11 has a big advantage in that it has the ability to track consumer purchases and make recommendations foster loyalty and much more.

Unique Value Proposition: T11 offers and unbeatable shopper experience and grocers a software solution to run their business with the latest technology, designed for the mobile customer, artificial intelligence, voice and much more.

Going back the analysis criteria, after the primary store evaluation is complete, we do a secondary rating on the use of touch, sight, hearing, smell, taste in the retail experience which impacts the overall customer journey. Our research shows that the more senses are activated during the shopping experience, the higher the satisfaction levels are generated which helps foster a returning shopper who becomes a loyal customer. Eataly and the Starbucks Roastery are examples companies that have mastered a thousand little details executed with excellence. Casinos have long mastered the use of customer design to control traffic and time spent in the casino. T11 rates very highly in these areas.

It should be noted that T11 is also above average in use of frictionless payments and self-check-out systems. The Chinese market is already at the 90% level for frictionless payments according to the Retail Store Tours Institute (RSTI). We recommend that retailers and grocery store make all efforts to reduce friction at check-out.

T11 is not alone in grocery innovation for “new” retail in China.There is a term in China called “new retail” which includes grocery was coined by Jack Ma, the founder of Chinese e-commerce giant Alibaba. Alibaba supermarket is Hema, headquartered in Hangzhou, was to take the online shopping experience that Alibaba’s customers already enjoy and transpose it from the virtual space into the physical world. Hema chief executive office, Hou Yi, sees no reason why his customers can’t have the same digitized shopping experience in-store as they have online. To that end, shopping at a T11, Hema store is similar to shopping online at Alibaba, except that in-store customers can actually inspect the food they are buying.

The Beijing-based 7-Fresh stores also function as both offline markets and online distribution hubs. Much like Hema, they integrate online digital technologies extensively into the shopping process. 7-Fresh’s most remarkable innovation, the RoboCart, is a souped-up shopping cart that customers link to their smartphones while in-store. Usually, the cart follows a shopper around the store without having to be pushed. But if the shopper can’t find an item, it can also lead the way. As customers find what they want and place those items in its basket, the RoboCart automatically registers products, obviating the need for scanning. When the shopper is finished, the Robocart makes its way to the checkout. 7-Fresh charges the cost of the items to the customer’s digital wallet and JD’s fleet of delivery vehicles takes care of the rest. As with Hema, 7-Fresh guarantees delivery in thirty minutes within a three-kilometer radius 

Some aspects of New Retail have already made their way into the American marketplace. The new Amazon Go stores, for example, have also done away with checkout. Shoppers use the Amazon Go app to enter the store, take what they want from the shelves, and simply walk out. Amazon’s technology identifies what has been taken and charges the cost of those items to the customer’s Amazon account. No scanning, no checkout. Shoppers can also use the Amazon Go app to find out remotely what items a particular store has in stock.

The business implications of New Retail are profound and far-reaching. T11, Hema and 7-Fresh require customers to download apps and open accounts, they essentially bind these customers — and their data, including shopping preferences — to Alibaba and JD.com and T11 respectively. In terms of new customer acquisition, if nothing else, New Retail is clearly the winning play and T11 is a leader in this category.

Dan Hodges is Founder & CEO of Retail Store Tours. Retail Store Tours is an experience specially curated for organizations to discover and explore the driving forces changing retail around the world today. Participants see and experience the best of retail innovation in a two-hour plus experience led by an industry professional. You will meet with and talk to the companies creating the "new" retail. The opportunity to network with professionals in and outside your organization and to share expertise is one of the benefits of the experience. Retail Store Tours are available in twenty-five cites around the world and at leading industry events. Retail Store Tours was launched in China in August 2019 with programs in Shanghai, Beijing and Hangzhou.