3 Brand Lessons From China’s Virtual Showrooms

Chris WrenMay 17, 20183 min

In many ways, emerging markets are one of the best places to look for what’s cutting edge and breaking through in retail. Unburdened by legacy infrastructure and processes, brands in these markets are free to imagine new ways to connect with customers. Some of the most stellar examples can be found in China.

Most people buy cars from dealerships. In China, more people are doing it online. It’s no secret that China has a booming eCommerce market, accounting for 47% of digital sales worldwide, and it’s only natural that as these consumers buy groceries, clothes and appliances online, their comfort with buying online is expanding into more substantial items, like cars.

The top brands see opportunity to blend the digital and physical worlds into an experience designed to delight customers. In Guangzhou, customers can buy or try a car using a smart phone app and a car vending machine. Ford and Alibaba partnered to create the Super Test-Drive Center built around a multi-story building housing dozens of Ford vehicles. The service taps services used in Alibaba and provides potential buyers with discounts and incentives based on their usage.

As Matt Burns notes in TechCrunch, “It seems the Super Test-Drive Center’s edge will come from its deeper understanding of potential buyers. The data provided by Alibaba should make for an interesting shopping experience especially, if as advertised, it gives deals based on a person’s perceived lifestyle. If nothing else, it should be a fun advertising tactic because there’s nothing like a car vending machine with giant cat ears.”

Alibaba is leading the way with what it calls the New Retail model. Taking to JWT Intelligence, Victor Wu, director of smart store operations at Tmall’s New Retail division says, “We use online advertisements to spark interest, and the analytics gathered can be leveraged to provide even more precise marketing.” The data is mixed with online and offline loyalty program information to help salespeople create tailored in-store experiences, starting with an AI receptionist that greets customers at the dealership.

Some manufacturers that aren’t using eCommerce, are using China as a testing ground for digital-first dealerships aimed at connected customers. Porsche has a digitally-optimized dealership featuring interactive displays, augmented reality and online-to-offline WeChat engagement. The Mercedes Me experience center, which mixes fashion, nightlife and retail in a single space, is now on its third year of driving awareness and increasing brand loyalty.

Here are three ways brands can learn from the trend at the heart of what these dealerships are doing in China:

1. Partner with a platform: Digital transformation wasn’t just a revolution in how customers buy, it’s equally revolutionary in how brands sell. Just last week in the US, Sears shares perked up on news that customers can now buy tires at Amazon and get them installed at Sears. Partnering with a platform might also provide additional data streams which can be used to enhance the customer experience with anticipatory, predictive offers.

2. Seamless blends the best of both worlds: Following the success of their partnership with Alibaba’s Tmall, Masterati is now working with Alibaba to leverage its online data and artificial intelligence to provide customers with an improved experience in their Beijing and Shanghai dealerships, which will be the first “smart store” offline. It’s important to understand how your customers like to buy versus how they like to shop.

3. Try something new: Interactive displays with haptic feedback and facial recognition are enabling screens to be smarter and attract more business. Even KFC is trying out facial recognition in China, using the technology to make recommendations based on a customer’s age, gender and mood. If that sounds a little Orwellian, consider more basic tactics like signage that is connected to the cloud, dynamically serving offers based on real-time changes like weather, or volume of traffic to the store. The price points for solutions like this continue to decrease.

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