How brands like KFC use innovative O2O strategies in China

Smart brands in China are implementing sophisticated and innovative online and offline strategies to capitalize on the Chinese consumer's mobile-first approach to shopping.

Smart brands in China are implementing sophisticated and innovative online and offline strategies to capitalize on the Chinese consumer’s mobile-first approach to shopping.

China has seen unprecedented growth in its economy, fuelled in no small part by the population’s enthusiasm for purchasing both homegrown and international consumer goods. A lot of that is now happening across ecommerce channels and on mobile.

With a slowing economy in China however, brands are realising they can no longer simply rely on a localized website or a presence on key social platforms such as WeChat and Weibo. Important though they are in the promotional mix, a great retail strategy in China mixes the online and offline with clever integrations.

According to a Deloitte report into customer loyalty in China,  inconsistent, confusing messages across different channels discourages repeat business, as does a lack of customer focus.

Deloitte_Customer loyalty challenges China_600

*Source: Delivering Superior Customer Experience in China, Deloitte

In practical terms, this means retailers need to make more effort to afford customers all the benefits of digital in a physical environment.

China already boasts early adoption of mobile payments with the likes of Alipay and WeChat Pay allowing consumers to use their phones to pay for goods in-store.
China checkout

The question is, how can retailers step up their game and meet the needs of tech-savvy Chinese customers with ever-increasing expectations?

The answer lies in coupling of technology with the wealth of data generated by both customer and brand activity to provide shoppers with a seamless experience personalized to their needs.

Here are some examples:

1. The No. 1 People’s Department Store

The No. 1 People’s Department Store in Hangzhou has made a move towards a connected shopping experience through by integrating checkouts, which allow customers to not only pay for goods in-store but also order online and arrange for pickup.

2. Yonghui Supermarket

Yonghui Supermarket has taken mobile payments a step further, building convenience and customer choice into its offering.

Its mobile app allows customers to shop by scanning the QR codes on in-store goods. The items are automatically added to their shopping basket – and the consumer can then pay via mobile and arrange for delivery, either at home or in-store.

Yonghui online supermarket

3. Leyou

Leyou is China’s leading multichannel retailer for toddler, baby and maternity products. It has focused on parents’ inherent desires in China to make the right decision about purchases for their children.

App users can scan barcodes around the store to get information, recommendations and other useful tips on products. Given the level of concern over the authenticity and safety of baby products in China, this is proving to be a popular service. It has clearly tapped into and answered the needs of Leyou’s customers.

leyou[3]Of course, the increasing availability of practical solutions for integrating data to make the customer experience better have encouraged forward-thinking retailers to take even bolder steps.

Now that cognitive computing and AI have reached a stage where they can recognise natural language and use context to process information from millions of data points, the development of virtual concierges, chatbots and service robots has leapt forward.

4. KFC

KFC, in partnership with Baidu, recently opened its first robot-powered outlet in Shanghai. Called Original+, it is staffed entirely by virtual service staff in the form of small, friendly-looking robots (or Du Mi), which take orders and process payments.

Time will tell if customers engage with the idea or prefer at least some human interaction, but it’s an interesting experiment, which will drive the automation conversation forward.

kfc du mi_600


One thing is clear – whether integrating systems to bring customers all the benefits of online into the physical store or setting out for the relatively uncharted territories of AI and smart computers, retailers who want to engage China’s technically aware, experience-hungry customers need to make connected retail part of their core strategy.

*Do you want to learn more about the Chinese market? Join us at ClickZ Live Shanghai on September 19-21 where local and international brands operating in China will share their digital marketing experiences and case studies for this lucrative, innovative and dynamic market.


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