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LuxePulse: Autonomous Retail and AI Chatbots Rise as China’s Economy Recovers

LuxePulse by Gusto Intelligence is a quarterly market analysis of beauty, fashion and hospitality industries, available on an annual subscription of USD 1,400. The latest Q3 2020 LuxePulse Beauty provides a market scan of new retail activity, influencer and celebrity collaborations, reports from outside agencies, market trend analysis and more.

Read about the economic recovery of China and rising conservatism in Chinese youth here:

LuxePulse Fashion China: Retail Exceeds Pre-Covid, Events Industry Booms and Gen Z Gets Conservative

This latest excerpt looks at autonomous retail making a comeback; is it for good this time around?

Unstaffed stores, vending machines, and unstaffed shelves first emerged in 2016, but interest quickly cooled down due to a number of factors. Then COVID-19 made contactless shopping the preferred, and often the only, method for consumers. Between January and May 2020 alone, the number of autonomous retail businesses grew by 40%. The sector has more than doubled in four years and is expected to cater to +200 million customers by 2022.

In the beginning, the e-commerce giants Alibaba, Suning and JD.com ruled the autonomous retail landscape. At one point, Alibaba had over 200 unmanned stores in China.7Fresh was JD.com’s autonomous retail venture. The brand started off with five vending machines in Beijing, selling fresh vegetables and fruits to consumers without any human contact. The product assortment was based on big data analytics in the surrounding area to reduce waste and increase shopper satisfaction.

In hospitality, many hotels embracing no or minimal contact were established before the pandemic struck. Alibaba launched its FlyZoo Hotel in Hangzhou in 2018. During the same year, Suning opened an autonomous hotel near its headquarters. Smart LYZ hotel, launched in 2017, was China’s first fully automated hotel.

From January 2020 onwards, as COVID-19 spread across China, ‘no contact’ services quickly became the norm. Food delivery platforms Meituan and Ele.me, and beverage company Heytea were among the first to set up protocols for no contact. Luckin Coffee, for example, set up unmanned vending machines across Wuhan hospitals to provide coffee to hospital staff. The Weibo hashtag #takeout with contactless delivery# has had over 76 million views and it has been included in over 32,000 discussions.

Hospitality has also seen the autonomous trend grow due to COVID-19. From contactless check-in systems and in-room dining, hotels are aiming to offer safer and more convenient experience to guests. Shangri-La Hotels & Resorts updated its conference protocols to ensure hygienic spaces and contactless dining. Hilton Hotels launched an artificial intelligence powered chatbot called Xiao Xi to offer contactless service 24/7. The Weibo hashtag #hotel self-check-in within 30 seconds# has been viewed over 21 million times and included in over 2,600 discussions.

Beauty brands have been exploring the potential of autonomous retail. Chinese brand Marie Dalgar opened its first autonomous beauty store in Shanghai in 2018 and the second in Beijing in May 2020. With no beauty advisors, the stores have smart mirrors enabling product testing and payment via the Taobao app or a self-service check out machine. There is also an artificial intelligence robot and online beauty advisor services available.

While the Burberry x Tencent store in Shenzhen isn’t strictly autonomous, it is the first social store to emerge. The store is heavily reliant on technology as it blends the physical and social worlds of shoppers for a smoother and more engaging customer experience.

Find case studies, news on campaigns and offline events, social media and influencer happenings, sources and references in the full report

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The Luxury Conversation is wholly owned by Gusto Luxe, part of independent holding group, Gusto Collective, whose mission is to bring together the best in branding and tech agencies from Asia.

With offices in Shanghai, Hong Kong, Singapore and London, Gusto Luxe represents some of the world’s most celebrated luxury and premium brands, with clients including Harrods, Margiela, Sotheby’s, Swarovski, Swire Hotels, The Estee Lauder Companies and Tourism Australia.

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