What Alibaba Can Teach Us about Omnichannel


What Alibaba Can Teach Us about Omnichannel

By TMCnet Special Guest
Girish Pai, AVP of client services for retail, consumer packaged goods and logistics at Infosys
  |  October 01, 2014

The buzz since April has been about the China-based web retail giant’s IPO, which started low on paper at $1 billion and has since ballooned to more than $20 billion. If the company surpasses that figure, it will eclipse Facebook (News - Alert), the largest technology IPO, and edge the current IPO record, the $19.2 billion The Agricultural Bank of China raised in 2010.

Alibaba excites investors because the company possesses the singular ability to create and enter new markets and dominate with keen omnichannel tactics.

In China, Alibaba has honed its online to offline strategy, catapulting the company to realize 10 times the profit of Amazon. With its recently acquired 26 percent stake in Intime Retail, a Chinese department store, Alibaba aims to reverse the trend of consumers window shopping at brick-and-mortar shops, finding the lowest price online and clicking to purchase.

It is furthering its reach through its $215 million minority stake in Tango, a messaging app with 200 million users. Free apps of its ilk are burrowing into consumers wallets from selling games, sponsored content, and digital goods. Few companies in the world sell as much as quickly as Alibaba, so Tango is a natural fit in Alibaba’s growing portfolio. These tactics have made Alibaba ubiquitous throughout Asia. There’s no reason why the company, flush with cash post IPO, will hesitate from applying the same strategy to the American market.

Everyone from local shops to global monoliths would do well to take a page from Alibaba’s book and refresh their omnichannel strategies.

Engage companies already bridging the last mile.

Alibaba has no doubt raised the volume of its IPO by tying its name to American brands. It has a stake in Lyft, the ride-sharing app that has grown in scope from two to 30 cities in the last year. It’s not hard to imagine the company co-opting Lyft cars as delivery vehicles in a pinch.

Clearly not everyone can buy into a hot app. But the lesson here is to think simple, which the company has done in China by leveraging bike messengers or public transportation to efficiently get packages from warehouse to doorstep. Stateside companies can experiment on bridging the last mile with WeDeliver, a same-day delivery service that helps neighborhood boutiques increase their reach, and Caviar, the food courier recently snapped up by Square for $90 million.

Think of when and where to be seen.

The goal of omnichannel is to be unobtrusively in front of consumers at the right place at the right time. One way Alibaba has accomplished this is by acquiring a provider of navigation and location-based services in China. This allows for Alibaba sellers to advertise on the app and let a consumer know if its physical shop is along the way home. The same app interfaced with Alibaba’s food delivery service during a public holiday to help users find open restaurants.

Conform to the consumer’s need for convenience.

Consumers everywhere shop online out of convenience. This need not cut physical shops out of the commerce equation, though. Going back to Alibaba’s stake in Intime, the company can use Intime’s department stores as defacto warehouses and make a wider variety of brands and goods available to online shoppers. This also gets them their orders sooner. Concurrently, making Intime’s inventory available online, even if it is, for example, a single dress in one size, fuels consumer desire for discovery and buying something unique.

Another flavor on convenient pick up is currently being piloted at Stop & Shop in New England. The grocery chain realized that many of the consumers it was losing to online shopping did not have the time to come into the store to shop; the only hours they could do so were during peak hours when parking lots were more likely to be full and checkout lines longer. Thus, Stop & Shop built refrigerated pick-up stations in places like shopping mall parking lots so consumers could pick up their groceries in less congested locations more convenient to them. Shoppers simply give the station attendant their phone numbers, which are matched up with their orders that the attendant then puts the groceries into the shopper’s back seat or trunk.

Alibaba has proven that with some simple yet innovative decisions, it has won over its consumers as well as future investors. Retailers would do well to experiment with the same elegant tweaks that Alibaba has in making its customer experience that much more personal, convenient and pleasurable.

Girish Pai is AVP of client services for retail, consumer packaged goods and logistics at Infosys (News - Alert), a global provider of technology, outsourcing, and consulting services.

Edited by Maurice Nagle
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