Innovative Retailing - China - August 2019

OVERVIEW
What you need to know
Covered in this Report
Excluded
EXECUTIVE SUMMARY
Market overview
Who’s innovating
The consumer
Most surveyed consumers have not tried New Retail formats but show intense interest
Figure 1: Interest and trial of New Retail formats
Unmanned stores show strong promise in lower tier cities
Figure 2: Interest in unmanned stores, by city tier
Overtime meal occasions are best fit for self-heating vending machines
Figure 3: interest and trial of meal vending machines, by employment
Married consumers with kids are loyal customers of mini karaoke booths
Figure 4: Interest and trial of mini karaoke visits, by family structure
Convenience in beauty is growing
Figure 5: Interest and trial of self-service makeup room, by gender and age
Mini workout pods are about excising in your own time
Figure 6: Interest and trial of micro workout pod, by city tier
Innovative retailing is an extension of experiential retail
Figure 7: Triggers to shop at New Retail channels
Understanding what consumers want is key for New Retail formats
Figure 8: Barriers to New Retail channels
Self-checkouts and self-ordering are new norms
Figure 9: Interest and trial of New Retail services
New experiences grab consumer eyeballs
Figure 10: Reasons to visit pop-ups
Product recommendation by smart device is gaining popularity
Figure 11: Attitude towards product recommendation, by generation
Familiarity is not that meaningful for young consumers
Figure 12: Attitude towards familiarity
What we think
ISSUES AND INSIGHTS
Unmanned stores are not a ‘pull’ product
The facts
The implications
Pop-up stores are in
The facts
Figure 13: YSL Beauty Club on The Bund
The implications
Figure 14: TISSOT bus for 5.20
Vending machines are good for diversified submarkets
The facts
The implications
Figure 15: Farmers Fridge in downtown Chicago
THE MARKET – WHAT YOU NEED TO KNOW
Market overview
Market drivers and challenges
Who’s innovating
MARKET OVERVIEW
Unmanned stores – Need to better understand consumer behaviour and needs
Community-based unmanned stores
Full-service unmanned stores
Fresh food and drink unmanned stores
Vending machines – Great potential for cost-effective solution to reach customers
Mini karaoke booths – Popular new entertainment
Self-service makeup rooms – Sanitation is a key concern
Figure 16: Interior of seventeen beauties
Micro gyms – A community-oriented social space
Figure 17: Pure Run mini workout pod
Figure 18: Park Box in a high-end residential community
Figure 19: Supermonkey warehouse gym
Mystery boxes – Driven by curiosity
Figure 20: Mr. Wish mystery box vending machine
Pop-up stores are powerful sales and marketing tools
Figure 21: Mojosh’s pop-up event at Jiuguang department store
Figure 22: Nutella’s pop-up event in Hong Kong
Figure 23: Prada’s exclusive bar
Figure 24: CoCo game center
MARKET DRIVERS
IoT ecosystem in China is pushing for retail revolution
AI and consumer data are shaking up retail
Real estate industry is looking for next growth opportunity
Figure 25: Self service area at metro station
Government support for New Retail formats
CHALLENGES
Consumer-centric experience is king
Barrier to entry is on the higher end
WHO’S INNOVATING?
Just temporarily exclusives
Figure 26: Burberry tram cruising the streets of Hong Kong
Figure 27: Weddings day for singles
Mixing & matching is an interactive advertising tool to drive traffic
Figure 28: Pop Mart vending machine at a shopping mall
Figure 29: Pop Mart’s physical store near a public university in Shanghai
Figure 30: Vita water station in Hong Kong
THE CONSUMER – WHAT YOU NEED TO KNOW
Unmanned stores are still very new to customers
Management and self-employed are active users of meal vending machines with heating systems
Mystery boxes are kids’ favourite
Married with kids are loyal customers of mini karaoke booths
Convenience in beauty is growing
Micro workout pods are about excising in your own time
INNOVATIVE FORMATS
Unmanned stores
Most surveyed consumers have not tried New Retail formats but show huge interest
Figure 31: Interest and trial of New Retail formats
Unmanned stores show strong promise in lower tier cities
Figure 32: Interest in unmanned stores, by city tier
Unmanned stores can be futuristic and retro at the same time
Figure 33: Interest and trial of unmanned stores, by generation
Figure 34: Interest and trial of unmanned stores in tier one cities, by generation
Kids can be a deciding factor
Figure 35: Interest and trial of unmanned stores, by children in household
Meal vending machines with heating systems
Overtime work meals are best fit for self-heating vending machines
Figure 36: Interest and trial of meal vending machines, by employment
Mystery/lucky box vending machines
Mystery boxes are designed for curiosity seekers
Figure 37: Interest and trial of mystery/lucky box vending machine, by family structure
Mini karaoke pods
Married consumers with kids are loyal customers of mini karaoke booths
Figure 38: Interest and trial of mini karaoke visits, by family structure
Self-service makeup touch-up vending machines
Convenience in beauty is growing
Figure 39: Marie Dalgar’s collaboration with Tmall
Figure 40: Interest and trial of self-service makeup room, by gender and age
Micro workout pods
Micro gyms are about excising in your own time
Figure 41: Interest and trial of workout pod, by household income
Lower tier city residents are fond of community
Figure 42: Interest and trial of micro workout pod, by city tier
Figure 43: Interest and trial of mini workout pod, by children in the household
CONSUMER MOTIVATIONS
Innovative retailing is an extension of experiential retail
Figure 44: Triggers to shop at New Retail channels
Entertainment and trendiness are two game changers in lower tier cities
Figure 45: Reasons to shop at New Retail channels
Understanding what consumers want is the key for New Retail formats
Figure 46: Barriers to New Retail channels
Lower tier city citizens are more practical
Figure 47: Barriers to New Retail channels, by city tier
NEW RETAIL SERVICES
Self-checkouts and self-ordering are new norms
Figure 48: Interest and trial of New Retail services
Lower tier cities are more open to self-checkouts and self-ordering
Figure 49: Interest and trial of self-checkout, by city tier
Families with children open to self-ordering
Figure 50: Interest and trial of self-order, by family structure
Virtual product trials a trend in the making
Figure 51: Interest and trial of virtual trial of products, by gender and age
Gender plays an important role when it comes to product recommendation
Figure 52: Interest and trial of product recommendations by smart devices, gender and age
POP-UP STORES
New experiences grab consumer eyeballs
Figure 53: LV pop-up
Exclusivity, familiar brand and attractiveness are three pillars
Figure 54: Zhihu pop-up
Figure 55: Reasons to visit pop-ups
Social media is the information channel
Figure 56: Silk Mix Beijing Stage
Figure 57: Silk Mix Online Program
Figure 58: Silk Mix pop-up event
City tier plays a role in pop-up formats
Figure 59: Reasons to visit pop-up stores, by city tier
CONSUMER ATTITUDES
Self-service represent efficiency and convenience
Figure 60: Attitude towards self-service
Product recommendations by smart devices gaining popularity
Figure 61: Attitude towards product recommendation
Figure 62: Attitude towards product recommendation, by generation
Familiarity is not that meaningful for young consumers
Figure 63: Attitude towards familiarity
Figure 64: Attitude towards privacy, by age
Singletons and couples seek new experiences while families look for the safe option
Figure 65: Attitude towards peer review
Figure 66: attitude towards peer review, by family structure
MEET THE MINTROPOLITANS
Shopping futurists
Figure 67: Attitude towards product recommendation, by consumer classification
Figure 68: Attitude towards self-service, by consumer classification
Figure 69: Attitude towards peer review, by consumer classification
They are an open minded bunch
Figure 70: Attitude towards price, by consumer classification
Figure 71: Pop-up stores participation, by consumer classification
APPENDIX – METHODOLOGY AND ABBREVIATIONS
Methodology
Fan chart forecast
Abbreviations