Daily Insights

The World’s Smart Store Capital

By: Liz Flora | Mar 22, 2019

For multinational consumer brands getting in on the smart store trend, one of the first places they’re heading is China.

Nike, for example, chose Shanghai as the first location globally for its House of Innovation flagship, which is profiled in detail in Gartner L2’s Activewear: China Insight Report. Visitors who sign up for the NikePlus membership online can try on the brand’s shoes to perform exercise drills in its Center Court area. Their scores are digitally recorded and sent to them on WeChat, giving them the opportunity to show off their athletic prowess to friends. Users can also book styling appointments online and scan in-store QR codes to be entered in product launch lotteries. The store’s digital features even extend to the dressing room, where shoppers can change the lighting concept. Other activewear brands that have invested in digital store features include adidas and Chinese label Li-Ning.

In the jewelry sector, Swarovski recently chose the southwestern city of Chengdu as the second location for its digitally integrated “forerunner” store concept, which features AR “magic mirrors” connected to Chinese social media platforms. Users have the opportunity to virtually “try on” the brand’s jewelry at one life-size screen, while another one allows them to take selfies with branded stickers.

While a growing number of luxury brands are offering omnichannel features, the practice is still not widespread, according to Gartner L2’s Digital IQ Index: Luxury China. In order to encourage store foot traffic, 29% of brands now allow users to check inventory for a specific store on their sites, while just over a fourth offer online store appointment booking.

Alibaba’s B2C e-tailer Tmall is also enlisting brands to use its smart store technology, which has been adopted in a range of brands across sectors including clothing retailer Gap, electronics brand Bose, K-beauty brand Innisfree, and luxury automaker Maserati. At the Innisfree x Tmall New Retail Store in Hangzhou, users can virtually try on makeup with magic mirrors, receive digital “smart skin” analysis, buy discounted face masks through a QR-code vending machine, and more.

With a tech-savvy population that includes many digitally native young shoppers, China is a key global testing ground for smart stores. While the practice of adding digital features and online-offline integration to stores is growing, brands that adopt them soon will still be ahead of the curve.