- May 13, 2021
- Business Update
JD Emerges as Key Omni-channel Player: eMarketer Report
by Kelly Dawson
In-store shopping has proved its staying power in China after the pandemic initially accelerated ecommerce business last year, with JD.com emerging as a key player in driving omni-channel efforts, according to a new report released last week by market research firm eMarketer.
While the rapid growth of e-commerce has received more attention, omni-channel offerings have also quietly accelerated during the same period.
The report pointed to JD’s partnership with household appliance retailer Gome, which enables customers to purchase products at Gome’s physical stores through the JD platform, as an example of omni-channel innovation. Additionally, Gome opened its digital flagship store on the JD platform.
JD is also facilitating the expansion of luxury brands into the ecommerce space via omni-channel. Shoppers who want to buy a Prada purse can visit an offline store for the upscale ambiance of a luxury store, and then later purchase the item online through JD, with a guarantee that it will be delivered from the same store at which they viewed the purse.
“It’s unlikely that physical retail [in China] will become obsolete, just changed,” said Jade Hsiao, program director of China-based innovator community XNode, in the report. “For large retailers, factors like understanding more about your customers—from even before they first enter your store—and building a data lake to send to a centralized retail ‘brain’ become ever more important. And accurately predicting both customer preferences and influencing factors has become a priority. That’s why we’ve also seen a rise in artificial intelligence technology, such as precision marketing and chatbots, to improve decision-making.”
How retailers choose to deploy tech in both online and offline settings will be key to their success, the report noted. For example, contactless last-mile delivery has the potential to transform the industry— with one example being JD’s city-level autonomous delivery robot project in Changsu, Jiangsu province, in which the robot drives itself from JD’s delivery station on a self-planned route based on the parcels’ destination addresses.
JD has long known ecommerce’s limitations and has thus offered omni-channel solutions to retail partners, the report noted.
JD’s omni-channel approach extends across multiple categories and industries, with over 12,000 offline home appliance experience stores across China and another 20 stores planned in first-tier cities by 2025. These offline stores play an important role in the company’s expansion into lower-tier markets, where customers are still acclimating to online shopping. Customers can also access post-sales services at the offline stores.
JD’s omni-channel strategy has also been a key factor in ensuring ever faster delivery. While the traditional retail model (still prevalent in many countries including the US) relies on a few major warehouses, JD’s extensive network of offline stores combined with advanced logistics have drastically shortened delivery time to consumers.
JD Retail CEO Lei Xu has said that omni-channel will remain a key strategy for the company.
“The significance of JD’s omni-channel strategy is to improve overall retail efficiency in a wider range of new formats and scenarios, meet consumers’ diversified and instant purchases of goods and services, and create value for merchants and consumers. We believe that the penetration rate of omni-channel and instant consumption models in different industries will continue to increase in the future. The industry space is huge.”