Oct 6, 2020|

Supply Chain Chief Scientist, Dr. Max Shen, Unveils the Inside Story of JD.com’s Omni-channel Solution during COVID-19


“The biggest change in the retail industry is users shifting from a centralized platform to multi-end shopping scenarios,” said Dr. Max Shen, supply chain chief scientist of JD.com, during a keynote speech titled “Embrace the Change of the Digital World: Growing Omni-channel” at NAEOS20 on October 5th, which was held live online.

During his remarks, Dr. Shen introduced the structure and capabilities of JD’s omni-channel business solution, and put forward a theoretical framework of the future supply chain.

JD.com’s omni-channel solution

Dr. Shen explained that JD’s omni-channel business solution has grown with changes in the consumer market. In the past, consumers mainly shopped at offline supermarkets, stores or online centralized e-commerce platforms. Nowadays, shopping has expanded to various retail scenarios such as social e-commerce, content e-commerce, and live broadcast e-commerce.

“JD’s omni-channel solution links multi-end scenarios through its supply chain capabilities, commodity trading capabilities and member marketing capabilities,” he said. “By reconstructing the elements of products, places, and people, JD.com provides consumers with a richer product selection, more convenient shopping experience and delivery services to meet the omni-channel needs for consumers to shop anytime, anywhere.”

Products: Combine online and offline orders, inventory and fulfillment capabilities to achieve omni-channel fulfillment services 

JD’s omni-channel fulfillment service can undertake orders from multiple sources both online and offline, mobilize warehouse and store inventory, and distribute capacities of upstream suppliers and third-party delivery companies. Through optimizing the algorithm, a better fulfillment path will emerge with optimized cost, timeliness, and a better fulfillment experience. In the past, when a user placed an order of daily necessities on JD.com, the product had to be delivered to the user through a series of processes such as JD’s warehouse, sorting center, and delivery station. However, through an omni-channel solution, the system would use an intelligent algorithm when matching inventory on JD.com. The most cost-effective, geographically convenient solution will be chosen, and the package will be delivered to the customer within 20 minutes. Through this cooperation, JD.com and partners have not only reduced the cost of order fulfillment, but also improved the user experience.

Places: Strategic integration of online and offline data among millions of stores

JD.com has completed the integrated layout of online channels and offline business formats, including JD’s online app, JD’s offline home appliance, experience shop JD Home, SEVEN FRESH and more, as well as cooperative convenience stores. In these scenarios, JD can build a comprehensive user behavior path through online user big data and offline user behavior, and create a closed-loop shopping experience that combines both online and offline data.

Taking SEVEN FRESH as an example, the store has added easy-to-operate QR code payment, self-service POS and a smart replenishment system.

JD.com is providing consumers with a more convenient, comfortable and personalized shopping experience through strategic integration of online and offline data.

People: Precise marketing for all users

In terms of membership marketing, JD can help brand partners achieve global user precision marketing, including user identification, crowd insight, user benefit design, membership system construction, distribution and monitoring of marketing activities and more.

A peek into the future supply chain

The epidemic has pushed JD to think more about the future supply chain capabilities. “The supply chain of the future is a supply chain driven by demand, functions with open coordination and agile responses,” Dr. Shen said.  “JD.com will focus on strengthening the user insight capabilities, deepening the collaboration, and optimizing the efficiency between supply chain collaboration nodes. By seeking certainty out of uncertainty, JD.com aims to improve the efficiency and agility of the entire supply chain.”

In terms of strengthening user insight capabilities, JD.com has built a new C2M customization platform for new products. Based on JD’s massive user data, it has in-depth insights into user needs. Through new product development, industrial design, simulation trials, launch and precision marketing, this approach provides an innovative path for new product development. Compared with traditional methods, the JD C2M customization platform can reduce product demand investigation time by 75%, and new product launch cycles by 67%.

In terms of deepening collaboration, JD’s supply chain is not only connecting partners together, but also collaborating with upstream and downstream enterprises in related industries to achieve continuous business innovation through open data, open process and open capability.

Optimizing the efficiency between collaboration nodes through big data technology and artificial intelligence algorithms, JD.com aims to realize the digitalization of business processes, the automation of operation execution, and intelligent decision-making, so as to improve the efficiency of the supply chain.

The future omni-channel supply chain must be an open and collaborative supply chain. JD is actively working to open up various capabilities and cooperating with partners to build an omni-channel business ecosystem.