Skip to content
MarketScale
‹ Back to Industries

Retail

An Inside Look at How Alibaba Uses Technology to Improve Customer Experience

While online sales penetration in China is the highest in the world, brick-and-mortar businesses still make up more than 80% of their total retail sales. This is due in part to Jack Ma’s “New Retail” concept which he unveiled two years ago, melding the best of both the in-shop and online experiences together. Ma is…

This story was produced through MarketScale. See how Retail teams put it to work with Sales Enablement.

Share
An Inside Look at How Alibaba Uses Technology to Improve Customer Experience

While online sales penetration in China is the highest in the world, brick-and-mortar businesses still make up more than 80% of their total retail sales. This is due in part to Jack Ma’s “New Retail” concept which he unveiled two years ago, melding the best of both the in-shop and online experiences together. Ma is the founder of Alibaba which operates the country’s largest e-commerce platforms and has more than half a billion consumers shopping on its marketplaces.

According to Jeffrey Towson, a Peking University professor and private equity investor who closely follows the development of China’s retail sector, “‘New Retail’ is a bold extension of Alibaba’s strategy of pure digital competition into the physical world. And It hinges on the strange ‘economics of participation’…’New Retail’ means a massive expansion in their brands and merchants and in the participation and activities of their consumers.”

  • Alibaba Changes Grocery Shopping

While Alibaba’s Hema supermarkets look like most other grocery stores, they are instead a smartphone-powered experience. Patrons use phones to scan barcodes to get product information and make cashless payments via the Alipay platform embedded in the Hema app.

  • Alibaba Simplifies Car Buying

Rather than several visits to countless dealer locations facing aggressive sales tactics, Alibaba has rolled out its first “auto vending machine” with Ford in the southern city of Guangzhou. The Ford auto vending machine provides a no-pressure experience where customers browse vehicles, select and pick up models to test drive for three days, then make a dealer appointment when ready to buy.

  • Alibaba Increases Patronage in Malls

The New Retail concept has also upped the game for China’s malls. “Virtual shelves” allow customers to choose the merchandise they want, and if the color and size isn’t in stock, they can scan with an app to have the exact product delivered directly to their homes. Further, powder rooms are equipped with “magic mirrors” that allow customers to virtually apply makeup then make purchases from vending machines.

Other Retailers Bitten by Digital Interactive Technology Bug

  • Cosmetics brand Charlotte Tilbury is another brand that put the “magic mirror” on the wall. When customers sit in front of the AR mirror it scans an image of their face, which then virtually applies ten of the brand’s iconic looks in under a minute.
  • Lacoste’s LCST AR mobile app allows customers to virtually try on shoes and create AR experiences with window displays, in-store signage, and promotional postcards.
  • American Apparel’s mobile app-driven experiences also encourage engagement with in-store signage and displays, and their product scans provide details, reviews, color options, and pricing.
  • Timberland drives more foot traffic with their virtual fitting room that becomes one of the store’s main window displays.
  • Toys “R” Us created a “digital playground” targeted towards kids. With the downloaded mobile app, children can unlock AR-enabled activities and bring mascot Geoffrey to life.

Digital signage campaigns that simply stream video loops or product image slideshows are becoming more and more passé. To be successful, retail digital signage must embrace cutting-edge interactive technology and the “Era of Experience” to stand out from other screens and keep customers coming back. Digital interactive technology has the collaborative power to extend shopper dwell times that can strengthen product sales while bringing the brand back in to the shopping experience.

New to MarketScale?

MarketScale is the platform Retail companies use to turn their own experts into content like this. Want the short overview?

Free workspace

You just read one expert. Imagine publishing your whole team.

This article was produced through MarketScale. Create a free workspace and turn your own team's expertise into articles, video, and social posts. No credit card, no demo required.

NPS +73 · 1,000+ creators · 38+ countries

What you get, free

Your own MarketScale Studio workspace
One video edit a month, on us
AI writing, editing, and publishing tools
In-platform coaching to learn the system

More Retail Insights

B2B ecommerce pulse: AI agents, marketplace expansion, and digital investment drive mid-2026 momentum

B2B ecommerce pulse: AI agents, marketplace expansion, and digital investment drive mid-2026 momentum

B2B ecommerce is accelerating into the second half of 2026, driven by concrete AI deployments, marketplace expansions, and measurable gains from digital investment. The global B2B ecommerce market reached $20.4 trillion in 2024 and is forecast to hit $36.1 trillion by 2031, providing the macro backdrop for a string of notable mid-year developments. Kawasaki Engines USA's reported 500% average-order-value increase and Global Industrial's 9.2% Q1 sales growth illustrate the real-world stakes of getting digital infrastructure right.

  • 01Kawasaki Engines USA reported a 500% increase in average order value through its B2B ecommerce channel, according to Digital Commerce 360's coverage of Salesforce Connections 2026.
  • 02The global B2B ecommerce market reached $20.4 trillion in 2024 and is projected to reach $36.1 trillion by 2031, per Grand View Research via Creatuity.
  • 0372% of organizations reported adopting AI in at least one business function in 2025, up from 55% in 2023, according to McKinsey's State of AI report.

Jun 18, 2026

Zero-click commerce arrives: AI agents set to intermediate $15 trillion in B2B purchases by 2028

Zero-click commerce arrives: AI agents set to intermediate $15 trillion in B2B purchases by 2028

Gartner predicts that AI agents will intermediate $15 trillion in B2B purchases by 2028. As a result, businesses will need to reconsider their approaches to data management, discovery, and digital infrastructure. This shift indicates a significant transformation in how B2B transactions are conducted using AI technology.

  • 01AI agents will manage $15 trillion in B2B purchases by 2028.
  • 02Businesses must revamp data, discovery, and digital infrastructure.
  • 03AI technology is changing the landscape of B2B transactions.

Jun 17, 2026

Zero-click commerce: AI agents set to intermediate $15 trillion in B2B purchases by 2028

Zero-click commerce: AI agents set to intermediate $15 trillion in B2B purchases by 2028

A Gartner projection cited by commercetools places $15 trillion in B2B purchases under AI agent mediation by 2028, pushing procurement entirely past the traditional vendor storefront. Adobe Digital Insights data shows AI-referred traffic already converts 42% more often than non-AI visits as of March 2026 — a full reversal from a year earlier. Together, the figures signal that agentic and AI-assisted commerce have moved from pilot phase to structural infrastructure priority for B2B organizations.

  • 01Gartner forecasts AI agents will intermediate $15 trillion in B2B purchases by 2028, according to commercetools — compressing the timeline for commerce infrastructure upgrades.
  • 02Adobe Digital Insights found that AI-referred traffic converted 42% more often than non-AI traffic in March 2026, reversing a trend from just one year prior.
  • 03Only 18% of B2B companies describe their AI commerce maturity as 'advanced,' according to Boston Consulting Group, leaving most organizations exposed to fast-moving competitors.

Jun 17, 2026

Explore More Retail Insights

Read more expert perspectives from across Retail.

Browse Retail Hub