JD.com's AI-Powered Smart Retail Technology Wins Innovation Award

JD.com, as an innovative enterprise deeply integrating physical and digital economies, has demonstrated its natural ability to solve problems in traditional offline retail. Since last year, JD.com has set a goal to transform into a retail infrastructure service provider and proposed the strategy of boundaryless retail to break down barriers between people, goods, and places.

Recently at the 2018 Innovation Impact Forum, the China Association for the Promotion of Industrial Development (CAPID) awarded JD.com a special award for technological industrialization in intelligent retail innovation. This is also the first enterprise in the e-commerce industry to receive this award. JD Group Senior Vice President Ma Song stated: "JD.com's smart retail technology enables online and offline to be fully integrated. Through digital technology, merchants can transform from experience-based to intelligent operations. Through the application of big data and algorithms, resource allocation becomes more optimized and efficient. This drives traditional offline stores to transform. By the end of last year, this project had helped numerous offline physical stores achieve digital upgrades, driving direct and indirect economic benefits of hundreds of billions of yuan."

Digital technology, as an important means to accelerate industrialization, has brought many changes to offline store upgrades. Open intelligent decision-making technology uses data mining, big data analysis, and data modeling analysis to encapsulate technology into universal components through technical innovation, and quickly assembles components into systems through a building block approach. Under the guidance of this innovative thinking, JD.com has designed and created a complete e-commerce intelligent retail management system. It provides a series of operational decision support for traditional retail stores, from store site selection to product selection. Based on this, it provides data and AI-related value-added services, and fully opens JD's online e-commerce software, hardware, and service capabilities to offline stores.

With the rapid growth of offline store business scale, channel sinking has become the company's strategic direction. The speed of manual site selection and store opening can no longer meet the demand for rapid business growth. Currently, site selection for offline retail and vending points relies on manual decision-making, which cannot fully leverage the capabilities of boundaryless retail. Through intelligent site selection technology, relying on JD's big data, intelligent analysis of user location and consumption data in the surrounding living area is conducted, using machine learning algorithms and user behavior analysis technology to accurately extract areas suitable for business store opening, greatly improving the intelligent decision-making capabilities of the business.

Inside stores, JD.com has created unmanned shelf technology. When users pick up goods, the system can automatically identify the goods and settle accounts. Based on machine learning, big data, biometric recognition, IoT, and other technologies, it comprehensively uses technologies such as facial recognition, gravity sensing, intelligent inventory management, and intelligent advertising screens, showing outstanding performance in convenience, scene application, and product category selection, and can be combined with offline retail to create a complete solution for full-scene, full-time, and full-category consumer shopping needs.

Professor Zhao Xiande of Operations and Supply Chain Management at China Europe International Business School once said: "If the competition in the first half of e-commerce is a platform war, then the second half should be called a supply chain war. In the end, who can go further often depends on the cost and efficiency of the supply chain." JD.com's supply chain technology has always maintained a leading position in the industry. Since last year, JD.com has opened its supply chain technology to the outside world and created an intelligent supply chain technology service platform. It provides services such as intelligent replenishment, intelligent pricing, and intelligent inventory management to more enterprises.

Today's supply chain management faces complex challenges brought by multi-category, multi-level network, high-frequency transactions, and weak constraint relationships, and traditional ERP and SCM systems can no longer solve complex business problems. The intelligent supply chain technology service platform extensively applies technologies such as machine learning, deep learning, blockchain, IoT, human-computer interaction, computer vision, and emotion and semantic analysis, deeply combining AI, cloud computing, big data capabilities with vertical domain knowledge to form a series of supply chain decision-making tasks for product selection, product pricing, demand forecasting, planning management, procurement management, inventory management, delivery management, capacity management, network planning, and product anti-counterfeiting traceability. Taking JD's self-operated consumer goods system as an example, as of the end of May 2018, intelligent product selection has optimized the product structure of nearly 300 third-level categories, intelligent inventory's purchase, sales, and inventory decisions cover 70% of small and medium-sized warehouses and 100% of large-sized warehouses, the automation rate of intelligent replenishment reaches 85%, the automation rate of inter-warehouse transfer in warehousing networks is above 85%, dynamic pricing covers more than 80% of long-tail products, ensuring a 99% in-stock rate for home living categories while reducing overall inventory by 1.6 days. In the inventory management of nearly 4 million types of books, the adoption rate of intelligent sluggish product handling suggestions reaches 100%, with GMV and gross profit margin increasing by billions of yuan.

Traditional retail has long had problems such as slow informatization and low intelligent operation levels, forming a sharp contrast with the excellent shopping experience brought by rapidly developing Internet e-commerce to users. With the promotion of JD.com's boundaryless retail strategy, integrating digital technology into offline scenarios, it has brought solutions for traditional retail upgrades, breaking through the limitations of traditional retail in space and time, and greatly improving the operational efficiency of traditional retail.

In JD.com's view, boundaryless retail makes scenes unlimited, goods boundless, and people and enterprises without barriers. In the traditional retail concept, a store is actually just a place where consumers need to come here to buy, goods need to be transported here for sale, and brand merchants and retailers' terminal transactions are also concluded here. This is the boundary of traditional commerce's scenes. The goods produced must be transported to the store, which is the boundary of goods. People will be limited by the distance to the store, which is the boundary of customers. Future retail will break through the boundaries of traditional commerce under the drive of technologies such as artificial intelligence, IoT, and big data, enabling people, goods, and places to achieve multiple asynchronous synergies. The so-called asynchronous synergy means breaking the boundaries between people, goods, and places, making the purchasing process no longer constrained by time and space, and allowing the evolution of traditional industries to have no boundaries.