Future Retail Ready Now

The most transferable lesson from China needs no robot, no app and no capital budget.

We went to China expecting the future of retail to be technological. Robots, AI livestream hosts, palm payments - and yes, we saw all of that. But when our delegation compared notes at the end of each day about what had genuinely raised the bar, the conversation kept landing somewhere far less futuristic.

It was people.

Human is the new luxury

China is automating faster than almost anywhere. We were told more than 70,000 JD merchants now run AI livestream hosts at about a tenth of the cost of a human presenter, and that fashion brand Semir halved its customer service team after switching to Alibaba's AI service agent. Robots clean stores and patrol them overnight.

Yet in the 22 stores we walked, people were everywhere. Stores were well staffed. Personal shoppers were standard rather than a VIP perk. Product had room to breathe, and there was a café in almost every store. Before you left, the sales associate had added you on WeChat, so the conversation carried on after you'd gone. Paying was so quick you barely noticed it. And this was just as true in mid-market mall stores as in the big flagships. Oh and I loved that everywhere I shopped they gave me a gift – from a bookmark, candle or sweets – I was “thanked” for being a part of the relationship.

That's the strategy. Use technology for the jobs customers don't care about - the admin, the content, the wait at the till - and put the savings into what they do care about: someone who knows the product, remembers you and follows up. As machines take over the transaction, the human part becomes the premium. Even AgiBot, who make humanoid robots, told us their in-store robot is little more than a greeter. A person still makes the sale.

Birkenstock's first community store in China, in Shanghai, is a good example. There's no giant LED screen or five-storey set piece. Instead, you get a proper footbed fitting area (styled like a traditional Chinese medicine cabinet), a foot spa, personalised engraving and help caring for your shoes. A long-established European brand moving upmarket through service.

We can't copy China's staffing levels, and I'm not suggesting we try. But a lot of retail here has spent the past decade going the other way - fewer people on the floor to protect margin, and more technology that makes the customer do the work. In China it's largely the reverse: the technology sits behind the scenes and the people are out front. That's a choice any retailer can make.

A question for next week: if AI gave your team back a fifth of their week, would you spend it on the customer?

The store is the media channel

Chinese shoppers are being careful. Retail sales rose only 0.6% in July. Look closer, though, and the money is moving rather than disappearing. Spending on traditional luxury and anything linked to housing is down. Spending on experiences, health, collectables and good value is up. Maggie Wang, who briefed us on the Chinese consumer, said value now comes down to two things: is the quality worth the price, and how does it make me feel? Shoppers won't buy poor quality however cheap it is, but they will pay more for something that gives them a lift.

That helps explain MINISO LAND on East Nanjing Road. MINISO is a value retailer, yet it has built a 2,000 sqm, three-storey store full of toy-like fixtures and fairground-style displays. It's reported to have taken more than RMB 100 million in its first nine months, with character and licensed product making up 83% of sales. The store itself is the advertising.

At 13DE MARZO on Anfu Road, every drink comes with a collectable teddy bear keyring. No seating, takeaway only, and queues every day. It's a fashion brand using a café to win new customers, and the bear does the marketing.

At Anta's Sneakerverse, shoeboxes drop down a bronze chute from the stockroom straight to the counter. China's biggest sportswear group is using a bit of theatre, rather than discounting, to be taken seriously as a premium brand.

I'm not suggesting every New Zealand retailer needs a bear. But it's worth asking: what happens in our store that a customer would want to tell someone about? What made it “worth the trip.”

The store's real job is the relationship

The second thing that surprised me was how many of the best stores weren't chasing sales at all.

Huawei's global flagship in Shenzhen is the only store in the world Huawei runs itself. It's split into six zones, including space for public talks, business meetings and simply hanging out, and Huawei's executives describe it as a city living room. Xiaomi has put its store at the base of its global headquarters. NIO House looks nothing like a car yard: upstairs there's a library, co-working space, a café and room for owners' birthday parties. NIO calls it a second home.

Three tech brands, three very different stores, and the same idea behind them: build the relationship and the sales will follow.

On Running suggests it works. China is now On's second-largest and fastest-growing market, with net sales up 96.4% according to the company, and it got there through run clubs organised on WeChat and athlete-led events rather than big advertising spend. On is trialling its bigger experiential store format in Shenzhen first, before rolling it out globally.

Online and offline also work as one. At Hema, more than 60% of purchases go through the app, including by people standing in the store. At JD MALL, search for something in the app and it sends you to your nearest store; scan a QR code in store and it's delivered to your door. Chinese retailers assume the relationship started online before you arrived and will carry on after you leave.

Doing less, better

None of this means doing everything at once. Some of the best lessons came from businesses that tried that and pulled back.

Hema, Alibaba's showcase for blending online and offline grocery, went through as many as twelve store formats, including a much-criticised switch to discounting. A new CEO cut that back to two, and Hema posted its first full-year profit.

On Wujiang Road, fresh snacks shop I'M SNACK? stood out in a category full of gimmicks by keeping things simple: clean shelving, a calm layout and the product front and centre. Test, try, and recommend. A few doors down, AMAM's London-themed bakery has had queues every day for more than a year, but regulators also ordered it to cover its open food displays after a food-safety complaint. The buzz brings people in, and it comes with risks.

Permission to ship

We never asked a host about culture, and it came up in every session anyway.

ByteDance's guiding value is "have context, not control". Everyone's goals are visible across the business, and decisions are made by the people closest to the work. Every company we met talked about going from idea to launch in weeks. Nobody mentioned a steering group.

ByteDance had a good line on AI too. People feel ten times more productive using it, yet no company has become ten times more valuable, because the AI doesn't know enough about the business. Ask it for a report and you get a template. Give it your own operational data and you get a real report.

That's what I'd most like to see more of in New Zealand retail: people trusted, and given the information they need, to get on and try things.

Three things I'm still thinking about

A few things from the trip don't sit neatly in either the "bring it home" or the "leave it there" pile.

The first is WeChat. On paper, running your whole customer relationship through one app looks risky (well that is what the chatter said). If the platform changes its rules, you're exposed. But standing in those stores, I loved it. The customer lives in one place. One login covers finding you, paying you, collecting points and getting help. No app to download, no password to remember. Brands run their own mini programs inside WeChat and keep their customer data, which is exactly why Uniqlo moved there. After years of selling through marketplaces, it wanted to know who its customers actually were.

So is that dependency a real risk, or something we don't fully understand from the outside? I think it's a bit of both. And we're hardly platform-free here. Most retailers already rely on Google, Meta and Apple to be found and to get paid - our customers just have to stitch it all together themselves. The better question for New Zealand retailers is whether we make it easy for customers to stay with us in the places they already spend their time.

The second is robots. The humanoid greeter got the photos, but AgiBot were clear about where the money is today: cleaning, security patrols and brand activations. They're now training robots for harder jobs like shelf replenishment and heavy lifting. Each task takes around a thousand hours of training, and every planogram change needs about three days of retraining, so it's slow, expensive work. But it's real, and it's coming. The lesson for us is to start where a robot genuinely adds value, rather than where it looks impressive.

The third is regulation. AgiBot and JD both told us Australia's privacy and product-compliance rules are slowing their plans there, and AgiBot is building local infrastructure in Sydney so customer data stays onshore. New Zealand has similar protections. It's tempting to see that as a moat that keeps the big platforms out and gives local retailers a trust advantage.

I'd be careful what we wish for. The same settings that slow overseas players down slow us down too. China is moving at the pace it is partly because businesses are allowed to test things with real customers - Alipay has reported processing 120 million payments started by AI agents in a single week. Here, only 12% of ANZ retailers say their data is ready for AI, and around two-thirds of Australian shoppers are uncomfortable letting AI complete a purchase for them. Trust is a genuine strength. It just won't protect us if we use it as a reason to wait.

Ready now

Most of what impressed us in China isn't years away. It's happening now, and much of it doesn't need a big technology project or capital spend. It needs leaders to make some choices.

Four questions to take into your next leadership meeting:

• Where could we put people back in front of customers, and who will make it happen?

• What happens in our store that's worth telling someone about?

• Does the relationship carry on after the customer leaves, or stop at the till?

• How long does it take us to go from a good idea to a live trial, and who has to sign it off?

  
  

Coming up in the series

Next, I'll look at China's big box retailers and what they tell us about formats we know well here, from Bunnings to Kmart to the weekly grocery shop. After that, why having no presence on RedNote could be costing you customers in Auckland, and what Temu's move to local warehouses and local sellers could mean for New Zealand retail.

Each part will also go up on The X-Files Unedited on LinkedIn, so follow along there and join the conversation.

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