Using your phone as a wallet is old hat in China. Using it as a checkout counter? Not so much yet.

But a prototype solution is in the making, and before large-scale adoption is off the ground, it has received early recognition from perhaps the world’s most independent and rigorous critics.

In March, Germany-based iF Design Award, a key industry parameter, has granted WeChat Pay the laurel of being highly “customer-centric” for its smart retail innovation known as “Scan& Go”.

As its name suggests, the function embedded in WeChat allows shoppers to check out without queuing at the cash register, shortening the payment procedure and overall increasing the turnover of shops.

To be more specific, the function enables customers to scan the bar code on items and bag these goods, including produce, while they shop and pay directly with their smartphones, according to a press release from WeChat.

“All parameters of the good user experience are met in this service design, including touchless access, efficiency or ease-of-use in scanning of market products and the final payment and checkout. This is user-friendly design at its best,” said the award committee in a statement.

Early adopters have emerged. WeChat said it is extending such smart checkout systems to retailers from global names like Walmart to local houses such as Yonghui.

While QR code payment is yet to find mass appeal in the West, it has become a daily essential for consumers in China. According to consultancy eMarketer, almost 80 percent of smartphone users in China will be tapping, scanning and swiping at the point of sale or PoS by 2021. That is set to contrast with 30.8 percent in the United States and 22 percent in Germany.

And services can go beyond payment per se to include product recognition, customer relations management, even advertising, when merchants tie in with WeChat’s Mini Program, an array of built-in functionalities connecting users across a wide spectrum of online and offline services.

“We see Mini Program as an important tool to empower merchants and brands in acquiring traffic at a lower cost through WeChat’s large social network,” said Karen Chan, an equity analyst from Jefferies Group, in a report.

Global retailers are scrambling to leverage technologies to navigate the world’s biggest consumer market. For instance, Walmart’s WeChat Mini Program now has over 30 million members and is developing an e-commerce service based on WeChat to help customers shop more easily and more accurately.

Wern-Yuen Tan, president and CEO of Walmart China, told China Daily earlier this month that the company is moving from intuitions and experience of the local operation team to the use of technology like artificial intelligence and big data in order to pinpoint customer needs.

As China enters the new consumer economy era, three aspects of its retail industry are being transformed: geographic location, population and technology, according to a latest report from global advisory and audit firm KPMG.

“Retailers have to rethink their business models and positioning strategies, and establish customer-focused business operating systems in order to remain competitive during the transformation process,” Jessie Qian, sector head of consumer markets at KPMG China.

Many are swarming the digital trend. French hypermarket chain Carrefour SA opened its first smart retail store last year in Shanghai, featuring technologies ranging from facial recognition payment to personalized mobile advertisements backed by Tencent.

With a staggering 1 billion users, Tencent can claim its marketing prowess is something no-one can ignore. It is backed by an entire suite of digital marketing tools built into WeChat, from Mini Programs, advertising placements on WeChat Moments (a Facebook-like mobile feed on news and information), as well as Tencent Video.

“Consumption data collected via WeChat Pay can help us pinpoint customers and predict their preferences. We can feed promotional deals to attract new customers, or push in-app notifications to engage with recurring shoppers,” said Tian Jiangxue, deputy general manager in charge of strategy at Tencent Smart Retail.

Experts believed that digitalization is not simply the application of informational tools but requires more “systematic transformation” at the corporate level.

“This means changes are expected in business models, operating systems, and even corporate culture,” said Gao Shulin, chairman of Rainbow Department Store Co Ltd.

For instance, Carrefour and Tencent have joined hands to shoot specialized shows featuring gourmet food and have them distributed via multiple channels including Tencent’s own video platform.

This means the tie-in requires not only coordination from the traditional sales departments but engagement perhaps with media and digital departments.

And Tencent is blazing the trail in offering a one-stop solution through a unified QR code. At a news conference in Shanghai last month, the company unveiled a comprehensive offering where big data are deployed to help brands detect consumer preferences, offer advice on marketing campaigns and online ad placements, as well as engaging with clients through public account promotions and digital coupons.

All of these are designed to “employ and maximize the merchant’s digital asset and raise the re-purchase rate”, said Fan Yijin, an executive overseeing corporate clients at Tencent’s advertisement arm.

Data showed the raft of WeChat’s smart retail solutions have connected over 3 billion merchandise items being sold in China, enhanced the merchants’ return on investment, or RoI, on marketing campaigns by 15 percent, and saved over 300 million yuan ($43.6 million) worth of marketing budget.

Today’s digital retail landscape has “spoiled” modern consumers who now have high expectations of a personalized shopping experience, and this means that marketers must improve customer interaction and meet these demands by tapping into AI, according to industry experts.

Ren Peiyu, chief product officer and president of nEqual, a data technology firm, said that AI is helping marketers capture the right audience and engage with existing users.

He referred to the use of data management platform, which is in essence a unifying platform to manage, organize and activate any form of data from any source, and convert it in a way that is useful for marketers, publishers and other businesses to know their audiences.

Ren explained that such platforms can create a set of audiences based on a range of variables like demographics, geography and behavior to create a unified customer view. They can also translate data into useful information for marketers, publishers and other businesses to know their audiences better.

“In China, we have noticed a growing urgency for brands to trace where their marketing budget goes and how well the advertisements are tapping into prospective customers,” said Ren.

Fast-moving consumer goods, maternity and baby products, as well as automobiles are the top three sectors that have embraced such smart data management tools to optimize customer outreach, he noted.

China’s retail sector has moved from being the copycat of matured business models in the West to heralding some of the world’s most pioneering practices, said Pei Liang, president of the China Chain Store and Franchise Association.

“With the advent of AR, virtual reality, 5G and the internet of things, the efficiency and customization of retail will be on a whole different level,” he said.

But a prototype solution is in the making, and before large-scale adoption is off the ground, it has received early recognition from perhaps the world’s most independent and rigorous critics.

In March, Germany-based iF Design Award, a key industry parameter, has granted WeChat Pay the laurel of being highly “customer-centric” for its smart retail innovation known as “Scan& Go”.

As its name suggests, the function embedded in WeChat allows shoppers to check out without queuing at the cash register, shortening the payment procedure and overall increasing the turnover of shops.

To be more specific, the function enables customers to scan the bar code on items and bag these goods, including produce, while they shop and pay directly with their smartphones, according to a press release from WeChat.

“All parameters of the good user experience are met in this service design, including touchless access, efficiency or ease-of-use in scanning of market products and the final payment and checkout. This is user-friendly design at its best,” said the award committee in a statement.

Early adopters have emerged. WeChat said it is extending such smart checkout systems to retailers from global names like Walmart to local houses such as Yonghui.

While QR code payment is yet to find mass appeal in the West, it has become a daily essential for consumers in China. According to consultancy eMarketer, almost 80 percent of smartphone users in China will be tapping, scanning and swiping at the point of sale or PoS by 2021. That is set to contrast with 30.8 percent in the United States and 22 percent in Germany.

And services can go beyond payment per se to include product recognition, customer relations management, even advertising, when merchants tie in with WeChat’s Mini Program, an array of built-in functionalities connecting users across a wide spectrum of online and offline services.

“We see Mini Program as an important tool to empower merchants and brands in acquiring traffic at a lower cost through WeChat’s large social network,” said Karen Chan, an equity analyst from Jefferies Group, in a report.

Global retailers are scrambling to leverage technologies to navigate the world’s biggest consumer market. For instance, Walmart’s WeChat Mini Program now has over 30 million members and is developing an e-commerce service based on WeChat to help customers shop more easily and more accurately.

Wern-Yuen Tan, president and CEO of Walmart China, told China Daily earlier this month that the company is moving from intuitions and experience of the local operation team to the use of technology like artificial intelligence and big data in order to pinpoint customer needs.

As China enters the new consumer economy era, three aspects of its retail industry are being transformed: geographic location, population and technology, according to a latest report from global advisory and audit firm KPMG.

“Retailers have to rethink their business models and positioning strategies, and establish customer-focused business operating systems in order to remain competitive during the transformation process,” Jessie Qian, sector head of consumer markets at KPMG China.

Many are swarming the digital trend. French hypermarket chain Carrefour SA opened its first smart retail store last year in Shanghai, featuring technologies ranging from facial recognition payment to personalized mobile advertisements backed by Tencent.

With a staggering 1 billion users, Tencent can claim its marketing prowess is something no-one can ignore. It is backed by an entire suite of digital marketing tools built into WeChat, from Mini Programs, advertising placements on WeChat Moments (a Facebook-like mobile feed on news and information), as well as Tencent Video.

“Consumption data collected via WeChat Pay can help us pinpoint customers and predict their preferences. We can feed promotional deals to attract new customers, or push in-app notifications to engage with recurring shoppers,” said Tian Jiangxue, deputy general manager in charge of strategy at Tencent Smart Retail.

Experts believed that digitalization is not simply the application of informational tools but requires more “systematic transformation” at the corporate level.

“This means changes are expected in business models, operating systems, and even corporate culture,” said Gao Shulin, chairman of Rainbow Department Store Co Ltd.

For instance, Carrefour and Tencent have joined hands to shoot specialized shows featuring gourmet food and have them distributed via multiple channels including Tencent’s own video platform.

This means the tie-in requires not only coordination from the traditional sales departments but engagement perhaps with media and digital departments.

And Tencent is blazing the trail in offering a one-stop solution through a unified QR code. At a news conference in Shanghai last month, the company unveiled a comprehensive offering where big data are deployed to help brands detect consumer preferences, offer advice on marketing campaigns and online ad placements, as well as engaging with clients through public account promotions and digital coupons.

All of these are designed to “employ and maximize the merchant’s digital asset and raise the re-purchase rate”, said Fan Yijin, an executive overseeing corporate clients at Tencent’s advertisement arm.

Data showed the raft of WeChat’s smart retail solutions have connected over 3 billion merchandise items being sold in China, enhanced the merchants’ return on investment, or RoI, on marketing campaigns by 15 percent, and saved over 300 million yuan ($43.6 million) worth of marketing budget.

Today’s digital retail landscape has “spoiled” modern consumers who now have high expectations of a personalized shopping experience, and this means that marketers must improve customer interaction and meet these demands by tapping into AI, according to industry experts.

Ren Peiyu, chief product officer and president of nEqual, a data technology firm, said that AI is helping marketers capture the right audience and engage with existing users.

He referred to the use of data management platform, which is in essence a unifying platform to manage, organize and activate any form of data from any source, and convert it in a way that is useful for marketers, publishers and other businesses to know their audiences.

Ren explained that such platforms can create a set of audiences based on a range of variables like demographics, geography and behavior to create a unified customer view. They can also translate data into useful information for marketers, publishers and other businesses to know their audiences better.

“In China, we have noticed a growing urgency for brands to trace where their marketing budget goes and how well the advertisements are tapping into prospective customers,” said Ren.

Fast-moving consumer goods, maternity and baby products, as well as automobiles are the top three sectors that have embraced such smart data management tools to optimize customer outreach, he noted.

China’s retail sector has moved from being the copycat of matured business models in the West to heralding some of the world’s most pioneering practices, said Pei Liang, president of the China Chain Store and Franchise Association.

“With the advent of AR, virtual reality, 5G and the internet of things, the efficiency and customization of retail will be on a whole different level,” he said.