In China, the future of retail is already here. Alibaba Group launched its second Taobao Maker Festival on July 8th and introduced the Tao Café, an experimental cashier-less coffee shop driven by face recognition. Alibaba’s AI and data technologies have made it possible for customers to shop in this offline store without going through the time-consuming process of queuing to pay.

When a user walks to the counter and says she wants a cup of Americano, her face is scanned through the screen and deducts the coffee price from her Alipay account. Such facial recognition payment is backed by Alibaba’s artificial intelligence. Alibaba’s facial recognition payment was first shown to journalists who participated in 2016 Taobao Global Shopping day held on November 11th, Chinese Singles’ Day.

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While Tao Café runs with some clerks who prepare the food, buying goods at the Tao Café is done digitally, without the help of a human cashier. Users can grab physical goods and walk through a 1-meter long scanner to purchase the product using Alipay.

“Alibaba is a maker by itself. We would like to share the latest thinking through technology. Last year, we showed VR shopping through Buy+. This year we launched Tao Café, to introduce the new offline experience,” Chris Tung, Chief Marketing Officer of Alibaba Group said at the press conference at the festival.

When a customer drags a product to their shopping cart on the screen, it sinks with users' Taobao app (Image Credit: TechNode)

When a customer drags a product to their shopping cart on the screen, it syncs with users’ Taobao app (Image Credit: TechNode)

“We want to bring Alibaba experience to support retail brands, to run the operation with our data capability. It’s about digitizing the footprint the digital store and optimizing the shopping experience,” Chris says.

Alibaba has been putting efforts into “new retail (新零售)” to integrate online and offline commerce. Under the plan, Alibaba has founded Hema (盒马鲜生, Hemaxiansheng) in 2015 to enable cashless checkout, and has collaborated with Bailian Group that introduced a new retail supermarket called RISO last week in Shanghai.

Chris mentioned that Alibaba has been in the online space, and they observed how they can enhance the offline shopping experience using data assets and data technology they have.

“Online experience is shown differently because we personalize the web page for customers. Offline has always been the same, and we believe offline should be more exciting. You have to integrate the data to enhance the in-store experience,” Chris says.

Taobao Maker Festival participants lining up in front of Tao Cafe (Image Credit: TechNode)

Taobao Maker Festival participants lining up in front of Tao Café (Image Credit: TechNode)

Alibaba has no plans to open a cafe, according to Chris. This demonstration is about showing what is possible for stores of all kinds.

“It’s rather showing retailers that they can do better when they work with us. Department stores, convenience stores are now working with Alibaba. Tao Café just shows what we can do,” he said. “I don’t know if online or offline will lead the future. We are not a retailer, but a data technology provider, and we are showing that this kind of shopping is possible now. It’s our retail partners’ job to choose what is right for them. The goal is to digitize customer’s experience, and it’s not really about an unmanned store or getting rid of people in the store. This technology is all about improving the user experience.”