Richard Liu, founder, chairman and chief executive of JD.com, sent shockwaves through the retail world this week.
Speaking to delegates at World Retail Congress, the man behind “China’s largest retailer” declared that, in just 10 years’ time, retail would be run entirely by AI and robots.
It was a punchy prediction, and it provoked not only an audible gasp from the audience but many a heated discussion for the remainder of the conference.
Is he for real? Could tens of millions of retail jobs really be at risk over the next decade?
Each interviewee at the congress was inevitably asked whether they agreed or disagreed with the future of retail Liu had depicted.
A cynical outsider could dismiss his evocative remarks as an attempt to grab headlines in order to attract the attention of potential new retail partners. In terms of press coverage, Liu left his biggest rival Alibaba in the shade.
But there’s more to Liu’s forecast – terrifying as it may be – than that.
Put yourself in the JD.com founder’s shoes and it’s easier to understand how, for this retail leader, a robot-led retail world is entirely feasible by 2028.
Playwright Lucy Kirkwood put it well in her play Chimerica when she described China as a country that has gone “from starvation to Slimfast”, seemingly overnight.
And in retail terms, China leapfrogged much of what we dub ‘traditional retail’ in the UK – networks of shops and desktop websites – zooming straight to mobile, apps and digital platforms.
In the same way, the growth of JD.com has been rapid too. Liu founded the company – a single shop – in 1998 because he needed money to buy his sick grandmother medicine.
“You walk away from the power of the human at your peril. Humans and machines together will always be better than humans or machines on their own”
Tom Athron, John Lewis
When he took the business online in 2003 he’d never used the internet or heard of Amazon. JD.com now boasts 292.5 million active customers and 80% of its sales, totalling $55.7bn last year, are generated on mobile.
If Liu can achieve so much in two decades, why shouldn’t he believe that in 10 years retail will have taken that next dramatic leap?
Indeed, his prediction may be completely on the nose… for China.
But it won’t be so in the West.
As Kingfisher boss Véronique Laury observed, some established European retailers will find it harder to evolve at the same speed because they’ve spent the last 50 years building large store portfolios and employing thousands of human beings to work in them.
“When you are an existing company you must transform your model, you don’t create it from scratch. You have people, you have stores, you have the way you are structured, and you must change all of this – and that is the challenge,” she said this week.
“The other thing is the pace of change, how fast everything is moving, and you need to make people understand that either you change or you die. This is a challenge because people don’t always welcome change.”
Although she conceded that employee numbers would decrease in retail, she rejected the vision of a robot-run industry. Laury argued that “the only benefit of having stores in the future” would be to have staff who could deliver service or create experiences shoppers couldn’t find online.
And while some speakers accepted that Liu’s prophesy could, in theory, prove correct, they argued that speed and convenience are not all that customers want.
Outgoing John Lewis group development director Tom Athron said: “John Lewis will begin to give jobs to computers that humans used to do. If you don’t start to do that, you’ll become less efficient and therefore less competitive.
“We are an innately social species that craves community, human contact and engaging spaces”
“But, you walk away from the power of the human at your peril. Humans and machines together will always be better than humans or machines on their own.”
Futurist Howard Saunders made a similar argument.
“We are an innately social species that craves community, human contact and engaging spaces,” he said.
Whether Liu’s prediction comes to fruition or not, the JD boss has been highly effective at giving retailers from across the globe a jolt.
Because even the doubters will recognise that, when a man like Liu believes that’s what the future will look like, the chances are he’ll work relentlessly to make his vision a reality.