When companies start a digital transformation plan, the most important thing is to set specific goals so that everyone in the company can follow the roadmap "starting with the end in mind." FamilyMart is definitely a leader in retail transformation. With the vision of being "consumer-centric and becoming an everyday service platform across industries that is everywhere," they have gone through several waves of actual transformation, letting consumers feel that FamilyMart's innovation is at the forefront of the industry.
Right now, FamilyMart's innovative services continue to evolve. They partnered with Google Cloud to introduce the Vertex AI Search tool into their member App. This allows consumers to find all kinds of services provided by FamilyMart right on the App homepage, boosting search accuracy to 85%. The opportunity for all this transformation goes back 10 years.
FamilyMart currently has over 4,200 stores in Taiwan, and these dense physical locations are deep in consumers' daily lives. Responding to the digital economy and membership business opportunities, 2014 marked the start of FamilyMart's transformation. They decided to use the member App as the core carrier to build a platform for close interaction with consumers. But what did FamilyMart do right to make consumers willing to download and even frequently open the App?
王啟丞(Wang), General Manager of FamilyMart's E-Retail Division, said: "We used two strategies back then to successfully build the foundation for managing members. Now, FamilyMart has accumulated over 18 million members."
Looking back, many people still remember these two strategies. The first was changing physical sticker collection to App virtual points, changing how consumers collect points and gathering a large number of members for FamilyMart. The second was digitizing coffee "suspended" purchases (pre-purchasing for later), replacing paper receipts with the App and allowing cross-store redemption. This made customers open the FamilyMart App every day they bought coffee, greatly increasing how often the App was used.
These two strategies can be seen as the results of FamilyMart's Digital Transformation 1.0. Then, the 2.0 transformation greatly expanded the scope of services, achieving cross-industry convenience. Things like accounting, payment, packages, online bill payment, self-service laundry, and charity can all be done in the FamilyMart App. Not to mention Retail OMO (Online-Merge-Offline) scenarios, offering features like buy-now-pickup-elsewhere, fun maps, and FamiNow. Consumers can tap their phones to experience delivery services, pick up goods at the nearest store, or find same-day expiring food items, making FamilyMart "stick" to consumers every day.
As the various business services on the FamilyMart App increased, FamilyMart also observed a keen demand from consumers for the "search" function. Deputy General Manager 王啟丞(Wang) mentioned: "We found that consumers often use the search bar on our homepage to look for keywords like whether a hot-selling item is in stock, the location of a certain store, or if a store has a toilet or rest area."
Responding to market feedback, FamilyMart wanted to optimize the search experience and approached Google, the giant that started with search, believing Google's expertise in search and keywords could help. But beyond just search, FamilyMart also wanted to combine search with the latest AI applications. So, they partnered with Google Cloud to deploy Vertex AI Search for Retail, combining Large Language Models with vector search functions to improve the App's search accuracy.
Reviewing the participants in this collaboration: FamilyMart provided the App environment and data, Google Cloud supported the technical solutions and computing resources, and Dynacloud assisted with technical specifications and function settings. The project was successfully completed in about 3 to 4 months. Deputy General Manager 王啟丞(Wang) observed that because FamilyMart built a new independent data middle platform for this project and hosted it on Google Cloud's cloud environment, organizing and integrating data sources later to connect with Vertex AI Search was fast, leading to the successful achievement of the goal by the three parties.
As for the concrete benefits after connecting the search bar on the FamilyMart App homepage with Vertex AI Search? Deputy General Manager 王啟丞(Wang) mentioned three key indicators: First, search keyword match accuracy rose to 85%. Second, even without promotion, the percentage of users actively using the search function increased by 10% in just a few months. And the last item is that consumers clicking and purchasing based on information presented through search grew by 2 to 4 times compared to the past. The App effectively drove online business opportunities.
Google Cloud
FamilyMart Boosts App Search Accuracy to 85% with Vertex AI