How will Hong Kong’s luxury retail market be different in the post-COVID world?
The pandemic has drastically impacted the retail industry: the way luxury groups are selling as much as the way shoppers are buying. Some changes are more obvious than others but will not stay long: the lack of tourists, the rent discount offered by some landlords, the empty stores, the “revenge shopping” when we will be free to shop wherever we want…
At a contrary, I believe covid19 has been a catalyst of the pre-covid trends, accelerating the digital transformation of the industry as well as the social consciousness of the clients. People are more conscious than ever on the origin of the products and importance to preserve our planet. Several studies are highlighting that more time at home and Covid-19 led to cocooning mode, online simplicity and value debate. Clients are reluctant to go back to mass consumption, looking for more sense in their purchase and more experience while shopping. We provide insight-based-solutions to front line staff to answer these new customers behaviors and needs.
From retailer’s perspective; it has been challenging to make business while they were no clients in the stores. Crisis situation is always a booster of ideas, some retailers demonstrated their resilience and became stronger: they learnt how to sell at distance, using every tool at their disposal from Livestreaming on Facebook to Ecommerce platforms. Historically the city offers several shopping area multiplying the “place to be” for brands. During the pandemic, they optimized their stores localization and kept only the profitable ones, pushing landlords to reconsider their business model. I am confident of the HK luxury retail rebound, nevertheless I doubt we will see that many stores returning to Central and CWB in a near future.
With e-commerce booming, what role will frontline staff in stores play in the new luxury retail world?
Front line staff is instrumental of E-commerce success.
Several brands have launched LiveStreaming sales initiatives with a great success. But to conquer this USD169 trillion market in 2021, they need to empower the staff with the digital tools and knowledge to turn them into a KOL.
E-commerce initiatives were too often seen as silo. In 2021, omnichannel means “New Retail” and start by collecting client data and using the digital tools to register and enhance the client’s profile. The more information you learn about your clients, the more personalized your interactions with them will be in the future. The tools exist to help achieve it but, in the end, the client will only remember the staff. They are the face, they drive New Retail.
Beyond a shift to online shopping, what other trends have caught your attention in the past year?
COVID-19 changed the way staff needs to interact with customers in future, and it has therefore changed the way companies are training their staff. Most of the brands have adopted E-learning as the way to support training. Blended learning ratio have moved from 80% face-to-face training to 80% digital. Brands first need is always to have a scalable, efficient and low cost solution to improve product knowledge. During covid the strategy has evolved though, brands really want to build sales staff capabilities to increase basket size and conversion rate. Games are used to evaluate skills and learners receive course recommendations tailored to them through push notifications. They can “like” contents and share their scores with their peers. ACDL analyses data such as engagement level, success rate and integrate neuroscience to insure solution sticks. In the millennial’s era, bite-size contents, gamification and social learning are key.
Is brick-and-mortar luxury retail still relevant?
Historically the luxury sector in retail has relied on the senses – taste, touch, smell, feel as well as actual human engagement – to promote itself in store. Digital can complement this but not alienate the role of boutique staff. A memorable experience engages each customer in an inherently personal way and thereby create a positive memory and willingness to come back and to buy more. 20 years ago, luxury groups were declining the possibility of selling through Ecommerce. In 2021, they are embracing New Retail: an ecosystem that works together to create a seamless client journey. Staff can leverage digital at any step of their interaction with the client.
What excites you about the future of the luxury sector in HK/China?
We have offices in several countries and it has been amazing to notice the difference with Chinese market. While we were all concerned about “what’s now” across the world, luxury sector was there focusing on “what’s next” Using drones to create QR codes in the sky, boosting New Retail to the next stage. Like a phoenix, the luxury sector reborns stronger from digital transformation. Empowered by CRM tool, customer centricity enables the industry to get closer to the Generation Y/Z and preserve itself from disappearing.