Not if local retailers to use technology to tackle new challenges
Hong Kong has enjoyed a reputation as a shopper’s paradise for over half a century. But, the city’s world famous retail sector is under pressure.
Last month, the papers reported that retail sales dropped by more than 10% in February – the worst fall in nearly four years. What’s more, sales were down even though tourist numbers were up, and the biggest impact was felt by what have traditionally been best-sellers – expensive consumer items
Local retailers aren’t standing still. According to the SCMP, some of Hong Kong’s shopping centres are trying to combine entertainment with retailing, to transform malls from shopping venues into lifestyle destinations. That means offering fun activities like e-sports, mini golf and family entertainment alongside bread-and-butter business such as selling consumer products.
They aren’t just looking for ways to boost sales by hanging on to customers and getting them to come back. They also need solutions that can also help them to compete with the increasing popularity of e-commerce.
Dealing With Disruption
Perhaps more than any other industry, retail is facing massive disruption. Online commerce is a clear and present threat for physical outlets. Customers are demanding seamless omnichannel experiences. And businesses are under constant pressure to review back-end processes to remain competitive.
The question is what can retailers do about some of these key challenges, and how technology can help the industry succeed, rather than simply being the engine that is driving their biggest threat.
Transforming Back-Office Functions
On the front end, retail businesses need to deliver consistent, customer-centric experiences across all channels to drive sales and loyalty. Behind the scenes, driving process efficiencies, visibility and control over spend is how you maximise profit.
Integrated, cloud-based travel, expense and invoice solutions enable retailers to focus on their customers, secure in the knowledge that spend is under control. Supported by user-friendly mobile apps and tools that drive employee adoption and compliance, finance teams get a consistent, actionable and auditable view of spending.
Maximising Peaks And Troughs
Seasonality is always a challenge for retailers. How you do maximise returns in busy periods while minimising losses at quieter times? Increasingly, AI (artificial intelligence) is the answer. And that’s going to become more common. According to a survey by Global Market Insights, the global market for AI applications in retail alone will be worth over US$8 billion within the next five years.
From the point of view of the finance function, intelligent budget management tools can help them prepare for busy periods. Budget-holders can review consolidated data for a near real-time view of spend and trends – and act before minor anomalies turn into major issues.
Attracting And Retaining Talent
The retail sector is facing a recruitment challenge. With unemployment at historically modest levels, competition for the best people is only getting fiercer. One way to attract and retain talent is to simplify internal processes and enable employees to focus on the job they were hired to do. Again, intuitive tools are a good place to start.
When The Going Gets Tough, The Tough Go Shopping … For Technology
I’m convinced that Hong Kong will keep its retail crown, at least for the foreseeable future. But, things are clearly going to get tougher, not easier.
For example, rockier economic times, powered by fallout from global events, such as the increasingly fraught Sino-US trade relationship, also look likely to ramp up the pressure on local retailers.
Retailers need to understand the trends, and make the most of the latest technology, or risk getting left behind.