The Hong Kong Retail Report

The flexible, tech-driven experiences made available during the pandemic have blurred the line between sales channels and encouraged the rise of nonlinear customer journeys. Businesses are providing new or simply different ways to shop, from the convenience of click and collect or curbside pick-up to the perks of brand-owned apps – and customers love it.59% of shoppers reported using shopping apps more frequently during the pandemic than previously – an 18% increase compared to results from our 2020 Retail Report.

Both businesses and consumers have a taste for what’s possible with technology – and now there’s no going back.61% of consumers believe that retailers should deliver the same cross-channel flexibility they provided during the pandemic. Keeping up with these expectations greatly improves the likelihood of repeat purchases and higher spending. Falling short could result in the opposite: 78% of consumers will not shop with organizations that have a bad shopping experience, either online or in-store.

It makes sense that linking online, in-app, and in-store payments with a single system – i.e. unified commerce – has proved to enhance both brand resilience and customer satisfaction. 46% of businesses say online stores were able to offset the losses at physical stores during the pandemic.

And the more channels shoppers use, the higher their value: 44% of businesses say a benefit of unified commerce is increased sales, 44% also say unified commerce increases loyalty and 42% say it improves customer experience.

This brings us to some interesting findings around loyalty programs. Only a handful of brands are making the most of these programs and it’s an area of the customer experience ripe for innovation. 79% of consumers say retailers should use tech to make their loyalty or rewards schemes easier and more effective. Payments-linked loyalty apps are a good place to start, since 63% of consumers would download a retailer’s app to receive better loyalty rewards.

While shopping apps and online experiences have become increasingly important, that doesn’t mean consumers will be happy to wave goodbye to the physical store. In fact, 63% of Hongkongers prefer to shop in-store. And the pandemic has given the store renewed purpose in the consumer’s mind, with 40% saying they have a new appreciation for being able to touch, feel or physically try products before they buy.

Businesses realize that stores will continue to play an important role: 42% expect the proportion of revenue to increase from physical stores in the next year, and 36% plan to open more physical stores in 2022.

This doesn’t mean we can stock some shelves, throw open the doors, and expect the crowds to come and buy. It’s about creating a destination that entices: 62% of consumers say physical stores should be exciting places to visit. Stores must offer something more than the products and services available online.

Technology proves pivotal in creating an in-store experience worth visiting. From endless aisle shopping – providing kiosks or terminals to check additional stock for home delivery – to offering new ways to pay through QR codes or mobile payment terminals, 70% of consumers say they are more likely to shop with retailers that use technology to improve the shopping experience.

But even more crucial is the ability to connect online and physical channels to ensure a truly seamless experience: 65% of consumers would be more loyal to a retailer that lets them buy things online and return in store. Shockingly, only 20% of businesses say they currently provide this option.

Customer and staff experiences are inextricably intertwined; any technology leveraged for in-store experiences should help, not hinder, sales teams. 67% of consumers say they would love it if in-store sales assistants used technology to assemble items from their online wish list in the changing room ready for them to try on.

Our research shows that consumers want businesses to recognize, predict, and meet their needs in a relevant and timely way: 56% of consumers prefer retailers who remember their preferences and previous shopping behaviors to create a more tailored shopping experience – well above the global average of 47%. On top of that 45% of consumers like it when retailers serve personalized adverts and product suggestions. Businesses who can leverage real time data insights instead of relying on historic data will be best placed to deliver these more personalized, sophisticated experiences.

The insights unlocked via payments data, particularly unified payments, allow businesses to act more immediately on what consumers are telling them. A growing number of businesses are leveraging this opportunity – but many are still missing out. 29% of businesses use payments data to understand user behaviour and improve customer experience, and 32% to build a better picture of their customers.

Those businesses who are using payments data can identify popular product lines, inform inventory management, create personalized marketing campaigns, and inform decision making – a testament to the wealth of insights made possible through payments data.

Businesses need to strike a delicate balance. Clearly, consumers want businesses to personalize the customer experience and use technology to create unique interactions – this can’t be achieved without data. However, with data breaches seemingly becoming more common and very clear legislation in the form of the Personal Data Privacy Ordinance, businesses have to go the extra mile to ensure they use and store data responsibly.

50% of consumers believe retailers shouldn’t be able to use their data or purchase behaviour information unless they give express permission. And 43% of consumers will only allow data to be stored and used by retailers if there are assurances around security and privacy. Businesses need to stay informed and compliant to protect shoppers and themselves from data breaches and fraud.