Are virtual e-shopping walls the next big thing in Hong Kong’s retail market?
Hot on the heels of Pricerite trailing a virtual e-shopping wall earlier in April, AEON has launched 40 Japanese products in newly installed poster-on-wall displays at Causeway Bay, Admiralty, Tai Koo, Tsuen Wan and Tsim Sha Tsui station.
The idea, although still new to locals is definitely not the first of its kind.
The virtual wall trend in Asia can be traced back to April 2011, when Tesco Homeplus trialled the response of subway passengers to a virtual e-shopping store at a subway station in Seoul. The wall allowed passersby to place orders by scanning QR codes via the Emark mobile app on smartphones. The app has gained great traction in Seoul since with more than 900,000 downloads. More significantly online sales jumped by 130%.
But would merely replicating this concept achieve the same success in Hong Kong? Tommy Lam, digital creative strategist of Fluid, remains skeptical.
Digital behaviour can vary, even between different regions comparably penetrated by similar devices.
“Although Hong Kong has the world’s second highest penetration rate of smart devices of 87% (according to a 2012 report by US company Flurry Analytics), putting the territory four spots ahead of South Korea with 76%, the Koreans are actually far more savvy at integrating QR codes into their daily lives. Hong Kong is still suffering a low conversion rate of QR codes,” he explained.
According to SH Lee, CEO of Tesco Homeplus, the virtual store was most popular amongst 20 to 30 year olds in Korea. But the same age group in Hong Kong is less familiar with grocery shopping and food preparation.
“Similarity in demographics does not necessarily lead to similar shopping habits,” said Lam.
“Geographic characteristics and limitations may also affect shopping habits. Due to the compact living environment in Hong Kong, supermarkets or fresh markets are usually easily accessible; making daily shopping extremely convenient and more suitable for the smaller and cramped kitchen spaces.”
Sung Woo, global media director of Cheil Korea, the agency that handled the Tesco virtual wall campaign two years ago, expressed concerns about the returns on such an investment.
He said he was skeptical about the effectiveness of the wall in driving sales for AEON.
Technical systems including taking orders, delivering goods and payment procedures have to be ready in advance to create a successful virtual wall campaign.
“I am wondering if AEON is already equipped with this system and integrated well to have consumers investing a fair amount of money,” Woo said.
When reached by Marketing, AEON declined to comment on the campaign.
Though an attempt such as this may be able to create huge buzz in public and bring with itself great PR value, what is needed is a proper marketing strategy for the wall itself.
“Virtual wall store should be attractive enough to stimulate passengers’ psychological perception to make them stay and shop at a subway platform. Changing human being’s perception however needs a lot of time and input,” Lam says.
From a more local point of view, Lam advises AEON to enhance its brand and emphasise the value it adds for customers.
“In order to create a more relevant message to the user base as well as to build stronger emotional connections to customers, retailers might want to consider an online campaign eco-system that combines social media, CRM with free recipes, cooking lesson videos, knowledge about food and other elements to generate traffic to the online shop and MTR virtual shop,” he suggested.
To Lam, m-commerce “is no doubt the way to go”, but what what works for one market/brand might not work for another.
“There is no magic formula that can be universally applied to all regions. It takes constant research, analysis and adjustment to find a solution."