Challenging times for retail

Hong Kong is a melting pot for some of the big issues affecting retail brands across Asia and the world.

Brands are facing increasing competition from global buying websites, in addition to increased rents and tighter budgets. Sound depressing? It shouldn’t be, says Hong Kong’s top retail marketers, but strong innovation is needed.

Gallery from Retail Marketing 2014:

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Eva Leung, managing director of Nielsen Hong Kong and Macau, served up a sobering view of Hong Kong’s retail market, saying growth at the levels marketers have experienced in past years are a thing of the past.

“Retailers should no longer take double-digital growth for granted,” she said.
Nominal sales growth in the Asia FMCG retail space dropped sharply from 12.4% in 2012 to 6.3% in 2013, while Hong Kong saw a 9% figure in 2013, a drop of 3.9% compared with 2012.

Convenience stores, she said, are one of the fastest growth sectors in the retail space, making the challenge bigger for retailers with their private label strategy.

More than 80% of retailers in Hong Kong have diversified store layouts, with different formats that cater to different sectors, she said, most commonly including the formats of baby, cosmetics and health.

Packaging retail brands differently to cater to different customers is crucial in brand longevity and development, she stressed.

Julie Chiu, sales and marketing director at The Dairy Farm – Wellcome, manages all The Dairy Farm’s brands, including Wellcome, ThreeSixty, Market Place by Jasons and Oliver’s The Delicatessen, and agreed differentiation was critical.

“We apply a multi-format strategy to The Dairy Farm umbrella to present the brand to different customers accordingly.

“Location can tell each different supermarket’s positioning and differentiation.”

Chiu revealed the fun part of her job was building the digital platform from scratch.

For example, building a Facebook presence from 800 fans three years ago to more than 96,000.

“We proved that Wellcome customers are not only housewives who never use Facebook.
“Supermarket marketing can be fulfilling and fun once the myths are cracked.”

But multi-channel marketing doesn’t seem to satisfy Argha Sen, the omni-channel and e-commerce director at Fung Retail Group.

“Consumers are running wild,” Sen said.

He stressed the importance of e-commerce, of which growth is outpacing overall retail sales, especially in the US and China, as well as the need for seamless synchronisation across mobile, tablet and the PC.

But above all, it’s about personalisation.

“If online shopping platforms don’t have personalisation they shouldn’t even be there,” he said, adding it helped facilitate personal shopper treatments such as recommendations and preferred shopping lists and creating a better tailored shopping experience to speak to customers’ preferences.

“In today’s world, people check Facebook before brushing their teeth. The relentless growth of social usage around the world leads retail marketing to the issue of transparency,” he said.

Now more than ever, consumers expect transparency from brands where they can access content anytime and anywhere by a simple flick of a finger. Channel synchronisation plays a big role here.

Sen advised retailers to build a seamless exchange of value between the consumer and the brand within a market ecosystem.

“We need to bear in mind the concepts of personalisation, timeless accessibility, platforms which enable sharing and recommendations, convenience and maintaining a high transparency for the brand,” he said.

Bob Neville, global retail creative director at New Balance, emphasised the role of technology in retail and how it used the DNA of the 70-year-old brand to provide relevant content.

Neville said he was helping the sports brand apply a creative discipline into the data collection process to help generate useful data.

Technology gives support to the data needs based on creativity.

“What we are doing is to take the data and sales information, put it back together through a creative lens and apply back on the streets.

“We can show people a lot and we can show them nothing and it depends on how we segment that down and pass that information to people’s life.

“What we need to keep mindful is that we don’t blind people of how we present the product to them.

“Consumers often don’t know of the differentiation of products and the brands. There’s a room to bring brands alive.”

Retail Marketing 2014 was sponsored by China Search, Sun Mobile, Microsoft Hong Kong, Aspire Lifestyles, Qlik, Performance Media Group, Meltwater, Survey Sampling International, Madcradle Online, Nielsen and Active Network.