The pandemic has changed customers' behaviours. More and more, customers from both Hong Kong and the Greater Bay Area (GBA) are more comfortable with shopping online, and as such, retailers are implementing a GBA-specific strategy under the new normal too, said a study conducted by KPMG, GS1 Hong Kong and HSBC. In its fifth edition, the survey "Retail's Realignment: The Road Ahead for Omnichannel in the Greater Bay Area" examined the digitalisation and technology trends, as well as related corporate strategies in the retail sector. It surveyed 2,053 consumers and 400 senior retail industry executives in Hong Kong and nine GBA cities.
Half of Hong Kong consumers said they felt more comfortable when it comes to shopping online from the start of the pandemic, nine percentage points lower than their counterparts in GBA cities. Also,
24% of Hong Kong consumers and 23% of those in GBA cities said they could live without physical retail stores.
"Consumers are buying more online than ever before, and retail brands who have best survived this rapid transition are those who have proven agile in their response to the growing demand for digital engagement," said Alice Yip, partner, head of consumer and industrial markets, Hong Kong, KPMG China.
Meanwhile, the majority of consumers surveyed expect a seamless transition from an in-store experience to an online experience. 73% of Gen Z consumers in Hong Kong and 86% in GBA cities expected a swift response to product enquiries logged on online chat, and expected brands to use tech including AI to help shortlist new products. These Gen Z customers also expected that AR functions can help them make better purchases online (61% in Hong Kong and 82% in GBA cities).
As for contactless shopping, 60% of Hong Kong respondents said they preferred it, while 77% in GBA cities had the same idea too.
To prepare for the challenges and opportunities ahead, 73% of surveyed retailers were implementing a GBA-specific strategy across one or more of their business functions. The most common business functions for which 43% of surveyed retailers were implementing a GBA strategy were sales and marketing and communications, as these companies hoped to attract customers in the Chinese market. Moreover, 30% of polled retailers were developing a GBA programme for fulfilment, logistics, operations or supply chain management.
However, not every retailer is capable of handling customers' expectations. For example, 77% of Hong Kong respondents and 85% of their counterparts in GBA said that retailers needed to have a better connection between channels and create a seamless customer journey.
Among surveyed retail executives about their actions to enhance customer experience, only 39% of businesses were currently focusing on the integration between physical stores and online.
"This suggests that brands and retailers who forge an online-to-offline solution that encompasses multiple digital points of engagement will enjoy a significant marketplace advantage in the future," said Anna Lin, chief executive of GS1 Hong Kong.
Lastly, about two-thirds of consumers (65% in Hong Kong and 67% in GBA cities) said that they were more comfortable using digital payments. Retailers were taking actions to enhance customer experience, with 30% of surveyed respondents citing that they were prioritising technology investments to create a seamless purchasing and transactional process.