Retail in Asia


EXCLUSIVE INTERVIEW WITH GOOGLE: A smarter retail needs us all!

EXCLUSIVE INTERVIEW: A smarter retail needs us all!

On 12 September 2017, Google Hong Kong and Nielsen released the study “Hong Kong: Smarter Digital City”.

The whitepaper provides interesting insights into travel, finance, lifestyle, and retail sectors. This latter, being of our particular interest was the topic for our interview with Leonie Valentine, Managing Director for Sales & Operations at Google Hong Kong.

SEE ALSO : Hong Kong: smarter digital city

RiA: What is the rationale behind choosing Hong Kong for the study and the partnership with Nielsen?

There is a common thought: Hong Kong is not as digital as it should be. We have all these devices, a fantastic internet penetration, 85% of smartphone penetration, great broadband services, wide mobile networks, but not e-commerce. You walk into a store in Hong Kong and you do not have a modern retail experience. At Google, we wanted to understand why.

We checked whether there was any study of this kind, exploring digital acceleration in Hong Kong, and it did not exist. While there are studies about Hong Kong and how it could be a smart city through technology and infrastructure evolutions, very few of them actually looked at the consumers’ journey, their needs, and barriers to digitization.

It was the first time for Google to conduct a study like this in Asia and Google decided to approach Nielsen to help building a comprehensive research. Together, we defined a clear methodology and broadened our scope to engage consumers, experts, corporate leaders, businesses, policy makers, and government stakeholders.

We decided to launch our Think 2020: Google For Hong Kong initiative to offer recommendations in an attempt to join hands with corporates and policymakers to accelerate the city’s digitization, shaping Hong Kong to be a smarter digital city. Our Smarter Digital City Whitepaper was released to kick start conversation on this topic and investigate what are the barriers to digitization in Hong Kong.

Source : Google HK

RiA: All the results in your study put emphasis on the dichotomy between the perceived and the actual digitization, any particular areas in which this is more evident?

What we saw is that there is a very skinny use of technology. Smartphones are used for very trivial operation and the digital potential of such a tool is not explored at all. Ideally, for a full digitization, we should use our mobile for everything.

Before going to a physical store, you would search a product/store with your smartphone, helped by geolocation for example. However, a lot of businesses do not understand the importance of updating their information online! How many times did one get the wrong address on Google Maps?

Retailers need to understand the customer journey, from online to offline and vice-versa, being aware of the digital touchpoints to promote a truly integrated life.

RiA: In the first pages of the whitepaper there is a ranking of the main Asian cities based on their digitization. Do you agree with that?

We actually based the ranking on Hong Kong people’s perception of what Smart City is, and thus on how other Asian cities are doing in terms of digital integration.
I guess my ranking would now be slightly different as some cities are quickly accelerating their digitization. In the report, you will find Tokyo, Singapore, and Shanghai in this order. But if you visit Shanghai, for instance, the ubiquity of the digital experience and integration is now exceptionally visible there. You can even pay your 1RMB bun with mobile phones!

Additionally, Singapore government put increased effort on digitization with a dense start-ups ecosystem contributing to this rapid digital integration. Actually, they are launching an aggressive campaign which may lead the city to be the first country dematerializing its currency.

RiA: Based on the findings of this study, what was the impact of digital transformation in the retail industry?

The findings of the study mainly indicate that retailers are waiting for consumers’ demand instead of analysing their feedback to enhance their experience in store.

RiA: Is it the result of a customer-oriented approach?

It might be the result of a conservative mind-set instead. Hong Kong has a shop in every corner and the city is widely considered and recognized as a shopping destination. If retail was an Olympic game, Hong Kong will definitely win gold medals!

Hong Kongers do love shopping. And by habits, shopping has been associated with physical stores. But now, millennials are moving away from this pattern. They are very good at using digital platforms – they search for products online, they interact with e-commerce platforms, they know how to order online and get it delivered to their office or pick it up at a convenience store, shaping the future shopping habits.

For example, when food delivery services first launched in Hong Kong, common thought was: why do we need it? There is a Dai Pai Dong at every corner and Hong Kongers love eating out. And now, from the demographics, we see an uptake of home food delivery for millennials and these food delivery providers successfully launching in Asia!

Looking at what the global and Asian trends are on the use of mobile phones, online services – especially in the retail market – is key! It will help businesses to better understand the customer journey from offline to online as well as analysing the number of relevant touchpoints to build a better relationship with clients and increase brand awareness and customers’ loyalty.


RiA: So, what is the profile of the HK millennials? Any surprising findings?

What caught our attention was their concern about security and trust, especially the lack of trust in mobile personal finance app and using technology for monetary transactions. That was surprising because the use of mobile payments, peer-to-peer payment, is not as dominant as we would have expected or imagined for Hong Kong millennials.
Again, we asked ourselves what could be the obstacles to a higher digital penetration in smart finance which impact all other industries including retail? On that note, retailers should look at the customer journey and understand when is the right time to trigger each operation. The secret is solving customers’ issues, problems, so in a way, to understand when and where they need help.

RiA: Your study provides takeaways for retailers, anything to add at the light of your interactions with them after the release of the whitepaper?

Definitely, digital integration should be a priority for retailers. If you think about the role that technology plays in the life of Hong Kongers, what else could be implemented?

When we look at the report, we see Hong Kong is lagging a bit behind when it comes to Augmented Reality and Virtual Reality. From a retail perspective, it would definitely improve in-store experiences, with AR to scan a piece of clothing and see how it fits on you without trying it on, or to scan a pair of sneakers in store, and have direct feedback on whether it is the right one depending on the way you run and your daily use.

Retailers and customers are no longer experiencing a linear journey because digital integration allows to create different touchpoints, not only in-store, but also web-store.

RiA: Could you share any particular example in a specific sector?

Luxury, for instance.

I think luxury benefited from the digital transformation. For the very savvy luxury retailers, I see at least two ways of reinventing their business.

E-commerce techniques first. For instance, if I am searching for a product, and a relevant suggestion pops up, I am immediately interested and it could eventually lead me to the store.

Second, VR could be used to enhance customers’ experience online and offline and build a bridge between these to create tailored shopping journey.

RiA: one would argue it is overexposure that actually dilutes the luxury aura?

if I am looking for something specific and get more relevant results, tailored to my query, I would not call it overexposure. It would actually be convenient and helpful.
If I am seeing irrelevant suggestions, or receive any unwanted emails because websites shared my data to third parties, that is overexposure and even becomes a privacy issue.

SEE ALSO : Tips for a smarter retail

RiA: What is your message to Hong Kong stakeholders?

Google cannot boost digitization alone. We need to accelerate and it is a role for all parties including corporate leaders, companies, customers, policy makers. Government, for example, could establish frameworks of best practices and promote them.

Regarding the retail ecosystem, it is easy to understand how accelerating cannot work if only one ring of the chain accelerates. It needs to be a common and global move. It will promote e-commerce, cross-border e-commerce, and it will be of benefit to local brands in particular to those which want to target the domestic market and explore overseas opportunities.

Digital offers a huge potential, we should just be aware of that and start working towards a fully digital integrated lifestyle.