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How shifting consumer habits are revealing the future for retail

By Victor Chong, Director, Enterprise Commercial, Microsoft Hong Kong


Retail has changed forever. Since the outbreak of the COVID-19 pandemic and the resulting social distancing restrictions, consumer habits are no longer the same as they were before.



Online purchases have increased exponentially with global online sales reaching nearly US$4.29 trillion last year, which is 24% more than the previous year. The retail sector in Hong Kong has also been inevitably impacted by the pandemic. Companied by the evolving shopping behaviors of local consumers, it is encouraging to see a number of local retailers including HKTVMall, YATA and Watsons have been demonstrating strong resilience amid the pandemic and are ranked the top three most popular FMCG retailers by Hong Kong consumers in a recent study by Wisers. These retailers which have won customers’ hearts have one thing in common: they have been embracing new technology to better engage customers in the digital space and grow brand affinity.


To ride the wave of the e-commerce boom, retailers today need to incorporate the best digital tools and innovate in small steps. Here are some of my reflections on how retailers can cater to new consumer habits, thrive amid the challenging circumstances, and define the future of the industry.


Enabling retail offerings through e-commerce


According to Capgemini Research Institute, 59% of shoppers worldwide said they had high levels of interaction with physical stores before COVID-19. Now, less than a quarter see themselves in that high-interaction category. Consumers have been pushed out of their “in-store comfort zone” and expect both small and large retailers to get online.


HKTVMall, one of Hong Kong’s leading e-commerce platforms, has leveraged Microsoft Teams to host its annual HKTVmall Vision Day event virtually for the first time in response to the pandemic, empowering the company to securely and seamlessly communicate and engage with over 1,600 merchants and business partners regardless of geographical boundaries.


Apart from interacting with customers and merchants via online channels, it is also important to provide consistent, seamless customer experience across both digital and physical touchpoints. Peregrine Corporation, an Australian retailer which serves customers with fuel, food, and supplies, introduced an ‘On The Run’ app that facilitates a ‘Click and Collect’ experience so customers can pay for fuel online without going inside a store. By combining Azure Stack Edge and an in-store database, Peregrine ensures that customers have a reliable and speedy experience, while employees benefit from real-time connectivity and improved efficiencies.


Winning consumer loyalty by turning data into a strategic asset


Even as traditional retail spaces transform to suit new habits, retailers will need to offer hyper-personalized, value-added customer experiences. They might even need to redesign supply chains by harnessing timely data insights.


YATA, the modern Japanese lifestyle department store, modernizes its enterprise resource planning (ERP) system with Microsoft Dynamics 365 and Azure to gain better real-time insights, enabling more dynamic sales offers and personalized promotions to individual customers through the YATA Fans app, social media channels and its eShop site.


With the power of artificial intelligence, we can provide a 360-degree view of shopping behavior and retail history, allowing us to develop robust consumer profiles to easily tailor to individual needs.


By using Microsoft Cloud for Retail, merchants and brands can better understand their customers. Disparate data sources found across the retail value chain are brought together and translated into actionable insights for tailored services and offerings.


Driving growth securely and sustainably


Asia Pacific is set to account for almost half of global consumption by 2030. But with this promise of potential growth comes two important responsibilities for e-commerce retailers: security and sustainability.


Consumer data makes retail organizations a prime target for cybercriminals. According to Dimensional Research’s Retail Security Survey, 57% of organizations said the increase in remote shopping has made security more challenging. Retailers will need to invest in secure infrastructure and engage a technology partner to facilitate centralized security management of different environments so that consumer experiences remain uncompromised.


On the issue of sustainability, consumers are increasingly eco-conscious and expect brands to demonstrate transparency and social responsibility. The retail industry should play a significant role in reducing waste and greenhouse gas emissions.


Taking the first steps toward digitization


Success for retailers means closely tracking the pulse of fast-changing habits and expectations of today’s consumers. This begins with pivoting operations with digitalization and mining new opportunities to serve needs and preferences that continue to evolve every day.

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