Hong Kong Retail Technology Industry Association
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1 Hong Kong Retail Technology Industry Association Hong Kong Retail Technology Industry Association Presented by: Mr. Ken K.K. Fong B.Soc Sc (HKU), M.Sc. (I.M), MBA, MCIM, MHKCS, MHKMA, Chartered IT Professional. Chartered Marketer Chairman, Hong Kong Retail Technology Industry Association (RTIA) Vice Chairman, EPCAB, EPCGlobal HK Board Member, ECAB, HKANA
2 About RTIA Hong Kong Retail Technology Industry Association (RTIA) is a non-profit trade association target to be a united force in the industry to accelerate the development and usage of retail and payment technologies locally and to promote our experience outside Hong Kong
3 About RTIA Categories of Retail Technology Retail Automation/AutoID / RFID Technology Supply Chain Technology CRM Technology Payment and Card Technology Surveillance and Security Technology Anti-Counterfeit Technology Communication Technology
4 Hong Kong Retail Technology Industry Association Use of Technology on Retail Management upon IVS Opportunities?
5 Use of Technology on Retail Management Agenda Tourism, Economy and the Individual Visit Scheme Opportunity and Challenge Retailers Facing The Intelligent Retail Initiatives Conclusion
6 Tourism, Economy and the Individual Visit Scheme Record-breaking 21.8 million visitor by 2004 Increase over 30% compare to year of SARS 12.2 million from mainland Total expenditure: $91.8 billion Payments for goods and services consumed in Hong Kong grew to $69.6 billion 38.28b (55%) contributed by mainland visitors Overnight mainland visitors spending: $4355 Booms growth in related sector in retail, catering and hotel industries
7 Opportunity from Individual Visit Scheme Individual Visit Scheme (IVS ) As from March last year, the scheme has been extended to the whole of Guangdong Province and 11 additional major cities throughout the Mainland opportunity to increase further the number of Mainland visitors, especially at low season periods Increase no. of visit especially from the South with Similar Culture: Guangzhou: from 1.3 to 2.7; Shenzhen:3.3 to 5.6 Shorter length of Stay: 2.7 IVS vs. 5.1 night Non IVS stimulate impulsive consumption to maximize the overall returns for Hong Kong IVS: Shorter length and mainly for Leisure and Purchasing Extended from purchase of Jewelry Watch and Gold to Other e.g. Fashion, Computer accessories etc.
8 Tourism, Economy and the Individual Visit Scheme coming Other Provinces to join IVS Opening of Hong Kong Disneyland by Sept. Other major tourism infrastructure projects Tung Chung Cable Car Hong Kong Wetland Park Support by the Government: Budget Speech, Developing Tourism Hong Kong Tourism Board anticipates number of visitor arrivals > 27 million by year 2006.
9 Challenges Retailer Facing Today Consumers Demand Better Value More Convenience Higher Availability Availability Efficiency Better Efficiency Turbulent Market Environment Unfamiliar Customer Seller Market > Buyer Market High Cost New Competitor How to make it Simpler Better Cheaper to shop in our outlets and have the Repeated customer?
10 Use of Technology to Break Barriers
11 The Intelligent Retail Initiatives information and communication Retail Operation and Profitability In-Store Marketing and Promotion Store Assistant and CRM Security
12 Retail Operation and Profitability Retail Automation In the retail sector, the main channel is the store - some 98 percent of transactions happen there. So transactions need to be collected from all channels, most especially the store, and then centralized in a data warehouse. In a retail store a POS system help to track the transaction and can provide the inventory management tools as well as sales and marketing By implementing a good POS system, retailer could expect to improve business and profit through: increase sales, by increasing speed and accuracy of sales which improves customer service Decrease losses and improve cash flow with better inventory control and more accurate purchasing order management Reduce over / under stock, improve profitability Reduce overall expense by reducing labor Turn transaction into relation by target marketing
13 Retail Operation and Profitability Devices / Events Monitoring System Software agents installed at EPOS / PC to monitor the status of the system for hardware and software, connect to the service / call centre Provide proactive services BEFORE problem occurs Minimize the downtime for store operations Improve the sales throughput and hence overall profitability Shelf Management System Implement a total category management solution Optimize investments in the two most important retail assets: inventory and selling space Enhance profitability throughout the supply chain by implementing ideal category schematics Increase distribution efficiency with comprehensive replenishment modeling Extend the use of point-of-sale, market-level and consumer data Planogram
14 Retail Operation and Profitability RF ID tags Replace / Supplement bar code scanning Electronic article surveillance (EAS) No / less stock taking Better statistical information / knowledge Checkout Counter & Shop Floor Re-engineering With properly designed counter and layout of equipment, increase an average of 5% throughput With the shop floor re-engineering via compact, yet more efficiency design, reduce shop floor occupied by 16% Designs to reduce number of cashier yet increase throughput efficiency (1 cashier for 2 checkouts) Designs to increase customer interaction with cashier, increase customer service level and satisfaction, one-to-one service and marketing to loyal customers, improve bottom line
15 Retail Operation and Profitability Customer Relationship Management Why CRM for IVS? Facing new customer business challenges and dynamics in mainland visitor. e.g. not cost effective using advertising especially for customer retention Repeated Visitor of IVS > CRM retention promotion using and SMS What is CRM? Retail CRM help you to build your customer profile database and gain insight into your customers'purchasing patterns that will allow you to optimize your organization's customer-centric operations: merchandize, space utilization, assortment planning, pricing and in-store shopping experience Benefit of CRM Keep loyal customer by increased customer service level 20% / 80%; enhance overall bottom line Maximize profit from loyal customers Successful CRM: Turning Transaction into Relation and Customer Loyalty into Profitability
16 Retail Operation and Profitability Business Intelligence and KPI Smart use of Internet Cost effective use of communication over Broadband Access Bridging the information gap via Internet e-commerce with Real Outlet Lower Operation Cost
17 In-Store Marketing and Promotion Customers expectation of assistance from store staffs When cannot find the merchandise wanted 57.2% When want to buy merchandise of new brand or new function 39.1% When cannot find the price label, or information on label is confusing 34.7% When want to buy the high-tech merchandise 28.2% There are gaps between the services provided by the store staffs and the expectation from customers. Source China Chain Store & Franchise Association, 2003 Report
18 In-Store Marketing and Promotion Information Kiosk Product information & promotion Store guide Loyalty program user information Internet access Payment terminal for utilities, ticketing etc. Gaming Station Attract new customers via special promotions / prizes Create excellent store atmosphere for purchasing Higher turnover per transaction
19 In-Store Marketing and Promotion Electronic Shelf Label (ESL) Accurate and Instant Price Information Special promotion message Flashing LED to attract shoppers attention In-Store Advertising System Significant increase of sales by 33% through pictured / video promotions at the point-of-decision1 Store / national / global in-house messaging system Additional incomes for retailers/operators; Changing the IT expenses to incomes generator Uplift the image of the store Remote Management of Content at Office 1 Source: Consumer survey study, brand logistics, 2002
20 Store Assistant and Customer Satisfaction Personal Shopping Assistant Electronic Shelf Label Information Kiosk Non-Cash Tender Equipment Provide alternative means of tender More convenience for consumers Save total turnaround time Higher throughput, better sales turnover and profitability Prepaid card also enhance cash flow of the retailer Mobile Pre-Scanning (Queue-Busting) Scanning while customer queuing, shorter queue Data send from handheld to server via RF network Save up to 80% time at counter Higher throughput Increase customer service level Improve sales and profitability
21 Store Assistant and Customer Satisfaction Self Checkout Operation Reduce queue time for consumer Better shopping experience for consumers, increase consumer satisfaction Support customer loyalty programmes Reduce staff cost Extend store opening hours Reduce cashier pressure during peak hours Prestige & Publicity Safeway Hypermarket in UK
22 Security at Store Level Fraud prevention / detection system Electronic Article Surveillance Remote Digital Surveillance
23 Security at Store Level According to the 2001 National Retail Security Survey, U.S. retailers lost $32.3 billion on inventory shrinkage last year, 46 percent of which is attributed to thefts by disgruntled workers, and 31 percent to shoplifters. Unknowingly, a store may be losing a huge percentage of its profits while no one is watching. Traditional Tape based system: Not dependable and convenience in remote visual management Remote Digital Surveillance visual management system proactively help you prevent this from happening
24 Security at Store Level Advanced solution should be integrated with POS systems, and synchronize text data with video images. The recorded video database gives you the ability to track down a specific event by reviewing the videos of a specific date, time, location, or transaction. Simply point-and-click on the desired time and date image display to retrieve a video for replaying, editing, file exporting, or to print out still images for investigation or evidence purposes Functions Monitor employee performance and customer service Investigate liability claims Monitor storage space and remote assets Gather merchandising intelligence Reduce tape management costs
25 Conclusion: Retail Success information and communication Retail Operation and Profitability In-Store Marketing and Promotion Store Assistant and Customer Satisfaction Security Operational Excellence Effective Organization Successful Relationship
26 Hong Kong Retail Technology Industry Association Thank You For more information, please visit or to:
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