![\"A](\"https:\/\/trilogi.com\/en\/blog\/wp-content\/uploads\/sites\/2\/2021\/02\/Hong-Kong-Travel-Guide_Harbour-City-HK_Forbes.jpg\" "\\"luxury")
Several luxury stores in Hong Kong.<\/p><\/div>\n
WHAT IS HAPPENING?<\/h2>\n
Let\u2019s first focus on why this is happening. What are the main causes of this ongoing slump?<\/p>\n
Chinese Yuan Renminbi depreciation<\/h3>\n
Due to its geography, Hong Kong\u2019s retail sector largely relies on tourist spending (and their purchasing power). In particular, Chinese mainlanders account for more than 70% of the total tourists, but, since Beijing\u2019s currency devaluation policy in 2015 and the consequential RMB\u2019s loss of purchasing power against the Hong Kong dollar, it seems they now prefer to shop in the more affordable south-east Asia.<\/p>\n
Chinese middle-upper class lifestyle<\/h3>\n
The raising Chinese middle-upper class consumers are rapidly evolving, at the same (or even faster) pace of Chinese economy: they are shifting to new consumption patterns, becoming keener to enjoy a healthy and sporty lifestyle. They prefer to spend their money in travels, sport activities and events, and engaging EXPERIENCES<\/strong>, rather than mere luxury goods. Among the driving forces of this shift of habits, Chinese women play a major role: they have a way higher purchasing power than 10 years ago, and they\u2019re focusing their spending habits more on physical activities and healthy products (such as fitness, outdoor events, sports and related goods, healthy restaurants, food supplements\u2026etc) rather than just buying jewelry or the latest Prada bag. In other terms, enjoying life and having a fit and healthy body is becoming trendier than having shiny accessories.<\/p>\n In the past few years digitalization has completely revolutionized Asian markets, and it will keep doing so for a while. The eCommerce boom, driven by hi tech giants such as Alibaba, Amazon and more recently Tencent, has pushed most companies and brands to start selling online and invest a lot of capital in it. Accordingly, the high competition and the savings opportunities deriving from selling online (less inventory management costs, no rent or personnel costs\u2026etc.) has forced many brands to rebate online prices and run digital campaigns and promotions. The result? Digital stores are becoming the main competitors of their own brand\u2019s physical stores.<\/p>\n Women ready to enjoy a run organized by a running club in Hong Kong.<\/p><\/div>\n How are companies coping with these challenges?<\/p>\n The shrinking luxury retail market is having a major consequence: it\u2019s driving the rents down, especially in prime retail locations. Let\u2019s take Russel Street in Causeway bay as an example. Used to be ranked as one of the most expensive shopping strips in the world, in the last two years it has seen its rents dropping significantly: spaces that could be rented for HKD 2,500 per sq ft just two years ago, can be leased today for just HKD 1,000 per sq ft. This trend has opened up opportunities for middle\/mass markets brands and shops to find themselves a spot in primary locations. In particular, Sport goods retailers are taking advantage of this, leveraging this new tendency. Surprisingly enough, in order to compete with these mass market firms, even luxury brands are entering the sport apparel business, by launching their own sneakers and sporting accessories.<\/p>\n The lower rents, together with the shift of consumer habits towards experiencing recreational activities, are creating another exciting trend. Since retailers have access to more space for a lower price, they are allowed to use it more creatively to entertain and engage their shoppers. This practice, known as \u201cShoppertainment\u201d, consists in incorporating in-store shopping experiences (often involving hi-tech) to attract customers and build brand awareness. The front runner of this trend is again the activewear and sport apparel sector. The Causeway Bay Adidas store, for example, added a virtual reality fitting room giving the customers the chance to try new products in training run simulations, using also a temperature control system to simulate winter weather. In addition, more and more companies running shopping malls, such as Swire Properties, have significantly increased their food and beverage footprint as well as improved their cinema complexes with cutting edge technology. In fact, these shopping centers are evolving into entertainment hubs, revolutionizing shopping as we know it today.<\/p>\n Last but not least, how to properly ride the wave of retail digitalization? The answer is devising an intelligent omnichannel strategy<\/strong>.<\/p>\n What is it?<\/p>\n On the retailer\u2019s side, it means being able to properly manage physical resources and operations (shops, warehouses, products, orders\u2026etc.) with digital activities (web stores, social media, digital campaigns and promotions, ERP and CRM software\u2026etc.) as a single entity, in order to create a unique and profitable sales process. In other words, physical and digital are in symbiosis, and play as complements rather than competitors.<\/p>\n On the consumer\u2019s side, the result is a completely new shopping experience, where the benefits of both dimensions – digital and physical – can be enjoyed.<\/p>\n In-store VR experience.<\/p><\/div>\n As you should have realized, the \u201cshopper\u2019s paradise\u201d is everything but lost; it\u2019s just rapidly evolving, along with its customers\u2019 lifestyle and expectations. If you\u2019ll be able to offer an engaging all-around shopping EXPERIENCE<\/strong>, by exploiting technology, integrating online and offline channels, and providing entertaining subsidiary activities, you are setting up all the preconditions to let your Hong Kong retail business take off.<\/p>\n Wondering what’s the ideal way to integrate online and offline? TLG\u2019s software LogiCommerce<\/strong> offers a fully customized solution to set up a flexible omnichannel retail network in Hong Kong, turning eCommerce platforms and brick & mortar stores into powerful allies.<\/p>\nMultichannel retailing<\/h3>\n
![\"Women](\"https:\/\/trilogi.com\/en\/blog\/wp-content\/uploads\/sites\/2\/2021\/02\/007-NikeWomens-10K-HK-2015.jpg\" "\\"Women")
TRENDS & OPPORTUNITIES<\/h2>\n
Not only luxury<\/h3>\n
\u201cShoppertainment\u201d: the rise of entertaining shopping hubs<\/h3>\n
Omnichannelling<\/h3>\n
![\"VR](\"https:\/\/trilogi.com\/en\/blog\/wp-content\/uploads\/sites\/2\/2021\/02\/maxresdefault.jpg\" "\\"Entertaining")
CONCLUSION<\/h2>\n
![\"Omnichannel](\"https:\/\/trilogi.com\/en\/blog\/wp-content\/uploads\/sites\/2\/2021\/02\/how-to-bring-your-brick-and-mortar-retail-store-online.jpg\" "\\"Omnichannel")
BRICKS AND CLICKS WITH TLG<\/h2>\n