FAB Meetup “The Future of Retail” Report

Retail is one of the most affected industries under the pandemic. FabCafe Hong Kong hosted a FAB Meetup on 16 July to explore how retail stores could be transformed digitally and how the future of physical stores would look like.

Online FAB Meetup “The Future of Retail”

During this COVID-19 pandemic, many traditional businesses are looking for possibilities to transform digitally. Meanwhile, physical shops are still running but it needs to be transformed into other formats. For instance, shops are emphasizing more on customer experience and engagement rather than focusing on selling products only. So after this pandemic, what will be the future of customer experience? How can businesses create better connections between online and offline customer experiences? FabCafe Hong Kong was honoured to have Tina from Pinkoi and Roco from L’Occitane to share their valuable insights and experiences on the future of retail.

The meetup was hosted in panel discussion format and divided into 5 parts.

Part 1 – Introduction

Tina, SVP of Global Business Development at Pinkoi, first introduced Pinkoi as a Taiwenese online marketplace which is selling different design goods. They have expanded their market to Asia including Hong Kong, Thailand and Japan. Not only as a marketplace, Pinkoi also creates a path for brand owners and invests on potential brands to help them grow their businesses and promote them to the global market. There are more than 18,000 design brands and almost 4 million members on Pinkoi. Pinkoi also launched their first retail store in Hong Kong last year.

Tina, SVP of Global Business Development at Pinkoi

Roco, Regional Director of Store Development & Visual Merchandising – APAC at L’Occitane, then introduced there are more than 500 retail stores for L’Occitane in over 50 APAC countries. Roco’s role is to ensure the presentation of their brand identity in the stores. He also mentioned there is a stronger need for integration of customer experience. Retail stores are no longer just the place for product selling, it also creates moments for interaction between customers and the brand.

Roco, Regional Director of Store Development & Visual Merchandising – APAC at L’Occitane

Part 2 – During Pandemic

Under the COVID-19 pandemic, retailers are facing very difficult challenges. Roco admitted that it is a tough time for retail stores. Meanwhile, L’Occitane found significant growth in their online business during the pandemic. But not only building up their online store, Roco mentioned that they also provide pick up at store service for their customers. This could be a chance for retail stores to offer add-on trials and up-sell opportunities. Retail stores are able to serve different purposes, not only just a space for transactions. 

Roco: “There was a shift for stores that they transformed from just a simple transaction space to a space that serve different purposes.”

Tina then shared that as an online marketplace, they did benefit from the growth of the online shopping trend. But at the same time, Pinkoi cares about their designer community. They launched the “Pinkoi Stays with you” campaign, which lowered the commission fee and offered discounts to customers, so as to help 2,000 design brands to get through this difficult time. Pinkoi also hosted webinars for the brands to educate them on improving their marketing skills. Tina also said that during the pandemic, many of the courier services were suspended, which greatly affected the online shopping progress. As the shipping costs were increased, Pinkoi offered subsidies to the sellers in order to help them get through this tough period.

Tina shared the path of growth for creative brands on Pinkoi

Part 3 – Online Trend

Online shopping is not a new trend at all, but definitely will get more and more popular, especially in the post-pandemic era. Tina agreed that there are huge rooms to improve on providing better online user experiences to their customers. She mentioned that online shopping environments only allow very short time for customers to go through from exploring products to making decisions. Customers would only spend 50 seconds on one page on average, so it is difficult to catch customers’ attention in a short period of time. Tina believed that the ethical values behind products become more transparent and important, like the brand stories behind, materials or design details could be the elements affecting the online buying decisions.

Tina: “We are not competing with price, but uniqueness and creativeness. …we can observe that the ethical shopping values behind (products) become more important.”

Roco mentioned that there is a co-existence of online and offline retail platforms. The two platforms are not competing with each other, but Roco believed that the one who can break the gap between online and offline will be the winner in the retail industry. Roco shared that most brands developed their in-store customer journey, which should also bring it to the online environment. Online retail platforms should not be regarded as a transaction platform only, but it is essential to build the online shopping experience as the first engagement point with customers, then continue this experience at physical stores.

Part 4 – Future of Physical Shops

Even though online shopping is becoming more and more important, there are still irreplaceable values for physical stores. Roco believed humans do have the urge to interact with others and physical stores could not be easily replaced by online stores. There is a need in the post-pandemic era to reconsider the purposes of each physical store. Roco mentioned that due to the online shopping trend, this could affect how physical stores should be designed. For instance, physical stores might have less merchandising space but more space for their staff and stocks. 

Roco: “After the pandemic, it would take some time for the customers to regain the confidence to visit physical stores…there is a huge push to re-purpose each store in different regions.”

Tina then shared that their first physical store in Hong Kong is not named as a store, but as “Pinkoi Space”. This is because they do not only view that space as a retail store, but a space that could serve different purposes. They have launched the Mount Fuji exhibition at the space and it has driven a lot of traffic and media exposure. Tina believed that going to a physical store has become a special schedule for customers, especially they can mostly shop online nowadays. The memorable experience that the store could bring to customers is important.

Roco shared the elements that L’Occitane needs to consider for physical store management

Part 5 – Branding & Customer Experience

Retailers always wish to bring positive branding and customer experience, and it can affect customers loyalty as well. Tina shared that Pinkoi has just launched a new loyalty program called “P Coins”. The purpose of launching this loyalty program is to build the alliance of the Pinkoi design community, and it connects different stakeholders in the community. Tina also shared that Pinkoi customers would regard their purchases as the vote to support the designers. Customers also leave supportive comments to designers, which shows a strong connection between designers, customers and the whole community. 

Tina: “Purchasing is like a voting option…customers express their supports by purchasing products.”

Roco believed that there should be the convergence between retailing strategies, frontline staff engagement with customers and physical store designs to enhance  customer experience. In terms of bringing good customer experience, Roco said it is important to build connections with customers through each touchpoint on the customer journey. For example, visuals showing at physical stores should align with online visuals in order to provide seamless customer experience from online to offline. Roco also believed there should be more collaborations between departments inside the company to build a smoother customer experience in the future.

At the end we had a 30-minute Q&A session. Online audiences are interested to learn from real life examples. Roco and Tina shared their experiences and observations in the retail industry and provided valuable insights with audiences.  It was our honour to have 2 wonderful speakers to share on the meetup. FabCafe Hong Kong is going to host more meetups in the future and we will discuss different local and global challenges. Stay tuned and hope to see you next time on FAB Meetup!