Retailers need to sell experiences, not products says Habbitzz CEO
Technology that allows retailers to sell “experiences” instead of products will flourish in coming years, creating huge opportunities for startup companies.
That’s the prediction of Habbitzz CEO Alex Bono, one of the speakers at next week’s Retail’s Cutting Edge at the Hong Kong Convention & Exhibition Centre organised by Inside Retail in partnership with InvestHK.
“I would recommend to retailers they invest in experience which translates in final value to the consumer and builds a sticky ecosystem of value. It is the only way [for brick-and-mortar retailers] to thrive beyond competing on price, which is not sustainable in the long run.”
Bono believes technology companies need to deal with what he calls the “syndrome of hyper-adoption” in which consumers are adopting technologies in two ways: ‘depth and niche’ or ‘broad and more shallow’.
“That means that there is space for different types of tech to impact consumers to different degrees. For instance, Virtual Reality (VR). If we look at VR now, we see that there are some restrictions due to complexity, cost and usability (consumers still see wearing a VR headset as a bit weird). However, the upside is that some niches are huge for some retail categories – such as for bulky items like furniture.
“Augmented Reality (AR) on the other hand, is a lighter version of VR and I foresee a lot of adoption in all those categories in which consumers want to see how a product fits. For example, beauty and wellness, fashion and furniture.”
Bono says retailers who do not invest in Artificial Intelligence (AI) as a basic pillar will struggle in the coming decade.
“Personalisation technologies will be the bread and butter of this decade. The big guys in e-commerce are already showing the path. I would invest in strong AI initiatives to push smooth personalisation.”
However the biggest focus of all technologies he recommends, is enabling a full Online-to-Offline (O2O) experience. Any technology that enables that journey should be on retailers’ radars, he argues.
Blockchain, too, offers a massive opportunity to optimise the supply chain for retailers, optimising costs, reducing overheads at all levels. The e-commerce sector will be the first to adopt blockchain, but Bono says traditional retailers need it even more urgently as they are less efficient operationally than e-commerce rivals.
Hong Kong retailers ‘too complacent’
Bono believes Hong Kong retailers have become complacent.
“Everyone keeps saying the Hong Kong retail experience is good. However when Habbitzz does surveys and asks why shoppers want to use e-commerce, most say because it is more convenient online. That means that at the end of the day not everyone sees offline shopping as being as convenient as we might think. I agree that shopping in Hong Kong is convenient in some aspects, but so is online shopping. Denying that is like putting a blindfold on and keeping walking: you know that sooner or later you will certainly walk into a wall.”
“However what is different is the consumer. The Hong Kong and Mainland consumers are slightly different now, yet within a couple of years their behaviour will be very similar.”
He advises any Hong Kong retailer who wants to look at how the future of retailing will look needs to take a sneak peak at China’s e-commerce and retail strategies.
Bono’s final advice for retailers: “Invest in experience which translates in final value to the consumer and build a sticky ecosystem of value. End complacency and start the year with fresh eyes. Set up some new teams which can lead a digital transformation into an experience online or offline without the current bias either way. Every CEO and board member of every retailer should do this quickly to avoid falling into the trap of “business as usual” which only leads to decline.
Tickets are still available for the day-long Retail’s Cutting Edge on January 23. For full details of speakers and the agenda, visit our dedicated website.