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Inside Retail & Adyen

Hong Kong: Two tips for retailers to stay agile and prepare for 2021

The global coronavirus pandemic has thrown the challenges of doing business in Hong Kong into sharp relief – but all is not lost. 

Retail sales in the first nine months of 2020 were down 28.7 per cent on the same period last year, according to Hong Kong’s Census and Statistics Department. And September marked the 20th straight month of contraction, with anti-government protests affecting retail sales last year. 

While the near-term outlook remains challenging, and social distancing restrictions tightening again recently, there may be a glimmer of hope ahead. 

For one thing, retailers and consumers have a better understanding of the health and safety measures that can help reduce the risk of transmission. People are now familiar with capacity limits, social distancing and sanitisation stations, giving them confidence to return to stores. 

At the same time, consumers have embraced e-commerce over the last year, gaining a new appreciation for the convenient cross-channel shopping experiences. Retailers who invested in digital technologies in 2020 could see them pay off in the new year. 

With 2021 just round the corner, get ready with the quick tips below – or see the full actionable insights including learnings from the world’s top retail brands inside the Adyen Agility Report Hong Kong.

Importance of contactless payments

Contactless payments may seem like an obvious strategy in 2021 – but what should retailers consider when implementing contactless? 

In Adyen’s Agility Report Hong Kong, 59 per cent of Hongkongers said they were concerned about the hygiene of payment terminals and would prefer contactless payment options such as NFC cards and wallet payments. This was higher than the global average of 54 per cent. 

Adyen merchant skincare brand, Aesop, for example, offers a range of contactless payment options, including via mobile point-of-sale (POS), which allows customers to pay outside the store. This is useful for retailers as safe distancing limits and crowd restrictions could limit the number of customers that can enter the store.

Contactless payment methods like Pay by Link have also gained popularity among retailers. 

Pay by Link allows customers to pay for items via a secure payment link and can be sent as a follow-up to a video consultation – a use case that’s now become familiar to consumers and brands alike.

“We’re looking at the ways people transact, particularly in this ‘new normal’ to make sure we’re providing the right options,” Robbie Tutt, Aesop’s GM of digital and technology, explained in the Adyen report

The line between online and offline has also been further blurred as shoppers quickly look for the safest and most convenient ways to buy. So retailers need to think of how they can make shopping easier. 

One quick way is to offer shoppers’ preferred payment methods whether online or in-store, including card payments and digital wallets like Apple Pay, Google Pay, Alipay and WeChat Pay. Not only can retailers seamlessly connect online and offline shopping experiences, but also be ever-ready to turn shoppers into customers whichever channel they may be on.

Unified commerce as a strategy to stay relevant in a post-pandemic world

Covid-19 has caused a well-reported e-commerce boom around the world, including in Hong Kong, where 42 per cent of shoppers have increased their online shopping as shared in the same Adyen report. Shoppers across all age groups – including 55+ year olds – have shared they will be shopping online more moving forward. 

At the same time, the store remains highly relevant. What’s even more important as a takeaway for businesses: 79 per cent of shoppers in Hong Kong now want brands to offer flexible, cross-channel experiences.

As the city gears up for its fourth wave of the local epidemic, it’s apparent to retailers that a temporary digital storefront as a stop-gap measure is simply not enough. The time has come for retailers to adapt and adopt unified commerce as a longer term strategy.

Shoppers will keep finding ways and means that are convenient and more importantly, safe, for them. These may be in-store or online – in-app, mobile, social, etc. Taking a unified commerce approach – connecting shopper activity and transaction on these channels, and being able to recognize the same shopper across all of them, have been proven to boost customer loyalty.

Unified commerce is the basis of many conveniences that shoppers already want, such as buy-online-return-in-store, and endless aisle where shoppers can order items that are out of stock and have them shipped to their homes. Some brick-and-mortar-only retailers pivoted by offering these options in the last few months, and it’s not hard to see why shoppers want these to continue.

For the full insights to prepare for 2021, get your copy of Adyen Agility Report Hong Kong now.