HK government funding expects to boost retailers' O2O strategy
A HK$50 million (US$6.4 million) fund is expected to be available for Hong Kong retailers to invest in technology to enhance productivity, according to the city’s Financial Secretary John Tsang, who announced the 2014-2015 budget announcement last week.
Available on a matching fund basis, the capital is expected to encourage the technology adoption among retailers that are conservative and hesitate to try new technologies, according to PM Lai, chairman of the Hong Kong Retail Technology Industry Association.
“This is a funding similar to those available in Singapore,” said Lai. “Although details of how this funding will be allocated remained unclear, it is a significant support for local retailers to increase their competitiveness.”
O2O: from online to outlet
Lai said retailers are expected to invest in technologies that enhance customers’ experience by integrating its online, offline and mobile channels.
“Most retailers are keen to invest in technologies that draw interest existing and new customers back to their physical outlets,” he said. “This is the O2O strategy, bringing online experience to the offline outlets.”
According to Lai, with a high rental cost and legacy investment in their physical outlets, most retailers remain focus on using technologies to drive customers to their outlets by providing more product information and interest via the online channels or mobile apps.
He said retailers are expected to look at new technologies like WiFi positioning technologies or iBeacon to track shoppers’ behaviors and understand their buying patterns. Other technologies like Internet of things and big data analytics are also expected increase in adoption upon the availability of the funding.
“Local retailers used to be skeptical with the adoption of new technologies because they are uncertain with the return,” said Lai. “The funding is going to lower the entry barrier for retailers to experience these technologies and their benefits.”
In addition to customer engagement, Lai said the available funding is also expected to encourage investment in POS or inventory management enhancement to increase its operational efficiency.
Talent and qualification framework development
On top of technology funding, the government budget also allocated HK$130 million (US$16.8million) for the development of manpower within the retail industry.
The funding was based on the recommendation from the Task Force on Manpower Development of the Retail Industry, which was set up last year to study the local retail industry outlook and its manpower demand and supply. The funding is expected to strengthen the training programs within the Vocational Training Council to match with the newly drawn up Specifications of Competency Standards for the Retail Industry, an industry benchmarks for skills, knowledge and attributes for the job.
“This includes running retail courses through a professional institution and launching pilot courses combining classroom learning and work placement,” said the Financial Secretary. “The Labour Department will provide targeted recruitment and employment services as well as organize large-scale and district-based job fairs, all dedicated to the retail industry.”
“This is an industry known of its high turnover,” said Lai. “The development of these benchmarks and training programs are expected to not only raise the service level and skill sets, but also professionalism and career prospect for the frontline retail workers.”