Hong Kong furniture retailer Pricerite has introduced its first online food range, Pricerite Food, fronted by Hong Kong rising star, actor Liu Junqian.
According to the company, Pricerite Food’s philosophy is to promote a “slow living” lifestyle amid the influence of “fast-food culture”. The range is split into three categories: quality exclusive, traditional taste and Asian taste.
“Our philosophy is to promote food culture and gradually change the life attitude of urban people,” the company said in a statement translated from Chinese.
The range will be launched simultaneously in Pricerite’s online store and at nine physical outlets, including stores in Mong Kok Chong Hing, Kowloon Bay, North Point, and Yuen Long.
As part of its launch campaign, Pricerite Food has introduced a video advertisement featuring actor Liu Junqian, who is also appointed as the brand spokesperson.
The brand also rolled out ‘Pricerite Food Virtual Store’ at Hong Kong station, with selected ingredients printed on the top of the poster. Customers can shop directly by scanning the QR Code next to the product they want to order to enter the online store for self-service shopping.
Furniture and housewares retail Pricerite has closed four stores and will cut staff and executive salaries as it rides out the combined impact of the protests and now the coronavirus on sales.
Four stores have been closed, the company said in a statement, without identifying their locations. The leases on another eight stores are due to expire this year and management is evaluating which of these will be renewed.
Store staff numbers have been reduced by 10 percent, but the company said this has not resulted in any effect on service quality.
Wages of senior management have been cut by 20 percent and directors’ salaries by 40 percent, from now until May and June respectively. Logistic employees have been asked to take unpaid vacations.
“Under the current economic downturn, the sales of local consumer goods such as furniture have been under great pressure,” said the chairman of Pricerite’s parent, Cash Group, Guan Baihao.
“The flow of customers has been reduced by 30 percent in the past nine months under the influence of epidemics and social movements. The new retail model is convenient for customers to enjoy online shopping and delivery services. However, the supply of major furniture and household goods has also been affected by the impact of the epidemic, and the supply chain is almost terminated,” he said in a statement translated from Chinese.
“Under the situation of severely affected supply and demand, if the economic situation does not improve in the short term, the group will be forced to take other measures, including further reduction of branches and layoffs.”
Meanwhile, the company is negotiating with landlords for temporary rent relief.
Baiho said the current series of cost-saving measures have gone far beyond the Sars crisis of 2003.
Along with declining retail sales since the social unrest commenced last June, Buildings Department data shows that only 12,923 private homes were completed in the first 11 months of last year, a decrease of nearly 18 percent over the previous year and the lowest figures in three years. That in turn impacts on the sale of furniture.
As of December 31, Pricerite had 28 branches across Hong Kong and employed 800 full- and part-time employees.
Pricerite has opened its third new New Retail concept store, at MegaBox in Kowloon Bay.
The 36,000sqft Pricerite at MegaBox has been designed to seamlessly merge the furniture retailer’s physical store offer with its omnichannel approach.
And it claims to be the first retail chain store in Hong Kong to accept cryptocurrencies. All Pricerite stores are now accepting Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC) as payment method. The store’s cash registers will instantly convert the cryptocurrencies into Hong Kong dollars according to the real-time exchange rate. Customers with a Lightning Network-supported cryptocurrency wallet can finish the BTC transaction in several seconds.
“Following the immense success brought by the opening of Pricerite’s first-of-its-kind New Retail concept store last year, we are making another big leap forward,” said CEO James Leung. “Continuing with our commitment to the integration of advanced technologies with human talent, we … adopted a wide range of state-of-the-art retail technologies, providing customers with an all-rounded shopping experience.”
One of the technologies the company has employed is a Virtual Store online, which simulates the actual environment of the Pricerite at MegaBox store. Customers can browse the aisles and click on a product on the shelf to read its details and price, before adding it to their cart should they wish to buy it.
Leung says the online shopping experience runs 24 hours a day and offers an almost totally true-to-real-life experience.
Another technical highlight is a smart kiosk in the new store which provides information such as inventory levels in the store and the availability of products in nearby stores if they are out of stock at MegaBox.
Pricerite’s Pepper the robot, has been updated, offering far more information than the loyalty program advice the first generation Pepper in Nathan Road was known for. Pricerite says the new-generation Pepper is the first retail robot in Hong Kong developed to provide and search the information of more than 10,000 products.
And the company’s 3D mobile app has been upgraded to provide a more fluid customer experience when customers are measuring if a furniture item will fit inside their home. The app merges the simulated apartment with the actual environment captured via the phone camera before it shows a 1:1 display of all furniture pieces in the real home environment. Users can ‘browse’ the apartment at his or her own pace in a first-person view. This app then offers typical apartment templates and a wide range of furniture options.
The Pricerite at MegaBox offers delivery services in as little as four hours.
During launch phase, the service will be available only for Kowloon customers who buy products with the ‘Pricerite Speed Delivery’ tag online or at the MegaBox outlet.
A lot of Hong Kong retailers are talking about technology right now, but before they even started, Pricerite founder and chairman Bankee Kwan was already embracing it. Now home to the first Pepper robot on customer service duty in a Hong Kong store and leading-edge online apps allowing shoppers to virtually place furniture in their home, Pricerite’s technology journey started way back in 1999.
The furniture retailer is part of Celestial Asia Securities Holdings (Cash Group) which was the first Hong Kong company to launch an online brokerage in 1999. Nowadays, trading shares online is an indispensable part of any brokerage business. Five years later, Cash Group was the first to introduce mobile trading for brokerages.
The company began developing a broader New Retail Concept back in 2012 and in 2014 became the first home furnishings retailer to launch an omnichannel business model.
“So we have always had the mindset to embrace technology to help the business become more competitive and to serve the customers better,” Kwan said.
“That’s why during the Sars epidemic (2003), Pricerite was the first company to introduce online shopping so that our customers could purchase necessities and have them delivered to them. That was 13 years ago, and now online shopping has become popular and common place for housewives to purchase goods.
“So I can actually say we go back a little bit regarding our group philosophy on technology. We always treat our customers’ concerns and feelings as our number one priority.
“New retail concepts will become much more popular. That’s why were are moving ahead with Pepper, with Augmented Reality (AR) and Virtual Reality (VR) to create an impact.”
Concept store
Pricerite’s two-story 20,000sqft New Retail Concept Store in Mong Kok’s Chong Hing Square has been trading for about a year now, a testbed for apps and in-store technology that is constantly being revised, enhanced and added to.
Pepper, the smiling robot with the female Cantonese voice, is probably the most visible execution Pricerite’s customer-centric digital transformation journey. To the delight of children it can dance on request and answer customer questions about the company’s loyalty program from its workspace outside the membership counter.
But it is the less visible execution of Pricerite’s digital strategy that is the most breathtaking: an innovative app which allows you to place furniture items in your own apartment virtually – and order direct from your phone or tablet, from in store or home. It is a great solution for Hongkongers facing shrinking apartment footprints, which make planning a layout that suits one’s lifestyle a challenging task.
The made-to-order zone on the Mong Kok concept store’s level B2 is equipped with a large display screen for app users to preview their selected product from all angles. Using VR technology, the system also provides customised furnishing solutions for medium and small-sized apartments. Guests can take a virtual tour of homes to gain an accurate glimpse of products in situ and see a product’s intelligent functions in action – for example, tables that convert to sleeping spaces and furniture with storage space built in. The AR mode uses cutting-edge mobile 3D Space-Tracking technology, including Apple’s iOS ARKit, which cuts out the hassle of product scanning while generating an “actual” 1:1 preview of an item, allowing simple and easy mix-and-matching for different home styles.
“Technology advances have transformed consumer behaviour and shopping patterns while e-commerce has changed the consumption value chain, creating a complementary retail channel to bricks-and-mortar stores,” observes Kwan.
“Using leading-edge retail technologies to combine online and offline shopping experiences, coupled with a modern supply chain, and big data and artificial intelligence innovations, we have created a pioneering all-round omnichannel retail network for home furnishing.”
The concept store also features multiple digital kiosks and touch-screens around the store augmenting the customer service roles of floor staff by suggesting alternative or complementary products, and providing specifications. AR features in several innovations in store, including creating 3D images of items in the company’s catalogue.
Centres of experience
Kwan says the company’s long-term investment in new technologies has been driven by asking how the company can serve its customers better in terms of information and engagement.
“It’s my experience that the physical store remains the centre of experiences and engagement.” Technology, he says, can make purchasing decisions easier.
“Many traditional retailers are still unsure about whether the innovations will take on, whether they should invest in the technology. But it is essential if we are to remain competitive, especially when we look at millennials and how they shop and interact online.”
Kwan believes that despite the slow uptake of online shopping in Hong Kong, online and mobile shopping will be significant in the future. He cites the Hong Kong government’s Smart City initiative to boost wi-fi connectivity and encourage e-payments as a major driver in years to come.
“With all those facilities established and enabled, fast retailing through mobile is the trend. It is gaining momentum in Hong Kong and we have everything quite well developed, but the market will dictate the change and if you do not accept that [as a retailer], you will fade out and become history.
“So I say, wait another three years and you’ll see the landscape of the retail market will change a lot. I was at a retail summit in Hong Kong recently where we had Facebook and Google and online marketers joining. We were all coming to roughly the same conclusion: technology is a must to keep you competitive.”
Kwan can only guess what percentage of Pricerite’s sales are online versus in-store now – and for good reason. So many transactions begin online and end offline – or the other way around – that it is no longer possible to attribute a sale to either channel. Perhaps retailers who do are missing the whole point of omnichannel. If pushed to nominate a figure he’d say 20 per cent online, 80 per cent offline and he expects that ratio to change to 40/60 within a year or two.
Pricerite’s customers do not make a distinction between online or offline, so it stands to reason the company should not do so either.
“This is whole model is an O2O model, so our customer can shop online, understand we have a promotion, understand the product meets their requirements and then they will come down to the store for the physical experience and to touch the products, then maybe go back home and place an order. So you cannot say this is offline or online,” says Kwan.
“But I believe application of technology to enhance the customer’s experience and engagement, is definitely the road to go and to develop together with more applications and technology, just like Pepper so as to reduce the customer service burden on store staff.”
Kwan stresses Pepper and any other technology implemented at Pricerite must integrate with human staff, not replace them, what he describes as “a balanced fusion of technology and people”.
“Pepper I believe will become popular to provide instant information and master data about product features, etc. That will allow our people to migrate into higher added-value areas.” Kwan says customer response to the AR and VR technology to date has been “really good” and it is driving sales of goods after people look at them either online or instore. “It boosts their confidence buying because they have seen on a screen how a sofa will look in one part of a room and a rug in another.
“The technology is constantly improving and getting much easier to use. I understand our competitors also shop at our stores on and off and they are now also developing the same sort of technology. That, together with efforts by the Hong Kong Government to encourage startups working to develop technology for the service and retail sectors will help drive its adoption in years to come.”
Pricerite’s technology quest is ongoing. The apps will continue to be refined and upgraded with more features and made as user-friendly as possible. Other initiatives are under development but not yet ready to be revealed publicly just yet. And more Peppers are on order, with expanded functions – most of them will speak English, too.
View the gallery below for full images (5 images) :
