Pricerite shows how it embraces robotic technology

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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) :

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