How big data can rescue struggling Hong Kong retailers amid the tourism slump
Peter Hopper says with fewer visitors coming here and spending money, Hong Kong’s priority must be to understand their likes – through the use of big data
Hong Kong has for a long time been thought of as a heaven for shoppers. However, this is now largely a myth. The recent retail sales figures confirm yet again the decline of spending in the city. A realisation that visitor numbers and spending per head are both declining, and that shopping habits have changed, should now be sinking in with retailers.
While the government has tried to capture the spending of the ebbing tide of mainland visitors in recent years, other destinations seem more attractive nowadays. Tokyo, Seoul and Taipei are the new “TST”, and European destinations are more attractive for groups given the downward trend for the euro and pound.
However, the decline in visitor numbers goes deeper. The growth of online shopping is slowly dawning on Hong Kong retailers. To attract tourists and consumers to a physical store, the visit now needs to be more compelling than simply offering a physical showroom for the online platform. Consumer engagement and value-added have never been more in demand. Combining online and offline in a way that enhances the consumer experience requires clear consumer profiling.
The same goes for attracting visitors. What differentiates European visitors from those from the mainland? What specifically do Canadian visitors like? Never before has it been easier to tap into data trends and buying preferences to tailor experiences to visitor tastes and needs.
The Hong Kong government should take a more proactive approach by making their pool of big data on transport, telecoms and hospitality more readily available to sectors across the tourism industry, so stakeholders can evaluate tourist spending habits.
For instance, local telecom providers could analyse the movements of tourists. By following their paths of travel, it allows stakeholders to profile guests based on activities and interests, such as the duration of stay at a specific tourist spot and the restaurants they dine at. With such information, businesses can offer tailored itineraries and targeted recommendations.
Our regional counterparts are already doing this. The Japanese government tracks the movement of tourists between each sightseeing spot by tapping into their location data, which is available whenever tourists use international roaming services in Japan.
Undoubtedly, Hong Kong is still a fabulous place to visit. But the message is clear: if you want to change the trend, doing more of what was done before will not work. A fundamental change of approach is needed, and fast.
Peter Hopper is Asia-Pacific managing director of the consulting firm Strategic Decisions Group