Hong Kong Shopping Malls Adjust Promotional Mix to Enhance Sales in the Retail Market’s Coldest Winter

The Census and Statistics Department released the latest figures on Hong Kong’s retail sales on 3 November 2015. The value of total retail sales in September 2015, provisionally estimated at HK$35.2 billion, decreased by 6.4 percent compared with the same month in 2014. The revised estimate of the value of total retail sales in August 2015 decreased by 5.3 percent compared with a year earlier. An ongoing retail slump in the city is expected to last for a period of time.

The Christmas shopping season is generally considered to run from late November to early January, incorporating a period of shopping which comprises a peak season for the retail sector during the Christmas and New Year holidays. This year, shopping malls and emporiums in Hong Kong rushed to start their festive promotions in early November to battle for sales in the recent retail sales slump.

Generally, a good tenant portfolio is a key to increase customer flow to a shopping mall. “In the past, McDonald’s and cinemas were seen as a guarantee for traffic flow to a shopping mall, but nowadays, it is the presence of Apple Store and Eslite Bookstore which contributes to huge flow of consumers,” says Leo Sin, Professor of Department of Marketing at The Chinese University of Hong Kong Business School in an interview with Bloomberg Businessweek/Chinese. “For example, people generally spend at least more than an hour at an Eslite Bookstore, and they will go to restaurants/café in the same shopping mall for meals.” Prof. Sin adds that “this explains why Hysan Place was able to maintain 80 percent of growth in retail sales in the first half year of 2015 as the shopping mall has both Apple Store and Eslite Bookstore.”

Meanwhile, shopping malls in Hong Kong not only adjust their tenant portfolios but also put effort in enriching consumer experiences for local customers. Tourists mainly focus on shopping experiences, whereas local customers consider the “overall consumer experiences” when visiting a shopping mall. For the purpose of customer retention, a majority of the shopping malls in Hong Kong have launched VIP membership services to target local customers. Unique and limited editions of consumer products will be offered to regular customers who visit the shops frequently. “These VIP benefits help a shopping mall create tighter bonding with its customers,” Prof. Sin says.

Prof. Sin points out that VIP membership services should have its uniqueness. “If a shopping mall can offer limited edition of products to its VIP customers exclusively, with benefits which cannot be purchased, it would add value and ultimately enhance customer loyalty,” Prof. Sin elaborates. “Only sales promotions carry the characteristics of ‘limited duration’ and ‘exclusivity’ can entice customers to shop at a shopping mall,” he adds.

Please click on the images below for more details in the original story written in Chinese.

Source: Bloomberg Businessweek/Chinese
Date published: 16 December, 2015

Photo: PRC Magazine