How can Hong Kong organisations leverage on the benefits of AI for improved customer experienceBy Edvan Chan
As a digitally savvy population, Hong Kong’s consumers expect retail organisations and brands to invest in enhanced digital capabilities that deliver seamless, hyper-personalised digital experiences. Advances in digital transformation and data modernisation enable retailers to target consumers more accurately and, as a result, achieve higher success.
According to the Census and Statistics Department in Hong Kong, the value of online retail sales increased by around 24 percent in the first half of 2022 as compared with the same period in 2021 which demonstrates how the pandemic has accelerated the adoption of online shopping. As a whole, Hong Kong is investing resources to enhance digitalisation and data-driven decision-making across businesses.
Chief Executive John Lee Ka-chiu has announced that Hong Kong will be promoting the development of innovation and technology by recruiting technology talents to support the growth of digitalisation. The central government is also facilitating Hong Kong’s involvement in national technology projects to promote the sharing of resources for the sector within the Greater Bay Area.
We observed that retailers capitalising on data analytics for micro-segmentation for e-commerce sales achieved much better results when delivering personalised offers and targeted communications.
The new chief executive mentioned that he will lead the SAR government to press ahead at full steam with the development of innovation and technology in Hong Kong and promote the combination of industry chains and complementary development of Hong Kong and other cities in the Greater Bay Area.
"The government will build a vibrant innovation and technology ecosystem, speed up the development of smart cities and make Hong Kong an international innovation and technology centre." John Lee mentioned.
According to McKinsey, companies that excel at customer intimacy generate 40 per cent more revenue, with real-time personalisation delivering a return on investment (ROI) of five to eight times marketing spend and increasing sales by 10 percent. Those are big numbers for any retailer, but achieving them is easier said than done, especially with inaccurate data locked in multiple silos.
As artificial intelligence-based analytics continues to evolve, businesses can leverage significant amounts of data to create customer microsegments, which can harness specific details to segment at an even deeper level to deliver unparalleled personalisation. Yet, despite today’s modernisation capabilities, many businesses are still struggling to extract value from their data.
A survey found that only 34 per cent of APAC IT leaders understand how Artificial Intelligence (AI) and machine learning boost marketing effectiveness. However, many leaders still recognise the value of AI and machine learning for creating a more personalised customer experience — with 77 per cent of respondents agreeing that it has helped them with customer relationship management.
It is crucial for Hong Kong organisations to leverage data and AI to identify patterns and insights from browsing and purchase data, enabling brands to deliver distinct shopping experiences. The first two steps in boosting the power of your marketing programs are understanding how to extract value from your data and using AI to overcome the challenges presented by micro-segmentation.
Integrate your data
Effective micro-segmentation requires accurate and complete data. One problem in achieving this goal is that retailers often have several brands, each holding siloed and disparate data. Micro-segmentation depends on a deep understanding of your customers. But you cannot get that with gaps in your data. Any flaws will inhibit your goal of delivering micro-segmented, personalised experiences to your customers.
The key to overcoming this problem is to consolidate all internal and external sources into one customer platform. Then you need to make the data easily accessible to your marketers.
Benefits of deploying AI
There are clear challenges for Hong Kong retailers in formatting their data for personalisation. However, for most companies the solution is within reach and simply requires modernising their data storage. How can AI help you to micro-segment your target audiences? By giving you the ability to achieve these goals:
- Share data between all areas of your business, so everyone has access to greater insights.
- Deploy visual data transformation to make it easy for everyone to understand data without code-wrangling
- Deliver highly personalised customer experiences based on deep data
- Recommend products based on data such as consumer purchasing history, engagement on social media and current trend
- Provide product recommendations that use contextual communication; for example, “It’s a cold day outside: try our limited-edition mint flavour hot chocolate."
Personalisation is the future of retail. But to get it right retailers need fast and easy access to accurate data. Data transformation and AI are leading the way. Thanks to data modernisation and the ability to access insights from large amounts of data quickly, marketers can provide highly personalised messages to consumers that potentially deliver a significant increase in sales.
Data-driven personalisation helps Hong Kong organisations optimise resources, like time and money, and instead divert them towards expanding intelligent applications and services. Cloud computing is an asset to decision-makers because it empowers organisations to harness data granularity, leaving out the ifs and buts to drive businesses down the path toward the front- and back-end efficiency.
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