In the Age of Connected Retail: Are you Best Leveraging your Expensive Retail Store Space?

Posted by Jacky Kee Jacky Kee on Sep 27, 2017

In Hong Kong, we all share that the most expensive resource is real estate. It is not uncommon to see families spend more than half of their income on mortgage or rental payment. The same thing also applies to the retail business. Russell Street of Causeway Bay is the most expensive retail place in Asia, and ranks even above Ginza of Tokyo.   Globally, it only comes second behind Fifth Avenue of New York City. Despite recent price adjustment due to spending slowdown of mainland China tourists, average rent is still close to US $250 per square foot per month.

Many people are asking the question: In an era where people can conveniently do shopping on ecommerce channels, what is the point for retailers to spend so much money on retail space?

You may be further confused by the fact that the two ecommerce giants, Amazon and Alibaba, are opening physical stores while they are already running very successful online shopping businesses. Apple is also opening their store locations in prime area in almost every major city. Paradoxically, Apple fans are most encouraged to do ordering over website and wait for their beloved items being couriered to their home or office. Yes, those market leaders are financially muscular and can afford it. But do they spend so much money just for a showroom or fitting room?

Of course not. It is all about one thing – “Customer Experience”. When shoppers buy from the store, those top retailers want to give them an unprecedented and powerful emotional response.     The shopping experience has become an integral part of the product and is key to whether customers will come back for repeat purchasing. This inevitably helps to build strong customer loyalty to a brand. It is made more powerful with social media when customer postings can create noise in the community and it can be more effective when compared with costly advertisement campaigns.

If “customer experience” is so key, are retailers getting the most out of their expensive investment on brick and mortar store space? Does it make sense if they invest a small fraction of the high rent to sweeten the entire customer experience?

Yes, the answer is connected retail technology. Please do not get me wrong. We are not talking about traditional point-of-sale terminals which addresses operational issues. There exists something much more appealing:

Imagine as you walk into your shop, will you be impressed if the shop assistant can call out your name even if he or she only meets you the first time? How does it sound if the shop assistant has information handy about your preferences or purchase histories? On your smartphone, you will be presented with “personalized” messages and suggestions about new products that has launched or when your favourite items are physically right around you in the store. In a fitting room, many customers want more privacy and do not fancy a shop assistant being next to him or her. Instead, you can work with a connected smart mirror, showing you your look in different colours and combinations of choices. You can call for assistance only as you like it. This is what we call the “wow” feeling which leaves unforgettable memories as your customer walks out from the store.

Apart from these, there is definitely more modern retail technology can do. It can track customer movement around the shop and produce heat mapping showing how busy which corner of the store is. By implementing RFID to the product tag, it captures the movement of display items in the shop. Before this, retailers had no idea on customer’s “trying and buying” behaviour. With such information, it will help make better decision on how to organize the display shelf. Such data will be fed into the system backend for big data analytics and produce dashboard for management reports and highly targeted remarketing information about customer and even keen insights into product performance to affect change on supply chain decision and product design.

Not too long ago, all of the above sounds great but really was just a dream. Already today, Tofugear’s Omnitech solution can bring this experience to life.   It can serve as a simple yet powerful connected retail experience solution. Tofugear Omnitech brings the entire retail operation together, whether it is in-store, online or on a mobile device. It empowers the staff with confidence and personalizes customer shopping journey, and ultimately will lead to paradigm shifts in designing products for the customer and just in time for what they are looking for on a daily basis.

If you would like to learn more about Omnitech, we welcome you to visit our company website ( or talk to one of our retail industry consultants and specialists (

Topics: Age of Connected Retail, Blog, connected, retail, Retail Store, Retail Store Space, Store Space


Jacky Kee

Written by Jacky Kee

Jacky is the Experience Centre Manager at Tofugear where he leads and demonstrates omnichannel solutions at industry events, workshops and in our in-house demo centre. With over four years of experience, Jacky is an expert when it comes to matching technological solutions to retailer's pain points.

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