Fung Group unveiled a retail laboratory it has developed in Shanghai with IBM and the brand activation company Pico to accelerate experimentation with omnichannel techniques with Chinese consumers.
The new “Explorium” laboratory is located at the 250,000-square-foot LiFung Plaza to provide a controlled setting for businesses to observe and explore in real time how consumers interact with new technologies, products and environments. The Fung Group is a privately-held multinational group of companies whose core businesses are sourcing, logistics, distribution and retail. It's holdings, which include publicly listed Li & Fung Limited and Global Brands Group Holding Limited, generated combined revenues of $24.7 billion in 2014.
Among technologies in the laboratory, which has been functioning on a soft-opening basis for three months, are virtual-reality fitting rooms, magic mirrors that bring images to life and 3D printing for creating customized products. Brands are also using Explorium to understand opportunities in China for their products and services, based on consumer feedback collected and analyzed at the laboratory. Retailers are using it to test different store concepts.
Unveiling Explorium, Fung Group Chairman Dr. Victor K. Fung said the initiative was sparked by challenges occurring in retail across the world, especially in China.
“Everything we thought we knew about how consumers decide upon what they buy, where they buy, when they buy, how they buy and how they pay is changing, ” he told more than 200 guests at a launch event attended by leading international and domestic brands and retailers, and mall owners and developers. “Technology is the catalyst empowering consumers. The Internet and mobile communications are disrupting the way consumers behave and, in so doing, providing unique opportunities for retailing to come up with new business models. Nowhere is this more evident than in China, one of the world’s most exciting, challenging retail markets.”
Home of China's most tech-savvy consumers
Dr. Fung added that he believed the future for retail in China and globally is omnichannel, which is, online-to-offline (“O2O”) or a combination of “bricks and clicks.”
“Chinese consumers are setting shopping trends globally, especially with their avid use of social media. And Shanghai is home, arguably, to China’s most vibrant, tech-savvy consumers. That is why we chose Shanghai as the launch pad for this major Fung Group initiative.”
Dr. Fung added that there were no preconceived ideas about which omnichannel business models would emerge from Explorium.
“As with most experiments of any lasting value, the greatest measure of success may simply be how much we learn from the results,” he said. “A key advantage for participating brands and retailers is that, with Explorium, they can experiment, incubate and iterate at high speed while minimizing their cost and risk.”
IBM global retail industry leader Stephen Laughlin said IBM is gathering data in the Explorium and analyzing it for insights.
“With analytics, IBM can help retailers in the Explorium deliver personalized, relevant marketing interactions to consumers in real-time, delighting them and differentiating the retailer from the competition. Consumers will be able to opt-in to receive offers and rewards from their favorite brands via social media and their mobile device — all tailored to their location and unique preferences.”
Real-time iteration
Pico Far East Holdings Limited experts in branding, experiential marketing and digital media worked with leaders from the retail and data technology industries to ensure Explorium can be used for rapid testing of omnichannel business strategies in a realistic environment.
“We identify and systematically track the changing preferences of consumers,” said Explorium’s Shanghai-based Director, Simeon Piasecki. “Based on what we learn from each experiment, we move quickly to the next iteration. Explorium is doing all this on a scale and intensity that we believe is unmatched.”
Already, Explorium, which is membership based, has close to 12,000 active participants registered from among employees and family members of the Fung Group and its business partners IBM and Pico.
Typically, members spend over three hours there per visit.
Focus to include apparel
“Children are among Explorium’s biggest fans,” said Mr. Piasecki. “We believe that creating a space where parents and children can bond through learning together and teaching each other will help drive purchases of higher-margin electronic toys, such as drones.”
He added that while children’s products are a special focus during Explorium’s first phase, it will go on to feature women’s and men’s apparel, and home products.
“Explorium’s priority in coming months is to design, build, run and measure a greater number and variety of experiments to produce a pool of data that will enable participating brands and retailers to obtain unique insights for their individual businesses,” said Mr. Piasecki.
The Fung Group is a privately-held multinational group of companies whose core businesses are sourcing, logistics, distribution and retail. The major shareholder is Fung Holdings (1937) Limited, a privately held business entity headquartered in Hong Kong. The Group’s listed entities are Li & Fung Limited, Global Brands Group Holding Limited, Convenience Retail Asia Limited and Trinity Limited. The Fung Group employs 46,800 men and women across 40 economies worldwide, with total revenue of over US$24.65 billion as of December 2014.
