Sustainable growth is the goal of companies of all sizes. The Hong Kong-listed jewelry group Chow Tai Fook has set out a three-year strategic framework “Smart+ 2020” that illustrates its commitment to innovation, technology, and sustainability.
Initiated since last year, the strategic framework focuses on five areas of work including multi-brand products, innovative retail experience, data analytics, customer-centric product customization, and innovative culture.
Unlocking data for actionable decisions
“Big data is involved in most of the areas of work in the new framework,” says Jade Lee, general manager for analytics and technology application at Chow Tai Fook in an interview with Computerworld Hong Kong. “Analysis of data provides us with insights on customer behaviors and business operations, helping us to make intelligent decision automation.”
Chow Tai Fook has been generating massive amounts of data pertaining to customers and products via different channels such as retail stores, e-commerce platforms, and membership program. In the new framework, data analytics is expected to empower the jeweler to continuously innovate and differentiate itself in the competition.
Unlocking data helps the jeweler make actionable business decisions such as predicting business performance and improving inventory turnover.
On business performance prediction, Lee explained that when there is a new store opening or store renovation, his team can apply statistical modeling to measure the potential sales impact on its existing stores nearby. Such foresight allows the jeweler to refine its strategies to achieve its business goals.
In inventory management, Chow Tai Fook uses RFID-enabled electronics jewelry display trays (known as smart trays) in its retail stores to capture data on customers’ preference and shopping behaviors. With a built-in sensor, a smart tray not only displays jewelry information but also tracks how many and which jewelry item(s) are taken away for customers to view or try.
“We’ve collected several billions of data records from smart trays,” says Lee. “They help us understand sales performance of each store, hence we could make appropriate merchandise assortment and distribution decisions.”
According to Lee, Chow Tai Fook has 10 employees to handle data analysis. They produce market intelligence and strategy reports to support management and operations teams in driving or executing business actions. They also help evaluate promotion campaigns in order to deliver the best offers for customers.
Innovative retail experience
Chow Tai Fook has set up five experience shops in Hong Kong, which are located in Kwun Tong, Kowloon Tong, Kwai Fong, Tsuen Wan, and Yuen Long. Augmented reality (AR) mirror is set up in the Kwun Tong shop, providing a new way for customers to try on jewels.
In addition, self-service experience corners will be rolled out in Hong Kong in due course, according to Lee. Customers could purchase jewels from the vending machines in the experience corners.
“We plan to pilot two experience corners to sell intellectual property products such as Disney Collection,” he says. “We’re working on the payment gateway for these corners.”
Self-service experience corners have been operating in five cities in China. Customers could purchase jewelry products via a mobile payment app at those experience corners.
Blockchain & smart product search
On the emerging technology front, Chow Tai Fook embraces blockchain and artificial intelligence (AI) to enhance customer experience and increase operational efficiencies.
Chow Tai Fook has been collaborated with Gemological Institute of America (GIA) to launch blockchain pilot since last September. They use blockchain technology to deliver secure and digital diamond grading reports to customers. Blockchain experience was piloted in 10 stores in Hong Kong in January 2019, and will be rolled out gradually to other stores in the city and China.
To ride on the blockchain experience, Lee says Chow Tai Fook will team with Ping An Insurance to launch jewelry insurance later this year. The insurance will be initially covered the jeweler’s diamond brand T MARK. Upon purchase of a diamond from the jeweler, a customer could subscribe to the diamond insurance policy via the jeweler’s app.
“Jewelry insurance not only provides insurance coverage to customers, but also helps us enhance customer stickiness and product differentiation,” he says.
Chow Tai Fook is also working on voice-activated product search and AI-powered photo search projects.
Voice-activated product search enables sales people to find products and the nearest store easier without the need to typing. AI-powered photo search lets customers snap jewelry photos and search for products on Chow Tai Fook’s e-commerce platforms.