RETAILER PROFILE: Fortress, Hong Kong

Hi-tech in Hong Kong

The Fortress retail chain in Hong Kong has celebrated 40 years by refurbishing its 10,000sq ft flagship store in Times Square and creating an ‘interactive shopping experience’. Simon King went to take a look around and talk to general manager Clarice Au

Fortress is the leading electrical retailer in Hong Kong with 95 stores in an area just three times the size of the Isle of Wight and this year marks its 40th anniversary. ERT is in Hong Kong to visit the retail chain’s newly-refurbished, 10,000sq ft flagship store on the 8th and 9th floors of the Times Square shopping and office complex in Causeway Bay, Hong Kong Island.

A year in the planning, the new store opened on September 14, the result of a HK$10 million (£845,600) investment that is expected to achieve a return on investment within three to five years.

The new premium store format includes more than 2,300 products – with over 100 well-trained staff – and provides Hong Kong’s digitally-savvy shoppers with a one-stop destination.

ERT catches up with general manager Clarice Au at the Times Square store. She tells us: “We know that today’s consumers don’t just want to buy the best and most cutting-edge products, they want to immerse themselves in an interactive shopping experience.

“Fortress has always put consumers’ evolving needs at the heart of our innovation, and the new Times Square store is a digital paradise, linking the shopping experience with shoppers’ connected lives.”

Fortress has always put consumers’ evolving needs at the heart of our innovation, and the new Times Square store is a digital paradise, linking the shopping experience with shoppers’ connected lives

Ms Au explains that the company chose Times Square for its flagship store because the nine-level shopping mecca – with a total retail floor area of more than 900,000sq ft – is popular with both locals and tourists.

She says: “Locals love to shop in Times Square, which is close to both Central and Causeway Bay.”

The most obvious thing ERT notices as we approached the store in Times Square is that one of Fortress’s competitors, Broadway, has a two-tier store next door.

Ms Au says: “We see some benefits of being located so close to our competitors. Customers can make comparisons. Competition is good and that’s why we have to make continuous improvements as we want to stand out from the competition.”

On the current uncertain economic situation, she comments: “The number of mainland China tourists coming to Hong Kong and staying for at least one night is declining. This type of consumer has a higher spending power, so they pay to stay overnight in a hotel and then do some shopping.

“For the mainland tourists, electronics is one of their favourite categories to shop, however, they are not more cautious and they tend to buy less per trip.

“There are challenges, but that’s the reason why we continue to invest in our shopping environments to strengthen our business. We are determined to maintain our growth in such a challenging environment.”

hong kong harbour
Hong Kong harbour

Merchandising

Fortress was established in 1975 and is owned by the AS Watson Group, a member of CK Hutchison Holdings, which also operates the Savers, Superdrug and The Perfume Shop chains in the UK. The retailer also runs five stores in Macau.

Ms Au joined Fortress as general manager in June 2013 and she is now responsible for more than 1,500 staff. Before joining the company, she worked in travel retail for Nuance Watson and headed the merchandising team there.

She says: “I was in charge of looking after all the merchandising at Hong Kong International Airport, where I was exposed to a very wide range of merchandise. This is what I really enjoy.”

So it is no surprise that the new flagship store is so well laid-out, given Ms Au’s passion for merchandising and the look and feel of a shop.

Fortress Demo room“The design is modern and I want to emphasise the most important design concept here – the customer experience. We display 290 live products in the consumer electronics and IT areas,” she says.

“When customers come here, they have the total freedom to touch and feel and play with the products. We strongly believe customers need space to walk around to test and experience the products. It was a very painful decision to take away merchandising space – there is always a tendency to bring in more and more products.”

The store is divided into lifestyle zones featuring products, such as consumer electronics and IT on the ground floor and domestic appliances on the upper level.

An area called the Tree of Innovation (see picture on previous page) features cutting-edge technologies, including 4K drones from Yuneec International and 3D printers from XYZprinting.

The flagship store is also home to an LG 105in 5K OLED TV – the only one in Hong Kong, priced at a mouth-watering HK$888,000 (£75,080).

Fortress store exterior
Fortress store exterior

Ms Au says: “When the customer comes in, it creates a wow factor – in Hong Kong screen sizes are quite small, the mass market is in 40in to 60in sets.”

The home appliances department features a number of categories, including vacuum cleaners, rice cookers, freezers and washing machines. Unlike UK stores, Fortress also sells air conditioning, beauty and medical products.

A key part of the household appliance department is a working kitchen, which regularly holds demonstrations by chefs, as well as cookery classes.

Looking to the future, Ms Au predicts that there will, in time, be around five of the premium style stores, similar to the Times Square format.

She adds: “We will continue to renovate our stores – this is only the beginning. In 2016, we will open our next premium store. We have to get the right location – it won’t work everywhere.

“Hong Kong is such a congested space, as a retailer you don’t have much choice about where you locate a store.

“In Hong Kong, it’s quite difficult to find the size of store we want – we are not Louis Vuitton or Chanel. We want to make a point that electronics stores can look nice – and are great for the customer experience.”

There is no sign that Fortress’s dominant position in Hong Kong’s booming electrical retailing sector is getting anything but stronger.