Hong Kong’s market research industry fends off data bias issues with technology that knows consumers better than they know themselves
With nearly 30 years of FMCG sales and marketing experience under his belt, Nielsen’s Managing Director of Hong Kong and Macau Michael Lee knows a thing or two about what makes consumers reach for their wallets.
“If we ask consumers whether they like something or not, what they say might not be the truth,” he says.
According to Deloitte’s CMO Survey, FMCG retailers spend over 20 percent of their annual budgets on marketing campaigns each year, so they want more than just our word that we’ll buy what they’re selling. We’re talking about cold, hard, proof; and market research companies like Nielsen are where retailers can go to get it.
“Consumers’ claims have to be evidenced by sales data, because if they claim they like a product, but it’s not the number one seller in the marketplace, it doesn’t make sense,” says Lee.
Nielsen integrates local retailers’ sales data with consumer tastes data into a single database for their clients, who look at both data sets to do things like measure product performance, identify new business opportunities and make important commercial decisions.
But given Lee’s earlier skepticism about the credibility of consumer claims, how can anyone be sure that the consumer data collected is really accurate? Substantiating it with hard sales figures as mentioned above is one way to find out, but a lower risk (and cheaper, in the long run) alternative is to enlist the help of innovative technologies, such as consumer neuroscience, virtual reality and artificial intelligence.
Riding the brain waves
If right now you’re thinking that the only way for retailers to know what their consumers truly want is to literally get inside their heads, then you’d be correct...
Consumer neuroscience involves wiring a consumer up to a headband fitted with EEG technology to monitor their brain signals while they watch video ads. By measuring the second-by-second emotional engagement of consumers, market research firms can help their clients to identify the most stimulating and relevant parts of their advertising content.
Neuroscience technology arrived in Hong Kong over eight years ago. But Nielsen was the first company in Hong Kong to apply the U.S.-developed EEG neuroscience technology to the market research sector, says Lee, who views it as the solution to eliminating bias from the self-reporting methodologies traditionally relied upon.
Nielsen added the power of virtual reality (VR) to its arsenal in May this year. VR headset technology allows customers to experience simulated 3D store environments, while built-in eye tracking technology gauges response indicators, such as length of time spent looking at things in different parts of the store.
If the alternative is investing time and money into actually building the store first, it’s a no brainer. So far, Nielsen has used VR to help supermarkets, luxury retailers and brands considering “pop-up” or concept stores.
Determined to not quit while it’s ahead, Lee says the company has been developing designated “intelligent” machines which will be able to process client’s direct questions and provide immediate answers based on specific datasets.
“The machine will be able to tell them immediately from looking at the dataset what the opportunities and issues are,” he says of the AI technology, currently being developed in the U.S. and expected to launch in Hong Kong within the next two years.
Lee predicts that the market research sector will explode with even more innovative solutions, and expects Nielsen’s competitors to introduce or import their own AI technology in the coming years.
“But it’s not a competition. For all industry players who introduce solutions, we are not cannibalizing the market and competing among ourselves, but moving the whole industry in the direction of becoming more tech-focused,” he says.
More than industry growth and expansion, the shift to tech is a matter of survival. Getting clients to understand and get on board with new research technology can sometimes be a frustrating process.
“Clients in Hong Kong are quite absent minded. We need to keep reminding them that we are driving business for the whole research industry. If they stick to the old research tools, customers are getting more and more sophisticated…” says Lee.
A user tries out Nielsen’s VR technology
The new retail
Retail players in Hong Kong adopt a similar collaborative mindset, which explains why most are willing to share their sales data with market research firms like Nielsen in the first place.
“Retailers in the market do not operate in silos. Not only do they want to understand their own performance but they also want to benchmark their performance against others in the market,” he says.
And contrary to what American media headlines would have us believe, physical retail stores aren’t going anywhere anytime soon.
“Shopping [in store] is therapy, especially in Hong Kong. No matter how busy you are you will still enjoy shopping, and technology will create a better experience overall,” he says.
Lee is keen to impress that there is no clear segmentation of online/offline customers in Hong Kong, that everyone shops both online and offline. The challenge for most retailers is how to create a frictionless and consistent experience between the two. Again, this is where VR can help retailers envision and create the best in-store experience.
“The idea is to use tech to create a seamless workflow, from decision to transaction to delivery – the three most important points of consumer experience,” says Lee.
As Nielsen’s Managing Director of Hong Kong and Macau, Lee is responsible for making sure the company stays abreast of the latest trends and of the competition. It’s a role with many demands, and one he balances out with running marathons. Lee hopes to complete the 6 World Major Marathons before he retires – a goal he’s halfway through.
“In Hong Kong you need to find your own work/life balance. It’s not strictly about working 9-5 but how you allocate your time to fit all aspects of your life,” he says.
Now if only there was a piece of technology to help with that...