Hallenstein Glasson Holdings has introduced two virtual assistants - Charlie and Benny - "conversational chatbots" to service its online store as it faces tough trading conditions and an ever-changing retail market.

Mark Goddard, group chief executive of Hallenstein Glasson Holdings, told shareholders at the company's annual general meeting in Christchurch this morning that chatbot Charlie, who works for women's fashion retailer Glassons and Benny for men's counterpart Hallensteins, operate on artificial intelligence to answer commonly-asked questions by consumers on its website.

The chatbots are one of a few technologies Hallenstein Glasson has introduced in its retail stores, such as interactive fitting rooms which allow consumers to play music of their choice, and trialling hand-held payment devices.

It has also extended its click-and-collect service and "endless aisle" strategies.

Advertisement

"We live in a dynamic and highly competitive market where technology is changing the way customers and retailers interact and engage. The pace of change and disruption is increasingly fast and transparent, and there is a need for continuous innovation," Goddard told shareholders.

The group would continue to invest in technology, it said.

Chair Warren Bell said the outlook for Hallenstein Glasson's second half of the year was uncertain. He did not offer earnings guidance.

"The outlook for the second half of the year remains uncertain as increasing costs - such as fuel, freight, electricity etc - and the lower New Zealand and Australian dollar puts pressure on our trading margins," Bell said in notes issued to the NZX.

"We will however remain focused on improving our market share and customer experience in the New Zealand and Australia fashion apparel markets in which we operate, and keep a tight control over our operating costs."

Hallenstein Glasson shares fell to a 10-month low $4.20, down 3.5 per cent, or 15 cents this morning. The stock has slumped 25 per cent since the end of November.

In September the group reported a 58 per cent increase in annual profit for the 12 months ended August 1. Online sales represented 12.8 per cent of all sales in that period.

While the outlook for the current financial year remained uncertain, the company remained focused on inventory levels and other factors within its control, Goddard said.

"Australia and New Zealand continue to be increasingly challenging retail markets.

"Consumers on both sides of the Tasman face ever-increasing pressures and challenges on their discretionary spend, and businesses in both countries are experiencing legislative change as well as challenging exchange rates and cost increase pressures."

The company managed to widen gross margins to 68.4 per cent in the 2018 financial year from 58.9 per cent in 2017, despite a 12 per cent increase in employee costs to $51.6 million.

Store expansion plans

Designs from clothing chain Glassons' Australian concept store will be rolled out to New Zealand stores in the first-half of next year, Goddard said.

The fashion retailer will change its Bayfair and Palmerston North stores and refurbish its Newmarket and Te Rapa locations.

Hallenstein Brothers will open a new store in Frankton, Queenstown and another Bayfair. The Botany Downs store will be refurbished.

"As strong as our new concept stores are, we are not standing still," he said.

"We are constantly looking for ways to improve, innovate and evolve our stores, ensuring we deliver the most exciting and engaging experience for our customer."

The group will issue a trading update after the crucial summer sales period.

- additional reporting BusinessDesk.