How Chinese Millennials are Rewriting the Future of Luxury Brand Experience
This blog post has been contributed by Jenny Chua, integrated head of creative, Brandimage China.
One-third of global luxury sales come through Chinese consumers aged between 18 to 30. China's personal luxury goods market is estimated to increase by 6% over the next five years. It is no question that these consumers are changing the face of the luxury experience in China and globally.
Young Chinese consumers prefer unique products over exclusive items, artful over artisanal and personalised over universal. They are a generation that expresses every part of lifestyle instantaneously on social platforms. No longer do they sit around for their loyal brand to launch a product; instead they follow a blogger whose content is more relatable to them to provide a review of the product before the official launch.
They value luxury products as high-quality items rather than expression of wealth. All of which identifies with the traits of Chinese millennials or aka 'Chinese Luxury Shoppers' - directing luxury hubs to get on the bandwagon of using social platforms to connect with them.
Dilution of sales between online and offline channels has forced luxury brands to undergo sales and marketing transformation as it races with new luxury shoppers. This shift drives brands to engage with millennials, build a relationship and maintain the community to have a visible presence amongst the sea of posts that the overloading the social accounts.
With luxury hubs leveraging the social platforms to maximise their social network, let us take a look at the three unconventional approaches undertaken by brands:
Luxury enters mass. A locally developed app, Douyin, known as Tik Tok internationally has captured 500 million monthly active users and 250 million daily active users, surpassing the likes of Instagram’s Stories feature, and Snapchat. With more than 46% users identified as millennials and Gen Zs, these users account for more than 50,000RMB transactions via the platform. Luxury brands have begun redesigning their digital marketing strategies to meet them.
For instance, the renowned Paris label, Louis Vuitton promoted its Christmas campaign by posting short videos and linking the product URL to the brand's e-commerce page. This strategy propelled customers to widen their choice of selection before proceeding to check out increasing sales for the brand.
Michael Kors took a different approach through the #TheWalkShanghai challenge. App users uploaded their version of ramp walk with customised branded filters. As users created their content with branded assets, brand engagement increased, and its exposure through subsequent social contents increased traffic to its page.
WeChat, luxury's new BFF. Luxury brands on WeChat go beyond the regular WeChat services to build fun and interactive experience for Chinese luxury shoppers. Consider, Sergio Rossi's WeChat mini-program to harness the direct-to-consumer luxury trend in China enabling consumers to personalise their footwear. The e-retail experience offered customers a one-stop shopping destination — providing the brand with 360 degree coverage through social media sharing and influencing the purchase decision.
French cosmetic brand, Guerlain, deployed a WeChat gamification marketing plan to introduce their new lipstick to China. Participants entered a racing game where winners have to go to the retail store to retrieve their awards. The omnichannel experience increased brand presence online and gained footfall to the brand's physical store.
Luxury takes flight. While some luxury hubs create an exciting online experience, others leverage travel retail stores to provide an unforgettable shopping experience for passengers.
Yves Saint Laurent (YSL) Beaute launched its first travel retail pop-up event at LA airport - one of the busiest airports with a large number of Chinese passengers. To build traction towards the booth, YSL invited four Chinese influencers to participate in different activities to showcase YSL's makeup looks.
The pop-up event offered a customisable lipstick arena, instagrammable photo corner and a centre stage to unleash their inner rock stars. A full 'retailtainment' experience created the mood attracting the younger luxury consumers to indulge in the brand through their creative expression.
In the hospitality sector, the Four Seasons hotel recently implemented its pop-down event in Hong Kong, making it more accessible to Chinese consumers. The two-day consumer campaign promoted the luxury chain's signature dishes served around the globe. It further promoted its event on social media with an easy-to-use hashtag. Creating a sophisticated culinary experience for the guests helps retain lasting memories for the customers.
Luxury brand experience is transforming from traditional product craftsmanship to undertaking an experiential journey with the brand. Chinese millennials are driving this shift in brand experience culture through the usage of social media platforms such as Tik Tok and WeChat. Travel retail concept is also gaining popularity amongst brands to connect with their affluential Chinese passengers. As the future presents itself NOW, luxury brands need to continue dedicating their marketing initiatives to social platforms.
Patterns Issue 2 2018 - The Time for Transformation is Now. Make it Happen.
- Driving Culture Change in the Age of Digital Transformation
- How Social Media Is Changing Packaging Design
- How to Create Deeper Connections by Going “Direct to User"
- How Digital Virtual Experiences Reinforce the Physical Environment
- Competing in a State of Content Entropy
- 4 Ways to Reimagine Your Private Label Today: A Perspective on the Asia Pacific Market
Patterns Issue 1 2018 - Designed to Connect: Meeting the Demands of Empowered Consumers
Consumers now have so many ways to encounter and interact with brands that it can be hard to command attention and forge a lasting bond. In this issue of Patterns, we offer insights into the new consumer empowerment and how to turn it to your advantage by creating meaningful connections.
- 5 Building Blocks for Winning at the Digital Shelf
- The Insatiable Demand for Content
- Rewriting the Packaging Rulebook: Strategy, Design and Delivery Under One Roof
- Digital Content Production: What's Next?
- 10 Tips for Successfully Implementing Marketing Automation
- How to Start Measuring Content Marketing ROI
- Achieving Value-Based Outcomes: The Role of Human-Centric Design Thinking in Healthcare
Don't just add to the competitive noise. Be the brand that consumers want to connect with.
This Is What Strong Brand Engagement Looks Like
Engagement around a brand is a term that’s used often to define the measured interactions between brands and consumers across digital platforms. Most notably in the marketing space, these activities are tracked with likes, shares, comments, open rates, and retweets.
While brand engagement is must broader than these metrics, it is important to examine how brands successfully navigate today’s digital landscape.
It can appear on the outside, that having brand engagement success is a matter of being in the right place, at the right time, and a healthy portion of luck. And while it can be a bit of those factors, it’s also and most importantly a great deal of preparation and intentionality.
Below are five approaches to creating impactful brand engagement that will seriously make a difference when developing marketing campaigns:
Think with your heart.
Make your brand the enabler, but the customer the hero. In order to hyper-target your consumers to make them the hero, first you must know:
- Who they are
- What they value
- How they make decisions
Many successful campaigns of the past focused on very rational reasons to purchase, such as price, safety, or availability. However, oftentimes explaining facts and figures does not encourage brand consideration for the modern shopper.
Now, brands are moving toward a lifestyle (family, children, pets) approach that triggers consumer emotions like happiness and love — the irrational reasons to purchase. Interwoven in these campaigns are the same rational features, but instead, the features enable consumers to live their lives better.
When a brand embraces more than rational benefits of their products, and they include the heart, consumers have the opportunity to engage with their brain and wallet.
Embrace data-driven storytelling.
As marketers, we understand the power of data. It can tell us who’s buying products, where and when they’re buying them, where they’re seeing advertisements, and influences how much money to spend on the ads — among a myriad of other things.
Data also collects insights like: audience ideals, personalities, quirks and idiosyncrasies, life stages, cultural influences, emotional associations, drive for individualism. These are the key factors that uncover what makes consumers, human — opening the door to data-driven storytelling.
Plan for the unplanned.
In order to build awareness and brand engagement, there must be a strong internal discipline and commitment to prepare and speak with a true brand voice when the opportunity presents itself. Successful brands operate with an always-on mentality and are willing to deliver quickly.
Be boldly transparent.
Whether from online reviews, social media actions, or even focus groups, receiving customer feedback is one of the best ways to understanding what they really think about the brand or product. It is also one of the few direct hits we have to get inside their head — their values, emotions, and expectations of the brand that is driving their engagement.
When the feedback is good, it gives us the chance to turn all of those warm, fuzzy feelings into wonderful stories and campaigns — to celebrate or strengthen our connection with them. When the feedback is negative, it’s time to put in the work and regain trust.
Sounds easy, right?!
For any company, changing a product or brand perception is a huge challenge with many obstacles. But, instead of ignoring criticism or coming out with a different product that claims to be better, successful brands admit to the truth and provide transparency and trust to customers.
“70% of shoppers say that brands who ‘respond quickly to serious product issues’ greatly increase their trust.” — 2017 Brandspark International study
This opens the opportunity to encourage positive engagement.
Champion a cultural movement.
Engagement can evolve when a brand’s campaign recognizes and reflects the cultural climate of the world around it. This type of brand activation requires the focus to be turned toward the consumer to provide an authentic connection.
More than sharing knowledge about their product, successful brands tell full and riveting stories. These brands embrace the “why” and share purposeful stories that align with the values of the consumer. With this, marketing becomes the making of meaning and connections between consumer and the brand. This bolsters the story by identifying that fundamental human truth — the shared truth that provides meaning to the consumer while anchoring the brand.
When brands embrace cultural relevance and emotional connection, it can come with complexity and unpredictability, but can also lead to new ways for consumers to engage with the brand in powerful ways.
Based on these powerful approaches to creating brand engagement, brands must adhere to an insight-driven strategic platform, make their customers feel like the heroes of the story, and advocate for the value of building long-term engagement.
Does your brand possess a customer-first attitude?
Personalisation vs. Customisation: Staying Ahead of the Curve in Asia
This blog post has been contributed by Kathryn Sloane, director of growth, Asia-Pacific, SGK.
What is Coca-Cola’s ‘biggest ever’ campaign? Was it when they re-created the image of Santa? Was it the introduction of Diet Coke? Or the infamous polar bears?
Coca-Cola’s Share a Coke campaign is heralded as Coke’s most effective campaign to date, by marketers and financial analysts alike. This campaign experienced an increased share of category by 4 percent, increased consumption by 7 percent, increased Facebook community by 7 percent, and most impressively, was launched in more than 80 countries.
We see many global brands who have jumped on this bandwagon and launched campaigns with mixed results within Asia. Every single day marketers apply personalised messages to shoppers, based on data from digital activity such as smartphones. From brand campaigns to store-specific promotional offers or even app-guided shopping lists, this marks a step-change in the role of point of sale.
With APAC accounting for 70 percent of total growth in global Internet users in 2016, we know that the region houses the world’s biggest eCommerce market and the world’s fastest growing markets. It is fast becoming the center of digital innovation for the world, with Fortune 500 brands such as Unilever and Ferrero setting up innovation hubs in the region.
APAC’s tech-savvy, always-on consumers require marketers to keep up with their soaring expectations. Over 80 percent expect a response within 24 hours, while 1 in 2 expect a response within 3 hours.
In the age of the selfie, when the world is pointed towards us, what drives impact? Messaging must now value add to the everyday consumer, while consumer data is treated as a precious commodity to the retailer.
Let’s begin with the difference between customisation and personalisation.
Marketers now need to be smarter in inherently anticipating consumers’ needs. Whilst personalisation is still widely perceived as a digital area, it ultimately comes back to the fundamentals of Maslow’s hierarchy of needs where humans need to be recognised and valued. Consider the following examples:
Etude House, a cosmetics powerhouse headquartered in Korea is offering a selection of 20 lipstick colors and 20 different cases, where each shopper can mix and match the two parts of each to create something truly “unique” or personalised.
On the other end of the spectrum, the Heinz ‘Get Well Soup’ campaign allows consumers to customise a can of soup for someone who’s feeling a bit under the weather. Consumers were willing to pay 2-3 pounds for a can that would cost 50p in the store. They were also willing to wait 3-5 days to receive it!
Similarly, with Ferrero’s 1.7 billion Sterling campaign for Nutella, consumers could customise their own hazelnut spread jar using their own self-expression. Nutella’s most recent campaign allows the consumer to make a choice and select a unique design based on their personalised wants and needs.
Interestingly in the Asia context, personalisation is very much rooted in traditional trade. A consumer can wander into their local grocery store and the shopkeeper will instantaneously remember his/her name, family, preferences and favourite brands. While this model still very much exist in developing countries like Indonesia, Cambodia and Thailand, what does the future look like?
The holy grail is both: “Products customised for me” (the “what”), and “Brands speaking directly to me” (the “how”). Achieving the “how” is much more challenging.
Consumers are multi-faceted in the way they buy and the relationships they want, and brands must recognise how to tackle each individual. In order to do so, we’ve found the biggest challenges facing brand owners today: budget constraints, retailer pressures, organisational alignment, and driving profitability while remaining creative and innovative.
We are competing in the playing field with world-class brands and hungry, agile emerging multinationals. Bridging these tensions present the opportunity for deeper relationships, greater intimacy, and advantage. Moving forward, personalisation and customisation will be the norm.
If we look back to 2010 when the Share a Coke campaign was launched, the Internet of Things didn’t yet exist and brands weren’t yet using augmented or virtual reality or artificial intelligence. Smartphones started outselling personal computers and the launch of the first iPad contributed to the rise of eCommerce. To put things in deeper perspective - $100 of bitcoin in 2010 is worth $75 million today!
Can we really still say someone’s likelihood to buy is based on his or her income anymore?
Marketers cannot continue to deliver campaigns and strategies around cookie-cutter consumer segments. However, change is constant and often confusing. Media owners and ‘above the liners’ are climbing on to it because they might not recognise what to replace it with. Segmentation is now a dated concept because everyone falls into a different category depending on who they choose to be on that day of the week.
Our approach to retail models, logistics, distributions, pricing, promotion and the relationship between people and brands will have to make a quantum leap. The brands that evolve will survive, rise and thrive.
We know that the ability to instantly produce personalised products, to tastes and specifications, instantly at work and on-the-go will revolutionise the way we shop, eat, drink and ultimately live.
Asia is running ahead of the pack. Brand owners are utilising personalisation to better profile consumers, and design experiences accordingly to support marketing efforts. Think different formats, signature tastes, aromas, sounds, visual and tactile experiences.
Personalisation can then represent sustainability – as a brand for life from cradle to grave, when dialogue becomes life-long. Personalisation can also be distinctive as an attitude; so customised it’s bespoke, and such a curated experience it’s our generation’s new media.
About Kathryn Sloane: Sloane has more than 20 years of experience in brand strategy, design strategy, workflow analysis and change management. Prior to joining SGK, Sloane worked with Design Bridge, Pearlfisher and Blue Marlin Brand Design.
Patterns Issue 1 2017 - From Timeless to Trailblazing: 6 Marketing Strategies
Sometimes you win by perfecting a marketing practice that has stood the test of time. Sometimes you win by blazing a new path. Proven strategies and innovative ideas meet in this issue of Patterns, with articles that include:
- Beyond Best Practices: How to Win in a Dynamic Market
- 5 Insights Into Multiculturalism and Talent Management
- Retail Is the Ultimate Social Platform
- The Future Belongs to Millennials: How Well Do You Know Them? 4 Key Trends That Define How Millennials Interact With Brands
- 4 Insights You Can Unlock by Mapping the Customer Journey
- 4 Approaches to Creative Leadership in CPG Companies
Know where you are. Know where you’re going. Here’s your GPS.
The FDA Nutrition Label Update is Your Opportunity to Gain a Competitive Brand Advantage
For more than two decades, the FDA Nutrition Label has been an icon of informed choice for shoppers. Now, the label has been updated to reflect the latest nutrition science and more realistic serving sizes.
CPG brands must comply with the new requirements by July 26, 2018. Are you ready? Even more important, do you regard the label update as a burden or an opportunity?
Get the latest issue of Patterns and get seven tips for streamlining compliance while also claiming a competitive brand advantage on the shelf. For this and six more articles from SGK’s global marketing experts, read Strategies for Growth: Making Change Work to Your Brand’s Advantage. Download the full Patterns report now.
Patterns Issue 2 2016 - Strategies for Growth: Making Change Work to Your Brand's Advantage
Iconic brands seem timeless and immutable. But in reality, change is constant, and brands need to continuously adapt. This issue of Patterns offers seven perspectives on constructive change, including:
- Ask Yourself If It’s Right for You: Empowering Health and Wellness Consumers
- Projecting the Future of Retail: A New Way to Engage Consumers in the Aisle
- RGB Printing Brings Spectacular Visual Possibilities to Packaging
- Latin America Is Ripe for Smart, Integrated Digital Marketing
- The FDA Nutrition Label Update Is Your Opportunity to Gain a Competitive Brand Advantage
- Building Graphics Workflows Across Emerging Markets
- Chief Growth Officer: The SGK Perspective on a Critical Development
Embrace change. That’s where you’ll discover opportunity.
Download the new Patterns report now.
Men's Beauty Goes Big in Asia
What do men see when they look in the mirror? Think of your brand as that mirror. It can reflect basic hygiene and grooming to meet social norms, or it can reveal expressive possibilities for a highly personal style.
Asian markets lead the world in embracing men’s beauty. And while most Western men aren’t quite ready for foundation and lipstick, they’re increasingly looking to flaunt their own individuality.
In our new issue of Patterns, we hold a mirror up to the East and visualize new opportunities for helping every man look his best. Going big with men’s beauty could be the future of your brand.
For this and four more articles from SGK’s global marketing experts, read Making Connections: Brand Insights from Around the World. Download the new Patterns report now.
The New Luxury Codes: Four Ways Venerable Brands are Reinventing their Allure
Luxury brands have the “luxury” of repeating time-tested messages of quality and opulence for buyers who already respect their cachet – right?
Wrong. Today’s most successful luxury brands aren’t just selling beautiful objects. They’re immersing shoppers in acclaimed stories and unexpected experiences. Revealing the inspiration and methods behind their fine craftsmanship. Speaking up for principled values.
In our latest Patterns report, we offer several examples of these new luxury codes. You’ll find ideas to inspire any brand – from haute couture to fast fashion. For this and four more articles from SGK’s global marketing experts, read Making Connections: Brand Insights from Around the World. Download the new Patterns report now.