Grading Luxury Brands’ Digital Efforts in 2017

In 2017, several major luxury brands finally realized the importance of developing a comprehensive digital strategy to cater to affluent Chinese consumers, people whose daily lives are heavily interwoven with the internet.

What follows is a detailed recap of major brands’ digital strategies, graded in terms of their digital sophistication. We’ve also added some suggestions for how brands can achieve even better results in 2018.

Apart from the impressive sales performance, Gucci also made great progress on digitalization in 2017. Photo: Gucci's WeChat account

Apart from the impressive sales performance, Gucci also made great progress on digitalization in 2017. Photo: Gucci’s WeChat account

Gucci, A+  

Gucci has enjoyed tremendous sales growth lately, thanks in part to its stronger digital capabilities. The Italian luxury label launched the Chinese version of its e-commerce store in July, becoming one of the first luxury brands to offer a direct-to-consumer (DTC) e-commerce channel in China. The New York-based data intelligence firm L2 wrote that Gucci was leading the luxury brands in the country on DTC adoption.

 

 

 

 

 

 

 

The brand has also made good use of WeChat’s mini programs in its marketing campaigns and developed a smart KOL strategy, which included collaborations with diverse celebrities from Li Yuchun to gogoboi.

The digital laggard launched on WeChat and opened the e-commerce store in China in 2017. Photo: Celine's WeChat account

The digital laggard launched on WeChat and opened the e-commerce store in China in 2017. Photo: Celine’s WeChat account

Céline, A-

Once known for its hesitation to innovate online, Céline has quickly mastered the Chinese digital landscape, opening its own official WeChat account in November this yearShortly thereafter, Céline launched its e-commerce website, joining Gucci and Louis Vuitton in the first wave to offer DTC services.

Prada has ramped up its digital efforts in China in 2017. Photo: Prada's WeChat account

Prada has ramped up its digital efforts in China in 2017. Photo: Prada’s WeChat account

Prada, A-

In 2016 Prada was in trouble. Now, the brand is betting on a sophisticated digital strategy to turn the situation around. Prada released its DTC e-commerce website in 2017, making sure it is mobile friendly, and offering a number of personalization services for customers.

The brand also launched a boutique on WeChat, where followers are able to make purchases after browsing through complete lines of clothing, handbags and accessories.

The French luxury powerhouse opened the Chinese-language e-commerce store. Photo: Louis Vuitton's WeChat account

The French luxury powerhouse opened the Chinese-language e-commerce store. Photo: Louis Vuitton’s WeChat account

Louis Vuitton, B+

Following Gucci, the French luxury powerhouse Louis Vuitton has opened a Chinese DTC e-commerce website in July this year. The new platform is currently available in 12 cities in China, including Beijing, Guangzhou and Shanghai, allowing customers to purchase items and make payments via UnionPay, Alipay and WeChat pay. Meanwhile, Louis Vuitton has taken advantage of Chinese celebrities to maximize the impact of its online campaigns.

In 2017, Hermès organized several WeChat pop-up stores to sell the lower-priced accessories such as smart watches and sneakers. Photo: Hermès' WeChat account

In 2017, Hermès organized several WeChat pop-up stores to sell the lower-priced accessories such as smart watches and sneakers. Photo: Hermès’ WeChat account

Hermès, B

This year, Hermès launched its first WeChat pop-up store with a unique edition of the Apple Watch. The positive reaction from Chinese consumers and on social media suggests there will be more digital experiments from Hermes in 2018.

Dior, B+

Dior was the first luxury brand in China to sell on WeChat. During Chinese Valentine’s Day in August, the brand hosted a flash sale of a limited edition handbag collection on WeChat. This year, the brand also tested the waters of China’s third-party e-tailers, cooperating with Secoo, the country’s biggest luxury e-commerce website.

Chanel still resists the digital trend owing to the demand from the Chinese customers. Photo: Chanel's WeChat account

Chanel still resists the digital trend owing to the demand from the Chinese customers. Photo: Chanel’s WeChat account

Chanel, C

In 2017, the French fashion label remained extremely resistant to digital channels, particularly with respect to e-commerce. This hyper-cautious approach apparently comes from its core Chinese customers.

“Every time I’m in China I meet clients who come and say, ‘whatever you do, don’t do e-commerce. The day you do it for us, this won’t be exclusive anymore,’ ” Bruno Pavlovsky, President of Chanel Fashion, remarked at the Vogue Fashion Festival in Paris.

Fendi collaborated with WeChat KOL Mr Bags to sell the "Kan I" handbags. Photo: Mr Bags' WeChat account

Fendi collaborated with WeChat KOL Mr Bags to sell the “Kan I” handbags. Photo: Mr Bags’ WeChat account

Fendi, B

Fendi’s digital strategy in China this year is relatively basic, focusing on raising brand awareness via different types of online and social media marketing campaigns.

A high-profile case includes its collaboration with fashion and luxury influencer Mr Bags. Before the release of the brand’s new “Kan I” model handbag in August, the blogger wrote a promotional WeChat post that attracted more than 100,000 page views. In that article, Mr Bags highlighted the key features of the new bags and called for his fans to purchase it.

The takeaway

In 2018, international luxury brands can better capitalize on their digital activities by:

  • Building a seamless online-to-offline (O2O) connection for luxury consumers who increasingly desire omnichannel services;
  • Striking the right balance between easy digital access and exclusivity; and
  • Making creative social media and mobile campaigns that spark consumers’ imaginations and make them feel empowered.

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Fashion, Industry Sectors