How Europe’s Luxury Retailers Can Get Mobile-Savvy to Reach Chinese Travelers

The sparkle has dimmed on the City of Light for China’s luxury consumers, creating a fresh French paradox. Global Blue’s latest report may describe Paris as the Chinese travelers’ “most sought after destination in Europe,” but these sentiments are not playing out in numbers, with fewer Chinese traveling to the French capital. It prompts questions: do purveyors of French luxury know how to connect to the digitally savvy generation they so desperately seek to engage? How should they embark on charm offensives to leverage Chinese social networks, which are the second most relevant source of luxury information for this audience? And how do they find a voice on WeChat, the top social influencer for the world’s youngest luxury shoppers? These topics created intense debate at China Connect, Europe’s largest gathering of experts on Chinese consumer trends. The biannual Paris conference (April 6-7) is a non-negotiable diary date for European brands with China in their sights. Industry observers have long charted how luxury brands were dragged kicking and screaming into the digital world. Their history of social media inertia prompted Alexander Mecl to urge them not to ignore the Chinese social platform WeChat, describing it as their potential “game changer” in China—and the key for reaching Chinese tourists in Europe. As the strategic global advisor for WeChat International, Mecl told his audience how the app that started as a free communications tool in 2011 (and now has 700 million active monthly users) has evolved to become “a lifestyle eco-system revolving around communication.” “The biggest challenge is not why you use WeChat but how you use it,” he said, noting Burberry as an exception to the rule and one brand that had profited from WeChat in China (although it currently endures falling sales in Hong Kong). Mecl has ensured Zurich Airport will deploy the most advanced use of WeChat in Europe this summer. When Chinese arrivals open their phone they will find a rich WeChat-powered experience in Chinese, beginning with live chat available for their questions. It’s a winning strategy for the airport and for brands and vendors who engage. When these users are asked, “What are you looking for?” if their favorite brands are listed, they’ll be directed to the address, availability of goods, have a pre-order facility plus the ability to pay via WeChat. In turn, the brands will have these shoppers on their radar, well before they enter the boutique. “You can look at WeChat as a life operating system,” said Philip Guarino, the European director of China Luxury Advisors (CLA). “When over 80 percent of all luxury sales happen outside mainland China (Chinese spent US$215 billion last year), the limited deployment of WeChat reflects a lack of strategic vision at the C-level in terms of engaging with traveling consumers—resulting in lost opportunities to learn more and better serve this powerful segment.” Paris-based Guarino, who counsels brands on global China strategies, said many continue to try to connect to Chinese consumers using “tactics that are short-term, when this requires thoughtful decisions from senior management. It’s no longer a case of paying commissions to tour guides or spending on print and other media which the Chinese don’t even read.” The power of WeChat has given rise to companies like Curiosity China, a Beijing-based social media solutions provider serving clients in the European luxury sector. “Communication is obsolete without WeChat,” said Kate Tratten, the communications director in Paris for Curiosity China. Tratten advocates brands adapt their strategies from the “many” to a “one-on-one” approach. She described how the company leverages WeChat, working to identify everyday active users and influencers, turning them in to advocates, brand ambassadors, and ultimately rewarding them when they drive shoppers to stores. Their analytics tools allow clients such as Dolce & Gabbana and Moleskine to target users by location, gender and purchasing power. “The word ‘influencer’ keeps coming up, said Tratten, but paid influencers cost a fortune.” With a veritable army of armchair influencers interacting on their cell phones, she said, “It makes sense to engage them when China is still so susceptible to word of mouth.” Of course, the strategy is a double-edged sword. When a brand is hot, these backstage influencers are favored advocates. But when the sparkle dims, the negative messaging calls for damage control. To this end, CLA, in collaboration with WeChat International, takes a “service-orientated” position. CLA launched a savvy new program called Cicerone Mobile this year. It’s a customizable product allowing travelers to connect with brands the moment they walk into stores, not unlike the Zurich airport model. Cicerone automatically brings visitors to a brand’s WeChat account where they become a follower, and the app delivers a personalized welcome and highlights customer services. It also serves targeted promotions, tracks loyalty rewards and can allow for preorders and purchases before a tourist arrives. On the brand side, retailers collect rich consumer data allowing them to nurture a relationship long after the consumer returns. There are WeChat success stories in Europe—notably El Corte Inglés (ECI), Europe’s largest department store chain. Javier Fernandez, the company’s director of tourism remarked that ECI’s WeChat following increased 500 percent following a concerted drive earlier this year. He fully expects the ROI to flow—with Spain projecting upwards of 290,000 Chinese tourists in 2016. These travelers are not looking for sun or sand in their favorite destination, Barcelona. It’s Cartier, Tiffany, and Chanel on their mind. Ultimately, European luxury brands need to value customer relationship management (CRM) when Chinese consumers represent 30 percent of their turnover. They neglect deploying WeChat solutions outside of China—misunderstanding the power of the platform to engage, activate and build loyalty with the traveling consumer. Currently this lack of social media engagement creates a negative for brands, which can turn it to a positive simply by engaging with Chinese consumers in their preferred manner—using social media. The thousands of tourists that come into stores on the Champs-Élysées in Paris each day are often met by staff who have no idea who they are, where they are from, what products are most interesting to them and how to engage with them when they leave. WeChat is simply their engagement tool for these 21st-century Chinese consumers. It’s the digital equivalent of today’s European customer service model. Loyal Paris shoppers have their own vendeuse (saleswoman) on speed dial at companies like Chanel. The vendeuse knows the client by name, her taste—she holds back the new season’s products she feels she might enjoy and when the client arrives to shop, the vendeuse offers customer service that genuinely indicates “we value you.” Susan Owens is the founder and editor of Paris Chérie, a Paris-based fashion website dedicated to bringing French style news to Chinese readers.

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How Europe’s Luxury Retailers Can Get Mobile-Savvy to Reach Chinese Travelers