When Will Luxury Brands Flex Their Digital Muscle In China?

Leather Goods Company Coach's Global Digital Strategy American leather goods company Coach has been on a turn-around recently, with the company ending its fiscal year owning 20% of the US market in accessories, as well as increasing penetration in both the UK and Europe. For Coach, China has been the most impressive venture in its expansion, with sales doubling to $100 million USD in the 2010 fiscal year, representing a 4% foothold in the accessories market. In the coming years Coach will continue its rapid international expansion, with plans to open 30 stores in China, 8 in Japan, 30 in the United States, as well as a flagship location in London. Much of its success is due to the vertical integration of items into its tiered pricing model, which is designed to reach a broad customer base. In the U.S., and particularly for the 2010 holiday season, Coach has focused on e-commerce and digital marketing. Digital strategies include streamlining the online shopping experience, using customized e-mails, and posting gift guides that tap popular fashion bloggers. For Coach, collaborating with fashion bloggers is not a new tactic; the company selected four popular bloggers to design collectible handbags that have been available online since May. This holiday, they’ve enlisted even more bloggers, who have been profiled on the Coach website, shot for a holiday advertisement, and provided their Coach picks for the season. All of Coach’s fashion bloggers are US-based, primarily in New York and Los Angeles. They include Kelly Framel of The Glamourai, Karla Dera of Karla’s Closet, Emily Schuman of Cupcakes and Cashmere, and Krystal Simpson of What Is Reality Anyway?, among others. The Coach holiday video campaign starring fashion bloggers: While these bloggers are well-known within the US, they don’t seem to have a significant international audience. Many of them are hosted on blogging platforms that are banned in China; in addition, the online campaign is not translated onto the Chinese language site and does not target Chinese consumers. Coach has a Chinese-language site but has not yet begun to provide e-commerce services for its users. As Reed Krakoff, president and creative director of Coach, launches his own line of handbags and accompanying website, Jing Daily wonders how both the Reed Krakoff and Coach brands will approach China digitally. In L2’s global Digital Index Reports, Coach was overall ranked first in the luxury arena with a digital IQ of 171 --"Genius class"-- due to the company’s social media and online campaigns. In particular, Coach was praised for its Poppy collection campaigns, including its blogger collaborations and e-commerce redesigns, as well as its large Twitter and Facebook followings (270,000+ and 1,300,000+). By contrast, In L2’s China Report, Coach was rated only "Average," signalling that the brand’s enormous online success in the US has not translated to China. Coach was ranked sixth in fashion and thirty-fifth overall, with much of its digital presence and buzz due to its Shanghai store opening and related advertising. Though Coach is already registering double digit growth in China, the company may be able to further boost sales by adapting some of its digital strategies to suit the China consumer market. A Coach representative told Jing Daily that the Reed Krakoff brand has no current plans to open stores or launch a website for China, though its current collection is available in Hong Kong at luxury retailer Lane Crawford. While Coach will continue to build on its digital initiatives in the US, including social media and online advertising, in China the next digital step will be e-commerce this coming summer--a move that could well bolster Coach’s appeal in second- and third-tier cities that don’t yet have brick-and-mortar stores. Article by Felice Jiang

When Will Luxury Brands Flex Their Digital Muscle In China?

How Bottega Veneta weaved China’s forever it bag

Upgrade to Pro

Sectors

Insights

Company

When Will Luxury Brands Flex Their Digital Muscle In China?

How Bottega Veneta weaved China’s forever it bag