Editor’s note: A version of this post first appeared on Luxury Society, the online destination of luxury brand executives when it comes to embracing digital and the impact of technology on the luxury industry.
Over the years, WeChat has evolved significantly. Opening its API to the public and continually rolling out new functionality has contributed to expanding the horizons of digitally active luxury brands. Over time, these new platform services, and the ease of connecting WeChat to external databases thanks to its API, led WeChat to be viewed as an established service-oriented platform. Compared to other Chinese social media platforms such as Weibo, WeChat never limited itself to simple content broadcasting.
Fully aware of this evolution and the opportunity it provided, luxury fashion brands started to develop WeChat-specific features through their official accounts, that took advantage of the added-value services offered by WeChat.
Today, two-thirds of the luxury fashion brands active on WeChat now operate a service account, a step up from subscription accounts, which are primarily used by news and media entities. Gucci, for example, which was an early WeChat adopter, transitioned last month its subscription account, followed by hundreds of thousands of followers, into a new service account to better complement its basic content broadcasting activities. It's worth noting that WeChat now allows users to upgrade an account from subscription to service.
Operating a service account without providing service-oriented features represents a missed opportunity and lack of alignment with consumer expectations. One of the first features that brands prioritized was anything that would generate in-store traffic, and the store locator was key to that.
Today, 88 percent of luxury fashion brands active on WeChat offer a store locator feature. User experience of such features was a challenge in the past (with Google Maps blocked or partially working in China), but we now observe that 73 percent are offering this service through the integration of a local map solution (Baidu Maps, Tencent Maps or Gaode), rather than Google, in order to guarantee an optimal user experience. In addition, 76 percent are offering location-based services, allowing users to directly find a nearby store or directions on how to get there.
The above is a great illustration that brands are now ready to invest in developing the right solutions to support their customer experience, but digging deeper also shows areas where brands can improve. Among the sample of brands analyzed, two-thirds are not providing any customer service on WeChat, meaning that in some cases, automated answers would redirect the user to a hotline or the corporate website’s FAQ, and in even worse scenarios, questions were simply left unanswered.
Another relevant illustration is O2O (the acronym for online-to-offline, also referred to as “omni-channel” in the West) and how brands are trying to take advantage of WeChat to generate a transaction, or at least stimulate the act of purchase, by driving traffic to both online or offline point of sales. While it may not be a surprise to see that only 24 percent of the luxury fashion brands analyzed were integrating call-to-actions and links to an e-commerce platform, no brands currently offer the possibility to set up an appointment in-store or request a call-back from the sales staff.
Another major surprise regarded the development of CRM programs through WeChat since only 16 percent of the brands analyzed were providing their users with options to join a loyalty program or simply to register their profile as a client.
Last but not least, when analyzing the performance of the store locator functions on WeChat, we realized that only 18 percent provided a service that worked abroad which, when we think about it, is a situation during which a customer would need even more help than when they shop in their home country.
All in all, the below illustration well summarizes a situation where brands are indeed embracing WeChat and its promise to serve users, but it also shows that a serious commitment to get things right by really understanding customer expectations is required to approach WeChat in a mature way. Online and social CRM have been at the core of most of the strategic discussions led by luxury brands when it comes to WeChat, but it seems that there is still a long way to go before developing WeChat strategies for fashion luxury brands that really goes the way of the users.
* Data collected by Digital Luxury Group on WeChat on December 31st, 2016, sample of 25 luxury fashion brands include: Balenciaga, Bally, Berluti, Bottega Veneta, Burberry, Chanel, Chloé, Christian Dior, Coach, DKNY, Dolce & Gabbana, Fendi, Givenchy, Gucci, Hermès, Kenzo, Loewe, Loro Piana, Louis Vuitton, Marc Jacobs, Michael Kors, Prada, Saint Laurent, Thomas Pink, Valentino