Luxury Brands Underestimate WeChat’s Importance Offline

Now more than ever, luxury brands are making WeChat a priority. According to a recent Bain study, all 40 of the top brands surveyed had an official WeChat account. But are they doing everything they can with the tools they have? When it comes to WeChat-led omnichannel strategies, there’s some catching up to do in the luxury sector, according to Liz Flora, editor of Asia Pacific research at L2. The digital intelligence firm recently reported that luxury brands are expanding the ways in which they use WeChat to engage consumers both online and offline, but there are some areas where activewear brands and accessible luxury brands excel, and luxury brands still lag. For example, half of the luxury brands cited in the study have geolocation capabilities on WeChat to help customers find their brick and mortar stores, but only 23 percent offer this resource globally to target Chinese shoppers overseas. Meanwhile, only about 13 percent of luxury brands offer loyalty programs on WeChat that also work in their brick and mortar stores. Most of the brands that do are accessible labels, as big luxury brands are wary of programs that suggest customers are getting a big discount, Flora said. But for any type of VIP or membership program, O2O is crucial. “Loyalty being synchronized with offline purchases is lower than the overall loyalty adoption on WeChat,” Flora said. “That’s a mistake—if you’re a luxury brand, then in-store experience is very important.” Other international brands are embracing WeChat’s omnichannel capabilities to bring their online community into their physical locations. Here are four ways they’re doing so. 1. Flash Sales “We’ve seen a growing number of luxury brands hosting flash sales where they only release a limited number of items,” Flora said. “Then, they sell out almost immediately and when the user goes on to make the purchase, it gives them a message that it’s sold out and they can purchase it in the store.” China’s leading handbag blogger Mr. Bags has been known to help drive several flash sales for luxury brands, including Givenchy, and most recently Longchamp. The KOL worked with the French handbag label to design a Chinese New Year collection, and in December, they released a limited number of bags on WeChat before offering them in worldwide stores on New Year’s Day. Longchamp China General Manager Josephine Liang said this strategy helps create a “social buzz” within its digital network. “We spread the news through WeChat first so that all the fans, fashionistas, and Longchamp customers will see the news. This allows them to explore and discuss before purchasing,” she said. “It also allows them to share their discovery with their friends.” “This starting point is important to all the customers as they can get more information before being ‘bothered’ by the sales staff in the store. Then they can decide whether they purchase directly online or visit our brick and mortar stores,” she added. Liandg said the strategy was successful. “Our store benefitted from the WeChat traffic as the limited quantity did create the curiosity and desirability that prompted customers to rush to the store to purchase the product.” 2. Guides Having basic international geolocation tools can be critical for helping Chinese travelers find stores, especially when many consumers have already researched what products they want to buy online before they travel. But there are also other creative ways brands have presented store guides. Domestically, Longchamp offered a mini program that featured a Shanghai city guide with restaurants, bars, and, naturally, locations of its Shanghai stores. Once customers are in the store, it can be useful to provide tools to help them navigate, especially in overseas locations. For example, Cartier caters to its traveling Chinese customers by offering a product translation tool on its official WeChat account. 3. O2O Promotions Lacoste has a list of boutiques across Chinese cities that includes what kind of Chinese New Year promotions each has, the discounts they offer, and the payment methods they accept. Another way luxury brands are driving WeChat followers into the store is by offering offline promotions—and remembering to target Chinese travelers when doing so. Some brands have been known to offer Chinese New Year promotions overseas due to the fact that it’s a big travel time for Chinese consumers. For example, last year, Lacoste had a list of boutiques on its WeChat account that included what kind of Chinese New Year promotions each of its stores had and the payment methods they accept. 4. Offline Events While many luxury brands create VIP and loyalty program opportunities for customers to visit their store to buy products, other brands have fostered ways to create communities that don’t necessarily require a purchase. Activewear brand Lululemon has relied on WeChat’s omnichannel capabilities to drive brand awareness and engagement by offering workout classes in its retail spaces. “In China, we’ve leveraged WeChat to understand everything from where our guests want the next event to be through voting and sharing, to registering for the events they helped create. We love how the channel lets our guests really interact and see themselves in the brand and lifestyle we helped create – The Sweat Life,” said Amanda Casgar, director of Brand & Community for Lululemon Asia Pacific. The takeaway Luxury brands could be doing more to leverage WeChat for O2O engagement. Brands should enable geolocation tools on WeChat for its international locations, not just those in China. Connecting with WeChat fans digitally first through flash sales can ignite curiosity and drive shoppers to the store. Online loyalty programs can be enabled to work in the brick and mortar store for a more seamless customer experience.

Luxury Brands Underestimate WeChat’s Importance Offline

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Published January 26, 2018

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Luxury Brands Underestimate WeChat’s Importance Offline