How Prada Stresses E-Commerce in New China Plan

Key Takeaways:

  • Prada has been revamping its e-commerce business and prioritizing digital customer experiences.

  • The Italian family-owned luxury label has already installed AI-powered chatbots for quickly resolving customer issues.

  • Prada used virtual reality to introduce and engage its consumers with exciting experiences.

Prada seems to be everywhere Chinese consumers are lately. In October, the Italian luxury brand opened a vegetable market in Shanghai. After that, it inaugurated its Prada On Ice collection at the SKP Atrium in Beijing. Then it announced openings of new physical stores in Austin, Texas, and the Baltimore-D.C. area, both of which attract a high number of Asian shoppers.

Prada on Ice Beijing Winter Olympics

Prada exclusively launched its “Prada On Ice” collection at the SKP Atrium in Beijing ahead of the 2022 Beijing Winter Olympics. Photo: Courtesy of Prada

Yet, this marketing mix might come with the peril of “over-presence” if Prada doesn’t identify the right balance between digital and physical contact. That is especially true today, with the Italian brand revamping its e-commerce business and prioritizing digital customer experiences.

Last November, Reuters announced that Prada expects to participate in discussions between Cartier-owner Richemont and online retailer Farfetch about launching a joint e-commerce platform. Acquiring a minority stake in Yoox Net-a-Porter (YNAP) would optimize Prada’s digital footprint. Moreover, it could help Prada reach its medium-term sales growth target of $5.1 billion (4.5 billion euros). At an investor presentation, Prada also said it aims to double its total digital sales to 15 percent of retail revenues over that timeframe.

Meanwhile, Prada’s digital retail footprint has been growing organically. According to the company’s 2020 fiscal year report, Prada e-commerce sales increased by 200 percent last year. The positive momentum continued even in H1 2021 when digital sales grew by 100 percent, year-on-year, with the sector now representing seven percent of retail revenues.

The COVID-19 pandemic triggered a shift to digital shopping, forcing Prada to bolster its omnichannel strategy, according to The Fashion Law. This fresh approach helped the luxury brand fight off competition from digital-first retailers and domestic luxury players who engaged more easily with Chinese consumers.

Prada highlights the importance of digital channels in China as it has pointed out that its Weibo hashtag #PradaSS21 hit 170 million views in a single day in 2020. Additionally, Prada is extremely popular on the user-generated content platform Xiaohongshu, where the Italian label “is among the platform’s most mentioned brands.” So how exactly does Prada boost its e-commerce sales?

Partnerships with e-commerce platforms

In 2019, Prada inaugurated digital stores on luxury e-tailer Secoo and the Chinese e-commerce giant JD. A year later, it launched flagship stores for Prada and Miu Miu on Tmall.

The Italian luxury brand accelerated consumer engagement by releasing product drops and capsule collections and prioritizing personalized brand experiences. For instance, it launched its Timecapsule collection, which presents limited-edition products such as wool sweaters made available for only 24 hours.

Also, Prada just launched its official Xiaohongshu account, making the brand present on an array of Chinese social platforms, including Weibo, WeChat, and Douyin. In addition, it will upgrade its WeChat pop-up e-store to a long-term e-store with enhanced online services on December 16. And on December 18, in conjunction with their pop-up store, Prada will kick off its #PradaBucketChallenge on Douyin. The challenge invites users to wear a Prada hat, especially its iconic black Re-Nylon bucket hat, and share how it has “shaken” their mood, with a host of celebrities and top influencers expected to accept this challenge.

Prada Timecapsule presents an exclusive product on prada.com the first Thursday of every month, for 24 hours only. Photo: Prada

Technology-driven supply chain solutions

Prada has overcome supply chain risks by integrating JD.com’s inventory with Prada’s internal inventory. This model fueled retail sales for Prada and Miu Miu, bringing in more than $47,000 (300,000 RMB) between July 29 and August 13.

“Thanks to the inventory integration, consumers who shop online on Prada and Miu Miu’s flagship stores on JD will also have access to a wider range of products,” said a JD press release.

AI-powered chatbots and automated customer service 

These days, consumers demand around-the-clock attention and immediate responses to their inquiries. Fortunately, AI-powered solutions can enrich the customer experience and quickly respond to changing consumer demands.

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Engati says that a leading cause of shopping cart abandonment is unanswered questions. According to Forrester, 53 percent of online shoppers are likely to abandon their carts if they do not receive instant answers to their inquiries.

Prada has already installed AI-powered chatbots on their website, which are programmed to resolve customer issues relating to purchases, deliveries, and returns. If the questions are too complex or specific to be answered by a bot, a customer support agent takes over to assist with the inquiry.

VR, 3D, and AR marketing campaigns

Prada also used virtual reality to introduce and engage consumers with exciting experiences. Through VR headsets, shoppers can “touch and explore dynamically the brand’s goods.”

Prada uses VR technology to give consumers a closer look at its latest collection. Photo: Prada

Additionally, its AR and 3D technology have been integrated into the brand’s sales and marketing strategies. For the Lunar New Year, Prada inaugurated its Enter 2021. New Possibilities campaign, which invited fans of the brand to open the door to the new year and share resolutions for the upcoming months. The campaign featured celebrities, such as singer Cai Xu Kun and actress Chun Xia, filmed on a symbolic journey into 2021.

Daxue Consulting says shoppers could make their New Year’s resolutions more authentic by writing them down using the Prada Mini-Program and activating several AR filters on Douyin to share them with friends.

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