Observations Suggest Brands That Court Younger Customers Digitally Might Come Out Ahead
New department stores like Lane Crawford in Beijing have increased the number of luxury brands available to potential buyers in Beijing
While many luxury brands are counting on ostensibly luxury- and brand-mad Chinese consumers to bring in steady profits for the foreseeable future, industry insiders — or research groups — with feet on the ground know that Chinese consumers are far from a uniform group. As luxury expert Patricia Pao, of the Pao Principle in New York, recently wrote, contrary to the beliefs of many brand managers, there is no “one” China. As major luxury brands like LVMH venture outward from Beijing and Shanghai and work to develop a stronger presence in second- and third-tier cities like Xi’an, Nanjing, Hangzhou and Changsha, it’s critical for them to take geographical, cultural, (in some cases) linguistic, and demographic differences into account:
As major luxury brands venture westward, and try to court the gradually emerging middle class in China’s vast interior, it appears that, in addition to keeping in mind the huge diversity in consumer behavior (and increasingly crowded retail market) that exists in that country today, brand marketers need to start thinking digitally. A new Forbes article by market researcher Shaun Rein (Twitter) suggests that one of the most important Chinese consumer trends we can expect to see pick up steam in 2010 is that of digital and social media marketing. According to Rein, Chinese consumers are increasingly being influenced by digital media, and companies need to invest more heavily in these forms of outreach at risk of missing out on a potentially lucrative (and relatively low-cost) method of reaching and creating new customers.
From the article:
Rein’s concluding point is the key, here. China’s consumer class has emerged onto the scene and evolved at a breakneck pace. This is particularly noticeable in places like Beijing, where the more sophisticated (or relatively long-time) luxury demographic has, over the course of the last 10 years or so, gone from worshipping the biggest names, like Louis Vuitton and Gucci, to branching out into less monolithic, more exclusive brands like Goyard and Azzedine Alaïa (though it must be said that part of this comes down to greater choice in places like Beijing now, since major department stores — which carry more hard-to-find brands — like Lane Crawford have opened in China’s capital in recent years).
As luxury buyers (at least in the more cosmopolitan cities) become less brand loyal, it’s becoming more important for luxury brands to recognize that they might risk alienating long-time customers by becoming more ubiquitous. Digital and social media marketing is a good way to do this. By tailoring messages to target demographics and to a given medium or platform — e.g., white-collar social media sites like Kaixin — brands like Tiffany & Co. have, over the last year, been able to give potential customers the feeling of exclusivity that traditional marketing simply can’t instill.
As we wrote last fall (“Tiffany, Other Luxury Retailers Push Digital Outreach In China Market“), the success of Tiffany’s digital campaign for their “Keys” line attests to the efficacy of digital outreach in China, and offers lessons for other luxury brands:
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