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12 Oct

Within the Midst of Market Revival, How Can the

Within the Midst of Market Revival, How Can the

The style industry urgently needs a recent methodology to adapt to complex and ever-changing market and business conditions. With its diverse online and offline commerce leading the world in scale and maturity, and its flourishing fashion ecosystem, China is constructing a vibrant omnichannel retail landscape. On this yr of revival, transformation is the important thing to unlocking the potential of the complete fashion industry.

On Sept. 27, 2023, on the WWD CEO Summit organized by WWD China in Shanghai, representatives from luxury fashion brands and omnichannel platforms convened to debate the subject of “Latest Landscape: Omnichannel Retailing Strategy within the Multipolarized Development of the Luxury Fashion Industry”.

Despite facing quite a few challenges out there in 2023, the excellent resurgence of China’s market has provided significant impetus to the expansion of the worldwide luxury industry. Based on the most recent data on China’s social consumption retail released by the National Bureau of Statistics, the whole retail sales of social consumption goods reached 30.2281 trillion yuan by August this yr, a year-on-year increase of seven.0 percent. Amongst them, the categories of clothing, shoes, hats and textiles increased by 4.5 percent yr on yr in August, near the general growth rate of social retail.

In 2023, quite a few brands have gone all out in China, with a flurry of initiatives starting from pop-up events, store expansions, internet marketing, to brand exhibitions. Nonetheless, the Chinese market has also modified significantly this yr, including the recovery of the actual economy, the penetration of luxury and wonder brands and malls into second-and third-tier cities, and consumers placing increasing importance on immersive shopping experiences, personalized services, and brand values resonating with digital social currency significance. These trends have made the omnichannel strategy a vital for brands.

Concurrently, consumer preferences are shifting as a consequence of generational differences, varied communities, and the emergence of slash lifestyles, resulting in a multipolarized trend in brand selection: they not follow a straightforward consumption upgrade or downgrade path, but make more complex and personalized decisions.

In response to those changes, WWD China organized the WWD CEO Summit in Shanghai, specializing in the theme Latest Landscape: Omnichannel Retailing Strategy for the Luxury Fashion Industry amidst Multipolarized Development. We gathered experts from Tencent Marketing Solution, Hugo Boss, Lanvin and other industries to explore how brands can solidify customer value through omnichannel operations within the evolving market, the right way to leverage recent technologies to achieve sustainable growth, and other topics. This summit won’t only address the present trends and challenges facing the style industry, but may even share insights and solutions for shaping its future in 2024.

Opportunities and Challenges for the Luxury and Beauty Industry in a Multipolarized Environment

2023 presents each opportunities and challenges for luxury and wonder brands. Based on the “China Luxury Market Digital Trends Insight Report” led by Tencent Marketing Insight (TMI) and supported by evaluation from Boston Consulting Group (BCG), the consumption of luxury goods by Chinese mainland consumers expects to hit 550 billion yuan by 2023, with a year-on-year growth rate of 15-20 percent. The improving macro economy, the influx of recent consumer groups and the recovery of social occasions drive consumer demand growth.

Nonetheless, the market has also grow to be more fragmented and multipolarized as a consequence of high-precision technological innovation, diversified population and wealthy interest circles. Faced with such an environment, how brands can enhance their brand power and value, maximize consumer value, and achieve sustainable development stays a key challenge.

From the attitude of an all-encompassing platform, Daniel Shu, vice general manager, Tencent Marketing Solution, commented on changing consumer demographics: “China’s luxury and high-end beauty consumers are more diverse and complicated, and the expansion of young groups and consumers in lower-tier cities brings opportunities and challenges for brands. Consumers are the origin of all brand themes, and that is where Tencent’s ecosystem has the best advantage. The ecosystem, epitomized by WeiXin, allows brands to totally reach the coverage of brands’ goal consumers, the rapid development of WeiXin Channels brings recent groups for brands, and the wealthy content ecosystem of video, music, games allows brands to discover alternative ways of expression and communication for various groups, achieving brand constructing and business growth for diverse consumers.”

Daniel Shu, vice general manager, Tencent Marketing Solution.

From a branding standpoint, luxury and wonder brands which have witnessed the rapid evolution and segmented consumption levels of the Chinese market are also actively adjusting their strategies to seize the following growth opportunity. As an illustration, the Lanvin Group has ventured innovatively into the realms of NFT (non-fungible token) and AIGC (artificial intelligence-generated content), showing that this French high fashion house with greater than 130 years of history and heritage is embracing the times.

Ivy Fu, Lanvin Group vice chairman.

Responding to the maturing consumer market, Hugo Boss launched into a holistic transformation guided by its Claim 5 strategy. The brand introduced a slew of localized measures, specializing in brand enhancement, product leadership, digital supremacy, omnichannel equilibrium, and sustained growth. Amongst them, the digitalization and the renewal of offline brand concept stores use technology to bridge the net and offline worlds and show consumers the brand’s transformation through more touch points. Judith Sun, the final manager of Hugo Boss Group China, emphasized their commitment to enhancing in-store digitalization and fortifying a seamless omnichannel experience. That’s because Chinese consumers are more receptive to emerging technologies.

Judith Sun, managing director, Hugo Boss Greater China.

How Luxury Brands Boost Online Growth Engines and Uncover Unique Brand Power

While personal satisfaction and pleasure are still the first purchase drivers for the posh market, aspects like social value as a standing symbol, versatility for various occasions, expression of individuality and uniqueness, brand recognition, and premium gifting options have gotten increasingly distinguished in consumer decisions. To reply to these changing consumer trends, brands must leverage their brand power, the soul of their content, to unlock their core growth potential.

At the identical time, the “China Luxury Market Digital Trends Insight Report” also identified that consumer behavior continues to shift online, and online channels’ penetration rate has grown to 46 percent in mainland China. Domestic offline stores, brand web sites, and brand mini-programs attract younger, frequent customers. Regarding information channels, online channels play an important role throughout the consumer’s interest phase, influencing greater than 90 percent of purchase decisions. Due to this fact, certainly one of the core competencies for brands to realize efficient interaction with consumers is the right way to use technology to stimulate consumers’ five senses and supply them with an ultimate experience guided by their brand spirit.

Lately, digital innovation has been an integral a part of every major market upgrade and has profoundly affected the consumption decisions of various generations. Tencent, as a platform with an enormous user base, encompasses a big selection of populations. As content seeding and KOLs grow to be increasingly crucial, Tencent’s ecosystem nurtures emerging groups and KOLs from various fields. Daniel Shu said, “Inside the Tencent ecosystem, the vast user base allows brands to effectively reach various consumers. As well as, its wealthy content ecosystem can provide more touch points and localized content support for brands.”

Easy methods to effectively convey the brand spirit? Luxury beauty brands can communicate their brand power by choosing brand ambassadors that match their tone, integrate with local culture, break interest circles and expand their reach. For instance, BOSS selected Wang Shun as its brand ambassador due to his spirit and appeal to the young generation. It also live-streamed its fall collection show in Milan on full-network digital platforms and launched a “see now, buy now” series on WeiXin mini-programs and other channels. These are ways to speak its brand value to customers in the brand new era.

Easy methods to Use Tech-empowered Omnichannel Marketing to Construct a Strategy that Transcends Time and Space

Gen Z is the brand new generation of luxury beauty consumers. They value uniqueness and trendiness, and continuously change their product preferences. For Gen Z who grew up with the web, online channels have a profound influence on them. Creative and localized content is crucial to capture their attention.

Brands must create more modern content campaigns and choose more refined platforms to resonate with Gen Z. In addition they need to make use of digital innovation technology to realize fast communication with consumers across online and offline platforms and expand recent customer groups while consolidating existing ones. These are the important thing steps for brands to survive and thrive out there.

To succeed in Gen Z effectively, brands should deal with three elements for platform reach and content strategy: people, content, and interaction. Staying true to the essence of retail, only by adapting to the evolving habits of various generations and offering comprehensive coverage can brands achieve sustained growth.

Daniel Shu said, “Tencent’s ecosystem will proceed to open up different transaction scenarios from recent touch points and it can adapt to consumers’ differentiated purchasing habits, help brands achieve growth, and constantly generate recent opportunities within the omnichannel service.”

Given the complexity of China’s digital ecosystem, Judith Sun, managing director, Hugo Boss Greater China, believes that omni-channel marketing is a capability that brands must constantly develop. From marketing to implementation to conversion, brands must mix their very own needs and techniques, decide to deeply collaborate with specific platforms, or integrate resources from multiple platforms to convey consistent information, delivering a strategic one-two punch.

It’s crucial to allocate resources based on the brand’s development stage, said Ivy Fu, vice chairman, Lanvin Group. As a French brand with a wealthy heritage, Lanvin is continuously breaking boundaries in its Yuyuan Fashion Show, collaborating with artists from different fields, and innovating experiences within the metaverse.

In conclusion, despite the uncertainty of 2023, Chinese consumers’ eager for a greater life and quality consumption offer a high potential market. Population Assets Management, Omnichannel Strategy, and Content-Driven Brand Power might be the engines for sustainable growth.

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