Feeding China's Value-Obsessed, Data-Hungry Shopping Travellers


Jenny Chan | October 24, 2017

Price-sensitive Chinese shoppers dig out microscopic levels of information while planning overseas shopping expeditions. Here's what one retail-village operator learned about what it needed to provide.

While the Value Retail brand may not be well known to most Chinese, the company is behind some renowned designer shopping 'villages' (luxury outlet malls), that are vying to attract Chinese outbound travellers.

The company's destinations include Bicester Village near London and La Vallée near Paris. Since 2015, Bicester Village, in particular, has become a major destination for outbound Chinese tourists travelling to the UK, with an estimated three out of four visitors heading there when they visit the country.

The company has studied these consumers up close in the field. The lessons it has learned not only help Value Retail attract buyers to its overseas and mainland villages, but also provide information about the habits and expectations of Chinese shoppers in general.

Last December, Value Retail Europe called on two digital-marketing agencies, Flipscript and Puzzle, to promote its nine European villages to Chinese consumers. Given Brexit's impact on the British pound, the UK retail economy is ever more reliant on tourists, but local shopping destinations can only capitalise on this by tailoring their brand communications to better suit Chinese tastes, said Alpha Xu, chairman of ASAP+ (owner of Flipscript).

Staying on top of mounting competition from downtown shopping malls and suburban discount stores has become a key challenge for Value Retail as Chinese consumers, particularly those interested in visiting such places, are a primarily young, digitally savvy target segment. Their daily lives revolve around a wide variety of digital platforms. Therefore, regardless of marketing strategy or method, digital expertise must underpin all promotional activities, said Xu. Considering this, Value Retail put digital at the core of launch plans for its Shanghai Village in May 2016, the company’s second domestic location after Suzhou Village opened in July 2014. On the basis of results from these two villages in China, Value Retail chose to expand marketing activities toward its European villages with a digital zest.

Image credit: Value Retail - Some of Value Retails's shopping 'villages'.

A journey to access shopper journeys

Both inbound and outbound Chinese shoppers are digitally more advanced than a lot of their counterparts in other markets. They expect functions such as mapping and pricing functionality, for example. On-the-ground qualitative research by a team led by Palmer Withers, Shanghai-based business development director of ASAP+, helped Value Retail bridge the gap between the buyer journey in China and that in Europe. 

"We’re very grateful to Value Retail for the opportunities to go out [to Europe] and see what an actual person's user journey looks like," said Withers. "Not just on a Powerpoint slide but actually going out and investigating what that journey looks like from the target audience’s perspective."

His team found that many aspects of the digital journey for Chinese shoppers could be improved upon once they leave China, all the way down to detailed levels of individualisation for single stores.

"Information is now being gathered before, during and after the trip," Withers said. "They don't merely follow the tour guide's flag." With the rise of the FITs (free independent travellers), people are traveling in small groups and booking their own itineraries after getting ideas from user-generated content (UGC) platforms in China, like Mafengwo and Qyer.

Image credit: Mafengwo - Chinese family photographed at Bicester Village in UK in front of a board showing opening hours.

From UGC content by other Chinese travellers, the user judges what a given destination looks like and what tips and tricks exist to obtain better deals. These are not generalised reviews, pointed out Withers. "If you look at something similar in the west like TripAdvisor, it might give you a list of things to do or maybe a few restaurant recommendations, but Chinese UGC sites go down to a level of detail that outline things like specific stock levels for a specific designer product at a specific outlet store".

One Shanghainese shopper, under the pseudonym of Elaina, was such a savvy shopper that she could guess the stock situation of a shoe on the rack depending on the size displayed. "If it's a size 35 out on the rack, she'll know they don't have any stock, because if there were truly inventory of that shoe, the store would have put out a 36, 37 or 38 [more common sizes], according to her," he recalled. She is one of many Chinese who are well-versed about not only the entire collections but the designers behind them—even before they've stepped in Europe, thanks to such precise UGC how-to guides.

Regardless of whether the content comes from ordinary tourists or sponsored influencers, "a post that highlights something as good is no longer good enough", he said. Outbound Chinese travellers are especially time-sensitive. "They want to scroll to the very top of the user-review page and see someone's description not from six months ago but from six days or even six hours ago. They then want to plan their trip in a very time-efficient manner. And when I say time-efficient manner, it's about allocating exactly one hour and 25 minutes to look at Buckingham Palace, for example". For Chinese FITs who are entering unfamiliar spots, to have trusted information provided by real people who have been there and done that before them is essential.  

Image Credit: Qyer - Reviews on Qyer La Vallée Village in France include delight with a 10-yuan discount coupon, but also disapproval of Armani's arbitrary queuing system and Burberry's tax refund procedure.

This offers branded-content possibilities for Value Retail on the micro level. Looking at what information consumers care about the most means giving them an additional option from "branded sources that might otherwise be absent", said Withers. "That’s not to say that we’re trying to replace UGC content with branded content. It’s more about working 'official' information into the greater digital ecosystem that the brand exists within."

From the agency standpoint, it’s a twofold assignment. One is making sure that Flipscript has the most updated, high-level intel regarding Value Retail and its clients (the luxury labels for which is sells off-season goods, such as Chanel, Burberry, Prada, Coach or Gucci). Two is figuring out how something like an official WeChat account can play harmoniously with all the UGC material floating out there in the digital space.

Offline, maps to the nine European villages, transportation instructions, showcases of brands sold there, size comparison charts, and other FAQs are distributed via translated brochures, but sometimes placed so prominently outdoors that non-Chinese visitors don’t feel as welcome, said Withers. So, putting information online, where most Chinese consumers already spend their time, not only makes it smoother and easier for them to buy but non-intrusive to the international tourists and locals shopping at the same time. "That’s really the balance that we’re trying to strike at the strategic level," he said.

Curated messaging

As middle-class Chinese FITs go on multi-country tours through the EU, maximising their Schengen or UK visas, one-size does not fit all. In Spain's La Roca Village, the Flipscript fieldwork team saw Loewe getting a considerable amount of Chinese attention. Similarly, Germany's Value Retail villages do not have as many high-street fashion brands as its UK locations. WMF and Zwilling, German cutlery and cookware brands, were more popular there, being brands that the Chinese wouldn’t be able to get easily in the mainland.

That's when more curated messaging is required for any future headway, said Withers, because outbound Chinese travellers who have been abroad a few times are more experienced in luxury outlet retail than thought. Often, it's emerging boutique brands like Lululemon and Cambridge Satchel Company that need to get their word out as the market matures, added Dan Beasley, CEO of Puzzle London.

Shadowing some of the Chinese FIT travellers around continental Europe and the United Kingdom reinforced the target segment's ravenous need for travel content, observed Withers. Be it UGC content from other travellers or TV shows that talk about travel extensively, these channels reflect the fact that travel is now an aspirational lifestyle as opposed to an activity to think about once a consumer has enough money. So, they need to be guided to discover such content; and such content needs to be abundant enough.

Understandably, content about past-season merchandise at up to 70 percent off recommended retail prices were not favoured in top-tier fashion pages, since current seasons are in vogue. From February to June 2016, Value Retail Europe engaged Red Bridge Communications to create a 'Stylist in Residence' campaign, whereby a rising Chinese stylist Ma Tianyo advised on overall looks rather than featuring 'outdated' individual items.

Image credit: Red Bridge 

Chinese celebrity model You Tianyi was also recruited to showcase the looks. The strategy netted 15 pages and 61 articles in six key fashion publications, according to Red Bridge, but both Ma and You were, after all, still paid KOL fees to enhance Value Retail's credentials. In China, if one has 'insider information' about a local area, one is viewed as a trusted source. This leads to almost-altruistic behaviour of tourists telling their stories—in-depth ones—to strangers for free about certain destinations, noticed Withers. "The very idea that an individual can assist others on being a trusted insider source of information is valuable for a certain section of Chinese consumers."

"Otherwise, we simply wouldn’t be seeing the level of detail and quality in what is effectively unpaid, user-generated content," said Withers.

That, compared to a bland laundry list of store promotions, is truly head-turning.

Cover image credit: Shanghai Village 

Originally published on Campaign China. Republished with permission.

China | Travel