Top 5 Takeaways From The 2019 Luxury Society Keynote Shanghai


Annick-Ange Logmo | September 24, 2019

We pick out the most important lessons by experts about building brand agility, understanding and capturing audiences, and overall optimizing omnichannel experiences in China at the recently concluded Luxury Society Keynote in Shanghai.

1. To capture e-commerce growth opportunities, brands must be willing to let go of control

Jacques Roizen, Baozun

While the e-commerce growth forecast in China is stronger than the rest of the world, luxury penetration remains at a low 9% of total sales. In fact, brands have been hesitant to extend their presence beyond brand-owned websites and WeChat stores.

The reason behind that is that the nature of e-commerce marketplaces and their business environments deter brands from setting up their operations on there. Concerns such as incompatible promotional activities, content management and consumer data control justify brands’ reasons for shying away from marketplaces, shared Jacques Roizen, Executive Vice President of Digital Transformation and New Ventures at Baozun – the largest TP in China.

However, the hyper digitalization of consumers and the weight of key players like Tmall and JD present opportunities in terms of marketing and impact that outweigh brand-owned environments. Brands need to leverage the traffic of these e-commerce platforms and take part in key e-commerce festivals to expose consumers to their brand content.

2. Content Should Facilitate The Integration Of A Brand’s Digital Supply Chain

Omnichannel is impacting how brands define their KPIs, with brands now paying more attention to metrics that have a direct impact on ROI instead of chasing numbers just for vanity’s sake. Consumers today tend to research online and purchase offline (ROPO), heightening the focus on content marketing so as to bring tangible results in terms of sales.

Pablo Mauron, Partner and Managing Director China at DLG (Digital Luxury Group) opined that companies should ideally implement content integration to three aspects of their businesses: infrastructure, methodology, and partners. However, the current operational and infrastructural models of companies challenge their ambitions in creating and distributing true omnichannel content.

To achieve content integration that will maximize sales and ROI, companies need to synchronize their brand building and sales operations in a way that strengthens the store weight and reduces the dependency on platforms’ promotional events. Lastly, one of the most important components to create an agile digital supply chain is to create a stakeholder collaboration framework that enforces planning, production, adaptation and distribution efficiency.

3. The Key To Wechat Growth Is Actually An Offline Presence

Kai Hong, JINGdigital

Growing WeChat communities is something brands struggle with. In order to get past a certain level of engagement and recruitment, brands need to redefine their omnichannel journeys. The fact that consumers widely tend to research online and purchase offline (ROPO), coupled with offline sales accounting for over 80% of total luxury purchases, demonstrates that there is a change in values attributed to different stages of consumers journeys.

The change in consumer expectations and the increasing cost of traffic has led to a decrease in customer acquisition between 2018 and 2019. However, brands with greater equity have experienced strong organic growth, up to an 18% increase in followers, against 6% for brands with smaller WeChat accounts, explained Kai Hong, Chairman and Co-founder of leading marketing automation platform JINGdigital.

QR codes and word-of-mouth are stronger factors of growth than media investments. Brands that focus on offline growth also have a better online performance in terms of conversion and engagement. Including QR codes in their sales ceremony and providing clients a personalized experience also favours the growth of their WeChat account.

4. Integrated Profiling Is As Important As Channel Integration

With platforms like JD having over 320 million annual active shoppers, brands have greater opportunity to raise awareness and expose consumers with high shopping intentions to their brand universe, shared Kurtina Guo, Senior Director Business Development for International Business at JD Fashion and Lifestyle.

Wei-Chong Khor, Head of Digital Transformation and Partnership at LVMH Asia added on to that by explaining that it is paramount for brands to integrate their customers’ profiles across the customer journey to capture opportunities across the customer journey. As personalization becomes a necessity in customer experiences, brands need to differentiate service in store with the data they capture online.

Today, companies are given the opportunity to leverage the social and shopping behaviours of customers to better understand them, have more targeted propositions and increase conversion. According to Adrian Messerli, Regional Vice President and General Manager of Four Seasons Hotel Shanghai, companies need to invest to create fascinating experiences for consumers, and leverage technology to get personal with customers.

5. Differentiating Platforms And Understanding Their Lifecycles Can Strengthen Brands’ Marketing Strategies

From left: John Artman (TechNode), Kim Leitzes (PARKLU), Ginger (KOL), Layla Lee (DLG)

While brands become less fearful of digital spaces, they need to understand each platform and what purpose they would serve in their strategies.

Conventional platforms like WeChat and Weibo are suitable for one-on-one interaction with consumers, and are highly adopted by heritage brands. On the other hand, new platforms like RED and Douyin – which are more UGC driven, pose new challenges for brands. As they highlight new user demands, brands need to identify how they can fit into these spaces and generate transactions.

To decide whether or not to enter these platforms, brands need to analyse the demand considering the following elements: the presence of their target audience among the platform users, organic brand mentions, reviews and content curators’ communities, said Layla Lee, Associate Account Director at DLG during a discussion panel at the event.

However, these new platforms are always shifting, and so are their user traffic dynamics. Brands need to build agile and responsive marketing strategies to avoid being overly dependent on problematic platforms.

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