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How Luxury Brands Position a Genuine Customer Profile in China

The year 2020 posed significant challenges across various industries, including fashion. The global fashion sector is projected to contract by 27% to 30% due to the impacts of the coronavirus pandemic. This crisis fundamentally altered lifestyles and solidified the importance of the Chinese market, which has largely returned to normal operations. The power of Chinese consumers has surged, now accounting for 38% of the global fashion industry. According to Bain & Company’s 2019 report, Chinese consumers represented 33% of the market in 2018, with predictions suggesting that this figure could reach 50% by 2025. Thus, China is poised to be a highly promising market in the future.

However, the Chinese market differs significantly from others. Its complex regional cultures, youth trends, and advanced digital marketing strategies create a unique landscape, making it challenging for luxury brands to define a clear customer profile. There are few designs tailored exclusively for Chinese consumers, leading to a fuzzy consumer image and demand. Consequently, establishing a genuine customer profile is crucial for gaining a foothold in the Chinese market.

A customer profile creates a portrait of consumers, encompassing demographic attributes (e.g., education, gender, income level) and additional transactional data (e.g., purchasing demands and concepts). This profile informs every aspect of the marketing mix. Importantly, “genuine” refers to being sincere and free from pretense, meaning that a genuine customer profile describes a real person rather than just commercial data. This process can be broken down into three phases: brand knowledge of the consumer, establishing companionship, and delivering positive value. Developing a genuine customer profile can yield significant benefits for both the brand and the consumer.

The brand’s understanding of its customers is the cornerstone of a genuine customer profile and the first step in this process. Respect is paramount; it is essential for fostering effective communication between the luxury brand and its customers. One often-overlooked reason luxury brands struggle in China is the lack of cultural understanding regarding consumer purchasing motivations. The mindset and demands of Chinese customers differ significantly from those in other countries, often due to a perceived lack of respect from luxury brands.

According to the Customer Experience Matrix, 79% of consumers are more loyal to businesses that understand them, and even a 7% increase in loyalty can boost profits by as much as 85%. Respect must extend beyond individual consumers to encompass society, culture, and the country at large. China’s 5,000-year history is rich and complex, and brands must navigate cultural sensitivities carefully. For instance, Dolce & Gabbana faced backlash for an offensive video that many perceived as disrespectful to Chinese culture, leading to significant fallout and the cancellation of a major fashion show. This example underscores the necessity for luxury brands to cultivate a nuanced understanding of their market.

To bridge this gap, brands like Chanel and Gucci have created positions for Diversity Officers to mitigate cultural and political issues through internal training and management reform. If luxury brands fail to meet the mainstream consumer’s demands and do not demonstrate genuine respect, they risk losing their foothold in the Chinese market.

Companionship is another essential quality luxury brands must consider when engaging with Chinese customers. By 2025, half of Chinese luxury spending will occur domestically, a trend accelerated by COVID-19. As social distancing became the norm, online platforms, especially social media, have become vital for maintaining connections. In China, platforms such as Xiao Hong Shu, WeChat, and Douyin dominate, replacing Western superpowers like Facebook and Google. Luxury brands should invest effort into these platforms to align with the daily lives of Chinese consumers.

For example, Gucci launched the "520 Gucci Story" campaign on Weibo, encouraging consumers to share their emotional connections with the brand. On Douyin, Gucci produced exclusive retro-style videos that resonated with younger audiences. These interactive experiences foster companionship and build trust between brands and consumers.

Leading customers toward positive values and an improved quality of life is the essence of a genuine customer profile. Gucci’s "520" strategy not only aligned with Valentine’s Day but also promoted a message of cherishing the present, especially in a post-pandemic context. Similarly, Dior launched "Dior Talks," a podcast featuring discussions with prominent figures in arts and culture. These initiatives reflect the growing interest among Chinese consumers in self-fulfillment rather than mere displays of wealth.

Ultimately, a genuine customer profile embodies humanization. Luxury brands should treat customers as friends and make decisions from their perspective. For too long, Chinese customers have been viewed merely as revenue sources, with brands often neglecting genuine service. The development of a more authentic customer profile will lead to greater wealth and success for luxury brands in China.

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Reviving Gucci: Strategic Recommendations for the Chinese Market

As a prominent luxury brand, Gucci has faced a myriad of challenges in recent years, particularly following the pandemic. The shift in consumer behavior, especially among younger generations, necessitates a strategic overhaul to revitalize its market presence. This essay proposes a targeted approach to reinvigorate Gucci's brand image and market strategy, particularly focusing on a pop-up store concept in China.

Understanding the Current Landscape

In the post-pandemic world, consumers are increasingly prioritizing personal well-being and sustainable practices. The desire for unique experiences and products that evoke nostalgia is particularly pronounced among Millennials and Generation Z. These consumers not only seek high-quality luxury items but also resonate with brands that reflect their values and lifestyles. Gucci's challenge lies in adapting to these evolving demands while maintaining its luxurious identity.

The Pop-Up Store Concept

To effectively engage the Chinese market, especially in urban centers like Shanghai and Beijing, Gucci should consider launching a pop-up store that embodies a fusion of nostalgia, nature, and art. The proposed concept, titled "Skyward Reflections," will leverage the growing interest in the Vaporwave aesthetic—characterized by its nostalgic and surreal imagery. This aligns with the current trends where consumers are looking for escapism and a connection to their past.

The pop-up store will feature limited-edition merchandise that reflects this theme, including a signature sweater inspired by the digital sky and childhood memories, along with accessories such as earrings and brooches. Each item will be designed to evoke a sense of nostalgia, encouraging customers to collect pieces that resonate with their personal history.

Strategic Location and Design

Selecting the right location is crucial for the success of the pop-up. High-footfall areas, such as popular shopping districts or art districts, will ensure maximum visibility. The store’s design should be immersive, incorporating elements of the Vaporwave aesthetic, such as pastel colors, surreal landscapes, and digital art installations. This environment will not only attract consumers but also encourage social media sharing, enhancing brand visibility and engagement.

Marketing and Engagement Strategies

To capture the attention of the target demographic, a robust marketing campaign that leverages social media platforms like WeChat and Douyin is essential. Collaborating with influencers known for their affinity with art and fashion can amplify the pop-up's reach. Interactive experiences, such as workshops where customers can personalize their merchandise, will foster a deeper emotional connection to the brand.

Additionally, exclusive events featuring local artists and musicians can create a sense of community around the pop-up. These events could also include discussions on sustainability and the importance of preserving cultural heritage, aligning with the values of the modern consumer.

ConclusionGucci stands at a crossroads, and the path forward requires a deliberate and innovative approach. By launching a pop-up store that merges nostalgia with contemporary aesthetics, Gucci can tap into the sentiments of a generation seeking connection and authenticity. This strategy not only revitalizes Gucci's brand image but also positions it favorably within the competitive luxury landscape in China. Embracing cultural nuances and consumer desires will be key to transforming challenges into opportunities, ensuring Gucci remains a beloved brand in the hearts of consumers worldwide.

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Fiorucci

brand research

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licensing

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customer’s need (Dior)

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the Gucci’s collection are always related to the nature 

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GUCCI HOME

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Dior haute couture 2020 F/W

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Dior case study 

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Sustainable fashion 

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sustainable fashion

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see now buy now

Burberry unveiled the “see now buy now show in London , which connect the consumer and the runway show closer, embrace digital and social media into their operations. This innovative action made a difference in global fashion industry. While the whole timeline has changed , Burberry had moved its internal process ahead by several months,  for example , designing and the communication about deadlines and lead times are simultaneous. As for the sampling , they made around three months ahead of the show. And the campaign shoot and showroom happened in advance as well. Burberry had released the details on social media before the show, and customer can watch the show in the internet, and shopping in both on-line and off-line shop.

I believe see now buy now strategy can help the brand increase their revenue. Victoria’s Secret recently integrated see-now-buy-now into its annual fashion show according to the story in Fashionunited.com, and the company reported that a number of items sold out online less than half a day after the launch, despite the slightly higher price tag. Even Amazon is getting into see-now-buy-now, and announced it won a patent for an on-demand manufacturing system designed to quickly produce clothing and other products after a customer order is placed. What’s more ,consumers can get what they want, when they wat it, regardless of any fashion seasonality. Because the production time zone had shorten rapidly, it potentially relocates production back to local , which is a plus for reshoring production.

Not everyone is in love with the idea. Non-believer John Thorbeck, chairman of supply chain analytics firm Chainge Capital LLC., was quoted in a Business of Fashion article questioning if see-now-buy-now was simply a publicity stunt. “But it’s just the buzzy language designed to mask and distract from deeper disconnects that have prevented real change.” We can find some negative effect in practice , the most important reason is  the ahead of manufacture absolutely. The brand couldn’t know the consumer will desire when they see it. So it effectively turns brands into retailers, with all the forecasting ,stock control and markdown loss risks that retailers have to take, particularly for high end fashion.

If the brand decide to take SNBN strategy , they have to update the whole model in retail formats, merchandising, supply chain and so on, otherwise,  they may fell into the trap of the marketing puff.

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Resort collection 

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Resort collection

Many luxury brands debuted the resort collection, which designed for the elite who were preparing for the end of year holidays at first. It means they could buy anything at any time of year wherever they were been. And because luxury brands need to serve different markets overworld, so it seemed necessary to have the resort collection. But someone disagree on account of the big amount of bill and the waste of the time. Moreover ,others believe that the brands could merge resort wear and capsule collection together. Meanwhile, because the market changes quickly , the resort collections could fill the time gap. And brands can show their collection more free, which would bring their value and aesthetics to new nations and bring the fashion buzz back.

In my opinion, I really believe that rolling out a resort collection is very necessary in fashion industry. The appearance of the resort collection really a good chance for luxury brands to advertise and win market share. There are so many big brands hold the resort collection for example Gucci’s haunted collection, Chanel’s nautical presentation upon a custom cruise liner, and Dior’s tribute to escaramuzas, Mexico’s female rodeo ,and all of them had become the trending topic at that time. Someone may think the big brand hold the resort collection just because they have no budget concern. Not really. It’s easy to get distracted by the big brands like Chanel, Dior, Louis Vuitton, Gucci, Prada, and Fendi, who all stage colossal Resort shows, studded with celebrity stars in far-flung places, but plenty of brands offer Resort but just quietly produce lookbooks and release images to media outlets as well. And more new looks means a constant and uninterrupted cash flow. Such as everyone’s favorite streetwear brand, Supreme, is a stellar example of a brand who gets it right. The streetwear giant will release product throughout the entire year to earn more money because consumers can always cop something new. Given that luxury fashion and streetwear is officially the same thing, the resort collection gives clients additional chances to consume. At the same time, because of the freedom of the resort collections, many big fashion houses are flying out the international press, clients, buyers, and celebrities to places as far as Havana, Tokyo, Rio de Janerio and even the Great Wall of China. it is a brilliant way for those destination to advertise the local culture, promote culture exchange, and attract more customers to have a trip, developing the travel economy by this chance.

To conclude, with all the reasons listed above, resort collection is very essential in fashion industry.

https://fashionunited.uk/news/fashion/why-resort-collections-are-significant-to-fashion/2019051343129