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Luxury brands yet to find a strategy for WeChat

Given that in China, many of the well known western social media is still banned, WeChat is often seen as a solution to communicate with customers. However, luxury brands are still struggling to interact with their customers, according to Jing Daily.

The first hurdle the brands face is in the greeting message as most luxury brands opt for a generic greeting message to inform users of the customer service times. This however does not sit well with customers as their problems are not addressed and cannot be solved immediately. Nonetheless, there are exceptions. For example, Gucci’s WeChat greeting message covers basic questions customers may have, from the address of its website and latest collections to care and repair information. Gucci also asks for more localised information, such as location, so that the brand can offer more specific information.

Jenny Chen, co-founder of WalktheChat, said that on WeChat, followers do not communicate with brands unless there is an issue. As such, the brand should give examples of what keywords followers could enter in the greeting message in order to receive answers, according to the news report. Chinese jewellry company Chow Tai Fook, for example, lists services as options and encourages customers to text the relevant letter for extra information.

Another highlight is the deployment of a personalised WeChat service account, directing customers to follow a service account for customer complaints, consulting on jewellry knowledge and industry news. Customers are assigned to an agent for every request, allowing the brands to track progress easier.

However, experts said automation cannot solve every problem and a human element is still crucial. Meanwhile, constant conversation, grouping and targeting of customers are other key factors as well.

Current digital landscape

Currently, luxury advertising is rapidly shifting towards digital media, led by luxury hospitality brands. About 50% of luxury hospitality advertising will be digital this year, up from 47% in 2017, according to Zenith’s Luxury Advertising Expenditure Forecasts 2018.

Across all luxury brands, 33% of advertising will be digital this year, up from 30% in 2017.

According to the report, digital advertising is now responsible for almost all the growth in luxury adspend. Zenith forecasts luxury advertising in digital media to grow by US$886m between 2017 and 2019. Meanwhile television advertising will grow by US$27m, cinema advertising will grow by US$21m, and radio advertising will grow by US$2m.

Luxury advertising in newspapers, magazines and outdoor advertising will shrink by US$305m in total, so there will be a net increase of US$631m in luxury adspend between 2017 and 2019. By 2019 Zentih forecast that digital advertising will account for 35% of total luxury adspend.

Consumers in the luxury hospitality category now do most of their research and purchasing online, so brands have shifted their budgets to digital accordingly. Consumers of other types of luxury goods are much more likely to make their final purchase after trying them in person. Zenith forecasts that luxury automobile brands will spend 39% of their ad budgets on digital advertising in 2018, followed by watches & jewellery brands (28%), fragrances & beauty (27%) and fashion & accessories (13%).

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