To coincide with Art Basel, Sotheby’s Hong Kong teamed up with publisher Jing Daily to host a series of panel talks with global leaders. The topic up for discussion was the ever elusive subject of luxury’s future in China. Talks addressed areas such as changing consumer habits and expectations driven by digital disruption, as experts weighed in on how brands and retailers can refresh strategies to keep up with the dramatic pace of change in China.
Below are ORDRE’s takeaways from the panel, ‘The Future of Luxury: E-commerce in Asia,” which featured senior partner of McKinsey, Achim Berg, Kiki Fan, deputy general manager of Tencent Advertising & Marketing Service, and Arthur Cohen, chief executive of marketing and communications agency, LaPlaca Cohen.
New Consumers Respond to Storytelling
The average luxury shopper in China accesses information from at least sixteen different digital platforms on a daily basis. Thus, standing out within a saturated space is vital. According to Achim Berg, it’s about generating a meaningful and unique brand story because pushing product will just add noise. “It comes down to creating an experience, but this requires authentic storytelling,” he explained.
Cohen quickly agreed, adding that roughly 55 percent of millennials in China believe luxury brands are increasingly less personal or special. This suggests there is an opportunity for brands to create or reinforce a relatable and authentic narrative. “Unless a consumer perceives a brand experience as authentic, it will not enter into that brand,” Cohen stated. “What really distinguishes companies today is an emotional character that people can relate to, and find meaningful to them.”
Treat Existing Consumers Like Connoisseurs
Cohen raised another notable point as to how brands and retailers can engage with existing customers: by treating them like a connoisseur: “[They] have already entered a brand and are well invested, but they’ve also become more sophisticated over time. Therefore the conversation the brand has with them must reflect this evolving sophistication.”
Berg chimed in, outlining the difference between consumers who buy for the sake of buying, and those who are more discerning – like collectors. “New luxury consumers in China are more likely to go for big logos and easily identifiable products, but existing consumers will want to show off their connoisseurship and the fact that they belong to a well-versed tribe.” He added that offerings and strategies need to be segmented and personalised according to different demographics – one size does not fit all.
“Younger consumers have been exposed to luxury much earlier, so what they crave is standing out from the crowd ”
Collaboration Results in Uniqueness
Though conformity once influenced consumption, what incentivises today’s shopper, according to Berg, is differentiation: “Fitting in was the older generation’s mantra, often basing their purchasing decision on wanting to be part of something. Younger consumers have been exposed to luxury much earlier, so what they crave is standing out from the crowd and uniqueness”. It stands to reason that under his predictions capsule collections and personalised luxury will continue to grow.
Cohen believes luxury collaborations with influential art or cultural bodies work well because the same basic qualities – authenticity, scarcity and creativity – drive both audiences. “Integrating an artistic or cultural collaboration into a luxury brand experience can inject a sense of pure emotion, and create something that wouldn’t exist without either one’s creativity and resources,” he muses.
While artistic collaborations are nothing new – brands like Gucci and Prada were all early adopters – surprisingly, they continue to reap rewards.