Ensuring your China store meets Chinese consumers’ expectations
Almost a third of all retail sales in China are online – among the highest rate in the world and double that in the US. This, coupled with the sheer scale of China’s retail market, sees China account for almost one in every two ecommerce transactions globally.
One of the largest contributors to China’s stunning rise in ecommerce has been that traditional brick & mortar stores are under-developed to serve Chinese consumers’ increasingly willingness to spend. There are just 0.26 square metres of retail space per person in China versus 2.2m² in the US.
Even after China’s post-pandemic opening up, when consumers returned en masse to high streets and malls again, the 8.2% increase in retail spending in the first half of this year was outshone by the 13.1% growth of online retail.
In short, it has become even more challenging to lure Chinese consumers away from the bright lights of their smart phones, to spend in brick & mortar stores. Online platforms flush with cash, data and insights, are constantly making the experience more engaging, addictive and convenient. Yet, even though they are throwing some of the world’s most innovative AI-driven tech at consumers, there remains some tactile experiences of traditional shopping that cannot be matched on a smartphone.
The most successful ‘offline’ retailers in China have figured this out. They have brought together the best of real-world retailing and bundled it up with many of the captivating digital experiences that consumers love, to create an experience that is strong enough to get people spending in their stores.
These retailers are creating shopping experiences that play to more senses. This allows them to connect at a deeper, more memorable level, and also provides new dimensions of consumer data to understand behaviour.
One of the best examples we’ve seen of this is Sephora’s ‘Store of the Future’ which opened in Shanghai last month. LVMH’s beauty and personal care retailer has choregraphed a shopping experience that seamlessly integrates online-to-offline technologies to make the shopping experience fun and rewarding. Unlike other ‘retailtainment’ offerings, Sephora’s features aren’t just novel, they have used beauty data and insights to identify genuine consumer needs and address pain points for shoppers. At the same time, they’re collecting a slew of data from their most committed shoppers.
China Skinny’s Tracy Dai visited the store and put together a 3.5 minute video showing how she got on with Sephora’s Augmented Reality, Artificial Intelligence and RFID to give you a taste of retail experiences that Chinese consumers have come to expect in the real world.
For brands with physical retail touch points, we should aim to create rich and valuable experiences in our brick & mortar stores like those in Sephora. But looking at the bigger picture, we would be wise to ensure that our internal structure doesn’t view physical and online channels in isolation. Consumers don’t view brands as the physical world versus online. They sometimes research online and buy offline, or research in a store and buy online. Brands should take a less channel-focused approach and focus more on the customer irrespective of where they are interacting with your brands, meaning they will have a richer and consistent experience. Contact China Skinny to learn how you can create optimal online and real world experiences for your customers.
