Brands

David has spent most of his life creating, and growing strong, valuable brands that are meaningfully differentiated and grow shareholder value.

8 Retail Trends In China – No 7. Gamification To Deliver Data

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To Deliver Data Insight data is of course one of the most important and also complex keys to the retail castle. There are massive amounts available from ‘likes’ and ‘wants’ to shopping patterns and the Chinese consumer is constantly inputting data to social discussions, chats and review sites. However, for some time the burning question has been how to extract relevant and usable data for a brand. In the Year of the Horse, we foresee gaming will become a major part of the plan. Consumers in China love the novelty of gaming and we know they will provide information if asked. The ability to ‘gamify’ users’ experience with a brand to get the best quality consumer feedback has proved to be one of the most powerful forms of information gathering, and we expect to see this gain real traction and begin to drive brand behaviour. Social media has given us some insight into the users’ experience but none has engaged, connected or interacted with consumers in the way gamification has proved itself able to. There is no doubt that eliciting meaningful data is of the utmost importance in driving growth for brands and that gaming will play a key part in the process for smart brand owners and retailers.

8 Retail Trends In China – No 6. Prime Time For Local Luxury

Local Luxury

Luxury has been a common theme in china’s recent retail history. From the Chinese going abroad to buy, Hong Kong as a luxury goods market and every global luxury and premium brand finding a home in the ‘high streets’ and top class malls of China, luxury is seen as more than a status symbol; it is the evaluation of the elite and the definition of the ladder of success. The hunger for luxury is, indisputably, one of the most defining features of the rising middle class and new Chinese generation. It was only a matter of time before we saw the emergence of home grown luxury brands and we envisage them gaining traction in the Year of the Horse – the ability to mix national pride, artisan skills and high-end luxury is an unbeatable formula in China. In our opinion, this segment will take time to build as the mindset of ‘foreign = better’ is still entrenched but we nonetheless believe it will continue to grow and result in the formation of some very strong, innovative Chinese luxury brands. We expect to see these starting to assert their place in Chinese decadence and also emerging as global players within the luxury market. Having watched the creation of Chinese brands in the toughest of conditions locally, we have no doubt that if they can establish their presence overseas, they will significantly strengthen their position within the minds of local Chinese. This is a long road and the Year of the Horse will be an important staging post in the journey.

8 Retail Trends In China – No 5. Execute To Survive

In Store Execution

As success outside ‘traditional’ bricks and mortar retailers continues, we anticipate increased pressure on manufacturers to conjure up growth. This is most likely to be achieved through a combination of basic marketing principles and decreasing costs in the system which, in turn, will demand greater sophistication in retail execution and sales forces across China. However, this kind of expertise and culture is not developed overnight, and it’s reasonable to speculate that specialists in this area will start taking over from the distributors that typically undertake this function. This does not bode well for these distribution companies that, until now, have had significant power – handling everything from the book, to the movement of physical stock, to in-store dealings. All this has been done with very little visibility for the brand owner, but as growth was so good, everyone was happy. Now, with the slowing in retail sales, we predict that a laser-sharp focus will be on delivering growth at lower cost. What will this mean? More science in field sales operation, better technology to drive execution, and complete visibility for the brand owner in terms of what it is paying for. All of these demands present a very real problem for distributors that are currently not geared for this level of in-store implementation. Don’t be surprised if there’s a sudden growth of outsourced sales force specialists, and an increase in the standard of in-store execution as a consequence.

8 Retail Trends In China – No 4. Local Retailers Become Masters Of Their Own Universe

Local Retailers

You can safely assume that local retailers will continue on their path of extraordinary evolution to becoming world class. Undoubtedly, they will become more sophisticated in their deployment of systems, stricter in their management and begin to deliver better value than the international retailers currently fighting for market share inside China. Local retailers, either national or region-specific, are already starting to outstrip their international counterparts and in the Year of the Horse you can expect this to accelerate, with geographic expansion and increased output through existing sites. Local retailers already have the ability, through multiple means, to extract more profit from their locations, with the added advantage of ‘neighbourhood’ knowledge and connectivity. As they absorb elements of global retailing best practice, we forecast an ever-improving performance.

8 Retail Trends In China – No 3. A Bank In The Hand

Digital Banking

As e-commerce continues to develop fast, so too will the ability of Chinese consumers to bank via mobile platforms. we’re already seeing this happening in multiple ways, from street vendors processing credit cards via their android tablets, to e-commerce companies like Alibaba offering their consumers small savings accounts, to phone-to-phone SMS transfers. Tencent (China’s largest internet portal) has started offering customers a banking platform and with its 400million+ users, it’s destined to have a big impact. In the Year of the Horse we’ll witness consumers being able to use, share and spend money faster and more easily, leading to more transactions in more locations. This is good news for small businesses that have previously been constrained by payment issues, and might well regenerate the steadily shrinking small, informal trader. Just imagine how the ability to transfer a relatively small sum of money with a simple cellphone connection will enable transactions that were simply impossible in smaller rural areas. We expect to see points of purchase springing up virtually anywhere – not just in markets, but even on the most remote street corner. Such is the growing power of digital and peer-to-peer banking.

8 Retail Trends In China – What’s In Store For The Year Of The Horse

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As China rebalances there will be significant changes and challenges which bring with them tremendous opportunities. Retail is always fast moving, dynamic and change is a constant. The two together, retail in China, represent a potent recipe for success as long as you can orchestrate it. So, as we are now in a new Chinese year – the Year of the Horse, I  have put together, with Mike Smollan, from  Smollan the 8 key retail trends you should be watching out for and creating strategies and activities around. Will be posting each one over the next few days…Here is the first one.

The Irresistible Rise Of E-Commerce

e-commerce will continue to engulf many areas of retail worldwide, but it’s in China that we fully expect to see the biggest surge. So much that by the end of the Year of the Horse China will become the biggest e-commerce market in the universe. Rising digital penetration amongst the Chinese and the development of digital banking (see ‘bank in the hand’ below), is set to sharpen both the appetite and ability to purchase anything and everything online. Businesses like Taobao (consumer-to-consumer online retail) and Tmall (b2c online retail) are already leading the charge – and indeed Taobao’s creation of a safe and cheap option for everyone to be buyers and sellers in a digital market place looks set to cement e-commerce in Chinese daily life. It’s inevitable that as other enterprises realise that online can provide a greater return on investment, they will start to put more effort and resources into it. We foresee more and more businesses beginning to use the digital platform to stimulate their flat traditional retail sales, further fueling the digital retail revolution. Undoubtedly a key enabler of this continued growth will be China’s low cost, dynamic supply chain; products can be delivered swiftly with little or no extra cost to consumers and this, coupled with the decreasing amount of time available to visit stores physically, will help make online shopping a nationwide norm.

The Biggest Supermarket Day Of The Year

Supermarket

Today will be the biggest sales day of the year for supermarkets here in England. With sales starting early and finishing late. As an example ASDA (part of WalMart) will process some 12 million transactions an hour as Christmas food shoppers stock up to make sure that they don’t run out of anything on Christmas day. With supermarket logistics stretched to the limit, today is the test for all that infrastructure investment and logistics planning

For The Person Who Has Everything

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What do you give the person who has everything?

If UK departments store legend Selfridges and The Royal Collage of Arts have anything to do with it – a unique one off piece of art from their pop up Christmas shop within a shop located on the ground floor of the Selfridges iconic flagship store in Oxford Street, London.

In a move that would have made founder Harry Gordon Selfridge, the masterful showman who created Selfridges, which opened its doors on March 15th 1909, smile with approval. Selfridges have partnered with the Royal Collage of Arts and created something truly unique with a price tag to match. It’ s not for your stocking filler.

Whilst Selfridges is synonymous with retailing, The Royal Collage of Arts (RCA) is not. The Collage was founded in 1853 and is one of the world’s most influential postgraduate universities of art and design. Its impressive list of alumni includes Tracy Emin, Peter Blake, Christopher Bailey, James Dyson, Ridley Scott, David Hockney and Ian Dury, to name but a few.

The concept of this store is simple yet effective.

It is called One & Only and that is what it is.

Inside the space you will discover, see and be able to buy one of a kind pieces from some of the RCA’s most esteemed recent graduates who are already making waves in their respective fields.

Your chance to give your loved one, and by the price tags you will need to love them a lot, something totally unique and if the past RCA’s hall of fame is anything to go by, a gift that will keep on giving by appreciating in value as well.

Another example of how retail spaces are changing: more flexible spaces; the fusion of retail, entertainment and art; collaborations with different, eclectic and unusual partners; adding different dimensions to their brand proposition and values to become more meaningfully differentiated.

Expect to see more of these interesting collaborations and don’t just sit on the side-lines –  go out and actively seek collaborations and ‘guest’ partnerships.

It is more important than ever to continue to give consumers reasons to shop out rather than just shop in.

BrandZ Top 100 Most Valuable Global Brands 2013

The BrandZ Top 100 Most Valuable Global Brands 2013 is launched today. Total brand value has increased by 7%.  This year was a year of recovery, refinement and relevance and there was a new tone. Total brand value was $2.6 trillion. All but two of the 13 categories improved in value.  There is much to comment on which I will do over the next few weeks posts, but for now, as I prepare to host 5 live web seminars today for WPP colleagues, clients and friends, here is a visual story line created by  the very talented Sergio.

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Download the entire report jammed packed full of insight

Countdown to Top 50 Most Valuable Chinese Brands 2013

I have had a lot of requests to see again the video created which countdowns the BrandZ Top 50 Most Valuable Chinese Brands 2013 that I played at the China-Britain Business Council Conference. So here it is. Photographs by the very talented Cecilie Ostergren. There is much to learn from each of the BrandZ Top 50 Most Valuable Chinese Brands which I will explore in future posts. So for the moment,  enjoy the countdown.

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