Strategy

WeChat gets even bigger The role of WeChat as the ‘super app’ that does just about everything will expand even further in the Year of the Rooster. WeChat combines an online browser, messaging app, social media platform and payment function under one virtual roof, and has in excess of 700 million users who can access over 10 million internal apps (known as official accounts). Appy days – WeChat gets even bigger WeChat provides the ultimate gateway through which retailers can reach consumers. Retailers can use their WeChat account to do everything from sharing news and special offers to customer engagement, loyalty programs and payment. WeChat allows users to get product recommendations from their peers, then choose those products directly from the site and pay for them via WeChat wallet – without ever leaving the WeChat app. It’s a proven business model and one that overseas retailers should embrace as its influence increases. WeChat

With the rise of mobile, social and cloud technologies, customer expectations of the brands they engage with are constantly on the rise. The pursuit – and expectation – of unique and memorable retail interactions makes customer experience the new battlefield for brands. Those brands that deliver a winning experience will attract new customers and keep them. Cutting out the middleman When manufacturers sell through retail distributors, their ability to influence how their product is sold is often limited. They’re essentially at the mercy of the distributor to ensure that every shopper leaves the store – whether that’s online or offline – a happy customer. In 2017 we expect to see a stronger push from brands to cultivate direct relationships with their consumers. They’ll offer more focused brand experiences that build their brand story, and will be able to deliver more targeted messaging. By selling directly to consumers (DTC), brands can determine how the customer journey should be, and work to make that vision a reality. Going DTC provides not just a sales channel but can also give a huge boost to the lifetime value of consumers; brands can gather information about their customers and use it to provide personalized shopping experiences. Nike and Under Armour are leading the charge on DTC. This year, there’ll be more entrants in the race to deliver the best customer experience, directly.

I’m in catch up mode.

It’s been busy…no excuse so a lot of ground to cover. So let’s start with Chinese New Year.

A few months back. Here are a few thoughts on what is in store for retail in China during the year of the rooster. Here are 8 trends (one per day)  in collaboration with a friend and colleague Mike Smollan that you should all be looking at if the “Year Of  The Rooster” is to be a retail success for you. More of everything for the world of retail Every year in China, we predict a period of unprecedented change for the 12 months ahead, and all indications are that 2017 will be no exception. In the Year of the Rooster, we expect more of everything for the world of retail: bigger challenges, but also bigger rewards; heightened consumer expectations, and greater wins for the retailers and brands that meet them and even greater ones for those that exceed them. Change has become the only constant in the Chinese market, and that change is happening faster than ever. This makes retailing an enormous challenge. The retail sector is at the nexus of the biggest forces shaping people’s lives: digitization, brand building and a rebalancing of the Chinese economy away from manufacturing towards services and consumption.

To help you focus on what’s most important right now, we’ve distilled this vast ocean of change into 8 key retail trends in China for the Year of the Rooster. To learn more about Chinese New Year and how this national holiday unlocks year round opportunities for brands and retailers, download this informative and visual BrandZ™ study: . We hope this will help develop your insight into China, and help you better understand the ever-changing business of retail in this dynamic market. Here’s wishing you a very happy and successful Year of the Rooster. Gong xi fa cai.

The decision by Beijing to end the decades-old One Child Policy means that from 2016, approximately 90 million couples will be allowed to have a second child. The implications of this change in policy are huge for the broader economy and for retailing specifically. There will, undoubtedly, be a surge in consumption of products and services for babies, young children and their parents.

Credit Suisse estimates there will be 1.2 million babies in total, born in China in 2016 alone. Given that the annual cost of raising an infant is 40,000 yuan, this will result in a 4.8 billion yuan boost to the economy. Parents are likely to reduce the amount of money they save in order to buy the things that their new arrivals need, and the market for baby formula milk is expected to grow by 6% in 2016.

We have already seen new brands of formula enter the market as a result; there is little consumer confidence in local infant formula, and the demand for international brands in this category is intense. The longer-term effects of the shift in policy will be seen in the amount of food each household consumes, the need for bigger housing, additional spending on clothing, medical care, higher utility bills and possibly even bigger cars.

All of this additional spend will give a welcome boost to China’s GDP, as well as helping address the need for a growing number of young people to help care for the country’s ageing population.

Shopper marketing has been an area that brands and, often, retailers in China have battled to understand. We believe that the Year of the Monkey will be the year that the value of the shopper – as a way to grow both brand preference and market share – comes into focus. Brands have traditionally sought to win over Chinese consumers using price as the main attraction. Online and offline, retailers and brands have for too long taken the easy option and pulled the price lever to boost sales.

The problem has been that, as a result, loyalty has been hard to achieve, and this lack of loyalty is becoming evident now, with slowing growth making it difficult for brands and retailers to keep cutting prices. We see forward-thinking brands now starting to focus on the shopper, and seeking out ways to win at the all-important point of purchase. A tremendous amount of decision-making happens in the so-called last mile, and the brands that understand shopper behavior stand to strengthen their position.

In a slowing marketplace, the brands that rely on price in order to win may succeed in the short term but will ultimately lose. This is the year in which those that have invested in brand equity will be in a stronger position. Brands and stores that understand the factors – beyond price – that trigger a sale at the point of purchase can now stand out, and that can mean the difference between life and death. Investment in improving the execution of cross-platform campaigns in the retail space will increase, as will spending on improving the presence of brands on the shelf. The bar for quality in shopper marketing will be raised this year, and those that execute poorly will lose crucial sales.