Bloomingdale’s smart strategy to target affluent Chinese shoppers in New York

Bloomingdale's advertising in Shanghai Travelers Club magazine - China Elite Focus 2015We have all seen these cheezy advertising campaigns made by department stores or western brands trying to attract Chinese tourists in the last years: Be assured that affluent Chinese tourists were also smiling…  But it is going to change. Exit the low quality shopping publications targeted to Chinese tourists that ended in the hotel rooms trash bins. U.S. and European Luxury brands and high end retailers start now to advertise seriously with affluent Chinese tourists.

Although luxury sales in mainland China have still remained in slowdown mode in 2015, and Hong Kong has recorded a significant slump as well, Chinese spending remains a potent force in the global luxury industry, propping up growth rates in developed markets worldwide.
This week, Hermès reported a 22 percent increase in global sales in the sAdvertisement Tower - Gervois Hotel Rating May 2017 featuring Pierre Gervoisecond quarter, with sales in Japan leaping 33 percent—a figure attributed in large part to an influx of big-spending Chinese tourists attracted by a weaker yen and easier travel. On a global scale, Chinese travelers are spending lavishly: a recent Global Blue report found that Chinese tourist spending jumped 87.8 percent in June, while spending on leather goods in Europe grew by an even more staggering 93.7 percent. Year-to-date spending growth sits at a whopping 110 percent.
These numbers contrast sharply with the situation in mainland China and Hong Kong, one that is particularly striking in formerly triumphant Hong Kong. Last week, Burberry reported a “double-digit percentage decline” there for the three months ending in June, while sales of Swiss watches in the former British colony were down 21.2 percent in June, despite 3.3 percent growth worldwide.

Woman reading Gervois magazine in a coffeeThese numbers further support the trend that growth is following Chinese tourists abroad, and brands need to keep up with their changing location preferences for travel—engaging outbound shoppers before they leave China and when they arrive overseas. Recent stats also illustrate the ever-shifting tides of Chinese travel patterns. Whereas Japan was, just a few years ago, faced with a Chinese tourist slump (caused in no small part by Sino-Japanese political tensions), the country is seeing a wave of Chinese arrivals and spending, owing to cooling attitudes toward Hong Kong and South Korea’s currency fluctuations and MERS outbreak.
Amid these rapid and unpredictable changes, what is clear is that brands need to have plans in place to quickly jump on opportunities, and ensure they’re able to reach and influence the Chinese outbound consumer wherever he or she happens to be in the world.
“Luxury retailers like Bloomingdale’s have well understood the importance of targeting affluent Chinese tourists”, said Pierre Gervois, CEO of China Elite Focus and Publisher of the Shanghai Travelers’ Club magazine, a high end publication in Chinese language for High Net Worth Chinese global travelers. “Bloomindale’s and the Shanghai Travelers’ Club magazine have launched a very creative marketing and PR campaign this spring showing actual Chinese customers and what it feels like to shop at the iconic Bloomingdale’s store in NYC.” Gervois added. This campaign has generated a considerable attention on Chinese social media and is the first ever campaign focused on the Chinese customer and the overall shopping experience in a U.S. luxury retailer. An example to follow for the industry.

Source: Jing Daily / Chinese Tourists Blog / Chinese tourists in America

60% of Chinese overseas shoppers plan their purchase in advance

Chinese shoppers at Hong Kong Louis Vuitton store - Chinese Tourists BlogTourists love to shop. Whether they’re browsing for small souvenirs or big-ticket items they can’t get at home, tourists around the globe are always on the prowl when they’re away from home. For mainland Chinese visitors to Hong Kong, shopping is a key activity that nine in 10 tourists enjoy. That ratio alone is impressive, but when you consider that 33.5 million mainland Chinese visited Hong Kong in first the 10 months of 2013—around five times the population of Hong Kong—it’s clear this group represents one of the greatest business opportunities for Hong Kong marketers.
However, a recent report by Nielsen, finds that mainland visitors are coming to Hong Kong less frequently, staying for shorter periods, and spending less on shopping, compared to last year. Nevertheless, accessibility to Hong Kong continues to grow. By the end of 2013, China outbound travelers will likely reach up to 94 million, up 13 percent from 2012, according to the China National Tourism Administration.

As the number of visitors from mainland China continues to grow, this group has begun to evolve, changing in tourist profile, travel pattern and shopping behavior. According to Nielsen, more than half of the mainland visitors traveling to Hong Kong during 2013 came from the Guangdong province, thanks to its proximity and convenient transportation. At the same time, the proportion of mainlander visitors from smaller tier 2 and 3* cities grew to 54 percent in 2013 from 31 percent in 2012.

According to the Hong Kong Tourism Board, the number of same-day visitors has increased significantly over the past 10 years, rising to 19.8 million in 2012 from 2 million in 2002, outpacing the number of overnight visitors. We expect that the number of same-day visitor will grow even faster by the end of 2013 as well.

Tourism in Macau has also benefited from retail-hungry mainland Chinese consumers. The number of mainland tourists traveling to Macau grew 12 percent in 2013 from 2012. However, Nielsen’s report shows that the number of people visiting Macau after Hong Kong is declining, indicating that more people prefer visiting Macau directly.

According to the survey, shopping is down for mainland tourists. The average actual spending among this group recorded a double-digit decrease to HKD24,800 in 2013, and spending on shopping recorded an 8-point slump. In addition, 75 percent of mainland tourists say they shop for themselves, buying in key categories including luxury-branded fashion, jewelry, cosmetics and electronics.
Purchases in these categories, however, differ between Guangdong and non-Guangdong visitors. According to the survey, Guangdong visitors intend to spend more on consumer packaged goods, while non-Guangdong visitors plan to buy more big ticket items such as luxury, consumer electronics (mobiles and tablet PCs), cosmetics, jewelry and watches. Guangdong and non-Guangdong visitors also vary in terms of the types of consumer packaged goods they buy—in particular, infant milk formula products. This is largely influenced by brand familiarity with the type they have in their home.

According to the report, more than half of mainlanders travelling to Hong Kong or Macau claimed that they planned their purchases during their visits. For those planned purchasers, word-of-mouth promotions and  social networks are the most popular channels that consumers use to gather product information. More than half of the respondents in the survey would refer to recommendations from friends or relatives, while online blogs and social networks (e.g., Weibo or Wechat) are popular with 44 percent of respondents.
“Among those planned purchasers with high engagement on online platforms, there is an opportunity for marketers to create targeted brand awareness programs by advertising on blogs and forums to maximize the reach to their potential consumers.” said Eva Leung, managing director of Nielsen Hong Kong and Macau. “Strategies in using social media to connect and resonate with the mainland tourists have become more and more critical in order to maintain brand awareness today.”

Source: Nielsen