12
Mar
2013

Service in the Chinese luxury sector; evolution and not revolution

Watching Chinese luxury consumers day by day, it is obvious to me that an evolution is taking place. Not one that will take century’s or millennia to complete, but a rapid transformation of hearts and minds that will reshape the luxury market here in a few years. Some may say I am stating the obvious and others that a transformation was inevitable, and maybe both are right to some degree.

What is clear is that the luxury revolution of the past few years where luxury brands opened stores and consumers came in their droves has moved on to a progressive evolution that requires a more subtle engagement strategy. Through observation, the actual depth of change in attitude and expectation that is permeating the middle and the wealthy classes alike in response to changes in the economy is visible, yet luxury brands still go straight for the big actions to compensate for them, and not the sensitive adaptations that are really what is in my opinion, called for.

Take the store environment for example. Many of the top brands began redesigning their flagship stores last year and have announced that this year their focus will be not on opening yet more retail space, but to redevelop what they already have. The application of sound financial logic like this cannot easily be argued with, the store delivers the first impression to the consumer, and first impressions are very important.

But when you think about it, a new shiny store offers very little value to the consumer if the products are the same as they were before, and the staff are the same people with the same attitude that they had in the old dull store. Where is the value to the consumer, and where are their new and changing needs being addressed? The luxury store is an alter to the brand and the staff the priests and disciples. The alter on its own delivers limited engagement; it’s the passion and commitment of the priests and disciples that really builds bonds and trust with the consumers or congregation.

What many Chinese consumers want now, is not more glitzy stores, but staff who know, understand and care about the brand, and who can pass their enthusiasm onto them, appreciating that luxury is as much about service as it is about the product. The evolution in consumer knowledge and demands must be matched by an equivalent or superior evolution in the way brands interact with their customers in store and online. Investment on building bigger alters will not guarantee a larger congregation, unless those whose job it is to communicate the values of the brand really appreciate that consumers are smarter, have many choices and are capable of making better informed decisions than they had in the past.

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