A Louis Vuitton shop in Sandton City, Johannesburg. Picture: SUNDAY TIMES
A Louis Vuitton shop in Sandton City, Johannesburg. Picture: SUNDAY TIMES

Luxury brands rely significantly on the spending of Chinese shoppers, who account for one third of global luxury retail sales. However, with most of these shoppers now staying at home as a result of the Covid-19 pandemic, this sector of the retail industry has faced the crisis by engaging with consumers proactively and positively through initiatives in brand communication, digital marketing and customer engagement, according to Forrester senior analyst Xiaofeng Wang.

As SA begins its own fight against the virus, with President Cyril Ramaphosa closing schools and encouraging social distancing; many people are looking to self-quarantine and the economy will most certainly be affected. SA brands can look to these examples to navigate what will certainly be a trying time.

Wang outlines three best practices that are evolving from the fallout of Covid-19 on the global luxury brands industry. The first best practice is ‘increasing brand affinity with cause marketing’. At the start of the outbreak in China, many luxury brands closed their retail spaces, while others curtained operating hours and stopped all marketing spend in China.

Despite this, these brands managed to maintain brand affinity. Some expressed their concern for their consumers via financial donations to the Red Cross Society of China. Louis Vuitton launched a cause marketing campaign to encourage support of frontline medical workers. The company’s campaign had 4.2 billion views within the first week.

The second best practice was the ability of these brands to sustain their businesses by moving online and developing creative digital marketing campaigns. Forrester estimates that online sales account for 14% of the luxury spending in China. Luxury brands have continued to engage with their consumers using digital initiatives.

the big take-out

Luxury brands that are heavily dependent on Chinese consumers have kept sales sustainable by moving events and sales online and engaging with customers in a positive and proactive manner.

Dior, for example, streamed its Autumn/Winter 2020 collection on Weibo; Louis Vuitton launched a Valentines pop up on a WeChat mini programme that not only allowed for online orders but also offered exclusive offline promotions to customers using QR codes. Partnerships were formed to ensure smooth delivery and pre- and post- sale consultations were moved online. Online sales doubled in comparison to last year’s Valentines promotion, despite the Covid-19 outbreak.

The final best practice noted was how these brands conveyed brand image with timely and positive brand messaging. Messages to employees, customers and stakeholders were caring and transparent, as well as relevant and in line with the brand’s positioning. 

Planning communication that is honest and transparent, via channels that customers felt comfortable to use and keeping messaging consistent with brand image has enabled these high-end brands to remain sustainable during this crisis.

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