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9October

5 ways to build Loyalty with Chinese Millennial Consumers.

9October

 

Attracting the attention of Chinese Millennial is the first challenge, but keeping it is entirely another. No matter how well-known brand is or how successful products are, marketers certainly can’t expect to command unquestioning loyalty from younger Chinese consumers. But they can adopt strategies that seek to inspire followership and repeat purchases among Millennial. Luckily, a number of homegrown Chinese brands have shown the way, coming from virtually nowhere to build huge and passionate followings online and offline. Here are 5 steps to drive repeat purchases and increase the long-term value of the Chinese Millennial consumers.

 

1. Grow your tribe.

Building a community is a slow process, requiring patience and resources—it’s also not easy to outsource—but the long-term rewards are clear. Case in point: Adidas is increasing its share in China's competitive sportswear and athleisure market is through aligning with social networks like that of KEEP, an app for sharing workouts that's extremely popular with Chinese Millennials, as well as launching innovative offline events. In 2016, Adidas launched its Republic of Sports event, which collaborated with gyms across six different cities to create a program of sporting events, including running, rock climbing, fitness classes, soccer, and other interactive activities. Those who want to participate only need to sign up online to become a “adiCLUB” member. The results were significant—its 2017 edition saw more than 92 million people live streaming events from the Republic of Sports, contributing to their goal to become “Greater China's Best Sports Brand” by 2020.

 

2. Establish a relatable identity.

Cosmetic brand Marie Dalgar has grown a huge following and achieved the distinction of being the first Chinese brand to be stocked by Sephora. Marie Dalgar’s success is grounded in a strong identity, built around values that resonate with young Chinese people. Like many Chinese Millennials who see the world as their oyster, Marie Dalgar’s ambition is large and global.

The brand’s founder, Masa Cui, is pivotal. She is stylish, accomplished, and many young women find her backstory—Cui gave up a comfortable corporate job to blaze her own trail with Marie Dalgar—both relatable and aspirational. The result is that Marie Dalgar benefits from having its own KOL as a figurehead.

Cui’s prominence is especially significant because Marie Dalgar has largely jettisoned high-profile campaigns with ambassadors or KOLs. Instead, Marie Dalgar aligns itself with other brands on co-branded campaigns. Some of these have been massively effective. By working with KFC on a co-branded campaign, the “insurgent” brand positioned itself on the same footing as an established global brand. Marie Dalgar has achieved a feat by aligning itself with artists, recruiting creatives to collaborate on packaging design and hosting the annual Marie Dalgar Crossover Art Project. The brand’s videos have featured a cinematic aesthetic that underlines its creative values.

Another notable example of a brand with a clear visual personality is Three Squirrels. The brand has used its eponymous mascots to establish an identity that is equal parts colorful and fun. E-commerce is the key to Three Squirrels’ success, $1.5 billion in sales in 2018, which is considerable—the brand has been the leading snack retailer on China’s top e-commerce sites for several years. Three Squirrels carves out a distinctive, identity around which it has built its online community.

 

3. Build non-transactional recognition.

Millennial consumers are more fickle than previous generations in terms of brand loyalty, but brands shouldn’t write these younger consumers off. Brands should think creatively but inspiring a sense of brand affinity in young consumers doesn’t need to be complicated. Brands can boost their chances of building affinity among Gen Z consumers by doing something as simple as sending a birthday greeting. In the study, 59 percent of post-95 consumers said they considered it “very important” for a brand to remember their birthday. Around 65 percent of respondents also said both that loyalty rewards were very important to them, and that rewards programs could influence their choice of where to shop.

 

4. Gamification & retailtainment.

Another way of creating non-transactional reward programs is gamifying them. A number of brands are adopting this strategy through WeChat, such as Guerlain, who in 2017 developed a WeChat game where players collected points to win lipstick. Players didn't need to make a purchase to play, but they did have to enter their personal information. The concept works offline as well—for example, Marie Dalgar woos shoppers with lipstick vending machines in partnership with Alibaba's Tmall, allowing consumers to try on colors via a connected smartphone app, and requiring them to follow Marie Dalgar's official WeChat account in order to complete payment. This establishes a connection with the shopper while collecting data on their preferences so as to personalize future transactions (see number 3 below). In addition to Marie Dalgar's, a number of other lipstick vending machines feature a more addictive video game-style element, keeping shoppers coming back to win a free product.

 

5. Create mass personalization.

Three Squirrels has set itself apart by branding itself as a higher quality nut snack than its competitors. It has also employed a highly personalized approach to product design, creating snacks tailored to niche audience segments including pregnant women, affluent consumers, kids and athletes. This product-led approach has also been key to Marie Dalgar’s success. The cosmetic brand has innovated with products that speak directly to the needs of its community. For example, the brand’s “grafting” mascara that has a lengthening effect on Asian eyebrows, which are typically shorter and thinner.

 

Marketers need to keep in mind that Chinese Millennials are repertoire shoppers and a lot more willing to switch brands than their previous generation. Building a community, establishing high-level brand recognition, adding fun and creativity to your marketing campaigns, and hyper personalizing the products are high resource strategies, but it is definitely worth the investment for getting the long-term value of the Chinese Millennial consumers.

 

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