Coronavirus analysis

Lessons from a crisis

We present highlights from two opinion pieces posted by Jing Daily, a content partner of The Moodie Davitt Report, assessing the luxury industry’s response to the COVID-19 outbreak, and changes brands can make to improve brand and community building.

Why luxury’s response to the coronavirus must look beyond revenue

While luxury may play a role in inspiring the Chinese community during the coronavirus outbreak, this will not alter its trajectory, writes Jing Daily Editor-in-Chief Enrique Menendez. Companies including Kering, LVMH, Hermès, L’Oréal and Estée Lauder have all pledged monetary donations to combat the virus. Beyond this, we understand that luxury’s true ability to help is limited.

The current climate does, however, provide an opportunity for luxury to face inward and adopt a heightened level of attention to the Chinese community: both the small percentage who can afford luxury and the hundreds of millions who are only observers. If industry executives are hesitant to care for this greater demographic, they may ask themselves who the millions of netizens were that tore down Versace and Dolce & Gabbana.

Indeed, the power dynamic in the industry has shifted. Luxury has traditionally derived its influence from the distinction it creates between those who can afford luxury and those who cannot. Now, the transparency derived from digital platforms has disrupted this model. Social media has empowered the consumer to determine what’s in and out — not just the physical luxury consumer, but also the digital consumer who can sway public opinion of a brand without directly purchasing from it. This dynamic is especially clear in China, where netizens are particularly vocal when it comes to evaluating brands.

The full implications of this recent shift in power, too, remain unclear. What is certain, though, is that the entire luxury industry requires a change in its own thinking. And not just the designers and core innovators who are inherently inspired by creativity, but the business leaders who set the tone for operations.

This necessary change goes further than superficial efforts to understand the market. The importance of putting individuals who come from the community in positions of power should go without saying. But beyond this, without a deep cultural perspective instilled at every operational level and a registered history of relating to the consumer, brand attempts to navigate any crisis will fall flat.

Now is the moment for the luxury industry to closely examine how it operates in China. A hands off, macro approach to the market no longer cuts it. Industry leaders who do not take time to intimately understand the singularity of the market and its consumers will not be capable of adapting quickly enough to the community’s exponential growth. Our call for a focus on individuality is not for the sake of it, but because this approach is necessary for decision makers to keep their businesses afloat, regardless of any market uncertainty.

In face of the outbreak, Jing Daily encourages the luxury and larger fashion industry to look to China with more care than ever before. As an industry, we must stop viewing China as ‘The Chinese’ and instead make a real effort to understand the leaders, employees, and consumers who form the Chinese luxury community.

High-profile Dior advertising at Daxing International Airport. The full impact of such campaigns will be muted by the COVID-19 crisis.

How can brands rethink community building?

No one predicted this, and no one could have: people quarantined at home, cities locked down, and business paused, writes Jing Daily’s Yishu Wang. Understandably, brands are temporarily closing down their stores in China; however, it puzzles me that brands are not doing more at this time to grow their online community.

It seems like a standard practice that when crises like these happen, brands donate money but generally keep quiet in marketing communications until things are back to normal. We know that brands don’t want to be seen as trying to take advantage of a crisis — it’s far better to play it safe than get it wrong. However, with social media now an essential tool for fashion companies, marketing is about developing a relationship between them and their consumer; it’s forging a brand’s community. If you have nothing to say during crises, you are doing community building wrong.

With most people quarantined in their apartments, social media has been rife with news, advice, distractions and warnings, but also alive with gags and humour: How many grains of rice in your cupboard? How many birds have flown past your window? People are sharing silly counting games to pass the time and it is heart-warming to see that people still have a sense of humour in the face of fear. This is the positive side of social media, which for all its ills, helps people connect digitally when they’re physically separated.

But this is a time of great possibility for companies and brands in China. They should be using it to better connect with their online community. This is a no brainer. At the moment, followers are active online all the time and are, frankly, bored. They are looking for stuff to do, content to consume. I’m saddened to see that most luxury brands during this time have stayed silent — a safe approach that made sense in a time before social media marketing.

Some brands did get it right though: Lululemon’s response to the crisis in China has been pitch-perfect. It arranged live-streamed yoga classes run by yoga instructors across the country giving those cooped up at home some respite in a perfectly on-brand way. Nike did a similar thing, curating online work-out classes on the Nike Training Club app — ideal for limited indoor space.

Creating a digital community shouldn’t seem forced, but its importance at such times can’t be underestimated. Luxury brands know better than anyone else that it is crucial to cultivate brand followers for long-term gains. A community is not just a group to receive messages passively; companies and their followers are in it together. Community building should be about brands understanding what their customers want.

Consumers will be interested in shopping again — hopefully soon. But for now, brands need to connect with them even more acutely, share their current challenges and show their support and that they care. This way, you could have a community of not just one-time shoppers but long-term brand followers.

Trying times often cause those going through an experience to form close bonds and the local Chinese community spirit on mainland China is at an all-time high. The night before I left my home in China and returned to London, our neighbour knocked on the door and gave us some fresh vegetables and fruit. He had been out to the supermarket and took it upon himself to pick up food for neighbours in the complex simply because fewer trips out meant less risk for all.

Now is not the best time for brands to drive sales. But it is an opportunity to cultivate online community building as this will create values for years to come.

The Moodie Davitt eZine

Issue 277 | 24 February 2020

The Moodie Davitt eZine is published 20 times per year by The Moodie Davitt Report (Moodie International Ltd).

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