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How Michael Kors is driving Chinese tourists to US stores
In keeping with the trend of brands strategizing to meet consumers where they are, Michael Kors is zeroing in on Chinese customers on WeChat, even in the U.S.
 
Michael Kors has gone all in on the platform, and among Chinese tourists in the U.S., it has worked to drive sales. Since 2017, Michael Kors has invested in multiple, multi-step WeChat campaigns to drive Chinese tourists to Michael Kors stores in the U.S during peak travel times. Those include Golden Week, the first seven days in October, and the Lunar New Year in February. During Golden Week 2017, 7 million Chinese outbound tourists spent $13 billion U.S. dollars. The U.S. was the fifth-most-visited destination. Outbound Chinese tourists totaled around 6.5 million during the Lunar New Year 2018.
 
The campaigns were directed at Chinese shoppers likely traveling to the U.S. and Canada, using demographic, environmental, keyword, behavioral and interest-based targeting unique to the WeChat platform. In the weeks leading up the holidays, Michael Kors ran a series of ads on shoppers’ WeChat Moments social feed (where users can share updates and images with a circle of friends) featuring Chinese actress Yang Mi, a global ambassador for the brand since September 2017. A second series of ads on Moments targeted the Chinese tourists during their vacations in the U.S. and Canada, calling out nearby Michael Kors stores. According to Poshu Yeung, vp of Tencent International Business Group, Michael Kors saw a 935 percent return on ad spend for the two campaigns running in October 2017 and February 2018. The brand also had a 330 percent higher engagement rate among Chinese tourists, compared to that of other fashion brands on the platform.
 
WeChat — owned by Tencent, which announced a 24 percent year-over-year revenue boost in its third-quarter earnings on Wednesday — has been a popular go-to for such one-off promotions, from which brands are usually driving to their e-commerce site (51 percent) or an owned physical store (13 percent), according to Gartner L2’s Luxury China 2018 report. However, it has struggled to attract luxury brands looking to gain footing in China through e-commerce. Brands have instead favored Alibaba’s Tmall and JD.com, equipped with more bells and whistles like luxury consultants, plus have better reputations for safeguarding against unauthorized third-party sellers. From April 2017 to April 2018, more brands made a point to launch some form of e-commerce to WeChat, which reports more than a billion users. Givenchy launched a WeChat boutique in May. Other brands to sign on include Fendi, Louis Vuitton and Hermes.
 
In August, Michael Kors launched its full product assortment on WeChat through a new, standalone mini-program (described as an app within the app), making it the first luxury fashion house to take advantage of WeChat’s shopping capability in a big way.
 
According to a Michael Kors spokesperson, the brand continues to look to Tencent to serve the needs of its jet-setting customers. WeChat is proving to be the most comprehensive platform for the brand, allowing it to connect with both customers in mainland China and the Chinese community around the world.
 
Michael Kors has continued to see momentum in mainland China, reporting a double-digit revenue increase in the region for the second quarter of fiscal 2019, announced in early November. (The brand does not provide specific figures by region. Overall, revenue was up 9 percent.) 
 
The brand has picked up on strong sales outside of China by Chinese consumers, and it’s responding accordingly. “We see continued strength in the China marketplace, and we see [Chinese consumers] domestically as being very, very strong,” said Michael Kors CEO John D. Idol, during the earnings call. “And we’ve always been of the point of view that we’re very comfortable working with our clients, whether in their home markets or whether they’re abroad.”
 
He added that one of the company’s best businesses is duty-free stores in airports, which he owed to traveling Chinese consumers.
 
As pricing gaps on luxury products narrow, Chinese shoppers are spending less abroad, according to China Luxury Advisors. But they are still doing their fair share, thanks in part to the added emotional, storytelling element that comes with scoring a Versace or Dolce & Gabbana dress in the brands’ birthplace of Italy, or buying a Michael Kors bag in the States. (The fact that Michael Kors styles often feature the brand’s signature “MK” logo only adds to their appeal.) According to Tencent, in 2016, Chinese consumers spent $261 billion outside of China, and that number is expected to reach $458 billion by 2021.
 
 
  Source: Glossy

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