March 19, 2020

What Can the UK Learn from the Changing B2C Marketing Approach of Brands in China as a Result of COVID-19?

By Gartner

New research by Gartner shows how the coronavirus has brought changes in consumer behaviour, media consumption, and the use of social and eCommerce platforms in China. The pandemic has forced brands to redirect their budgets into digital marketing as time spent purchasing offline has become practically non-existent, and that for online has increased by 20 per cent for those in quarantine. They are also being encouraged to reconsider their brand and product positioning to address the current situation. With this in mind, and as more and more Brits start to self-isolate and practice social distancing, what can brands in the UK do to mitigate the fallout caused by COVID-19, following China’s example?

Here are the key takeaways from Gartner’s research.

1. Prioritise brand equity through cause marketing while balancing sales messaging

Brands such as Richemont, L’Oréal, and Estée Lauder have made huge donations to help combat the coronavirus in China. They publicised their pledges on their Weibo (a Chinese microblogging site, similar to Twitter) accounts and, although the posts did not generate huge engagement, they did elicit positive reactions from consumers.

Other companies have also donated supplies to the relief effort and took to social media to share their contributions. LVMH, the owner of Louis Vuitton and Dior, are in the process of producing hand sanitiser for free to help tackle the shortage experienced by health authorities in France.

Brands like Starbucks have taken a different stance altogether, taking on the role of educator by showing people how to properly wash their hands. They posted a guide to their WeChat (a Chinese multi-purpose messaging, social media, and mobile payment app) account on how to make their prepackaged coffee at home, encouraging people to continue drinking their coffee while self-isolating.

In the hospitality sector, as a response to restaurant closures, Haidilao, a Chinese hot pot restaurant, published a Weibo post detailing its donation of 16 tons of produce to Wuhan.

Gartner says, “Although the form it takes in the West will be different, the need to immediately express solidarity and support will be the same. During a crisis, social platforms can serve as a vital channel to help spread awareness and raise funds.”

2. Prioritise online growth platforms for activation and paid media investment

More than 150 million Chinese citizens are being quarantined, with online time increasing 20 per cent from January to February. The largest increase has been seen in gaming, short video, and news and information, so take advantage of the marketing opportunities here. With the closure of offline stores, expanding online touchpoints and sales channels has been vital to maximise exposure and consumer engagement. Move to exclusively online marketing if possible, with an emphasis on targeted/personalised mobile advertising on short video platforms, for example, TikTok. Now would also be a good opportunity to increase your brand’s eCommerce footprint.

Gartner says, “Brands should prepare for offline closures and consider online alternatives for sales and marketing. Brands should expect an increase in the throughput required of their online content engines. It is important to start preparing now to secure digital assets, as the production process is likely to be disrupted. Brands should prioritise the platforms where consumers are spending the most time for activations and media investment.

3. Online video as an alternative to offline activities

Even before the crisis, live streaming has become a replacement for offline activities and has become more popular than ever in China since the outbreak. It offers the opportunity to mitigate sales losses and maintain customer engagement. In early February, livestreams on Taobao (a Chinese shopping website) had increased by 100 per cent in China compared to the same time last year. InTime Department Stores, one of China’s largest national retailers, did a livestream from their shopping malls, and partnered with Alibaba to create a landing page for viewers. Sales from one livestream surpassed that of a week in offline sales.

The coronavirus has also compromised various fashion weeks, forcing many brands to livestream their catwalks while having their would-be front-row attendees live tweeting. A video message from Dior’s creative director before their fashion show drew 26 million views and the fashion show was viewed 12.5 million times.

Gartner says, “Online video typically receives higher rates of engagement and resharing. Repackaging existing videos is an efficient way to release content. Celebrities and influencers, who already have established audiences, should be used to create branded livestreams and video content to ensure maximum reach. There is also an opportunity to arm employees to amplify brand messaging online. Ensuring consistency and providing protocol for such efforts will be key.

“The impending crisis might represent a turning point for livestreaming in the West. During extreme cases with resource constraints and rapidly changing conditions, brands may be forced to abandon highly produced online video for more simplified and authentic content, which is where livestreaming is beneficial. Major platforms such as Facebook, Instagram, and YouTube all offer livestreaming, but lack the direct connection to commerce found in China.”

4. Provide delivery transparency and opportunities  

In their messaging, brands have been keen to emphasise product availability. For example, Dettol have been posting on social media about how they’re going to meet increased demand for their products. Watsons (a health and beauty care chain store in Asia) have been encouraging people to make use of their contactless delivery service rather than leave the house to shop, Moony (a Chinese nappy manufacturer) issued an apology on WeChat for products being out of stock and, in one of its updates, Haidilao explained the hygiene and employee health standards required to reopen a store for delivery.

Gartner says, “Brands need to communicate realistic expectations on product availability and delivery, with the expectation that they will be compromised. Anticipating business risks and putting measures and communications in place in advance is key. Messages on preparedness help reassure consumers, and ensure that the brand is in the consideration set — even if only out of necessity. Social media is a good platform for updating shoppers on store closures and reopens. Providing multiple digital channels for customer support is key during crisis periods.

5. Remain agile to take advantage of new platforms and new product positioning 

RED (a Chinese social and eCommerce platform) and WeChat have recently launched livestream functionality to keep up with consumer and social media trends. Ongoing observations of trends in media consumption, consumer behaviour, and consumer sentiment will be key to optimising positioning during an evolving crisis. Also, recognising people are staying up later, spending more time on the computer, and that increased hand washing requires more hand cream, many brands are modifying their marketing messages and products to target specific conditions. For example, on Weibo and WeChat, SkinCeuticals repositioned their product messaging, providing product recommendations for crisis-related scenarios including working from home and staying up late. Brands that can adapt to new social media platforms and situations will be able to withstand uncertainty.

Gartner says, “Brands should constantly monitor trends to identify opportunities to change product positioning to match changes in consumer behaviour and conditions on the ground. New platforms and new platform functionality are likely to emerge during a crisis — an ideal time to experiment with new formats. Brands will need to quickly change media messaging and investment as the situation continues evolving.”

6. Brand activation

Gartner says, “During a crisis, timing is critical. Determining the appropriate cadence and striking the right balance between commercial and branding messaging will be key. Follow the lead of the consumer and adjust your content strategy accordingly. China has a much higher tolerance for sales messaging than the West, and a business-as-usual strategy approach is not advisable for Western markets. Brand-building should be prioritised in this period.”

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By Gartner